On September 9, 2020 PDL BioPharma, Inc. ("PDL" or the "Company") (Nasdaq: PDLI) reported the closing of the sale of its wholly owned subsidiaries Noden Pharma DAC and Noden Pharma USA (collectively "Noden") to Stanley Capital (Press release, PDL BioPharma, SEP 9, 2020, View Source [SID1234564915]). The total value of the transaction will result in payments to PDL of up to $52.83 million in cash, $4.58 million greater than previously announced .
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"After running an extensive process, we are excited about closing this transaction with Stanley Capital," commented PDL’s President and CEO Dominique Monnet. "It represents the completion of a key divestiture for PDL and an exciting opportunity for the Noden team."
Payments to PDL, in connection with the closing of the transaction, are $12.72 million. The agreement provides for an additional $33 million to be paid to PDL in 12 equal quarterly installments from January 2021 to October 2023 and two potential contingent payments totaling $3.25 million. There is an additional $3.86 million to be paid to PDL in four equal quarterly installments from January 2023 to October 2023, primarily due to the incremental cash accumulated in the business since July 31, 2020.
Together with their advisors, Torreya and SVB Leerink, PDL’s board of directors and management team evaluated a number of potential transactions to maximize stockholder value for Noden. Torreya was retained by PDL to explore potential strategic transactions and assist in the disposition of Noden, while SVB Leerink has been engaged by PDL to advise on overall liquidation and distribution strategies.
In addition to the cash proceeds from the sale to Stanley Capital, PDL believes that this transaction may qualify for some Federal tax benefit under the CARES Act. In connection with its monetization process, PDL expects to execute transactions in 2020 that may result in the recognition of ordinary tax losses that, under the CARES Act, could be applied to prior tax years in which PDL was a substantial tax payor. At this time, however, there can be no assurance that such tax benefits will be realized.