Protein Design Lifts Forecast

Protein Design Labs(PDLI) boosted its revenue forecast and reported quarterly earnings that were ahead of Wall Street's estimates, sending its shares higher in after-hours trading Thursday.

The Fremont, Calif., biotech reported a loss of $3.4 million, compared with a loss of $12.5 million in the year-ago quarter. On a per-share basis, Protein Design lost 3 cents a share vs. 13 cents a year earlier.

Excluding charges, the company reported income of $9.2 million, or 9 cents a share, compared with the 5 cents analysts expected for the latest quarter.

Revenue was $77.8 million, up from $25.8 million a year ago but below the $79.3 million analysts expected. Royalty revenue rose 52% to $37.5 million from $24.7 million. Product revenue totaled $35.3 million, reflecting the first full quarter of product sales following the acquisitions of ESP Pharma and Retavase.

Additionally, the company increased its full-year revenue guidance to between $255 million and $271 million, compared with its previously expected $250 million to $260 million.

Shares of Protein Design were up 94 cents, or 3.6%, to $26.85 in extended trading.

"Second quarter and first half 2005 results reflect our initial performance in having ESP Pharma become part of PDL, with product sales in line with our internal expectations for our first full commercial quarter. Meanwhile, our partners' success with breakthrough antibody products such as Avastin, Herceptin and Synagis are driving the growth of PDL's royalty revenues," said Mark McDade, the company's CEO.

Protein Design receives royalty payments from Genentech(DNA), the maker of the first two drugs, under a license agreement. Synagis is marketed by MedImmune(MEDI).

McDade said the company should have positive cash flow by the fourth quarter, thanks to strong products and royalty revenue growth, plus the effect of its new development and marketing agreement with Biogen Idec(BIIB).

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