PDL BioPharma, Inc. (PDLI)
Q1 2010 Earnings Call Transcript
April 29, 2010 4:30 pm ET
Danielle Bertrand – IR, WeissComm Partners
John McLaughlin – President and CEO
Cris Larson – VP and CFO
Phil Nadeau – Cowen and Company
Charles Duncan – JMP Securities
Christian Gordy – JP Morgan
Jason Zhang – BMO Capital Markets
Peter Schoenfeld – PSAM LLP
Previous Statements by PDLI
» PDL BioPharma, Inc. Q4 2009 Earnings Call Transcript
» PDL BioPharma Q3 2009 Earnings Call Transcript
» PDL BioPharma, Inc. Q2 2009 Earnings Call Transcript
Thank you all for joining us today. Before we begin, let me remind you that the information we will cover today contains forward-looking statements regarding our financial performance and other matters and our actual results may differ materially from those expressed or implied in the forward-looking statements. Factors that may cause differences between current expectations and actual results are described in our filings with the Securities and Exchange Commission, copies of which may be obtained in the Investor section on our website at pdl.com.
The forward-looking statements made in this presentation should be considered accurate only as of the date of this presentation and although we may elect to update forward-looking statements from time to time in the future, we specifically disclaim any duty or obligation to do so, even as new information becomes available or other events occur in the future. I will now turn the call over to John McLaughlin, President and CEO of PDL BioPharma.
Thanks, Danielle, and good afternoon, everyone. With me today is Cris Larson, our Vice President and Chief Financial Officer. In the first quarter of 2010, we continued to optimize stockholder value by maximizing returns from our Queen et al. patent estate. Our first quarter revenue from sales of Avastin, Herceptin, Lucentis Tysabri and Actemra grew by more than 35% over the first quarter of 2009.
We anticipate strong royalty revenue growth from these approved and licensed products throughout the year as well as additional growth through the approval of new indications for these existing products and the FDA's approval of Actemra for the treatment of rheumatoid arthritis in the United States earlier this year.
On April 1, we paid a special dividend of $0.50 per share and we will pay a second special dividend in the same amount on October 1. We are also continuing our rigorous management of the Queen et al. patent portfolio and are seeking to negotiate new licenses for late-stage development products using our technology.
We are in the process of completing an audit of each of our licensees to assure that all moneys due to PDL are being paid. This program will also give us further insight into sales and manufacturing practices of our licensees so as to better manage the receipt of royalties as our patents reach their termination.
Finally, we continue to manage the patent portfolio to assure that our intellectual property is being respected. While disputes or litigation are never a desired outcome, we continue to vigorously defend our IP when the financial interests warrant such actions on behalf of our shareholders.
On our year-end financial results call in March, we discussed an additional alternative being explored to increase return for our shareholders, namely, – excuse me – purchasing royalty streams on commercial stage products. We are diligently evaluating royalty streams owned by universities and ventures and other pharmaceutical companies that are considering selling their royalty rights in order to raise money.
We continue to evaluate simultaneously the repurchase of our convertible notes and/or a share repurchase program. Chris will talk more about this in a minute. As mentioned earlier, we are also seeking new licensees through our existing patents. As you can see, we are evaluating diverse opportunities to improve performance and growth in 2010 and we will continue to report our progress to you.
I will now turn the call over to Cris Larson, our CFO, to discuss our first-quarter financial results.
Thank you, John. Total revenue in the first quarter of 2010 was $62.1 million compared with $62.6 million for the same period of 2009. Of note, first-quarter 2010 revenue does not include royalties on sales of Synagis due to our ongoing legal dispute with MedImmune. Excluding first-quarter 2009 MedImmune royalties, first-quarter 2010 revenue grew by more than 35% over the first quarter of 2009.
The growth was primarily driven by increased fourth quarter 2009 sales by our licensees of Avastin, Herceptin, Lucentis and Tysabri. Total general and administrative expenses for the first quarter of 2010 were $9.4 million compared with 47 – $4.7 million for the same period of 2009.
The increase was primarily driven by increased legal expense, which increased from $1.6 million in 2009 to $6.4 million in 2010. Other significant expense items in the first quarter of 2010 were compensation and benefits of $1 million and professional service fees of $1.1 million.
Non-operating expense, consisting primarily of interest expense, increased from $3.2 million in the first quarter of 2009 to $12.4 million in the first quarter of 2010. The increase resulted from the issuance of a $300 million securitization debt in the first – third – excuse me – the fourth quarter of 2009. First-quarter 2010 interest expense on these notes was $9.5 million, of which $1.9 million was attributable to amortization of debt issuance costs.