Motley Fool Rule Breakers biotech pick Protein Design Labs (NASDAQ:PDLI) had an overwhelmingly positive earnings release after yesterday's market close. The company revised its revenue guidance for the year upwards and dropped the bomb that it will be sustainably cash flow positive as of this year's fourth quarter. That's a full year ahead of schedule, and the stock has moved up another 6% in response to that announcement.

Driving the company's financial performance was an uptick in royalty revenues received from companies such as Genentech (NASDAQ:DNA) and MedImmune (NASDAQ:MEDI) and growth from its own marketed drugs brought in through the acquisition of ESP Pharma. Importantly, the strength here is not temporary, since both of these revenue streams are expected to grow in excess of 20% a year through 2008. This means that PDL's current annual revenue near $260 million will be approaching $500 million in just a few short years.

Biotech stocks are nearly always valued on the market's hopes and dreams for the company's products. That has even been the case in the past with PDL as investors have had to look to the distant future for pipeline products to pay off. Even though the company has some potentially great drugs in the works such as Nuvion, M200, and ularitide, it is no longer the case that clinical stage drugs are driving the story. PDL's stock is not up 35% for the year because of investors chasing pipe dreams. It's because of hard and tangible financial performance.

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Charly Travers owns shares of Protein Design Labs. Protein Design Labs is a Motley Fool Rule Breakers pick. The Fool has an ironclad disclosure policy .