Week of drama for PDL Biopharma
restructure that left its key investor calling for the company
chairman to resign, a week after its CEO also decided to step
down after similar pressure.
The company announced a change of tack on Tuesday after months of company 'soul searching' led the management to devise asignificant restructure, involving a refocus of attention on the discovery and development of novel antibodies in oncology and immunological diseases.
The decision will see PDL sell off its entire commercial portfolio - two cardiovascular drugs, Cardene (nicardipine hydrochloride) and Retavase (reteplase), and chemotherapeutic agent IV Busulfex, an intravenous formulation of busulfan - along with another cardiovascular drug in its pipeline, ularitide (synthetic urodilatin).
PDL had acquired these drugs when it bought ESP Pharma in January last year.
However, they are not viewed as "core" focuses of the new company direction and PDL said the slimming down was necessary to realign the firm with its " new strategic focus, which does not include cardiovascular disease".
The firm indicated the sale would leave it with only pipeline products and result in the loss of 250 jobs, including those of its hospital sales force, in addition to a workforce reduction that is "anticipated in connection with aligning the organisation to the company's new strategy", planned for the third quarter.
Following the announcement, PDL's biggest investor, Third Point, called for company chairman of the board, Patrick Gage, to resign.
Rather than a refocus, the investor believes the company should instead be sold, as a whole entity or as separate units, with the proceeds of the sale going to shareholders.
PDL lost $160m (€118m) last year and this week Gage said he expects the planned sale of its commercial assets - which raked in $187.2m in sales in the last year - will cause earnings to be significantly again reduced in the near term.
Particularly as a report of the company's second quarter results earlier this month stated that: "We expect that in the foreseeable future, our revenue growth will be generated primarily by royalty payments and product sales, principally Cardene IV.
We expect our total costs and expenses to continue to grow as we continue to invest, identify, develop and manufacture our potential products, to invest in research, to expand our development, marketing and manufacturing capabilities and to sell our products".
The company's troubled financial situation has been a continual sore point for Third Point.
Last week PDL CEO Mark McDade announced he would step down from his position at the end of the year after being at loggerheads with the investor over this issue for some time.
Third Point had accused McDade of incompetence in managing the company's finances, including his handling of a potential deal with a major pharmaceutical company.
Although a subsequent investigation by PDL's finance committee exonerated him of the allegations, McDade decided to leave the company anyway.
Meanwhile, this week the firm was also forced to abandon its clinical programme for a lead pipeline candidate, Nuvion (visilizumab) - which consisted of a pivotal Phase II/III and a pivotal Phase III trial - after an interim review of the data on Friday showed "insufficient efficacy and an inferior safety profile in the visilizumab arm compared to IV steroids alone".
Nuvion is a humanised monoclonal antibody that binds to CD3, a protein found on the outer membrane of T cells - white blood cells that play a role in inflammatory and immune-mediated processes in the body.
The now defunct clinical programme was studying the drug for an indication of intravenous steroid-refractory ulcerative colitis (IVSR-UC).
While this indication was the company's near-term focus, it has also been eyeing the drug's potential in Crohn's disease and certain other autoimmune diseases.
Following this week's revelation, PDL said it is currently "reviewing whether to continue the ongoing dose-ranging trial, while it thoroughly evaluates the broader implications of these very recent results to the overall visilizumab programme".
Meanwhile, earlier this month the company also had to concede the failure of another pivotal Phase III clinical trial, when advanced liver disease drug Terlipressin failed to meet its primary endpoints.
PDL said at the time it would be considering the drug's future.
