UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): June 15, 2010
PDL
BioPharma, Inc.
(Exact
name of Company as specified in its charter)
000-19756
(Commission
File Number)
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Delaware
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94-3023969
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(State
or Other Jurisdiction of
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(I.R.S.
Employer Identification No.)
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Incorporation)
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932
Southwood Boulevard
Incline
Village, Nevada 89451
(Address
of principal executive offices, with zip code)
(775)
832-8500
(Company’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Company under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
7.01 Regulation FD Disclosure.
Press
Release
On June
15, 2010, PDL BioPharma, Inc. (the “Company”) issued a press release with
revenue guidance for the quarter ending June 30, 2010. A copy of the
press release is attached hereto as Exhibit 99.1.
Analyst
Information Sheet
On June
15, 2010, the Company distributed to analysts covering or interested in covering
the Company’s securities a summary of certain information regarding the
Company’s royalties, potential royalties and foreign currency hedging contracts
(the “Information Sheet”) to assist those analysts in valuing the Company’s
securities. A copy of the Information Sheet is attached hereto as
Exhibit 99.2.
Limitation
of Incorporation by Reference
In
accordance with General Instruction B.2. of Form 8-K, the information in this
report, including the exhibits, is furnished pursuant to Item 7.01 and shall not
be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that
section. This Current Report will not be deemed an admission as to the
materiality of any information in the report that is required to be disclosed
solely by Regulation FD.
Cautionary
Statements
This
filing, the press release and the Information Sheet include “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we can give no assurance that such expectations will
prove to be correct. Important factors that could impair the Company’s royalty
assets or business are disclosed in the “Risk Factors” contained in the
Company’s 2009 Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 1, 2010. All forward-looking statements are expressly
qualified in their entirety by such factors. We do not undertake any duty to
update any forward-looking statement except as required by law.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
Release, dated June 15, 2010, regarding second quarter revenue
guidance
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99.2
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Information
Sheet, dated June 15, 2010, regarding royalties, potential royalties and
foreign currency hedging
contracts
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| PDL BIOPHARMA, INC. | |||
| (Company) | |||
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|
By:
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/s/ Christine R. Larson | |
| Christine R. Larson | |||
| Vice President and Chief Financial Officer | |||
Dated: June
15, 2010
EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
Release, dated June 15, 2010, regarding second quarter revenue
guidance
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99.2
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Information
Sheet, dated June 15, 2010, regarding royalties, potential royalties and
foreign currency hedging
contracts
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Contacts:
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Cris
Larson
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Jennifer
Williams
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PDL
BioPharma, Inc.
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Cook
Williams Communications
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775-832-8505
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360-668-3701
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Cris.Larson@pdl.com
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jennifer@cwcomm.org
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PDL
BioPharma Provides Second Quarter 2010 Revenue Guidance of Approximately $120
Million
INCLINE
VILLAGE, NV, June 15, 2010 –
PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today announced revenue guidance
for the second quarter ended June 30, 2010 of approximately $120 million, as
compared with actual results of $125.9 million for the second quarter of
2009. Included in second quarter 2010 guidance is $1.5 million earned
on Eurodollar foreign currency hedging contracts that the Company initiated in
January 2010. Included in actual results for the second quarter 2009
and not included in second quarter 2010 guidance are the second of two $12.5
million installment payments from Alexion and royalties of $18.9 million for
sales of Synagis®. The Company does not anticipate receiving
royalties for Synagis sales in the second quarter of 2010 due to the ongoing
legal dispute with MedImmune.
Excluding
royalties for Synagis, second quarter royalty revenue guidance increased by more
than 25 percent in 2010 when compared to actual royalty revenue for the second
quarter of 2009. The growth is primarily driven by increased first
quarter 2010 sales of Avastin®, Herceptin®, Lucentis® and Tysabri® for which PDL
receives royalties in the second quarter of 2010.
Sales of
Avastin, Herceptin, Xolair and Lucentis are subject to a tiered royalty rate for
product that is made or sold in the United States and a flat royalty rate of
three percent for product that is manufactured and sold outside of the United
States. The net sales thresholds and the applicable royalty rates for
product that is made or sold in the United States are outlined below:
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Royalty Rate
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Net
sales up to $1.5 billion
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3.0%
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Net
sales between $1.5 billion and $2.5 billion
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2.5%
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Net
sales between $2.5 billion and $4.0 billion
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2.0%
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Net
sales exceeding $4.0 billion
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1.0%
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Reported
sales of Avastin and Herceptin increased 23 percent and 19 percent,
respectively, when compared to the same period for the prior year. Also
contributing to increased Avastin and Herceptin royalties are product sales that
are manufactured and sold outside the United States. As a percent of
total Herceptin sales, ex-U.S. manufactured and sold Herceptin increased to 47
percent from 30 percent for the same period in the prior year. Ex-U.S.
manufactured and sold Avastin sales represented 27 percent of total Avastin
sales; there were no sales of ex-U.S. manufactured Avastin prior to the fourth
quarter of 2009.
