---

---

---

•	Total revenues of $143.8 million and $189.3 million for the three and six months ended June 30, 2017, respectively.

•	GAAP diluted EPS of $0.39 and $0.42 for the three and six months ended June 30, 2017, respectively.

•	GAAP net income attributable to PDL’s shareholders of $60.4 million and $67.7 million for the three and six months ended June 30, 2017, respectively.

•	Non-GAAP net income attributable to PDL’s shareholders of $40.2 million and $53.5 million for the three and six months ended June 30, 2017. A full reconciliation of all components of the GAAP to non-GAAP financial results can be found in Table 4 at the end of the release.

•	Total revenues of $143.8 million for the three months ended June 30, 2017 included:

◦	Royalties from PDL’s licensees to the Queen et al. patents of $16.3 million, which consisted of royalties earned on sales of Tysabri® under a license agreement;

◦	Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of $83.7 million, which consisted of the change in estimated fair value of our royalty right assets, primarily related to Depomed, Inc., University of Michigan, AcelRx Pharmaceuticals, Inc. and Kybella;

◦	Interest revenue from notes receivable financings to kaléo and CareView Communications of $5.5 million; and

◦	Product revenues of $18.8 million, which consisted of $16.2 million from sales of Tekturna® and Tekturna HCT® in the United States, Rasilez® and Rasilez HCT® in the rest of the world (collectively, the Noden Products) and $2.6 million for sales and leasing of the LENSAR Laser System.

•	Total revenues increased by 583 percent for the three months ended June 30, 2017, when compared to the same period in 2016.

◦	The increase in royalties from PDL’s licensees to the Queen et al. patents is due to the increased royalties on Tysabri® from Biogen, Inc.

◦	The increase in royalty rights - change in fair value was primarily due to the current period increase in fair value of the Depomed, Inc. royalty asset by $87.0 million.

◦

PDL received $34.6 million in net cash royalties from its royalty rights in the second quarter of 2017, compared to $14.7 million for the same period of 2016. The increase in cash royalties is mainly due to the launch of the authorized generic for Glumetza® in February 2017 sold by Valeant Pharmaceuticals International, inc. (Valeant) subsidiary, oceanside Pharmaceuticals, Inc. PDL received royalties on the authorized generic equivalents under the same terms as the branded Glumetza, retroactive to February 2017.

---

◦	The decrease in interest revenues was primarily due to the early repayment of the Paradigm Spine, LLC note receivable investment.

◦	Product revenues were derived from sales of the Noden Products, which PDL did not begin to recognize until the third quarter of 2016, and the sale and lease of the LENSAR Laser System, which PDL did not begin to recognize until May 11, 2017.

◦	License and other revenue increased by $19.2 million primarily due to a $19.5 million payment from Merck as part of the previously announced settlement agreement to resolve the patent infringement lawsuits related to Keytruda®.

•	Total revenues increased by 52 percent for the six months ended June 30, 2017, when compared to the same period in 2016.

◦	The decrease in royalties from PDL’s licensees to the Queen et al. patents is due to the expiration of the patent license agreement with Genentech, Inc.

◦	The increase in royalty rights - change in fair value was primarily due to the current period increase in fair value of the Depomed, Inc. royalty asset by $93.5 million.

◦	PDL received $48.1 million in net cash royalties from its royalty rights in the six months ended June 30, 2017, compared to $31.9 million for the same period of 2016.

◦	The decrease in interest revenues was primarily due to the early repayment of the Paradigm Spine, LLC note receivable investment and ceasing to recognize interest from the LENSAR note receivable.

◦	Product revenue variances were the same as the three months ended June 30, 2017.

•

Operating expenses were $31.1 million for the three months ended June 30, 2017, compared to $9.9 million for the same period of 2016. The increase in operating expenses for the three months ended June 30, 2017, as compared to the same period in 2016, was primarily a result of the $18.9 million in expenses related to the Noden operations, including $7.4 million of non-cash intangible asset amortization and a change in fair value of contingent consideration, and $3.8 million in LENSAR operating activities since the business acquisition on May 11, 2017.

