PDLI » Topics » General and Administrative Expenses

This excerpt taken from the PDLI 10-Q filed May 8, 2009.

General and Administrative Expenses

In the first quarter of 2009, our general and administrative expenses were $4.7 million, a decrease of $8.0 million from the first quarter of 2008. This decrease was primarily driven by our significantly reduced cost structure discussed below.

We expect that our general and administrative expenses for 2009 will continue to be substantially lower due to the Spin-Off of the biotechnology business and the large reduction in our cost structure. Since the Spin-Off, we significantly downsized our operations including downsizing our office facilities such that the quarterly cost is less than $50,000 and we currently have fewer than ten employees managing our intellectual property, our licensing operations, and efforts to monetize our antibody humanization patents and royalties assets, if market conditions permit, as well as providing for certain essential reporting and management functions of a public company. In addition, in the first quarter of 2009 we recorded depreciation of $0.9 million on certain software assets which were fully depreciated as of March 31, 2009 and are no longer in use. We expect our quarterly depreciation will be less than $35,000 in future quarters.

Individual components of general and administrative expenses for the three months ended March 31, 2009 comprise:

 

(In thousands)

   Three Months Ended
March 31, 2009

Compensation and benefits

   $ 923

Legal fees

     1,560

Professional fees and insurance

     980

Depreciation

     887

Other

     343
      

Total general and administrative expenses

   $ 4,693
      
These excerpts taken from the PDLI 10-K filed Mar 2, 2009.

General and Administrative Expenses

In 2008, our total costs and expenses from continuing operations were $51.5 million, an increase of $10.4 million from 2007, and consisted entirely of general and administrative expenses. This increase was primarily driven from higher legal and consulting expenses associated with the Spin-Off and royalty monetization efforts which were terminated in November 2008. Our total costs and expenses from continuing operations in 2007 were $41.2 million, an increase of $9.3 million from 2006. This increase was primarily driven by higher legal and consulting expenses associated with the efforts to sell the Company and our key assets during 2007.

We expect that our general and administrative expenses for 2009 will be substantially lower due to the Spin-Off of the biotechnology business and the significant reduction in our general and administrative cost structure. Since the Spin-Off, we significantly downsized our operations and currently have fewer than ten employees managing our intellectual property, our licensing operations, and efforts to monetize our antibody humanization patents and royalties assets, if market conditions permit, as well as providing for certain essential reporting and management functions of a public company.

General and Administrative Expenses

FACE="Times New Roman" SIZE="2">In 2008, our total costs and expenses from continuing operations were $51.5 million, an increase of $10.4 million from 2007, and consisted entirely of general and administrative expenses. This increase was primarily
driven from higher legal and consulting expenses associated with the Spin-Off and royalty monetization efforts which were terminated in November 2008. Our total costs and expenses from continuing operations in 2007 were $41.2 million, an increase of
$9.3 million from 2006. This increase was primarily driven by higher legal and consulting expenses associated with the efforts to sell the Company and our key assets during 2007.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">We expect that our general and administrative expenses for 2009 will be substantially lower due to the Spin-Off of the biotechnology business and the
significant reduction in our general and administrative cost structure. Since the Spin-Off, we significantly downsized our operations and currently have fewer than ten employees managing our intellectual property, our licensing operations, and
efforts to monetize our antibody humanization patents and royalties assets, if market conditions permit, as well as providing for certain essential reporting and management functions of a public company.

STYLE="margin-top:18px;margin-bottom:0px">Interest and Other Income, Net, and Interest Expense

SIZE="2">Interest and other income, net, from continuing operations for the year ended December 31, 2008 decreased from 2007 due to lower average investment balances as well as lower interest rates earned on our investments. Interest and other
income, net, in 2007 increased from 2006 primarily due to the increased interest earned on our cash, cash equivalents, investments and restricted cash balances as a result of higher interest rates and higher invested balances. Interest and other
income, net, in 2008, 2007 and 2006 included interest income of $14.9 million, $20.2 million and $16.8 million, respectively.

SIZE="2">Interest expense from continuing operations increased during the year ended December 31, 2008 in comparison to 2007 primarily as a result of lower capitalized interest since we completed the construction of the Redwood City facility in
the fourth quarter of 2007. Interest expense increased by $0.6 million in 2007 compared to 2006 due to a portion of our lease payments on our Lab Building in Redwood City, being recorded as interest expense on the related long-term financing
liability.

