PDL Biopharma fears Third Point

March 5th, 2007		\| More
On March 5th of 2007 Third Point, LLC, an activist hedge fund purchased 8.6 million shares in PDL BioPharma. PDL BioPharma is a biopharmaceutical company that engages in the discovery and development of antibodies for oncology and immunologic diseases. In a 13-D letter to PDL, Third Point founder Daniel Loeb, called for PDL to implement a cost cutting plan in order to increase shareholder value by selling its ESP Pharma assets to a specialty pharmaceutical company and focus the company on its core strength of biotechnology product development. Mr. Loeb also suggested that the company should consider selling itself as a whole or in parts. The letter outlined how the company had "squandered cash on needless acquisitions and undisciplined R&D spending, depressing its stock price." [The letter went on to say that the company did have value including "hundreds of millions of dollars in royalties from Genentech's Avastin and Herceptin, a progressing product pipeline; undisclosed royalties that extend beyond 2014; approximately $430M in net operating loss carry-forwards; real estate and other assets that could be monetized; and a valuable antibody technology platform that should continue to generate new compounds over time."] In order to unlock potential profits, Mr. Loeb suggested that PDL focus on streamlining its cost structure and asset base.