Document



 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 9, 2018

PDL BioPharma, Inc.

(Exact name of Company as specified in its charter)

000-19756
(Commission File Number)

Delaware
 
94-3023969
(State or Other Jurisdiction of Incorporation)
 
(I.R.S. Employer Identification No.)

932 Southwood Boulevard
Incline Village, Nevada 89451
(Address of principal executive offices, with zip code)

(775) 832-8500
(Company’s telephone number, including area code)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
 






Item 2.02 Results of Operations and Financial Condition.
 
On May 9, 2018, PDL BioPharma, Inc. (the Company) issued a press release announcing its financial results for the first quarter ended March 31, 2018. A copy of this earnings release is furnished hereto as Exhibit 99.1. The Company will host an earnings call and webcast on May 9, 2018, during which the Company will discuss its financial results for the first quarter ended March 31, 2018.

Item 7.01 Regulation FD Disclosure.
 
Presentation Materials
 
On May 9, 2018, the Company posted to its website a set of presentation materials that it will use during its earnings call and webcast to assist participants with understanding the Company’s financial results for the quarter ended March 31, 2018. A copy of this presentation is attached hereto as Exhibit 99.2.
 
Information Sheet
 
On May 9, 2018, the Company distributed to analysts covering the Company’s securities a summary of certain information regarding the Company’s financial results and business (the Information Sheet) to assist those analysts in valuing the Company’s securities. The Information Sheet and its associated tables are attached hereto as Exhibit 99.3.
 
Limitation of Incorporation by Reference
 
In accordance with General Instruction B.2. of Form 8-K, the information in this report, including the exhibits, is furnished pursuant to Items 2.02 and 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended or the Exchange Act.
 
Item 9.01 Financial Statements and Exhibits.
The following exhibits are furnished with this report:
Exhibit No.
 
Description
99.1
 
99.2
 
99.3
 

Cautionary Statements
 
This filing and its exhibits include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could impair the Company’s assets or business are disclosed in the “Risk Factors” contained in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2018 and subsequent filings. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PDL BIOPHARMA, INC.
(Company)
 
 
 
By:
 
/s/ Peter S. Garcia
 
 
Peter S. Garcia
 
 
Vice President and Chief Financial Officer
 
 



Dated: May 9, 2018






Exhibit Index
Exhibit No.
 
Description
99.1
 
99.2
 
99.3
 



Exhibit


Exhibit 99.1
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Contacts:
 
 
Peter Garcia
 
Jennifer Williams
PDL BioPharma, Inc.
 
Cook Williams Communications, Inc.
775-832-8500
 
360-668-3701
Peter.Garcia@pdl.com
 
jennifer@cwcomm.org

PDL BioPharma Announces First Quarter 2018 Financial Results

INCLINE VILLAGE, NV, May 9, 2018 – PDL BioPharma, Inc. (PDL or the Company) (NASDAQ: PDLI) today reported financial results for the first quarter ended March 31, 2018 including:
Total revenues of $38.5 million for the three months ended March 31, 2018.
GAAP diluted EPS of $0.01 for the three months ended March 31, 2018.
GAAP net income attributable to PDL’s shareholders of $1.6 million for the three months ended March 31, 2018.
Non-GAAP net income attributable to PDL’s shareholders of $13.4 million for the three months ended March 31, 2018. A full reconciliation of all components of the GAAP to non-GAAP financial results can be found in Table 3 at the end of the release.

Revenue Highlights

Total revenues of $38.5 million for the three months ended March 31, 2018 included:
Product revenues of $23.3 million, which consisted of $18.3 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 $5.0 million for product sales of the LENSAR® Laser System;
Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of $11.1 million, which consisted of the change in estimated fair value of our royalty right assets, primarily related to the Depomed royalty asset;
Royalties from PDL’s licensees to the Queen et al. patents of $2.8 million, which consisted of royalties earned on sales of Tysabri®; and
Interest revenue from note receivable investment to CareView Communications of $0.7 million.

