PDL BioPharma, Inc

PDL BioPharma (NASDAQ: PDLI) manages a portfolio of patents and royalty assets, consisting of its Queen et al. patents, license agreements with various biotechnology and pharmaceutical companies, and royalty and other assets acquired. To acquire new income generating assets, PDL provides non-dilutive growth capital and financing solutions to late-stage public and private healthcare companies and offers immediate financial monetization of royalty streams to companies, academic institutions, and inventors. PDL has committed over $1 billion in these investments to date. PDL evaluates its investments based on the quality of the income generating assets and potential returns on investment. PDL is currently focused on acquiring new income generating assets, the management of its intellectual property and income generating assets and maximizing value for its stockholders.
The company was formerly known as Protein Design Labs, Inc. and changed its name to PDL BioPharma, Inc. in 2006. PDL was founded in 1986 and is headquartered in Incline Village, Nevada. 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 for which it receives significant royalty revenue.

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Initially incorporated in 1986 under the name Protein Design Labs, Inc, PDL BioPharma (PDL) is a Delaware corporation that pioneered the humanization of monoclonal antibodies. A significant portion of PDL’s annual revenues is derived from the royalty payments it receives from its proprietary antibody humanization technology.

  • Genentech/Roche: Antibody products include Avastin® for the treatment of several different types of cancers (including colon cancer) and Herceptin® for the treatment of breast cancer. Herceptin® and Avastin® are both first-in-class drugs used for the treatment of breast cancer and colon cancer respectively. Two other products marketed by Genentech/Roche include Lucentis®, which is used to treat age-related macular degeneration, and Xolair®, which is used for the treatment of moderate to severe persistent allergic asthma. Genentech is part of the Roche group of companies.
  • Elan/Biogen Idec: Tysabri® is used in adult patients with relapsing forms of multiple sclerosis (MS) to slow the worsening of disability that is common in patients with MS and decrease the number of flare-ups (relapses). Tysabri® was launched for MS in late 2004 and then withdrawn from the market in early 2005 due to safety concerns. Tysabri® was re-introduced to the market for MS in June 2006 with revised labeling, greater safety warnings, and a risk management plan entitled TOUCH.

In 2008, PDL changed its strategic focus. In August 2007, PDL announced its intention to sell its commercial and cardiovascular operating segments. IV Busulfex® product-related assets were sold to Otsuka Pharmaceutical Co., Ltd. for $200 million in cash while Cardene®, Retavase® and ularitide product-related assets were sold separately to EKR Therapeutics, Inc. for an upfront payment of $85 million, with up to an additional $85 million in development and royalties on certain future product sales. Both transactions were completed in March 2008. Also in March 2008, PDLI and GMN, Inc., a wholly owned subsidiary of Genmab concluded the sale of a Minnesota manufacturing facility and related operations for total cash proceeds of $240 million. As a result of these transactions, PDLI paid a special cash dividend of $4.25 per share in May 2008.
In December 2008, PDL transferred its remaining research and development operations to its wholly owned subsidiary, Facet Biotech (Facet). After capitalizing Facet with $405 million, PDL spun-off the subsidiary on December 18, 2008 to its shareholders as a stock dividend of one share of Facet for every five shares of PDL. Since that time, PDL has not had any financial ownership in Facet.

  • Political and Macroeconomic Analysis.

MarketAxess, is domiciled in the US and listed on the NASDAQ. Currently US and left behind the 2008 crisis , but its economy still receives stimuli of 2 types, bond purchases by the Fed and interest rates virtually at 0 , it is expected that this monetary policy harden over the next 6 months.

US growth indicators 2012 2013 2014 2015 2016 (e)
GDP (billions of dollars) 16.155,25 16.663,15 17.348,08 17.968,20e 18.697,92
GDP (annual growth in% , constant prices) 2,2 1,5 2,4 2,6e 2,8
GDP per capita (USD) 51.384 52.608 54.370 55.904e 57.766
Balance of public finances (% of GDP) -6,2 -4,1 -3,6 -3,1e -3,0
State debt (% of GDP) 102,5 104,8 104,8 104,9e 106,0
Rate of inflation (%) 2,1 1,5 1,6 0,1e 1,1
Unemployment rate (% of labor force) 8,1 7,4 6,2 5,3 4,9
Balance of current transactions (billions of dollars) -449,67 -376,76 -389,53 -460,62e -551,50
Balance of current transactions (% of GDP) -2,8 -2,3 -2,2 -2,6e -3,0

Note: (e) Estimated data

  • Sectorial analysis.
    Compared with the direct competitor.

