The ESP effect

PDL BioPharma had a 95% runup from the time it acquired ESP Pharma in early 2005 to a high of $32.80 on March 31, 2006. Since then, the stock has fallen 34%, in part in the wake of setbacks for clinical candidates terlipressin and ularitide, which were obtained from the acquisition. (A) Used revised 2005 sales figures, which were released in March 2006

A. 3/24/05 - Acquires ESPfor about $490M in stock and cash. Purchase also completes the acquisition of North American rights to acute myocardial infarction drug Retavase, under which ESP paid J&J (JNJ) $110M plus $45M in milestones.B. 8/4/05 - Reports 2Q05 product sales of $38M, reflecting the first full quarter of sales from ESP products including Cardene IV for hypertension, IV Busulfex for chronic myelogenous leukemia (CML), and Retavase (A)C. 9/6/05 - Stock rises $2.99 (11%) to $29.92 after ularitide met the co-primary endpoints of improved dyspnea score and decreased pulmonary pressure in the European Phase II SIRIUS II trial to treat acute decompensated heart failureD. 11/1/05 - Reports product sales of $43M in 3Q05. Cardene IV, Retavase and IV Busulfex accounted for $38ME. 2/27/06 - Reports 2005 product sales of $121.2M. Cardene IV, Retavase and IV Busulfex provided $111.4M. Says it expects 2006 revenues of $405-$435M and adjusted EBITDA of $44-$54M, or $0.38-$0.47 per diluted share. (A)F. 5/3/06 - Stock drops $6.49 (24%) to $21.10 after PDLI reports 1Q06 non-GAAP diluted EPS of $0.02, missing the Street's estimate by $0.12. Revenues were up 133% to $90.5M from $38.5M in the prior year's quarter, but fell short of the $103.3M consensus estimate.G. 8/3/06 - Terlipressin fails a Phase III trial to treat Type 1 hepato-renal syndrome. Company also reports 2Q06 non-GAAP diluted EPS of $0.17, beating the Street's estimate by $0.07. However, 2Q06 revenues of $104.3M fell short of the $107M consensus estimate. H. 11/2/06 - PDLI posts 3Q06 non-GAAP diluted EPS of $0.23, beating the Street's estimate of a loss per share of $0.01 and up from a loss per share of $0.04 in 3Q05. Third quarter revenues were up 44% to $111.4M from $77.1M in 3Q05. Also, PDLI says that Phase III testing of ularitide is on hold pending completion of a partnership...