PDL BioPharma Inc.
) posted second-quarter earnings of 53 cents per share, above the
year-ago figure of 39 cents and the Zacks Consensus Estimate of 49
cents. Earnings were boosted by higher revenues. Moreover, a lower
share count also aided earnings in the reported quarter.
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PDL BioPharma generated second-quarter 2012 revenues of $125.9
million, up 3.1%. Revenues were slightly above the guidance of $125
million announced by the company in June 2012. The Zacks Consensus
Estimate was also $125 million.
Quarter in Detail
PDL BioPharma generated the entire revenues for the second quarter
of 2012 from royalties. PDL BioPharma receives royalties on
worldwide net sales of
Roche Holdings Ltd.'s
) Avastin and Herceptin; Roche/
) Lucentis and Xolair; and
Elan Corporation/Biogen Idec's
) Tysabri. The company will also receive royalties on Roche's
Perjeta (pertuzumab), which was launched in the US in June 2012.
Royalty revenues of $125.9 million represented an increase of 3.1%
from the year-ago period. Increased royalties on sales of
Herceptin, Lucentis, Xolair and Tysabri drove second 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 US to Novartis. The payment is made in accordance
with a settlement agreement, which the companies had entered into
in February 2011. The second-quarter 2012 revenue is net of this
General and administrative (G&A) expenses were $5.1 million in
the reported quarter, up approximately 36.3% due to the company's
efforts to obtain new royalty assets, legal expenses and
compensation related expenses.
On June 14, 2012, PDL BioPharma paid the second quarterly dividend
of 15 cents per share.
The company is expected to provide third-quarter 2012 revenue
guidance in September 2012.
We currently have a Neutral recommendation on Shire. The stock
carries a Zacks #4 Rank (Sell rating) in the short run.