PDL BioPharma Inc.
) posted first quarter earnings of 30 cents per share, above the
year-ago figure of 25 cents and the Zacks Consensus Estimate of 26
cents. Lower diluted weighted average shares outstanding offset the
decline in revenue to drive earnings in the quarter.
PDL BioPharma generated first-quarter 2012 revenue of $77.3
million, representing a 7.2% decline from $83.3 million in the
prior-year period. Revenues were slightly above the Zacks Consensus
Estimate of $77 million and the guidance of $77 million announced
by the company in March 2012. First quarter 2011 revenues were
boosted by a $10 million sum received from UCB Pharma S.A. as final
settlement of a legal dispute.
Quarter in Detail
PDL BioPharma currently derives a significant portion of its
revenue from licenses granted to other companies.
PDL BioPharma receives royalties on worldwide net sales of
Roche Holdings Ltd.'s
) Avastin and Herceptin; Roche and
) Lucentis and Xolair; and
Royalty revenues of $77.3 million represented an increase of
5.5% from the year-ago period. Increased royalties on sales of
Herceptin, Lucentis, Xolair and Tysabri drove first quarter 2012
Effective from the second quarter of 2011, PDL BioPharma started
paying back a portion of the royalties it receives on Lucentis
sales outside the U.S to Novartis. The payment is made in
accordance with a settlement agreement, which the companies had
entered into in February 2011. The first quarter 2012 revenue is
net of this payment.
Avastin sales suffered due to the withdrawal of the drug in the
U.S. for the metastatic breast cancer indication as well as pricing
pressure in the E.U. In the first quarter of 2012, Roche reported a
mere 1% year-over-year growth in Avastin revenues.
General and administrative (G&A) expenses were $6.9 million
in the reported quarter, up approximately 20.2% due to the
company's efforts to obtain new royalty assets, expenses associated
with the tender offer and exchange transaction for the Series 2012
On March 14, 2012, PDL BioPharma paid the first quarterly
dividend of 15 cents per share.
The company is expected to provide second quarter 2012 revenue
guidance in early June 2012.
Currently, we have an Outperform recommendation on PDL
BioPharma. The stock carries a Zacks #1 Rank ("Strong Buy") in the
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