PDL BioPharma, Inc.
), which focuses on investments in new assets which will bring in
royalties, had entered into several financing agreements in the
past. The company successfully completed another financing
agreement with LENSAR, Inc., a leader in next-generation
femtosecond laser technology for refractive cataract surgery. The
total amount of the deal is $87 million.
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As per the agreement, PDL BioPharma will provide up to $60
million of debt financing to LENSAR. PDL BioPharma has already
funded $40 million in cash to LENSAR earlier this month and is
expected to fund the balance $20 million by Sep 30, 2014.
In return, PDL BioPharma will be receiving a security interest in
all of LENSAR's assets and the principal amount outstanding.
Additionally, PDL BioPharma along with Aisling Capital and some
other LENSAR co-investors will be making a $27 million equity
investment in LENSAR.
In Apr 2013, PDL BioPharma had entered into a credit agreement
with Avinger Inc. for $40 million. As per the agreement, PDL
BioPharma will be receiving interest on the principal amount
outstanding along with a low, single-digit royalty on the sale of
Avinger's suite of products till Apr 2018.
We note that PDL BioPharma receives royalties from big companies
Roche Holdings Ltd.
). The royalties are earned on worldwide net sales of products
like Avastin, Herceptin, Lucentis, Xolair, Kadcyla, Tysabri,
Actemra and Perjeta.
The company expects to receive royalty revenues of around $97
million in the third quarter of 2013, up 14% from the royalties
earned in the third quarter of 2012. The anticipated growth in
royalty revenues primarily emanates from higher sales of
Herceptin (up 1%), Avastin (up 13%) and Lucentis (up 9%) during
the second quarter of 2013 for which PDL will receive royalties
in the third quarter of 2013.
PDL BioPharma presently carries a Zacks Rank #3 (Hold).
Meanwhile, other companies such as
) currently look better positioned carrying a Zacks Rank #1