•

Operating expenses were $58.0 million for the six months ended June 30, 2017, compared to $19.8 million for the same period of 2016. The increase in operating expenses for the six months ended June 30, 2017, as compared to the same period in 2016, was primarily a result of the $34.4 million in expenses related to the Noden operations, including $14.8 million of non-cash intangible asset amortization and a change in fair value of contingent consideration, and $3.8 million in LENSAR operating activities.

•	PDL completed its $30 million share repurchase program, purchasing 13.347 million shares during the four-month period from the initial announcement in March 2017 through completion in June 2017.

•	In July 2017, PDL received a royalty payment from Valeant in the amount of $6.6 million for royalties earned on sales of Glumetza for the month of June. The royalty payment included royalties related to the authorized generic version of Glumetza. This payment will be recorded as part of PDL’s third quarter of 2017 revenue.

•	PDL had cash, cash equivalents, short-term investments and other investments of $435.3 million at June 30, 2017, compared to $242.1 million at December 31, 2016.

•	Net cash provided by operating activities in the six months ended June 30, 2017 was $61.6 million, compared with $94.8 million in the same period in 2016

•	PDL anticipates an estimated cash tax rate of 15% as the company begins to utilize available tax operating loss carry forwards and credits and expects an effective tax rate of approximately 47% in fiscal 2017, which is dependent on the mix and timing of income.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•	Total revenues of $143.8 million and $189.3 million for the three and six months ended June 30, 2017, respectively.

•	GAAP diluted EPS of $0.39 and $0.42 for the three and six months ended June 30, 2017, respectively.

•	GAAP net income attributable to PDL’s shareholders of $60.4 million and $67.7 million for the three and six months ended June 30, 2017, respectively.

•	Non-GAAP net income attributable to PDL’s shareholders of $40.2 million and $53.5 million for the three and six months ended June 30, 2017.

•	PDL completed its $30 million share repurchase program, purchasing 13.3 million shares during the four-month period from the initial announcement in March 2017 through completion in June 2017.

•	Continue to receive royalties on Tysabri from Biogen with respect to sales of the licensed product manufactured prior to patent expiry in jurisdictions providing patent protection licenses.

•	PDL received a royalty payment for the second quarter of 2017 in the amount of $16.3 million for royalties earned on sales of Tysabri. The duration of this royalty payment is based on the sales of product manufactured prior to patent expiry, the amount of which is uncertain.

•	Noden US is commercializing Tekturna® and Tekturna HCT® in the United States and Noden Pharma DAC, an Irish based company, assumed commercialization responsibilities for Rasilez® and Rasilez HCT® in the rest of the world in the second half of 2017. The products are indicated for the treatment of hypertension.

•	PDL repurchased it’s non-controlling interest in Noden and now owns 100% of Noden and continues to hold three of five board seats.

•	Noden and PDL are evaluating additional specialty pharma products in the form of optimized, established medicines, to acquire for Noden.

•	Noden net revenue for the quarter ended June 30, 2017 was $16.2 million, with $12.9 million in US revenue and $3.3 million in the rest of world.

◦	Gross margins on the US revenue in the second quarter were approximately 81.0 percent.

◦	The $3.3 million of revenue for the ex-U.S. is net of cost of goods and a fee to Novartis through its transition services agreement and will continue until marketing authorizations have been transferred.

•	Novartis and Noden Pharma DAC are working to transfer the marketing authorizations from Novartis companies to Noden Pharma DAC or to deregister the products.

◦	These transfers (specifically EU, Switzerland, Canada and Japan) have been delayed per our original plan and are now expected to take place in the fourth quarter of this year.

◦	Novartis has begun deregistering the product in countries in which the products have limited sales volumes and low operating margins.

