INCLINE VILLAGE, Nev. (AP) — PDL BioPharma Inc. said Wednesday that its second-quarter net income climbed 40 percent after the drug maker ended a dispute with Swiss drug maker Novartis AG.
The company, which licenses its patents to major drug makers, said its profit rose to $70 million, or 38 cents per share, from $50.1 million, or 30 cents per share. Revenue grew 1 percent, to $122.1 million from $120.3 million.
Analysts expected a profit of 40 cents per share and $125.5 million in revenue, according to FactSet.
On Feb. 28, PDL agreed to settle a dispute with Novartis by paying Novartis an amount based on net sales of the eye drug Lucentis. PDL dropped claims against Novartis, and Novartis withdrew a challenge to patents held by PDL.
The company's legal expenses decreased following the settlement, and professional services costs fell after some projects were completed. PDL said its general and administrative costs fell to $3.8 million from $8.8 million a year ago.
PDL gets most of its revenue from royalties on sales of the cancer drugs Avastin and Herceptin and the macular degeneration drug Lucentis, which were developed using technology PDL licensed to Genentech, which is now a unit of Roche. PDL said sales of Herceptin and Lucentis increased, but Avastin sales fell. The Food and Drug Administration has said Avastin's approval as a treatment for breast cancer should be withdrawn because of a lack of evidence that it works. The drug is the best-selling cancer treatment in the world and is approved to treat a variety of other cancers. Herceptin is used to treat breast cancer.
Roche markets Avastin and Herceptin, and it also markets Lucentis in the U.S. Outside of the U.S., Lucentis is marketed by Novartis. PDL is currently suing Roche and Genentech over royalties on the three drugs and the asthma treatment Xolair. Genentech wants to pay royalties only on U.S. sales of the drugs, while PDL is trying to get the European patents extended in 2014.
PDL also gets royalties on sales of Tysabri, a treatment for multiple sclerosis and Crohn's disease that is marketed by Elan Corp. and Biogen Idec Inc.
Shares of PDL fell 10 cents to $6.08 by midday.