PDL BioPharma continued on its chartered course of selling itself off a bit at a time, entering a deal with EKR Therapeutics Inc. for a suite of cardiovascular products that will net PDL shareholders $85 million up front, and up to an additional $85 million down the road.

Cedar Knolls, N.J.-based EKR gets Cardene I.V. (nicardipine hydrochloride), Cardene SR and new formulations of Cardene in development, as well as Retavase (reteplase) and the development product ularitide. In exchange, PDL will receive cash payments of $85 million at closing, up to an additional $85 million in development and sales milestones for the new Cardene formulations, as well as royalties on sales of the new Cardene formulations and ularitide.

The milestones include a $25 million payment upon FDA approval of a new formulation of Cardene, which PDL expects will occur before the November 2009 Cardene I.V. patent expiration. Also, PDL would receive two additional milestones of $30 million each if annual net product sales of the new Cardene formulations reach $80 million and $150 million. EKR also would pay PDL royalties of 10 percent and 5 percent on future net sales of the new Cardene formulations and ularitide, respectively.

PDL begin selling off parts of itself last fall during a tumultuous period that included an internal investigation of former CEO Mark McDade, who resigned after being cleared of alleged improper personal conduct and breach of fiduciary duty, and the discontinuation of its Phase III program for the monoclonal antibody Nuvion (visilizumab) due to insufficient efficacy and an inferior safety profile compared to intravenous steroids alone.

In August, Ophthotech Corp. picked up rights to develop volociximab, PDL's anti-angiogenic candidate, for use in age-related macular degeneration, and in December PDL sold rights to its marketed product, I.V. Busulfex, to Japanese firm Otsuka Pharmaceutical Co. Ltd. for $200 million in cash. (See BioWorld Today, Dec. 18, 2007.)

And the Fremont, Calif.-based PDL isn't done. Interim CEO L. Patrick Gage stated in a press release that the company will continue to explore alternatives for the remaining assets, including the royalty stream and the biotech R&D and manufacturing assets.

EKR, a specialty pharma founded in 2005, said it expects to hire a number of PDL's commercial employees to support its expanded portfolio. The company said it will focus all development efforts on the launch of the new Cardene formulations and will not pursue additional development in the pediatric population.

Cardene I.V., approved for the short-term treatment of hypertension when oral therapy is not feasible or desirable, is the only intravenous calcium channel blocker (calcium ion influx inhibitor) for that indication. Cardene I.V. plus Cardene SR net product sales for the 12 months ended Sept. 30, 2007, were $143.9 million.

Retavase is a fibrinolytic agent that was approved for the management of acute myocardial infarction in adults for the improvement of ventricular function following AMI, the reduction of the congestive heart failure and the reduction of mortality associated with AMI. Retavase net product sales for the 12 months ended Sept. 30, 2007, were $21.6 million.

Ularitide is a synthetic form of urodilatin, a naturally occurring human natriuretic peptide involved in regulating blood pressure and the excretion of water and sodium from the kidneys. It is in Phase II development as a potential treatment for patients with acute decompensated heart failure.

The deal drew a negative response from Joel Sendek, of Lazard Capital Markets. He called the transaction "disappointing, given that the $85 million in cash, due at closing, represents less than 1x our 2007 sales estimate for Cardene I.V. of $152 million. Furthermore, the transaction includes Retavase, for which we model sales of $17.3 million in 2007, and Phase II drug ularitide."

He maintained a "buy" rating but dropped the target price from $25 to $21.

The transaction has been approved by the boards of directors of both companies and is expected to close during the first quarter of 2008. EKR's equity financing for the transaction is being led by MPM Capital and LLR Partners. Also participating are existing EKR investors Quaker BioVentures and Garden State Life Sciences Venture Fund managed by Quaker, plus NewSpring Capital and ESP Equity Partners. As part of the transaction, Steven St. Peter of MPM and Scott Perricelli of LLR will join the EKR board.

Shares of PDL (NASDAQ:PDLI) fell 5.6 percent Tuesday, or 85 cents, to close at $14.23.