- Merrill Lynchs notes Third Point LLC recently bought a 9% stake in PDL Biopharma (NASDAQ:PDLI) and, based on SEC filings, voiced concern over PDL's corporate and R&D spending. Third Point is seeking to place 4 directors on PDL's board and to bring in consultants to analyze spending. This may be just the opening salvo, but in firm's view, PDLI stock is undervalued precisely because they expect the company to make significant efforts to improve R&D yield either internally or through deals. With pipeline expectations emerging from a low point, any positive news will likely boost the stock.
Despite robust revenues and significant R&D investment, PDL has never launched a product from its pipeline. However, MLCO believes that the new chief medical officer and management are taking a hard look at the pipeline and that everything is on the table in terms of asset allocation and potential deals.
In any event, with a robust and diverse revenue stream and a refocused R&D effort, the firm believes the stock is undervalued. We expect significant pipeline and collaborative activity that ideally will yield commercial products sooner rather than later to contribute to the company's Vision 2010 goal of $1bn in revenue. Maintains Buy.
Notablecalls: Expect to see some buy interest following the call.
Despite robust revenues and significant R&D investment, PDL has never launched a product from its pipeline. However, MLCO believes that the new chief medical officer and management are taking a hard look at the pipeline and that everything is on the table in terms of asset allocation and potential deals.
In any event, with a robust and diverse revenue stream and a refocused R&D effort, the firm believes the stock is undervalued. We expect significant pipeline and collaborative activity that ideally will yield commercial products sooner rather than later to contribute to the company's Vision 2010 goal of $1bn in revenue. Maintains Buy.
Notablecalls: Expect to see some buy interest following the call.
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