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PDL BioPharma (PDLI) Q1 Earnings Top Mark, Revenues Rise Y/Y

Zacks Equity Research

PDL BioPharma, Inc. PDLI delivered earnings of 9 cents per share in the first quarter of 2019, beating the Zacks Consensus Estimate of 8 cents. Meanwhile, the bottom line matched the 9 cents reported in the year-ago period.

The company’s total revenues grossed $38.9 million in the first quarter, reflecting a 1% increase year over year. This upside is mainly attributable to higher product sales and royalty rights.

Shares of PDL have rallied 13.4% so far this year, outperforming the industry’s increase of 3.4%.

Quarter in Detail

Product revenues in the quarter under review were $26.7 million, up 14.2% year over year. The same included $20 million from the sales of Noden products — Tekturna and Tekturna HCT — and another $6.7 million from the sales of LENSAR laser system in the United States.

PDL recognized $12.3 million in revenues from royalty rights while royalties from PDL's licensees to the Queen et al. patents were less than $0.1 million. Meanwhile, the company did not register any interest revenues in the reported quarter.

Royalty revenues from the Queen et al. licenses were significantly lower than the year-ago period, mainly due to weak product supplies of Biogen’s BIIB multiple sclerosis drug, Tysabri.

On first-quarter conference call, the company stated that it does not expect to report any meaningful Tysabri royalty revenues in the future quarters of 2019.

Other Updates

PDL repurchased 13.1 million shares worth $44.4 million in the quarter. Last September, the company’s board of directors approved a new buyback program of $100 million. Since its initiation, PDL has successfully bought back 15.9 million shares.

In March, the authorized generic version of Tekturna (150 mg/300 mg tablets) was launched in the United States. The unveiling activities were carried out by the privately held pharmaceutical company, Prasco, LLC.

In April this year, PDL invested $30 million in Evofem Biosciences, Inc. EVFM as the first tranche of a planned $60-million transaction. During the first-quarter earnings call, management stated that if PDL exercises its right and completes the full transaction, it will own approximately 30% of Evofem's equity capital.

Evofem is a biopharmaceutical company, which develops products for women's sexual and reproductive health. It's lead investigational drug product, Amphora, is an on-demand, non-hormonal gel contraceptive for women.

PDL BioPharma, Inc. Price, Consensus and EPS Surprise

PDL BioPharma, Inc. Price, Consensus and EPS Surprise

PDL BioPharma, Inc. price-consensus-eps-surprise-chart | PDL BioPharma, Inc. Quote

Zacks Rank & Other Stock to Consider

PDL currently carries a Zacks Rank #2 (Buy). Another top-ranked stock in the healthcare sector is Gilead Sciences, Inc. GILD, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings estimates have been revised 3.8% upward for 2019 and 1.6% for 2020 over the past 60 days. The stock has risen 5.7% year to date.

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