•	Noden filed its NDA for the pediatric indication and formulation of Tekturna. Approval is estimated to be sometime in the first quarter of 2018 and if approved, would grant Tekturna and Tekturna HCT an additional six months of marketing exclusivity in the US.

---

•

Noden received a paragraph IV notice letter from Anchen Pharnaceuticals advising that Anchen had submitted an ANDA referencing Tekturna 150mg an 300mg tablets and containing certifications against U.S. Patent No. 8,617,595, which is listed in the Orange Book for Tekturna and expires on February 26, 2026. Noden filed a complaint for patent infringement in the US District Court of New Jersey against Anchen and Par Pharmaceuticals within 45 days from receipt of the paragraph IV notice letter. As a result, Anchen’s ANDA is subject to a stay of approval for up to 30 months. The proceeding is currently in the pre-trial phase.

•	To date (through June 30, 2017), we have received cash royalty payments of $253.1 million of the $240.5 million investment.

•	Glumetza (and authorized generic version) royalty: 50% of net sales less COGS continues so long as the products are being commercialized. PDL is auditing Valeant.

•	In July 2017, PDL received a royalty payment from Valeant in the amount of $6.6 million for royalties earned on sales of Glumetza for the month of June. The royalty payment included royalties related to the authorized generic version of Glumetza. This payment will be recorded as part of PDL’s third quarter of 2017 revenue.

•	Recent product approvals, Jentadueto XR, Invokamet XR and Synjardy XR have yielded $17 million in milestones in 2016 and started generating royalties to PDL.

---

•	Low to mid-single digit royalties to PDL on new product approvals expected to continue to 2023 for Invokamet XR and 2026 for Jentadueto XR and Synjardy XR.

•

In NY court action commenced by PDL to collect from related entities who are guarantors of the loan, the judge ruled in favor of PDL. On appeal, the appellate division of the NY court reversed on procedural grounds the portion of the decision granting PDL summary judgment, remanding the case to the trial division for a plenary action. The action is currently before the NY trial court and in the pre-trial phase. The parties will have the opportunity to conduct discovery and file dispositive motions prior to trial. No trial date has been set yet.

•	PDL initiated foreclosure proceedings in January 2017 which resulted in obtaining ownership of certain of the DFM assets through a wholly-owned subsidiary, DFM, LLC.

•	PDL wrote off $51.1 million of assets against ordinary income in Q4 2016.

•	YTD 2017, PDL monetized $8.1 million of those assets. PDL is in the process of monetizing the ex-China assets of DFM, LLC. The amount of which recovery, if any, is unknown at this time.

•	As of June 30, 2017 remaining foreclosed assets are recorded as assets held for sale with a carrying value of $1.9 million.

•	LENSAR has emerged from bankruptcy, and LENSAR and PDL completed LENSAR’s financial restructuring with a court-approved exit plan finalized on May 11, 2017.

•	As a result of the restructuring, PDL converted most of its debt to an equity ownership position.

•	LENSAR is now a wholly-owned subsidiary of PDL, and PDL began consolidating LENSAR’s financial statements with PDL effective May 11, 2017.

•	Despite Auvi-Q being voluntarily pulled from market and Sanofi returning the product right to kaléo, kaléo has made all required interest payments in full and on time to date.

•	Auvi-Q returned to the market in February 2017 and third party reports suggest strong sales.

•	Evzio sales have been much stronger than projected so far. This is secondary source of repayment to PDL.

---

•	In the second quarter of 2017, PDL recognized and was paid $4.7 million in interest revenue from the kaléo note.

•	A second $20.0 million tranche was to be funded by PDL upon CareView’s attainment of specified milestones relating to the placement of CareView Systems and financial targets and was to be accomplished no later than June 30, 2017. These milestones were not achieved, and there is no additional funding obligation due to CareView from PDL.

•	In the second quarter of 2017, PDL recognized and was paid $0.7 million in interest revenue from the CareView note.

---

---