Jon - PDLI from Merrill, 7/28 (buy):
Gauging data points for sales, royalties and licensing revs
PDL reports Aug. 3 and in gauging potential results on the revenue side, NDC
data is pointing to in-line product sales, while royalties should meet or beat
estimates based on 1Q antibody sales. Licensing is less predictable, although
BiogenIDEC is spending in its collaboration with PDL. We are looking for 2Q EPS,
ex-options of $0.06, with consensus at $0.09. We like PDL for its three diverse
buckets of revenue (products, royalties, and licensing) and we believe the stock
has been the “baby thrown out with the bath water” in a weak biotech tape. We
reiterate our Buy rating as we believe PDLI is trading at compelling levels.
NDC monthly data for products tracking in-line
NDC institutional monthly sales data for PDL’s products in 2Q are tracking in-line
with our total estimate of $39mn, with Cardene IV modestly ahead of our $28mn
estimate and Retavase modestly below our estimate of $6mn for net sales.
Royalties should meet or beat estimates
We estimate 2Q royalties at $51mn based on partners’ 1Q antibody sales that
collectively totaled about $1.8bn. Results will reflect the seasonally strong 1Q
sales of MEDI’s Synagis.
Licensing revenue less predictable but BIIB is spending
PDL’s licensing revenue comes in large part from BiogenIDEC and Roche and
are less predictable. BIIB commented on its 2Q call that it expects to spend about
$50mn on its collaboration with PDL in ‘06, though we have no specifics on
payments in 2Q. We estimate licensing revenue of $13 mn in 2Q and $60mn for
‘06. Guidance is for $55-65 mn in ‘06 with $40mn from BIIB and Roche. |
