INCLINE VILLAGE, Nev., April 27, 2011 /PRNewswire/ -- PDL BioPharma, Inc. (PDL) (Nasdaq: PDLI) today reported financial results for the first quarter ended March 31, 2011.
Total revenues for the first quarter of 2011 were $83.3 million, compared to $62.1 million for the same period of 2010, and include a one-time settlement payment of $10 million from UCB Pharma resolving all legal disputes between the two companies. Excluding the one-time settlement payment, total revenue increased 18 percent for the first quarter of 2011 when compared to total revenue for the same period of 2010.
Royalty revenues for the first quarter of 2011 are based on fourth quarter 2010 product sales by PDL's licensees. Revenue growth for the first quarter of 2011 over the same period in 2010 was primarily driven by increased fourth quarter 2010 sales by the Company's licensees of Herceptin®, which is marketed by Genentech and Roche; Lucentis®, which is marketed by Genentech and Novartis; and Tysabri®, which is marketed by Elan and Biogen Idec. Also contributing to the increased royalty revenue are increased royalties from sales of Avastin® that was both manufactured and sold outside of the United States. PDL received royalties for these product sales in the first quarter of 2011.
Total general and administrative expenses for the first quarter of 2011 were $5.8 million, compared with $9.4 million for the same period of 2010. The decrease in general and administrative expenses was primarily driven by decreases in legal and professional services expenses. The decrease in legal expense is a result of the conclusion of the outstanding legal issues with MedImmune, the opposition to PDL's European patent in the European Patent Office (EPO) and the interference proceedings in the U.S. Patent and Trademark Office (PTO), all of which were resolved in the first quarter of 2011. The decrease in professional services expense resulted from reduced costs associated with one-time special project costs. Significant components of general and administrative expenses in the first quarter of 2011 were legal fees of $3.5 million, compensation and benefits expense of $0.9 million, and professional services expense of $0.6 million.
Net income for the first quarter of 2011 was $44.5 million, or $0.25 per diluted share, compared with net income of $26.0 million, or $0.15 per diluted share for the same period of 2010.
Net cash used in operating activities for the first quarter of 2011 was $13.2 million, compared with $26.9 million in net cash provided by operating activities for the first quarter of 2010. At March 31, 2011, PDL had cash, cash equivalents and investments of $193.5 million, compared with $248.2 million at December 31, 2010.
RECENT DEVELOPMENTSDeclaration of 2011 Regular Quarterly Dividends and March 15, 2011, Dividend PaymentOn February 25, 2011, PDL's board of directors adopted a regular, quarterly dividend policy and declared that the quarterly dividends to be paid to PDL stockholders in 2011 will be $0.15 per share of common stock. The dividends are payable on March 15, June 15, September 15 and December 15 of 2011 to stockholders of record on March 8, June 8, September 8 and December 8 of 2011, the Record Dates for each of the dividend payments, respectively. On March 15, 2011, PDL paid the first quarterly dividend to its stockholders totaling $21.0 million using earnings generated in the first quarter of 2011 and cash on hand.
Resolution of Legal DisputesIn early 2011, we resolved a number of challenges to our Queen et al. patent estate in the United States and in Europe:
As a result of the settlements and the acquisition, the EPO cancelled its opposition hearing regarding the appeal of the validity of our European patent and the claims of our European patent are deemed to be valid in this final action of the EPO. In the three months ended March 31, 2011, approximately 40 percent of our revenues were derived from sales of products made in Europe and sold outside of the United States.
Convertible NotesEffective March 7, 2011, in connection with the dividend payment on March 15, 2011, the conversion ratios for PDL's 2.00% Convertible Senior Notes due February 15, 2012 (the 2012 Notes) and the 2.875% Convertible Senior Notes due February 15, 2015 (the 2015 Notes) were adjusted to 144.474 shares of common stock per $1,000 principal amount or $6.92 per share. The conversion rate for each of the 2012 Notes and the 2015 Notes was previously 140.571 shares of common stock per $1,000 principal amount. In connection with a cash dividend, the conversion rate is increased by multiplying the previous conversion rate by a fraction, the numerator of which is the average closing price of PDL's common stock for the five consecutive trading days immediately preceding the ex-dividend date of March 4, 2011, for the cash dividend, and the denominator of which is the difference of such average closing price less the dividend amount.
Revenue Guidance for 2011As previously announced, PDL will continue to provide revenue guidance for each quarter in the third month of that quarter. Second quarter 2011 revenue guidance will be provided in early June.