Interest expense from continuing operations in all periods presented, net of amounts capitalized, included amounts related to
our 2.00%, $250.0 million convertible senior notes due 2012 and our 2.75%, $250.0 million convertible subordinated notes due 2023.

This excerpt taken from the PDLI 10-Q filed Nov 7, 2008.

General and Administrative Expenses

 

General and administrative expenses consist of costs of personnel, professional services, consulting and other expenses related to our administrative and marketing functions, an allocation of facility and overhead costs and stock-based compensation expense accounted for under SFAS 123(R) as a component of personnel-related costs..

 

General and administrative expenses for the three months ended September 30, 2008 increased 8% to $18.5 million from $17.2 million during the comparable period in 2007. This increase was primarily due to $1.5 million of idle facility costs in our Redwood City facilities in addition to increases in legal costs of $1.3 million, which were principally related to the strategic review process, Spin-off preparations, royalty monetization efforts and ongoing litigation. These increases were partially offset by significant reductions in our personnel-related expenses as a result of our company-wide restructuring efforts that commenced in the first quarter of 2008.

 

For the nine months ended September 30, 2008, general and administrative expenses increased 23% to $55.6 million from $45.2 million during the comparable period in 2007. This increase was primarily due to increases in legal costs of $6.9 million principally related to our efforts to spin off Facet Biotech and monetize our royalties as well as ongoing litigation.  The increase was also driven by $4.1 million of idle facilities costs related to our Redwood City facilities in the first nine months of 2008.  These increases were partially offset by reductions in our personnel-related expenses as a result of our company-wide restructuring efforts that commenced in the first quarter of 2008.

 

This excerpt taken from the PDLI 10-Q filed Aug 11, 2008.

General and Administrative Expenses

 

General and administrative expenses consist of costs of personnel, professional services, consulting and other expenses related to our administrative and marketing functions, an allocation of facility and overhead costs and stock-based compensation expense accounted for under SFAS 123(R) as a component of personnel-related costs.

 

General and administrative expenses for the three months ended June 30, 2008 increased 4% to $16.6 million from $16.0 million during the comparable period in 2007. This increase was primarily due to increases in legal costs of $1.8 million, principally related to the Spin-off and ongoing litigation, as well as due to $1.4 million of idle research facility costs in our Redwood City facilities classified as general and administrative costs. The increase resulting from these items was partially offset by significant reductions in our personnel-related expenses as a result of the sale of our Manufacturing Facility and our other restructuring efforts, all of which occurred in the first half of 2008.

 

For the six months ended June 30, 2008, general and administrative expenses increased 32% to $37.0 million from $28.0 million during the comparable period in 2007. This increase was primarily due to increases in legal costs of $5.6 million due principally to work on our efforts to spin off our Biotechnology Business and ongoing litigation.  The increase was also driven by $2.6 million of idle facilities costs related to our Redwood City research facilities which were classified as general and administrative costs in the first half of 2008.  The increase resulting from these items was partially offset by significant reductions in our personnel-related expenses as a result of the sale of our Manufacturing Facility and our other restructuring efforts, all of which occurred in the first half of 2008.

 

This excerpt taken from the PDLI 10-Q filed May 12, 2008.

General and Administrative Expenses

 

General and administrative expenses generally consist of costs of personnel, professional services, consulting and other expenses related to our administrative, marketing and clinical affairs functions, and an allocation of facility and overhead costs. General and administrative expenses also include stock-based compensation expenses accounted for under SFAS No. 123(R) as a component of personnel-related costs. Total stock-based compensation expenses recognized as general and administrative expenses were $2.2 million and $1.3 million for the quarters ended March 31, 2008 and 2007, respectively.

 

General and administrative expenses increased by $8.4 million during the first quarter of 2008 in comparison to the same quarter in 2007.  The increase was due primarily to increases in legal costs of $3.8 million, primarily related to our strategic review process and ongoing litigation, and in professional services fees of $1.0 million related to our strategic review process.  In addition, in the first quarter of 2008, (1) we classified $0.9 million of facilities costs related to idle research and development capacity in our Redwood City facilities as general and administrative expenses, (2) we accrued $0.8 million in retention bonuses that were provided to our employees, (3) stock-based compensation increased by $0.4 million due to modification charges for certain stock options in connection with the termination of certain employees and (4) depreciation allocated to general and administrative expenses increased by $0.5 million as we placed into service in late 2007 leasehold improvements associated with our Redwood City facilities.