    PDLI AMGN XOMA SGEN Sector
    Market capitalization: 536,35Mill 127,85MM 72,39Mill 6,49MM 139,51Mill
    Employees: 10 17.900 80 759 57,00
    Quarterly revenue growth (yoy): -0,88 0,06 -0,83 0,24 0,19
    Revenue (ttm): 377,01Mill 22,47MM 54,66Mill 384,11Mill 11,18Mill
    Gross Margin (ttm): 1,00 0,82 0,62 0,05 0,67
    EBITDA (ttm): 339,25Mill 11,34MM -23,68Mill -89,99Mill -20,37Mill
    Net operating income (ttm): 0,90 0,42 -0,45 -0,28 -2,59
    Net income (ttm): 230,07Mill 7,43MM 1,35Mill -104,51Mill N/A
    EPS (ttm): 1,41 9,77 0,01 -0,76 -0,68
    Price/Earnings (P/E) (ttm): 2,30 17,48 54,57 N/A 22,98
    PEG (5 yr): 0,42 1,88 -0,06 -2,57 N/A
    Price / sales (P/S) (ttm): 1,31 5,65 1,24 16,38 16,18

    Industry = Biotechnology
    AMGN = Amgen Inc.
    XOMA = XOMA Corporation
    SGEN = Seattle Genetics, Inc.

    Biotechnology Companies Ranked By Sales
    Company Symbol Price Change Market capitalization Price / sales (P/S)
    Amgen Inc. AMGN 170,84 0,01 127,85MM 17,48
    Genentech, Inc. “Privado”
    Biogen Inc. BIIB 310,67 -0,01 68,07MM 18,15
    GENZYME CORPORATION “Privado”
    Gilead Sciences Inc. GILD 77,88 0,01 102,78MM 6,84
    MEDIMMUNE, LLC “Privado”
    Life Technologies Corporation “Privado”
    TEVA PHARMACEUTICAL INDUSTRIES LIMITED “Privado”
    Sandoz International GmbH “Privado”
    Allergan plc AGN 239,12 0,01 94,68MM 22,77
    Ver Biotechnology Centro industrial
    Generic Drugmakers Ranked by Sales
    Company Symbol Price Change Market capitalization Price / sales (P/S)
    RANBAXY LABORATORIES LIMITED “Privado”
    Mylan N.V. MYL 40,40 0,01 21,61MM 25,57
    Pfizer Inc. PFE 34,77 0,00 210,90MM 30,82
    Johnson & Johnson JNJ 119,75 0,00 327,62MM 22,32
    GlaxoSmithKline plc GSK 43,99 -0,01 106,92MM 2.749,38
    SANOFI “Privado”
    Novartis AG “Privado”
    Roche Holding AG “Privado”
    AstraZeneca PLC AZN 33,09 -0,01 83,72MM 37,82
    Abbott Laboratories ABT 42,16 0,00 61,98MM 27,83
  • Business analysis. 
    PDLI PDL BioPharma, Inc. weekly Stock Chart
    Index P/E 2.31 EPS (ttm) 1.40 Insider Own 0.60% Shs Outstand 164.45M Perf Week 14.08%
    Market Cap 532.82M Forward P/E 15.73 EPS next Y 0.21 Insider Trans 1.02% Shs Float 163.25M Perf Month 7.28%
    Income 230.10M PEG 0.17 EPS next Q 0.08 Inst Own 77.40% Short Float 4.80% Perf Quarter -4.99%
    Sales 426.80M P/S 1.25 EPS this Y 9.30% Inst Trans -1.11% Short Ratio 5.72 Perf Half Y 3.71%
    Book/sh 4.51 P/B 0.72 EPS next Y -59.92% ROA 22.20% Target Price 3.75 Perf Year -32.84%
    Cash/sh 0.70 P/C 4.60 EPS next 5Y 14.00% ROE 33.20% 52W Range 2.50 – 5.16 Perf YTD -5.63%
    Dividend 0.20 P/FCF EPS past 5Y 30.30% ROI 37.80% 52W High -37.21% Beta 0.79
    Dividend % 6.17% Quick Ratio 14.20 Sales past 5Y 11.30% Gross Margin 52W Low 29.48% ATR 0.14
    Employees 10 Current Ratio 14.20 Sales Q/Q -84.80% Oper. Margin 91.00% RSI (14) 63.61 Volatility 5.40% 3.81%
    Optionable Yes Debt/Eq 0.32 EPS Q/Q -94.70% Profit Margin 53.90% Rel Volume 1.76 Prev Close 2.99
    Shortable Yes LT Debt/Eq 0.32 Earnings Aug 04 AMC Payout 28.50% Avg Volume 1.37M Price 3.24
    Recom 3.00 SMA20 12.89% SMA50 3.00% SMA200 0.21% Volume 2,415,159 Change 8.36%

    From the data shown here we see that the macro – economic environment of the company is a stable environment with sustained economic growth, and a predictable rise in interest rates and elimination of economic incentives that negatively affect the market price of the company.

    PDL BioPharma traded well below that rival companies as P/S ratio, a fact that could lead to a growth in value.

    Regarding the ratios own company

    PDL BioPharma
    P/E Ratio 2,31
    P/S Ratio 1,25
    P/Free CF Ratio
    P/BV Ratio 0,72
     PEG 0,17
    Dividend % 6,17

    As these ratios the company is undervalued and should have a substantial increase in value.

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