Conference Call DetailsPDL will hold a conference call to discuss financial results at 4:30 p.m. ET today, April 27, 2011. To access the live conference call via phone, please dial (888) 396-2384 from the United States and Canada or (617) 847-8711 internationally. The conference ID is 47670706. Please dial in approximately 10 minutes prior to the start of the call. A telephone replay will be available beginning approximately one hour after the call through May 4, 2011, and may be accessed by dialing (888) 286-8010 from the United States and Canada or (617) 801-6888 internationally. The replay passcode is 86999670.
To access the live and subsequently archived webcast of the conference call, go to the Company's website at http://www.pdl.com and go to "Company Presentations & Events." Please connect to the website at least 15 minutes prior to the call to allow for any software download that may be necessary.
About PDL BioPharma PDL pioneered the humanization of monoclonal antibodies and, by doing so, enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases. PDL is focused on maximizing the value of its antibody humanization patents and related assets. The Company receives royalties on sales of a number of humanized antibody products marketed by leading pharmaceutical and biotechnology companies today based on patents which expire in late 2014. For more information, please visit www.pdl.com.
NOTE: PDL BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma, Inc.
Forward-Looking StatementsThis press release contains forward-looking statements. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those, express or implied, in these forward-looking statements. Factors that may cause differences between current expectations and actual results include, but are not limited to, the following:
Other factors that may cause PDL's actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in PDL's filings with the SEC, including the "Risk Factors" section of its annual and quarterly reports filed with the SEC. Copies of PDL's filings with the SEC may be obtained at the "Investors" section of PDL's website at www.pdl.com. PDL expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in PDL's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based for any reason, except as required by law, even as new information becomes available or other events occur in the future. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.PDL BIOPHARMA, INC.CONSOLIDATED STATEMENTS OF OPERATIONS DATA(Unaudited)(In thousands, except per share amounts)Three Months EndedMarch 31,20112010RevenuesRoyalties
$ 73,336$ 62,061License and other
83,33662,061General and administrative expense
77,55752,651Interest and other income, net
(9,154)(12,527)Income before income taxes
68,57840,204Income tax expense
$ 44,545$ 26,007Net income per basic share
.22Net income per diluted share
.15Cash dividends declared per common share
.00Shares used to compute income per basic share
139,640119,525Shares used to compute income per diluted share
184,954184,308PDL BIOPHARMA, INC. OPERATING EXPENSE DATA(Unaudited)(In thousands) Three Months EndedMarch 31,20112010General and administrative expenses:Compensation and benefits$ 942$ 1,001Legal fees3,4956,350Professional services5681,078Insurance204228Stock-based compensation50188Depreciation1434Other506531 Total general and administrative 5,7799,410PDL BIOPHARMA, INC. CONSOLIDATED BALANCE SHEET DATA(Unaudited)(In thousands) March 31,December 31,20112010Cash, cash equivalents and investments$ 193,463$
248,229Total assets$ 248,704$
316,666Convertible notes payable$ 310,601$
310,428Non-recourse notes payable$ 183,959$
204,270Total stockholders' deficit$ (371,204)$
(324,182)PDL BIOPHARMA, INC. CONSOLIDATED STATEMENT OF CASH FLOW DATA (Unaudited)(In thousands) Three Months Ended March 31,20112010Net income$ 44,545$ 26,007Adjustments to reconcile net income to net cash provided by operating activities2,4092,653Changes in assets and liabilities(60,106)(1,724)Net cash provided by (used in) operating activities$ (13,152)$ 26,936PDL BIOPHARMA, INC. MIX OF EX-U.S.-BASED SALES AND EX-U.S.-BASED MANUFACTURING AND SALES
OF GENENTECH PRODUCTS(Unaudited)Three Months EndedMarch 31,20112010Avastin% Ex-U.S.-based Sales
56%50%% Ex-U.S.-based-Manufacturing and Sales
71%70%% Ex-U.S.-based Manufacturing and Sales
40%43%Lucentis% Ex-U.S.-based Sales
57%57%% Ex-U.S.-based Manufacturing and Sales
--Xolair% Ex-U.S.-based Sales
39%35%% Ex-U.S.-based Manufacturing and Sales
(In millions)3/31/201112/31/20102.00% Convertible DebtMaturity - February 2012
3310.25% Non-recourse NoteExpected Maturity - September 2012
1842042.875% Convertible DebtMaturity - February 2015
|SOURCE PDL BioPharma, Inc.|
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