PDL BioPharma Inc.
) recently announced that it expects to receive royalty revenues
of around $143 million in second quarter 2013, up 14% from the
royalties earned in the second quarter of 2012.
PDL BioPharma receives royalties from companies like
Roche Holdings Ltd.
). The royalties are earned on worldwide net sales of products
like Avastin, Herceptin, Lucentis, Xolair, Kadcyla, Tysabri and
Royalty payments for Roche's products are tiered (1-3%) in the
US, while PDL BioPharma receives a flat 3% royalty if a product
is both manufactured and sold outside the US.
The anticipated growth in royalty revenues primarily emanates
from higher sales of Herceptin (up 7%), Avastin (up 8%), Tysabri
(up 12%) and Lucentis (up 8%) during the first quarter of 2013
for which PDL will receive royalties in the second quarter of
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 Feb 2011. The second quarter 2013 royalty
guidance includes this payment.
We remind investors that in Feb 2013, the US Food and Drug
Administration (FDA) approved Roche's Kadcyla as a second line
treatment for HER2+ metastatic breast cancer and as a first line
treatment for patients who relapse within six months following
adjuvant therapy. PDL BioPharma expects to receive royalties on
sales of Kadcyla from the second quarter of 2013.
PDL BioPharma also announced that it had filed a Notice of
Arbitration against Roche with the American Arbitration
Association in Voorhees. The Notice of Arbitration was filed as
PDL BioPharma believes that Roche has paid it lower royalties
from at least 2007. Roche also did not allow PDL BioPharma to
check its books and records to determine whether the paid royalty
amounts were calculated accurately.
PDL BioPharma currently carries a Zacks Rank #4 (Sell).
However, other companies such as
Elan Corporation, plc
) currently look better positioned with a Zacks Rank #2
ELAN CP PLC ADR (ELN): Free Stock Analysis
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PDL BIOPHARMA (PDLI): Free Stock Analysis
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