Total revenues decreased by 15 percent or $6.9 million for the three months ended March 31, 2018, when compared to the same period in 2017. The evolution of our revenues reflects PDL’s strategic shift to a specialty biopharmaceutical business model and the residual decline in royalty income from our expired Queen et al. patents.
The 85 percent increase in product revenues was derived from the sales of the Noden Products and the LENSAR Laser System, the latter of which PDL did not begin to recognize until May 2017. Product revenues accounted for approximately 61 percent of total revenues compared to approximately 28 percent in the first quarter of 2017. Rasilez and Rasilez HCT revenues were $7.8 million, which was the first full quarter of revenue recognized from the ex-U.S. commercialization by Noden, having assumed commercialization from Novartis in November 2017;
PDL received $18.6 million in net cash royalties from its royalty rights in the first quarter of 2018, compared to $13.5 million for the same period of 2017. The increase in cash royalties is mainly due to royalties from Glumetza® sold by Valeant Pharmaceuticals International, Inc., partially offset by the decrease of royalties from ARIAD Pharmaceuticals, Inc. as royalties ceased when the asset was sold in the first quarter of 2017;





Royalties from PDL’s licensees to the Queen et al. patents were 80 percent or $11.4 million lower than in the first quarter of 2017 as product supply of Tysabri® manufactured prior to patent expiry in the United States have been extinguished and ex-U.S. product supplies are rapidly being exhausted; and
The decrease in interest revenues was primarily due to the sale of the kaléo, Inc. note receivable in September 2017.

Operating Expense Highlights

Operating expenses were $34.2 million for the three months ended March 31, 2018, compared to $26.9 million for the same period of 2017. The increase in operating expenses for the three months ended March 31, 2018, as compared to the same period in 2017, was primarily a result of Noden Products and LENSAR contributing additional cost of product revenue of $5.6 million and $2.4 million, respectively, which was the result of increased revenue and recognition of costs of goods for ex-U.S. revenue from Noden Products and increased revenue from LENSAR, which PDL did not begin to recognize until May 2017. Sales and marketing expenses at Noden and LENSAR increased an additional $1.4 million and $1.5 million, respectively, and research and development expenses increased an additional $0.6 million due to LENSAR clinical studies. These increases were partially offset by a decrease in the fair value of acquisition-related contingent consideration of $2.0 million, a decrease in research and development costs for the completion of a pediatric trial for Tekturna and a decrease in general and administration asset management and legal expenses related to the Merck litigation.

Recent Developments

Stock Repurchase Program
From April 1, 2018 to May 8, 2018, the Company repurchased approximately 2.8 million shares of its common stock under the share repurchase program at a weighted average price of $3.03 per share for a total of $8.4 million.
Since the inception of the share repurchase program in March 2018, the Company has repurchased approximately 4.2 million shares of its common stock for a total of $12.6 million.
Approximately $12.4 million remains available under the current share repurchase program.

Other Financial Highlights

PDL had cash, cash equivalents, short-term investments and other investments of $405.1 million at March 31, 2018, compared to $532.1 million at December 31, 2017. The change in cash balance for the quarter was primarily a result of PDL retiring the remaining $126.4 million of principal of its 4.0% Convertible Senior Notes due 2018 at their stated maturity by making a payment to the noteholders of $129.0 million, which included $2.6 million of accrued interest.

Conference Call and Webcast Details

PDL will hold a conference call to discuss financial results at 4:30 p.m. Eastern Time today, May 9, 2018.
 
To access the live conference call via phone, please dial (800) 668-4132 from the United States and Canada or (224) 357-2196 internationally. The conference ID is 1798597. Please dial in approximately 10 minutes prior to the start of the call. A telephone replay will be available beginning approximately one hour after the call through one week following the call, and may be accessed by dialing (855) 859-2056 from the United States and Canada or (404) 537-3406 internationally. The replay passcode is 1798597.

To access the live and subsequently archived webcast of the conference call, go to the Company’s website at http://www.pdl.com and go to the Investor Relations section and select “Events & Presentations.” Please connect to the website at least 15 minutes prior to the call to allow for any software download that may be necessary.
 
About PDL BioPharma, Inc.

