PDL shares plunge 32% as firm ends sale process

Shares in PDL BioPharma plunged 32%, after the US biotechnology firm decided to take itself off the market (Marketletters passim). Although the stock staged a partial recovery the following trading session, with a 5% rise to $11.25, on the day of the news, March 5, the firm's stock price nose-dived to a four-year low of $10.36.

The company now plans to remain independent and focus on the discovery and development of new antibody drugs for cancer and immunologic diseases. In pursuing this path, PDL says it will substantially reduce its expenses and implement a significant workforce reduction. The firm will also distribute to stockholders at least $500.0 million of the initial proceeds from previously-announced commercial, cardiovascular and manufacturing asset sales transactions. As part of its reorganization, the firm plans to continue to evaluate several structures to distribute to its stockholders 50% or more of the value of its future antibody humanization royalties from currently-marketed licensed products, net of any applicable corporate-level taxes, as well as re-start a process led by the board to search for a new chief executive. Interim CEO, Patrick Gage, will continue to serve as interim chief during the process.

"During our thorough strategic review process, we entered into agreements for the sale of our manufacturing, commercial and cardiovascular assets for a total of over $525.0 million in cash, up to $85.0 million in potential future milestone payments, as well as potential future royalties," said Karen Dawes, chairperson of PDL's board of directors. "Although we garnered interest regarding certain of our pipeline programs, we did not receive a firm offer for the company as a whole or for our biotech R&D assets. We believe that the completion of and planned distribution of proceeds from our strategic transactions, our expense reduction efforts, and our renewed focus on antibody discovery and development not only will maximize stockholder value, but also will enhance the opportunity for attractive partnering transactions in the future," she added.