PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today reported financial results for the fourth quarter and full year ended December 31, 2012.
Total revenues in 2012 were $374.5 million, compared to $362.0 million in 2011, with royalty revenues increasing seven percent over full year 2011. For the fourth quarter of 2012, total revenues were $86.0 million, compared to $72.8 million in the fourth quarter of 2011.
Royalty revenues for the fourth quarter of 2012 are based on third quarter product sales by PDL's licensees. The fourth quarter 2012 revenue growth was primarily driven by increased royalties from third quarter 2012 sales of Herceptin® and Avastin®, which are marketed by Genentech and Roche. Royalty revenue for the fourth quarter and 2012 are net of payments made under our February 2011 settlement agreement with Novartis Pharma AG.
Operating expenses in 2012 were $25.5 million, compared with $18.3 million in 2011. For the fourth quarter of 2012, general and administrative expenses were $7.7 million compared with $4.8 million for the same period of 2011.
Net income in 2012 was $211.7 million, or $1.45 per diluted share as compared with net income of $199.4 million in 2011 or $1.15 per diluted share. Net income for the fourth quarter of 2012 was $49.4 million or $0.34 per diluted share as compared with net income of $38.9 million or $0.24 per diluted share for the same period of 2011.
Net cash provided by operating activities in 2012 was $210.2 million, compared with $169.8 million in 2011. At December 31, 2012, PDL had cash, cash equivalents and investments of $148.7 million, compared with $227.9 million at December 31, 2011. The reduction in cash relates primarily to the Company's income generating asset transactions, repayment of the Company's non-recourse notes and dividend payments.
Recent Developments
Kadcyla™ or T-DM1, a New Royalty-Bearing Product of PDL
On February 22, 2013, Genentech announced that the U.S. Food and Drug Administration (FDA) approved Trastuzumab emstansine (T-DM1), now named Kadcyla. Kadcyla was approved for second line treatment of HER2+ metastatic breast cancer and first line treatment for those patients who relapse within six months following adjuvant therapy. Roche has submitted a Marketing Authorization Application to the European Medicines Agency (EMA) for the same indication. Kadcyla is a licensed product of Genentech and has been priced at $9800 per month. PDL expects to receive royalties on sales of Kadcyla in the quarter following the first quarter of sales in accordance with Genentech's license agreements with PDL.
Avastin, a Royalty-Bearing Product of PDL
In October, Genentech and Roche announced that the European Commission approved Avastin in combination with standard chemotherapy (carboplatin and gemcitabine) as a treatment for women with first recurrence of platinum-sensitive ovarian cancer. In November, the European Medicines Agency adopted a positive opinion regarding the use of Avastin in second-line metastatic colorectal cancer. Also in November, additional details were announced regarding Phase 3 patients with newly diagnosed glioblastoma, who were treated with Avastin plus radiation and chemotherapy, which showed an increase in progression-free survival of 36 percent when compared to radiation and chemotherapy.
Obinutuzumab, a Potential Royalty-Bearing Product of PDL
In January, Genentech announced Phase 3 results from an obinutuzumab (GA101) trial showing a significant improvement in progression-free survival in people with chronic lymphocytic leukemia (CLL). Data from this trial will be submitted to European regulatory authorities and to the U.S. Food and Drug Administration (FDA) for potential approval.
2013 Dividends
On January 30, 2013, PDL's Board of Directors declared regular quarterly dividends of $0.15 per share of common stock, payable on March 12, June 12, September 12 and December 12 of 2013 to all stockholders who own shares of PDL on March 5, June 5, September 5 and December 5 of 2013, the record dates for each of the dividend payments, respectively.
Revenue Guidance for 2013
As previously announced, PDL will continue to provide revenue guidance for each quarter in the third month of that quarter. First quarter 2013 revenue guidance will be provided in early March.
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