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Analyst Blog

PDL BioPharma, Inc. (PDLI - Free Report) reported adjusted earnings of 11 cents per share in the third quarter of 2016, missing the Zacks Consensus Estimate of 14 cents. Adjusted arnings also declined from the year-ago figure of 49 cents. Nevertheless, the company’s shares gained 0.6% following its third-quarter earnings release.

The company generated total revenue of $53.6 million in the quarter, down 57% from the year-ago period.

Quarter in Detail

Revenues included royalties of $15 million from licensees to the Queen et al. patents, which consisted of royalties earned on third-quarter sales of Tysabri, net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of 16 million, interest revenue of $8.6 million, product revenues of $14.1 million.

Revenues from the Queen et al. licenses were down 87.5% due to the expiration of the patent license agreement with Genentech, Inc. a subsidiary of Roche Holding AG (RHHBY - Free Report) .

The higher change in fair value was driven by an increase of $9.6 million in the fair value of Depomed royalty rights assets primarily due to a $5.0 million milestone payment based on the FDA approval of Invokamet XR, a type 2 diabetes drug in the Depomed portfolio.

Net cash royalty and milestone payments from acquired royalty rights amounted to $15.3 million in the third quarter, compared to $6.9 million in the year-ago period.

Research and development expense for the quarter came in at $1.9 million. This included research and development costs related to the completion of the pediatric trial on Tekturna by Noden, a global specialty pharmaceutical company. No R&D costs were recorded in the year-ago quarter.

General and administrative expenses were nearly $10.4 million, up 22.4% due to an increase in the headcount and expenses associated with the Noden-related product acquisitions.

The company’s board of directors has decided to eliminate the quarterly cash dividend payment in Aug 2016.

PDL BIOPHARMA Price, Consensus and EPS Surprise

PDL BIOPHARMA Price, Consensus and EPS Surprise | PDL BIOPHARMA Quote

Zacks Rank & Key Picks

PDL BioPharma currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) and Cambrex Corp. (CBM - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 33.1%. Its share price has increased 9.4% year to date.

Cambrex’s earnings estimates have increased from $2.46 to $2.60 for 2016 and for 2017 estimates remained unchanged over the last 60 days. The company has posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.8%.

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