PDL BioPharma Pulls Sale Plans

PDL BioPharma(PDLI Quote - Cramer on PDLI - Stock Picks) couldn't find a buyer.

The Redwood City, Calif.-based biopharmaceutical firm said Tuesday that it has ended plans for a potential company sale after no bids were submitted.

As a result, PDL intends to remain an independent company but will put in place a corporate restructuring plan that includes cutting costs and firing nearly half of its employees. The company is also exploring ways to distribute past and future proceeds from product royalties and asset sales to shareholders.

Shares were plunging $2.94, or 19%, to $12.90 in after-hours trading.

PDL put itself up for sale in October, seeking buyers for all or parts of its operations. Since then, the company sold its antibody manufacturing facility and its marketed cardiovascular drugs.

But PDL's most important assets -- its pipeline of experimental drugs and the royalties it receives on humanized antibody drugs like Genentech's(DNA Quote - Cramer on DNA - Stock Picks) Avastin and Biogen Idec's(BIIB Quote - Cramer on BIIB - Stock Picks) Tysabri -- remained out there for the taking.

No one was interested enough to put in a bid.

"Although we garnered interest regarding certain of our pipeline programs, we did not receive a firm offer for the company as a whole or for our biotech R&D assets," said PDL Chairwoman Karen Dawes in a statement.

To remain independent, PDL says it will fire about 260 employees, reducing its headcount to about 300. The company will also reduce operating expenses to about $150 million annually from its current run rate of $340 million.

PDL says it will continue to develop its drug pipeline, which includes a cancer drug and a multiple sclerosis drug partnered with Biogen Idec. The company has a poor track record of developing its own drugs, which is one reason why a buyer was being sought.

Separately, PDL said its fourth-quarter loss from continuing operations swelled to $24.5 million, or 21 cents a share, from $2.7 million, or 2 cents a share, a year earlier. Revenue tumbled to $49.8 million from $59.8 million.