Thesis and insight
In this article, I show how PDL BioPharma (PDLI) is transitioning from an extraordinarily profitable biotech IP company to what will essentially be a biotech BDC (Business Development Company) making loans to other biotech and medical instrument companies.
The most important income-generating asset PDL BioPharma possesses, its Queen et al. patents, is about to expire. With that expiration, the source that has enabled PDLI's large yield will also be gone. PDLI's value will thus be the after-tax value of the income this asset is still expected to generate, plus the value of its emerging BDC business.
At this point PDLI makes its money from royalties it receives from products using its Queen...
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