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Why Is PDL BioPharma (PDLI) Up 4.6% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for PDL BioPharma (PDLI). Shares have added about 4.6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PDL BioPharma due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

PDL BioPharmaMisses on Q4 Earnings, To Dissolve by Year-End

PDL BioPharma reported earnings of 3 cents per share (including the impact of stock-based compensation expense) in the fourth quarter of 2019, missing the Zacks Consensus Estimate of 5 cents. The bottom line was also lower than the year-ago earnings of 10 cents.

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The company reported total revenues of a negative $5.8 million in the quarter against the positive $46 million generated in the prior year. The negative revenues were due to a change in the fair value of royalty rights.

PDL announced a plan to dissolve the company by the end of 2020.

Quarter in Detail

Product revenues in the quarter were $21 million, down 19.3% year over year. The same included $12.4 million from the sales of Noden products, namely Tekturna and Tekturna HCT, and another $8.5 million from the sales of LENSAR laser system in the United States.

Notably, revenues from LENSARlaser system increased 19% year over year and also 4.9% sequentially. Additionally, in the fourth quarter, LENSAR procedure volume surged 41% year over year.

During the fourth quarter, PDL recognized negative revenues of $26.8 million from royalty rights against the positive $19.1 million revenues reported in the prior-year period.

As of Dec 31, 2019, PDL had cash, cash equivalents, marketable securities worth $193.5 million compared with $294.3 million as of Sep 30, 2019.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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