We seek to provide a significant return for our stockholders by acquiring and managing a portfolio of companies, products, royalty agreements and debt facilities in the biotechnology, pharmaceutical and medical device industries. In 2012, we began providing alternative sources of capital through royalty monetization and debt facilities, and in 2016, we began acquiring commercial-stage products and launching specialized companies dedicated to the commercialization of these products. To date, we have consummated seventeen of such transactions, of which nine are active and outstanding. We have one debt transaction





outstanding, representing deployed capital of $20.0 million: CareView; we have one hybrid royalty/debt transaction outstanding, representing deployed capital of $44.0 million: Wellstat Diagnostics; and we have five royalty transactions outstanding, representing deployed capital of $396.1 million: KYBELLA®, AcelRx, University of Michigan, Viscogliosi Brothers and Depomed. Our equity and loan investment in Noden represents deployed capital of $179.0 million, and our converted equity and loan investment in LENSAR represents deployed capital of $40.0 million.

NOTE: PDL, PDL BioPharma, the PDL logo and the PDL BioPharma logo are trademarks or registered trademarks of, and are proprietary, to PDL BioPharma, Inc. which reserves all rights therein.

Forward-looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those, express or implied, in these forward-looking statements. Important factors that could impair the value of the Company’s assets and business are disclosed in the risk factors contained in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission, filed with the Securities and Exchange Commission on March 16, 2018. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.





TABLE 1
PDL BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME DATA
(In thousands, except per share amounts)

 
 
Three Months Ended
 
 
March 31,
 
 
2018
 
2017
Revenues
 
 
 
 
Royalties from Queen et al. patents
 
$
2,783

 
$
14,156

Royalty rights - change in fair value
 
11,091

 
13,146

Interest revenue
 
749

 
5,457

Product revenue, net
 
23,324

 
12,581

License and other
 
571

 
100

Total revenues
 
38,518

 
45,440

 
 
 
 
 
Operating Expenses
 
 
 
 
Cost of product revenue (excluding intangible amortization)
 
10,566

 
2,552

Amortization of intangible assets
 
6,293

 
6,015

General and administrative expenses
 
11,661

 
12,576

Sales and marketing
 
5,513

 
2,584

Research and development
 
793

 
1,766

Change in fair value of anniversary payment and contingent consideration
 
(600
)
 
1,442

Total operating expenses
 
34,226

 
26,935

Operating income
 
4,292

 
18,505

 
 
 
 
 
Non-operating expense, net
 
 
 
 
Interest and other income, net
 
1,914

 
212

Interest expense
 
(3,585
)
 
(4,971
)
Total non-operating expense, net
 
(1,671
)
 
(4,759
)
 
 
 
 
 
Income before income taxes
 
2,621

 
13,746

Income tax expense
 
1,019

 
6,552

Net income
 
1,602

 
7,194

Less: Net income/(loss) attributable to noncontrolling interests
 

 
(47
)
Net income attributable to PDL’s shareholders
 
$
1,602

 
$
7,241

 
 
 
 
 
Net income per share
 
 
 
 
Basic
 
$
0.01

 
$
0.04

Diluted
 
$
0.01

 
$
0.04

 
 
 
 
 
Shares used to compute income per basic share
 
151,473

 
163,745

Shares used to compute income per diluted share
 
152,579

 
163,992

 
 
 
 
 
Cash dividends declared per common share
 
$

 
$








TABLE 2
PDL BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In thousands)

 
 
March 31,
 
December 31,
 
 
2018
 
2017
Cash, cash equivalents and short-term investments
 
$
405,078

 
$
532,114

Total notes receivable
 
$
70,811

 
$
70,737

Total royalty rights - at fair value
 
$
341,691

 
$
349,223

Total assets
 
$
1,100,401

 
$
1,243,123

Total convertible notes payable
 
$
119,166

 
$
243,481

Total stockholders’ equity
 
$
843,109

 
$
845,890








TABLE 3
PDL BIOPHARMA, INC.
GAAP to NON-GAAP RECONCILIATION:
NET INCOME AND DILUTED EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share amount)

A reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows:
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
 
2018
 
2017
GAAP net income attributed to PDL’s shareholders as reported
 
$
1,602

 
$
7,241

Adjustments to Non-GAAP net income (as detailed below)
 
11,776

 
5,971

Non-GAAP net income attributed to PDL’s shareholders
 
$
13,378

 
$
13,212

 
 
 
 
 
An itemized reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows:
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
 
2018
 
2017
GAAP net income attributed to PDL’s shareholders as reported
 
$
1,602

 
$
7,241

Adjustments:
 
 
 
 
Mark-to-market adjustment to fair value assets
 
7,532

 
348

Non-cash interest revenues
 
(74
)
 
(75
)
Non-cash stock-based compensation expense
 
957

 
1,112

Non-cash debt offering costs
 
2,132

 
2,675

Mark-to-market adjustment on warrants held
 
(71
)
 
(100
)
Amortization of the intangible assets
 
6,293

 
6,015

Mark-to-market adjustment of anniversary payment and contingent consideration
 
(600
)
 
1,442

Income tax effect related to above items
 
(4,393
)
 
(5,446
)
Total adjustments
 
11,776

 
5,971

Non-GAAP net income
 
$
13,378

 
$
13,212


Use of Non-GAAP Financial Measures

We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered “non-GAAP” financial measures under applicable SEC rules. We believe that the disclosure of these non-GAAP financial measures provides our investors with additional information that reflects the amounts and financial basis upon which our management assesses and operates our business. These non-GAAP financial measures are not in accordance with generally accepted accounting principles and should not be viewed in isolation or as a substitute for reported, or GAAP, net income, and diluted earnings per share, and are not a substitute for, or superior to, measures of financial performance performed in conformity with GAAP.

“Non-GAAP net income“ is not based on any standardized methodology prescribed by GAAP and represent GAAP net income adjusted to exclude (1) mark-to market adjustments related to the fair value election for our investments in royalty rights presented in our earnings, which include the fair value re-measurement of future discounted cash flows for each of the royalty rights assets we have acquired, (2) non-cash interest revenue from notes receivable (3) stock-based compensation expense, (4) non-cash interest expense related to PDL debt offering costs, (5) mark-to market adjustments related to warrants held, (6) mark-to-market adjustment related to acquisition-related contingent considerations, (7) amortization of intangible assets, and to adjust (7) the related tax effect of all reconciling items within our reconciliation of our GAAP to Non-GAAP net income. Non-





GAAP financial measures used by PDL may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.



Exhibit


Exhibit 99.2

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Exhibit

Exhibit 99.3

PDL BioPharma, Inc.
Q1 2018
May 9, 2018

Following are some of the key points regarding PDL’s first quarter 2018 financial and business results.

Highlighted Financial Results from Q1/2018
Total revenues of $38.5 million for the three months ended March 31, 2018.
GAAP diluted EPS of $0.01 for the three months ended March 31, 2018.
GAAP net income attributable to PDL’s shareholders of $1.6 million for the three months ended March 31, 2018.
Non-GAAP net income attributable to PDL’s shareholders of $13.4 million for the three months ended March 31, 2018.
PDL had cash, cash equivalents, short-term investments and other investments of $405.1 million at March 31, 2018, compared to $532.1 million at December 31, 2017. The change in cash balance for the quarter was primarily a result of PDL retiring the remaining $126.4 million of principal of its 4.0% Convertible Senior Notes due 2018 at their stated maturity by making a payment to the noteholders of $129.0 million, which included $2.6 million of accrued interest.
On March 31, 2018, PDL had a net book value of approximately $5.60 per share.

Recent Developments
From April 1, 2018 to May 8, 2018, the Company repurchased approximately 2.8 million shares of its common stock under the share repurchase program at a weighted average price of $3.03 per share for a total of $8.4 million.
Since the inception of the share repurchase program in March 2018, the Company has repurchased approximately 4.2 million shares of its common stock for a total of $12.6 million.
Approximately $12.4 million remains available under the current share repurchase program.

