PDL BioPharma, Inc. (PDLI)

The company has made great strides in moving up the ladder from a pure play royalty model to one, which derives its income from drug development and commercialization. This change is clearly visible in its financial statements, which is showing an increased bias towards product revenue compared to royalty revenue a few months ago.





Driving this change is the company’s hugely successful drug Cardene IV, an oral drug for short-term treatment of hypertension. Revenue contribution from this drug jumped 40 percent during the first quarter of 2007 compared to the same period of 2006. With opportunities in the fields of neurology, cardiology and other acute hypertension applications and with presence in over 1800 hospitals throughout the U.S, the revenue from Cardene IV looks promising. The share of Cardene IV in the total product sales of the company is close to 70 percent and thus, any increase in Cardene revenue will directly jack up the product sales.





Royalty segment, which still constitute a sizable chunk of revenues, is expected to see growth as its fortunes are tied with product sales. Although there will be quarterly fluctuations from this segment, overall the result will be a net gain.





On the research front, the firm has a strong product pipeline with seven major programs of which five are in clinical development and two in product manufacturing moving towards clinical progress. Of the clinical trials the Nuvions program got onto its phase III trials while the data from daclizumab drug trials has been promising.





Thus the company has been exhibiting all signs of a scrip that looks set to scale new heights and will continue its course without any major hiccups like it has been doing for the past few months.