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Company: PDL BioPharma (PDLI)
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  Pick of the biotech field

The pick is in the biotech field, and also has a "sum-of-the-parts" play to it. Protein Design Labs (PDLI), or "PDL, Inc.", as they are known now, is actively divesting itself of pieces of its drug portfolio, spinning off royalty streams and intellectual property into a small collection of income-producing vehicles.

PDL, Inc - what a dry name! It's the old Protein Design Labs, which we think had a lot more pizzazz to it. In case you've forgotten, Protein Design Labs was responsible for creating "Avastin", amongst many other engineered drugs, which has proven to be one of the most useful anti-cancer drugs on the market. PDLI recently (late 2007) decided to basically split itself up into several pieces and sell itself, thus realizing what its directors and shareholders believed would be a significant premium to its then-prevalent share price. As a result of the sales of a few of its patented drugs, the company paid the first special dividend of over $4 per share to holders last month. There are more spin-offs and special dividends to come here as the company completes this effort.

What's happening with those royalties to realize their value today? Specifically in April, PDLi announced that it would distribute royalty revenue that the firm receives on drugs from companies like Genentech (NYSE: DNA), AstraZeneca (NYSE: AZN), and Wyeth (NYSE: WYE), in that process, create a new publicly traded stock for PDLI Stockholders. The Company also revealed that it would distribute almost all of the revenue it receives from these royalties as dividends to shareholders of the new spinoff.

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