PDL BioPharma offering upcoming dividend

PDL BioPharma, Inc.(NASDAQ: PDLI) is one for those interested in trading stocks with upcoming dividends. As we told our subscribers yesterday, this biotech is offering investors a $0.50 per share dividend in the coming weeks.

PDLI is a company many might not have heard of, but the drugs covered under their pioneering antibody humanization patents and related assets are sure to ring a bell: Herceptin® (trastuzumab), Xolair® (omalizumab), Avastin® (bevacizumab), and Lucentis® (ranibizumab injection). They also will receive royalties on a number of future potential products, like T-DM1 and Bapineuzumab.

In a recent press release, the company “reaffirmed its previously announced dividend of $0.50 per share to be paid on October 1, 2010 to all stockholders of record on September 15, 2010.” (It is important to note that the Ex-dividend date is 9/13/2010.) Now that is some serious cash for any investor to pass up.
Additionally, this trade has even more value ever since Genetech sent them a letter “asserting that Avastin®, Herceptin®, Lucentis® and Xolair® (the Genentech Products) do not infringe supplementary protection certificates (SPCs) granted by various countries in Europe”. This sent shares down roughly 20%, even though the letter “neither addressed the issue of royalty payments nor challenged the validity of its patents.” Sounds like Roche and PDLI need to sit down and have a chat. As they stated, “Royalties on sales of the Genentech Products that are made and sold outside the United States accounted for approximately 30 percent of PDL's revenue in the first half of 2010.” Hence, this is a big deal to company who makes all their money off of royalties.

PDLI is currently full of cash, but with some long-term debt that I am sure they can pay off given their total revenue in the second quarter of 2010 was $120.3 million. They will be providing revenue guidance for the third quarter of 2010 in early September. Here is a link to their most recent presentation. I am sure once some guidance is given on the Genetech matters, the stock will return to the $6-6.50 range, until then, enjoy the dividend.


Disclosure: No positions

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