Noden Pharma
Noden US is commercializing Tekturna® and Tekturna HCT® in the United States and Noden Pharma DAC, an Ireland based company, assumed commercialization responsibilities for Rasilez® and Rasilez HCT® in the rest of the world, starting in November of 2017. The products are indicated for the treatment of hypertension.
PDL owns 100 percent of Noden and continues to hold three of five board seats.
Noden and PDL are evaluating additional pharma products in the form of optimized, established medicines, to acquire for Noden.
Noden net revenue for the quarter ended March 31, 2018 was $18.3 million, with $10.5 million in US revenue and $7.8 million in the rest of world, compared to $12.6 for the same period in 2017.
Noden product revenues increased 46 percent and accounted for approximately 61 percent of total revenues compared to approximately 28 percent in the first quarter of 2017.
Rasilez and Rasilez HCT revenues were $7.8 million, which was the first full quarter of revenue recognized from the ex-U.S. commercialization by Noden, having assumed commercialization from Novartis in November 2017;
Gross margins on revenue in the first quarter were 55.4 percent, 80 percent in the U.S. on Tekturna and Tekturna HCT and 24 percent ex-U.S. on Rasilez and Rasilez HCT.
Noden’s overall goal is to maximize profits generated from its portfolio, and this led us to de-register the products in those few European countries where Rasilez was either not or only marginally profitable. Although this has had a negative impact on revenue, it has improved operating margins.
In December of 2017, Noden entered into an agreement with Lee’s Pharmaceutical Holdings Ltd. granting them exclusive sales rights to Rasilez in China, Hong Kong, Macau and Taiwan, with guaranteed payments due to Noden. We had not forecasted sales in these territories during our acquisition of Rasilez, so this agreement represents an incremental opportunity.

Page 1

PDL BioPharma, Inc.
Q1 2018
May 9, 2018


Also in December, 2017, Noden entered into an agreement with Orphan Pacific for the distribution of Rasilez in Japan. The marketing authorization has been transferred from Novartis, and Orphan Pacific started shipping products in the Japanese market at the end of February, 2018.

LENSAR
LENSAR Laser System revenue for the for the quarter ended March 31, 2018 was $5.0 million. PDL did not begin recognizing revenue from LENSAR until May 2017.
Gross margins on LENSAR revenue in the first quarter were 52.2 percent.

Updates on Income Generating Assets

Royalty Rights Assets

The following table provides additional details with respect to the fair value of the PDL royalty rights assets as of March 31, 2018 and with changes from December 31, 2017 as reflected in our Balance Sheet:
 
 
Fair Value as of
 
Royalty Rights -
 
Fair Value as of
(in thousands)
 
December 31, 2017
 
Change in Fair Value
 
March 31, 2018
Depomed
 
$
232,038

 
$
(9,430
)
 
$
222,608

VB
 
14,380

 
137

 
14,517

U-M
 
26,769

 
(187
)
 
26,582

AcelRx
 
72,894

 
2,237

 
75,131

Avinger
 
397

 
(295
)
 
102

KYBELLA
 
2,745

 
6

 
2,751

 
 
$
349,223

 
$
(7,532
)
 
$
341,691


The following table provides a summary of activity with respect to our royalty rights - change in fair value for the quarter ended March 31, 2018:
 
 
 
 
Change in
 
Royalty Rights -
(in thousands)
 
Cash Royalties
 
Fair Value
 
Change in Fair Value
Depomed
 
$
16,907

 
$
(9,430
)
 
$
7,477

VB
 
280

 
137

 
417

U-M
 
996

 
(187
)
 
809

AcelRx
 
52

 
2,237

 
2,289

Avinger
 
305

 
(295
)
 
10

KYBELLA
 
83

 
6

 
89

 
 
$
18,623

 
$
(7,532
)
 
$
11,091


Updates on Royalty Rights Assets

PDL received $18.6 million in net cash royalties from its royalty rights in the first quarter of 2018, compared to $13.5 million for the same period of 2017. The increase in cash royalties is mainly due to royalties from Glumetza® sold by Valeant Pharmaceuticals International, Inc., partially offset by the decrease of royalties from ARIAD Pharmaceuticals, Inc. as royalties ceased when the asset was sold in the first quarter of 2017;

Depomed, Inc. To date (through December 31, 2017), we have received cash royalty payments of $325.4 million from the $240.5 million investment.
Glumetza (and authorized generic version) royalty: 50% of net sales less COGS continue so long as the products are being commercialized.
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®.