Following
are total ex-US sales by quarter for Avastin and Herceptin based on the quarter
in which the Company receives the royalty as well as that portion of ex-US sales
that are manufactured outside of the United States.
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Reported
sales of Lucentis increased 49 percent when compared to the same period for the
prior year. The growth was primarily driven by ex-U.S. sales of
Lucentis, which is approved in more than 80 countries worldwide. At
present, Lucentis is made in the United States but Roche has announced that it
intends to make Lucentis at a new E. coli plant in Singapore which may be
operational by the end of 2010.
Reported
sales of Tysabri increased 25 percent when compared to the same period for the
prior year. Elan recently reported that at the end of March 2010,
approximately 50,300 patients were on therapy worldwide representing an increase
of 26 percent over the approximately 40,000 patients who were on the therapy at
the end of March 2009. Tysabri royalties are determined at a flat
rate as a percent of sales regardless of location of manufacture or
sale.
The sales
information presented above is based on information provided by PDL’s licensees
in their quarterly reports to the Company.
About
PDL BioPharma
PDL
pioneered the humanization of monoclonal antibodies and, by doing so, enabled
the discovery of a new generation of targeted treatments for cancer and
immunologic diseases. PDL is focused on maximizing the value of its antibody
humanization patents and related assets. The Company receives royalties on sales
of a number of humanized antibody products marketed today based on patents which
expire in late 2014. For more information, please visit
www.pdl.com.
NOTE: PDL
BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma,
Inc.
Forward-looking
Statements
This
press release contains forward-looking statements. Each of these forward-looking
statements involves risks and uncertainties. Actual results may differ
materially from those, express or implied, in these forward-looking statements.
Factors that may cause differences between current expectations and actual
results include, but are not limited to, the following:
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--
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The
expected rate of growth in royalty-bearing product sales by PDL's existing
licensees;
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--
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The
relative mix of royalty-bearing Genentech products manufactured and sold
outside the U.S. versus manufactured or sold in the
U.S.;
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--
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The
ability of our licensees to receive regulatory approvals to market and
launch new royalty-bearing products and whether such products, if
launched, will be commercially
successful;
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--
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Changes
in any of the other assumptions on which PDL's projected royalty revenues
are based;
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--
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The
outcome of pending litigation or disputes;
and
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--
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The
failure of licensees to comply with existing license agreements, including
any failure to pay royalties due.
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Other
factors that may cause PDL's actual results to differ materially from those
expressed or implied in the forward-looking statements in this press release are
discussed in PDL's filings with the SEC, including the "Risk Factors" sections
of its annual and quarterly reports filed with the SEC. Copies of PDL's filings
with the SEC may be obtained at the "Investors" section of PDL's website at
www.pdl.com. PDL expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in PDL's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based for any reason, except as required by law, even as new information becomes
available or other events occur in the future. All forward-looking statements in
this press release are qualified in their entirety by this cautionary
statement.
PDL
BioPharma, Inc.
2Q2010
June 15,
2010
The
following document was compiled from public press releases, SEC filings, medical
meeting abstracts and recent articles for your convenience. This
document, together with the press release issued today, provides information
regarding PDL’s royalty income for the second quarter of 2010.
Sales
of Lucentis®
(ranibizumab)
PDL
receives royalty revenue one quarter trailing revenue reported by its
licensees.
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·
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Reported
1Q10 US Sales (Roche/Genentech): 327 million Swiss francs1
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o
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Growth
of 27% over 1Q09 due to an increased number of patients using Lucentis to
treat age-related macular degeneration
(AMD).
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o
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In
March 2010, FDA confirmed Genentech’s sBLA for Lucentis in the treatment
of macular edema following retinal vein occlusion was designated for
priority review, with June 22, 2010 as the action
date.
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·
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Reported
1Q10 Int’l Sales (Novartis): $364 million2
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o
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Growth
of 59% over 1Q09; strong growth, particularly in France, the United
Kingdom, Australia and Japan, where it was launched in early
2009.
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o
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Regulatory
submission for “wet” AMD accepted in China in April 2010; regulatory
submission filed in Europe for the treatment of visual impairment due to
diabetic macular edema in December
2009.
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Ex-US
Manufacturing Trends: Lucentis and Avastin®
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·
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All
Genentech products manufactured and sold outside the United States result
in royalties to PDL of 3%, regardless of sales levels as compared with the
tiered royalty rate paid for Genentech products made or sold in the United
States.
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·
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In
March 2007, Genentech announced a land-lease agreement in Singapore for
the construction and development of a 1,000-liter bacterial manufacturing
facility which will be dedicated to the bulk drug production of Lucentis.
