PDL BioPharma, Inc. (NASDAQ:PDLI)

CAPS Rating: 3 out of 5

A biopharmaceutical company focused on discovering, developing and commercializing innovative therapies for severe or life-threatening illnesses.

Recs

2
Player Avatar tutaemeia (88.68) Submitted: 12/20/2008 1:57:02 PM : Underperform Start Price: $4.02 PDLI Score: +2.13

No way this guys will have good times soon. The fundamentals talk by themselves:Who will by a company with a P/B of 16x, have a ROE in the last 5y of -11, a P/S of 3,63x? Maybe you are looking for the 62,87% of Dividend Yield (Trailing 12mo.). But remember, with a company do not have profits, will not distribute dividends. And that is waht will happen to PDLI during 2009: no profits, no money, no DVD. The next year, the administration of PDLI will pass all the year digging lots and lots of debts and not decreasing the ratio debt/equity = 105,50%.That's why i am shorting this stock for a several months....

Member Avatar typeiisupernova (39.23) Submitted: 12/22/2008 2:20:52 PM
Recs: 4

I just want to help you understand this company. PDLI just spun off Facet biotech to shareholders. Facet will retain the ongoing biotech research/development and products in clinical trials. They will have over $400 million to fund operations for the next 3 years or so. Biotech is boom or bust with individual products, as you know. The royalty stream will be retained under the ticker PDLI. This should be close to $300million/year initially. The Queen patents expire in 5 or 6 years, so whatever royalties this company can collect over that time period should mostly go to shareholders either as dividends or by the company selling the royalty stream to an aquirer. These royalties should grow over this time period as the products that use PDLI patented technology grow or increase in worldwide sales. Costs for the company are minimal; no R&D or product expenses/mostly bare bones administrative with minimal amount of employees. This royalty stream should be worth several dollars a share per year and increase some until patent expiration. My estimate is $15-18 per share total over 5-6 years. What is that worth to you after the company is taxed and you discount out the cash flow? As far as the ongoing Facet biotech business, it could be worth nothing or quite a bit depending on the success of the pipeline. Any marketable product would be years away. Add the two together and what do you get? I am long PDLI and thinking of selling Facet . Wish I would have done it already.

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