 

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These excerpts taken from the PDLI 10-K filed Mar 13, 2008.

General and Administrative Expenses

        General and administrative expenses generally consist of costs of personnel, professional services, consulting and other expenses related to our administrative, marketing and clinical affairs functions, and an allocation of facility and overhead costs. Beginning with the first quarter of 2006, general and

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administrative costs also include stock-based compensation expense accounted for under SFAS No. 123(R) as a component of personnel-related costs. Total stock-based compensation expense recognized as general and administrative expenses, including amounts recognized under SFAS No. 123(R), was $5.4 million and $7.5 million for the years ended December 31, 2007 and 2006, respectively.

        General and administrative expenses for the year ended December 31, 2007 increased $14.1 million, or 26%, from 2006. This increase was primarily due to $8.4 million in increased legal costs related to our strategic review process and litigation in 2007, $2.6 million in executive severance payments that were accrued for during the fourth quarter of 2007 (see Note 9 for more details) and $5.3 million in depreciation reclassified to general and administrative in 2007 related to idle capacity in our Minnesota manufacturing facility.

        General and administrative expenses for the year ended December 31, 2006 increased $18.0 million, or 51%, from 2005. This increase was primarily due to increases in personnel-related expenses, consulting services and facility-related expenses. These increases were partially offset by decreases in information technology-related costs.

General and Administrative Expenses



        General and administrative expenses generally consist of costs of personnel, professional services, consulting and other expenses related to our administrative,
marketing and clinical affairs functions, and an allocation of facility and overhead costs. Beginning with the first quarter of 2006, general and



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administrative
costs also include stock-based compensation expense accounted for under SFAS No. 123(R) as a component of personnel-related costs. Total stock-based compensation expense
recognized as general and administrative expenses, including amounts recognized under SFAS No. 123(R), was $5.4 million and $7.5 million for the years ended December 31,
2007 and 2006, respectively.



        General
and administrative expenses for the year ended December 31, 2007 increased $14.1 million, or 26%, from 2006. This increase was primarily due to $8.4 million
in increased legal costs related to our strategic review process and litigation in 2007, $2.6 million in executive severance payments that were accrued for during the fourth quarter of 2007
(see Note 9 for more details) and $5.3 million in
depreciation reclassified to general and administrative in 2007 related to idle capacity in our Minnesota manufacturing facility.




        General
and administrative expenses for the year ended December 31, 2006 increased $18.0 million, or 51%, from 2005. This increase was primarily due to increases in
personnel-related expenses, consulting services and facility-related expenses. These increases were partially offset by decreases in information technology-related costs.



This excerpt taken from the PDLI 10-Q filed Nov 14, 2007.

General and Administrative Expenses

General and administrative expenses generally consist of costs of personnel, professional services, consulting and other expenses related to our administrative functions, clinical affairs, an allocation of facility and overhead costs and stock-based compensation expense accounted for under SFAS 123(R) as a component of personnel-related costs.

General and administrative expenses for the three months ended September 30, 2007 increased 37% to $19.7 million from $14.4 million during the comparable period in 2006. This increase was primarily due to increases in consulting and legal costs of $3.5 million, principally in support of our efforts to improve our portfolio management and allocation process and to enforce our intellectual property rights, and personnel-related expenses of $1.1 million. In addition, in the third quarter of 2007, general and administrative expenses included $1.0 million in costs related to idle manufacturing capacity at our Brooklyn Park manufacturing facility, while no such costs were included during the comparable 2006 period. Our Brooklyn Park facility, which was placed into service in July 2006, is qualified to manufacture clinical development products. Currently, this facility has capacity greater than our current manufacturing demands and, therefore, we had idle manufacturing capacity during the third quarter of 2007, the costs of which we recorded as general and administrative expenses. Similar reclassifications of idle manufacturing capacity costs to general and administrative costs also were made in the first and second quarters of 2007.

For the nine months ended September 30, 2007, general and administrative expenses increased 22% to $54.6 million from $44.8 million during the comparable period in 2006. This increase was primarily due to increases in consulting and legal costs of $6.4 million and costs related to idle manufacturing capacity at our Brooklyn Park manufacturing facility of approximately $3.8 million. These increases were partially offset by decreases in information technology costs of $1.6 million.