In August 2009, Genentech exercised its option to purchase Lonza’s
mammalian cell biologic manufacturing facility in Singapore. The facility
was merged with Genentech's existing bacterial production facility to form
one site, and in November 2009 the campus was opened under the name Roche
Singapore Technical Operations as part of the integration between Roche's
and Genentech's combined technical operations.3 The plant is expected to be
operational by 2010.4
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·
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In
November 2006, Genentech and Lonza entered into a supply agreement for the
manufacture of Avastin at Lonza's 80,000-liter facility currently under
construction in Singapore, with FDA licensure expected in 2010.5
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·
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Beginning
in the Q409, Roche began selling Avastin that was made outside of the
United States with the percentage increasing from 5% of total Avastin
sales in the Q409 to 27% in the
Q110.
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Trastuzumab-DM1
(T-DM1)
Genentech
is developing trastuzumab-DM1 (T-DM1), a novel, antibody-drug conjugate in
development for HER2-positive advanced breast cancer, in collaboration with
Roche and Immunogen, Inc.
|
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·
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According
to analyst estimates, T-DM1 could reach peak sales of 2 to 5 billion Swiss
francs and T-DM1 could win regulatory approval as early as 2011.6
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·
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Genentech
plans to submit a US marketing application in 2010 for T–DM1 (RG3502) for
patients with advanced metastatic HER2-positive breast cancer.i
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·
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At
the Annual Meeting of the American Society of Clinical Oncology in June
2010, data was reported from a Phase 1b/2 trial using T-DM1, in
combination with pertuzumab, a HER dimerization inhibitor, in previously
treated women with advanced HER2-positive breast cancer. Preliminary
efficacy data included an objective response rate of 35.7% (10/28)
patients; stable disease was reported for 46.4% (13/28) patients,
including two patients with unconfirmed responses.7,8
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·
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Selected
ongoing clinical studies
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o
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Genentech
and Roche initiated a Phase 3 study evaluating T-DM1 in women with
advanced HER2-positive breast cancer whose disease has progressed after
receiving initial treatment.
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o
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Phase
2 and Phase 3 clinical trials in patients with locally advanced or
metastatic HER2-positive breast cancer who have progressed on a
chemotherapy regimen containing
Herceptin®.
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Foreign
Currency Hedging Contracts
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·
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In
January 2010, PDL BioPharma entered into a series of Eurodollar foreign
currency exchange forward contracts and Eurodollar foreign currency
exchange option contracts covering eight quarters in which PDL’s
licensees’ Eurodollar sales occur for the two years ended December
2011.
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·
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Gains
or losses on cash flow hedges are recognized as revenue in the same period
that the hedged transactions (royalty revenue) impacts
earnings.
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As of
March 31, 2010, the fair value of PDL’s foreign currency hedging contracts
totaled $9.8 million of which $4.1 million was included in other current assets
and $5.7 million was included other non-current assets. As of March, 31, 2010,
the unrealized gain on the effective component of PDL’s foreign currency
contracts included in other comprehensive income, net of estimated taxes, was
$6.4 million. There was no ineffective component of PDL’s foreign currency hedge
contracts during the three months ended March 31, 2010.
Forward-looking
Statements
This
document contains forward-looking statements. Each of these forward-looking
statements involves risks and uncertainties. Actual results may differ
materially from those, express or implied, in these forward-looking statements.
Factors that may cause differences between current expectations and actual
results include, but are not limited to, the following:
-- The
expected rate of growth in royalty-bearing product sales by PDL's existing
licensees;
-- The
relative mix of royalty-bearing Genentech products manufactured and sold outside
the U.S. versus manufactured or sold in the U.S.;
-- The
ability of our licensees to receive regulatory approvals to market and launch
new royalty-bearing products and whether such products, if launched, will be
commercially successful;
-- Changes
in any of the other assumptions on which PDL's projected royalty revenues are
based;
-- The
outcome of pending litigation or disputes;
-- The
change in foreign currency exchange rate; and
-- The
failure of licensees to comply with existing license agreements, including any
failure to pay royalties due.
Other
factors that may cause PDL's actual results to differ materially from those
expressed or implied in the forward-looking statements in this document are
discussed in PDL's filings with the SEC, including the "Risk Factors" sections
of its annual and quarterly reports filed with the SEC. Copies of PDL's filings
with the SEC may be obtained at the "Investors" section of PDL's website at
www.pdl.com. PDL expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in PDL's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based for any reason, except as required by law, even as new information becomes
available or other events occur in the future. All forward-looking statements in
this press release are qualified in their entirety by this cautionary
statement.
8
Immunogen, Inc. (June 5, 2010). “Immunogen Announces Promising Data for
Trastuzumab-DM1 at ASCO Annual Meeting”. Press release.