PDL BioPharma, Inc. (PDLI Quick QuotePDLI - Free Report) announced that it has committed to an equity investment in privately held Noden Pharma DAC in a bid to acquire global rights to manufacture, market and sell Tekturna and Tekturna HCT.

Under the terms of the agreement, PDL BioPharma will pay equity contributions of approximately $107 million to Noden in the first year and an initial equity investment of $75 million upon the closing of the transaction. It will also pay an additional $32 million equity contribution at the end of one year of closing the transaction.

Moreover, Noden expects to obtain debt financing with regard to the equity investment. PDL BioPharma may contribute additional amounts of equity depending upon the amount of debt obtained by Noden, and requirement for specified milestone payments or other purposes.

PDL BioPharma's investment will eventually reach 88% equity interest in Noden. The company will consolidate Noden's financial statements into its own, which will be immediately accretive to earnings.

We remind investors that Noden Pharma had executed a purchase agreement with Novartis AG (NVS Quick QuoteNVS - Free Report) to acquire rights to Tekturna and Tekturna HCT for the treatment of hypertension. Tekturna and Tekturna HCT are marketed in ex-U.S. countries as Rasilez and Rasilez HCT, respectively.

We note that the active ingredient of Tekturna and Tekturna HCT, aliskiren, is indicated for the treatment of hypertension. In 2015, Tekturna and Tekturna HCT generated revenues of $154 million.

PDL BioPharma currently carries a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the health care sector are Bristol-Myers Squibb Company (BMY Quick QuoteBMY - Free Report) and Pfizer Inc. (PFE Quick QuotePFE - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>