This excerpt taken from the PDLI 10-Q filed Nov 14, 2007.

General and Administrative Expenses

General and administrative expenses generally consist of costs of personnel, professional services, consulting and other expenses related to our administrative functions, clinical affairs, an allocation of facility and overhead costs and stock-based compensation expense accounted for under SFAS 123(R) as a component of personnel-related costs.

General and administrative expenses for the three months ended June 30, 2007 increased 42% to $18.2 million from $12.8 million during the comparable period in 2006. This increase was primarily due to increases in consulting and legal costs of $2.6 million principally in support of our efforts to improve our portfolio management and allocation process and to enforce our intellectual property rights, personnel-related expenses of $1.7 million and costs related to idle manufacturing capacity at our Brooklyn Park manufacturing facility of approximately $1.0 million. Our Brooklyn Park facility, which was placed into service in July 2006, is qualified to manufacture clinical development products. Currently, this facility has capacity greater than our current manufacturing demands and, therefore, we had idle manufacturing capacity during the second quarter of 2007, the costs of which we recorded as general and administrative expenses.

For the six months ended June 30, 2007, general and administrative expenses increased 15% to $34.8 million from $30.4 million during the comparable period in 2006. This increase was primarily due to increases in consulting and legal costs of $2.9 million and costs related to idle manufacturing capacity at our Brooklyn Park manufacturing facility of approximately $2.6 million. These increases were partially offset by decreases in information technology costs of $1.4 million.

This excerpt taken from the PDLI 10-Q filed Aug 9, 2007.

General and Administrative Expenses

General and administrative expenses generally consist of costs of personnel, professional services, consulting and other expenses related to our administrative functions, clinical affairs, an allocation of facility and overhead costs and stock-based compensation expense accounted for under SFAS 123(R) as a component of personnel-related costs.

General and administrative expenses for the three months ended June 30, 2007 increased 42% to $18.2 million from $12.8 million during the comparable period in 2006. This increase was primarily due to increases in consulting and legal costs of $2.6 million principally in support of our efforts to improve our portfolio management and allocation process and to enforce our intellectual property rights, personnel-related expenses of $1.7 million and costs related to idle manufacturing capacity at our Brooklyn Park manufacturing facility of approximately $1.0 million. Our Brooklyn Park facility, which was placed into service in July 2006, is qualified to manufacture clinical development products. Currently, this facility has capacity greater than our current manufacturing demands and, therefore, we had idle manufacturing capacity during the second quarter of 2007, the costs of which we recorded as general and administrative expenses.

For the six months ended June 30, 2007, general and administrative expenses increased 15% to $34.8 million from $30.4 million during the comparable period in 2006. This increase was primarily due to increases in consulting and legal costs of $2.9 million and costs related to idle manufacturing capacity at our Brooklyn Park manufacturing facility of approximately $2.6 million. These increases were partially offset by decreases in information technology costs of $1.4 million.

This excerpt taken from the PDLI 10-K filed Mar 16, 2005.

General and Administrative Expenses

 

General and administrative costs include costs of personnel, professional services, patent, consulting and other expenses related to our administrative functions and an allocation of facility costs. The increase in 2004 was primarily related to increased personnel and recruiting costs of $1.4 million, increased facility-related costs of $1.0 million, costs related to compliance efforts surrounding Section 404 of the Sarbanes-Oxley Act of 2002 of approximately $0.9 million, and higher stock-based compensation expense associated with the continued vesting of certain stock options that had been granted to consultants and former employees of the Company of approximately $0.4 million. These increases were partially offset by lower legal costs related to our intellectual property, licensing and other contractual matters of $1.0 million.

 

The increase in 2003 was primarily related to increased personnel and recruiting costs of $5.2 million, higher legal costs related to our intellectual property, licensing and other contractual matters of $1.7 million, increased facility-related costs of $0.7 million, and stock-based compensation expense associated with the issuance of stock options to non-employees in 2003 of approximately $0.3 million.

 

Assuming that the acquisition of ESP is completed, we would expect increases in our general and administrative expenses, in addition to sales and marketing expenses, related to the retention of ESP’s sales force and supportive personnel.

 

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