PDL BioPharma reported Q319 results with revenue of $44.2m, down 35% compared to Q318 mainly due to a $31.6m change in fair value in the Assertio royalty rights in that quarter. Importantly LENSAR revenues were $8.1m, up 22% compared to the prior year, mainly due to increased sales in Asia. Following these results, the company has increased guidance for 2019 for LENSAR from a range of $27–29m to over $29m and for cash royalties from a range of $60–65m to over $65m.
Evofem is expected to announce top-line results from its 860-subject Phase IIb AMPREVENCE trial evaluating Amphora for the prevention of chlamydia in November. Additionally, the company remains on track to resubmit its Amphora NDA for pregnancy prevention in Q419, with approval expected in Q220.
The LENSAR femtosecond cataract laser business had product revenue of $8.1m in the quarter, up 22% compared to Q318 and up 9% sequentially. Importantly, procedure volume over the first nine months is up 30% compared to the previous year, with the company now at an estimated 13% market share in the space (the fourth largest player after Alcon, Johnson & Johnson and Ziemer).
The company initiated a strategic and financial review with an external financial advisor in September to provide an independent perspective on its business. The company has quite a few possible paths with regards to capital allocation, including returning additional capital to shareholders (the company recently completed its third stock buyback program, repurchasing around 32% of its shares since March 2017), focusing capital on existing investments or making additional investments.
We have increased our valuation from $713m or $6.24 per basic share to $730m or $6.39 per share, mainly due to a higher net cash level and increased estimates for LENSAR following Q3 results and increased guidance. We await the AMPREVENCE trial data from Evofem as we currently do not include any value for the use of Amphora for the prevention of chlamydia in our model.