In a move that may placate an activist shareholder's concerns, PDL BioPharma Inc. of Redwood City, Calif., said Monday it sold rights to its transplant drug IV Busulfex to Japan's Otsuka Pharmaceutical Co. Ltd. for $200 million in cash. The Busulfex sale should close in the first quarter.
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Busulfex, a chemotherapy agent that prepares leukemia patients for bone marrow transplants, is one of three marketed products that PDL bought in 2005 for $500 million in an attempt to boost earnings while it developed its own bioengineered antibody-based drugs through clinical trials. However, that strategy ended when activist shareholder Third Point LLC forced the ouster of CEO Mark McDade and an auction of the company.
Third Point cashed out recently, but its cause was taken up by another activist shareholder, Highland Capital Management LP. Last week, the firm disclosed a 7% stake in the company and issued a letter of its demands to the board, recommending that the biotech company replace Merrill Lynch & Co. with a new adviser. Highland is complaining that Merrill isn't
suited for the job of maximizing royalty payments, claiming the bank has no experience in such deals. Perhaps the Busulfex deal will assuage Highland's concerns because Merrill Lynch can now notch a deal.
In addition to tapping Merrill Lynch, PDL received legal advice from DLA Piper. Montgomery and Co. LLC and Heller Ehrman LLP were Otsuka's advisers. — Alex Lash and Matthew Wurtzel
See story from the San Francisco Business Times
See related Highland story from Dealscape
