PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today announced royalty revenue guidance for the first quarter ending March 31, 2013, of approximately $92 million, as compared with actual royalty revenue of $77 million for the first quarter of 2012, a 19 percent increase.
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The forecasted growth in royalty revenues is driven by increased fourth quarter 2012 sales for all licensed products for which PDL receives royalties in the first quarter of 2013. Sales of Avastin^®, Herceptin^®, Lucentis^®, Xolair^® and Perjeta^™ (the Genentech Products) 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 (ex-US manufactured and sold). The net sales thresholds and the applicable royalty rates for the Genentech Products are outlined below: Genentech Products Made or Sold in US Royalty Rate Net sales up to $1.5 billion 3.0% Net sales between $1.5 billion and up to $2.5 billion 2.5% Net sales between $2.5 billion and up to $4.0 billion 2.0% Net sales exceeding $4.0 billion 1.0% Genentech Products Made and Sold ex-US Net sales 3.0%
The first quarter royalty payment received from Genentech included royalties based on worldwide sales.
Revenue guidance for the first quarter of 2013 is net of an estimated payment due under our February 2011 settlement agreement with Novartis AG (Novartis). PDL pays to Novartis certain amounts based on net sales of Lucentis, made by Novartis, during calendar year 2011 and beyond. The amount paid is less than we receive in royalties on such sales.
Reported worldwide sales for Avastin sales increased 10 percent in the fourth quarter of 2012 when compared to the same period in 2011. Ex-U.S. manufactured and sold Avastin sales represented 50 percent of total Avastin sales in the fourth quarter of 2012 as compared with 27 percent in the fourth quarter of 2011. Reported worldwide sales for Herceptin increased 11 percent in the fourth quarter of 2012 when compared to the same period in 2011. Ex-U.S. manufactured and sold Herceptin sales represented 41 percent of total Herceptin sales in the fourth quarter of 2012 as compared with 35 percent in the fourth quarter of 2011. Reported worldwide sales for Lucentis increased 12 percent in the fourth quarter of 2012 when compared to the same period in 2011. All sales of Lucentis were from inventory produced in the United States. Reported worldwide sales for Tysabri increased 16 percent for the fourth quarter of 2012 compared to the same period in 2011. Tysabri royalties are determined at a flat rate as a percentage 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 as well as from public disclosures made by PDL’s licensees.
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