NEW YORK—Shares of biotechnology company PDL BioPharma Inc. fell Tuesday after the company said it would sell its cardiovascular drugs for less than Wall Street anticipated.
The stock fell 85 cents, or 5.6 percent, to close at $14.23. Shares have traded between $14.04 and $27.98 over the last 52 weeks.
Late Monday, the company said it will sell the hypertension drug Cardene, the heart attack drug Retavase and drug candidate ularitide to EKR Therapeutics Inc. for $85 million upfront. The company could also see up to an additional $85 million in development and sales milestone payments for new Cardene formulations.
The sale is a continuation of a previously announced restructuring plan. The company already sold rights to its chemotherapy drug IV Busulfex to Japan's Otsuka Pharmaceutical Co. for $200 million in cash.
Analysts considered the price of the heart drug franchise too low, but said the sale makes the company more attractive as a buyout target.
"Because we had valued ularitide and PDL's commercial assets to be worth $433 million, we are mildly disappointed by the price at which PDL has divested these assets," said BMO Capital Markets analyst Jason Zhang, reaffirming a "Market Perform" rating.
He lowered his price target to $18 from $22, citing an unenthusiastic outlook for the company's development pipeline.
"For companies that want to break into the biologics field, we believe PDL is now more attractive as a potential acquisition," he said.
Wachovia Capital Markets analyst George Farmer reaffirmed a "Outperform" rating, calling the sale price "paltry" but adding it is the final step in getting rid of burdensome assets.
"From our perspective, all that now meaningfully remains of PDL is a cash-generating engine fed by a steady royalty stream from $7.9 billion in estimated 2008 sales of humanized biologics, a brand new biologics manufacturing plant ready to be fired up, $200 million in estimated net cash, and about $685 million of estimated net operating losses," he said in a note to investors.
He gave the stock a valuation range of $19 to $20.
Meanwhile, Pacific Growth Equities analyst Kimberly Lee reaffirmed a "Neutral" rating and value of $24 per share.
