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PDL BioPharma, Inc. Message Board

  • gaolthegop gaolthegop May 14, 2014 10:18 AM Flag

    when are some of the royalties scheduled to run out?

     

    curious in the event I want to buy this....looks too good to be true ...but if the royalties have some long shelf life It could be a good one to hold

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    • The Queen royalties, which represent the bulk of the company's revenue, expire at the end of 2015 as a result of a recent settlement agreement with Genentech. The company has made a number of acquisitions that will produce interest or royalties, but will not come close to replacing the $400 million or more per annum that the Queen patents produce.

      In order to fund these acquisitions while maintaining the dividend, the company has issued convertible bonds. It is highly unlikely that the company will be able to maintain the dividend after the Queen royalties expire, hence the reason for a valuation that looks low on the basis of p/e and dividend yield. On the basis of anticipated cash flow from the remaining life of the Queen royalties and the value of recent acquisitions, I would argue that the company is worth about $5 per share.

 
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