Biotech investors can add QLT
Since Genentech
To sustain some level of profitability, QLT has tried selling off non-core assets and reducing its cash burn by ending the legal battles over its hormone-therapy drug Eligard. But none of these steps has helped revive the sagging sales of Visudyne.
In yesterday's press release, QLT announced that it's forming a board committee and hiring a financial advisor to explore "strategic alternatives." None of these steps guarantees that a sale of the company will actually happen -- just ask ImClone Systems
With Eligard partnered out to Sanofi-Aventis
QLT's other most visible asset is acne treatment Aczone, which the FDA approved in 2005. Aczone is unpartnered, and because of a very restrictive label, QLT doesn't even bother to promote the compound.
Getting this label improved would be the biggest near-term value driver for QLT. The FDA's PDUFA date for labeling revisions is March 23. But it's hard to imagine that any bidder would put much value on this drug until the uber-safety-conscious FDA makes its decision. If the new label is allowed, then QLT expects Aczone to reach peak annualized sales of $100 million.
Only a few years ago, QLT was doing the acquiring, when it paid $855 million in cash and stock to buy Atrix Laboratories and get access to Eligard. Now it looks as though another drugmaker may get the chance to scoop up most of the Atrix assets, plus get a call option on any possible resurgence with Visudyne, for a much cheaper price.