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Biotech / Medical : Protein Design Labs (PDLI): Stock strong -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (376)	8/29/2007 6:22:10 AM
From: rkrw	Read Replies (2) \| Respond to of 407

They did the same thing with lgnd, pushed for asset sales, got their special dividend then blew out of the stock as fast as they could.

To: tuck who wrote (376)	8/29/2007 7:19:20 AM
From: tom pope	Respond to of 407

Not an encouraging message to give anybody contemplating the job. OTOH Merrill doesn't find it weird: Plans to divest products & ularitide to focus on antibodies PDL BioPharma announced plans to divest its marketed products (Cardene, Retavase, IV Busulfex) and pipeline candidate ularitide in order to focus on developing antibodies for cancer and immunological diseases, which it considers its core competency. Separately, it also announced the termination of the Nuvion phase III program in ulcerative colitis after a DMC review showed no efficacy. We lowered our P.O. to $27 from $30 on the Nuvion news but maintain our Buy rating and expect more announcements ahead as the strategic review continues. Expects divestiture of commercial assets by YE07/early08 PDL expects to complete one or more transactions by YE07/early08 to divest the products and ularitide but gave no specifics on potential buyers or the financial impact of a sale other than to disregard prior guidance, expect a hit to near term earnings, a work force reduction, and proceeds to be offset by NOLs. PDL expects to provide updates on its 3Q call in Oct. and an R&D day in Nov. 16. Anticipating more strategic announcements With the CEO planning to resign, we believe the planned sale of commercial assets is just the beginning as PDL works to streamline the company down to core assets (humanized antibody technology platform and royalties, oncology/immunology pipeline, manufacturing capability) in preparation for a new CEO and a new direction, or possibly for outright sale of the company. When smoke clears, stock is undervalued, maintain Buy Whether PDL hires a new CEO to run a refocused company, sells off additional assets (e.g. royalties) or is acquired remains to be seen, but in any event we believe the stock is undervalued based on our sum-of-the-parts NPV model.