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PDL BioPharma (PDLI) Q3 Earnings Beat, Revenues Rise Y/Y

PDL BioPharma, Inc. PDLI reported earnings of 14 cents per share in the third quarter of 2017, surpassing the Zacks Consensus Estimate of 13 cents. The bottom line was also higher than the year-ago figure of 8 cents.

The company generated total revenues of $63 million in the quarter, up 17% when compared with the year-earlier figure of $53.6 million. This upside is mainly driven by rise in royalty rights — change in fair value — primarily on the back of the current period’s increase in fair value of the Depomed royalty asset. Also, increase in net product revenues contributed to a stronger top line this quarter.

Notably, the company received cash payments of $26.3 million from the royalty rights acquired from Depomed, primarily related to Glumetza, a product marketed by Valeant Pharmaceuticals International, Inc. VRX. An authorized generic version of Glumetza was also launched by a Valeant subsidiary in February for which, PDL BioPharma receives 50% of the gross margin.

Shares of the company have outperformed the industry so far this year. The stock has surged 38.7% compared with the industry’s increase of 2.3%.

Quarter in Detail

Revenues included royalties of $1.4 million from licenses to the Queen et al. patents, which consisted of royalties earned on sales of Tysabri, net royalty payments from the acquired royalty rights and a change in fair value of the royalty rights assets of 35.4 million, interest revenues of $6.1 million and product revenues of $20.1 million (sales of Noden products — Tekturna and Tekturna HCT in the United States and leasing of the LENSAR Laser System).

Revenues of $1.4 million from the Queen et al. licenses were lower than the year-ago figure of $15 million due to recognition of a refund liability of $13.5 million for the potential overpayment amount received from Biogen BIIB. This is related to royalties on Tysabri sales in the United States, Spain, Italy and South Africa.

Research and development (R&D) expenses for the quarter came in at $0.6 million, down 68.7% from the year-ago quarter.

General and administrative expenses escalated 61.4% to nearly $12 million from the year-ago figure.

PDL BioPharma, Inc. Price, Consensus and EPS Surprise

PDL BioPharma, Inc. Price, Consensus and EPS Surprise | PDL BioPharma, Inc. Quote

Zacks Rank & Key Pick

PDL BioPharma carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Ligand Pharmaceuticals Inc. LGND, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up from $3.68 to $3.70 for 2018 over the last 30 days. The company delivered positive earnings surprises in two of the trailing four quarters with an average beat of 6.19%. Share price of the company has surged 43.6% year to date.

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PDL BioPharma, Inc. (PDLI): Free Stock Analysis Report
 
Biogen Inc. (BIIB): Free Stock Analysis Report
 
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Valeant Pharmaceuticals International, Inc. (VRX): Free Stock Analysis Report
 
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