Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

PDL BioPharma, Inc. (PDLI - Analyst Report), which focuses on investments in new assets which will bring in royalties, had entered into several financing agreements in the past. The company successfully completed another financing agreement with LENSAR, Inc., a leader in next-generation femtosecond laser technology for refractive cataract surgery. The total amount of the deal is $87 million.

As per the agreement, PDL BioPharma will provide up to $60 million of debt financing to LENSAR. PDL BioPharma has already funded $40 million in cash to LENSAR earlier this month and is expected to fund the balance $20 million by Sep 30, 2014.

In return, PDL BioPharma will be receiving a security interest in all of LENSAR's assets and the principal amount outstanding. Additionally, PDL BioPharma along with Aisling Capital and some other LENSAR co-investors will be making a $27 million equity investment in LENSAR.

In Apr 2013, PDL BioPharma had entered into a credit agreement with Avinger Inc. for $40 million. As per the agreement, PDL BioPharma will be receiving interest on the principal amount outstanding along with a low, single-digit royalty on the sale of Avinger's suite of products till Apr 2018.

We note that PDL BioPharma receives royalties from big companies like Roche Holdings Ltd. (RHHBY - Analyst Report) and Novartis (NVS - Snapshot Report). The royalties are earned on worldwide net sales of products like Avastin, Herceptin, Lucentis, Xolair, Kadcyla, Tysabri, Actemra and Perjeta.

The company expects to receive royalty revenues of around $97 million in the third quarter of 2013, up 14% from the royalties earned in the third quarter of 2012. The anticipated growth in royalty revenues primarily emanates from higher sales of Herceptin (up 1%), Avastin (up 13%) and Lucentis (up 9%) during the second quarter of 2013 for which PDL will receive royalties in the third quarter of 2013.

PDL BioPharma presently carries a Zacks Rank #3 (Hold). Meanwhile, other companies such as Actelion Ltd. (ALIOF) currently look better positioned carrying a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%