PDL BioPharma, Inc.
) recently completed a structured financing transaction. As per the
financing transaction, PDL BioPharma paid AxoGen $20.8million for
royalties on certain revenues of the latter.
Of the $20.8million paid to AxoGen, PDL BioPharma paid $19.1
million in cash on October 5, 2012 as per a Revenue Interests
Purchase Agreement. Under the eight year Revenue contract, PDL
BioPharma is entitled to receive royalties on the basis of AxoGen
revenues, which depends on certain minimum payment requirements
starting in the fourth quarter of 2014.
The agreement also allows AxoGen to repurchase the revenue
contract at the end of the fourth year. AxoGen also has the right
to call the contract between the fifth and the eighth year.
In August this year, AxoGen signed a two-year Interim Revenue
Interest Purchase Agreement with PDL BioPharma, under which the
latter paid $1.7 million to AxoGen in respect to the purchase of
specified Acquired Revenues.
We remind investors that in September this year, PDL BioPharma
announced its third quarter 2012 royalty revenue guidance. The
company expects to generate around $85 million as royalty revenues
during the period which represents 2% year over year growth.
PDL BioPharma receives royalties on worldwide net sales of
Roche Holdings Ltd.
) Avastin and Herceptin; Roche/
) Lucentis and Xolair; and
) Tysabri. The company will also receive royalties on Roche's
Perjeta (pertuzumab), which was launched in the US in June
Currently, we have a Neutral recommendation on PDL BioPharma.
Both PDL BioPharma and AxoGen carry a Zacks #3 Rank (Hold) in the
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