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PDL BioPharma, Inc.
Q1 2018
May 9, 2018


Updates on royalty-bearing products relating to Queen et al. Patents

Tysabri® (Approved royalty-bearing product relating to Queen et al. patents)
While the Queen et al. patents have expired and the resulting royalty revenue has dropped substantially since the first quarter of 2016, we continue to receive royalty revenue from one product under the Queen et al. patent licenses, Tysabri, as a result of sales of the product that was manufactured prior to patent expiry.
Royalties from PDL’s licensees to the Queen et al. patents were 80 percent or $11.4 million lower than in the first quarter of 2017 as product supply of Tysabri manufactured prior to patent expiry in the United States have been extinguished and ex-U.S. product supplies are rapidly being exhausted.
PDL recorded revenue of $2.8 million from Tysabri in Q1 2018.

Notes Receivable

The following table presents the fair value of assets and liabilities not subject to fair value recognition by level within the valuation hierarchy:
 
 
March 31, 2018
 
December 31, 2017
(In thousands)
 
Carrying Value
 
Fair Value
Level 3
 
Carrying Value
 
Fair Value
Level 3
Wellstat Diagnostics note receivable
 
$
50,191

 
$
52,412

 
$
50,191

 
$
51,308

Hyperion note receivable
1,200

1,200

 
1,200

 
1,200

 
1,200

CareView note receivable
19,245

19,420

 
19,100

 
19,346

 
18,750

 
 
$
70,811

 
$
72,712

 
$
70,737

 
$
71,258


Updates on Notes Receivable

CareView
In February 2018, we entered into a modification agreement with CareView whereby we agreed, effective as of December 28, 2017, to modify the credit agreement before remedies could otherwise have become available to us under the credit agreement in relation to certain obligations of CareView that would potentially not be met, including the requirement to make principal payments. Under the modification agreement we agreed that (i) a lower liquidity covenant would be applicable and (ii) principal repayment would be delayed for a period of up to December 31, 2018. In exchange for agreeing to these modifications, among other things, the exercise price of our warrants to purchase 4.4 million shares of common stock of CareView was reduced and, subject to the occurrence of certain events, CareView agreed to grant us additional equity interests.

Wellstat Diagnostics, LLC:
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.
In September 2017, Wellstat Therapeutics, one of the Wellstat Guarantors, obtained a decision against BTG International, Inc. in a breach of contract case which set the damages at $55.8 million plus interest and fees.  Wellstat Therapeutics will only receive the award in a final court decision or settlement between the parties, and BTG has appealed the decision.
On February 6, 2018, the NY Court issued an order from the bench which enjoins the Wellstat Diagnostics Guarantors from selling, encumbering, removing, transferring or altering the collateral, and further precludes PDL from foreclosing on certain collateral during the pendency of the case.

Forward-looking Statements
This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those, express or implied, in

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PDL BioPharma, Inc.
Q1 2018
May 9, 2018


these forward-looking statements. Important risks and uncertainties with respect to the Company's business are disclosed in the risk factors contained in the Company's Annual Report on Form 10-K, as updated by subsequent reports filed with the Securities and Exchange Commission. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.


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PDL BioPharma, Inc.
Q1 2018
May 9, 2018


Queen et al. Royalties
Royalty Revenue by Product ($ in 000's) *
Tysabri
Q1
Q2
Q3
Q4
Total
2018
2,783




2,783

2017
14,156

16,284

1,443

4,531

36,414

2016
13,970

14,232

14,958

15,513

58,673

2015
14,385

13,614

13,557

14,031

55,587

2014
12,857

13,350

16,048

15,015

57,270

2013
12,965

13,616

11,622

12,100

50,304

2012
11,233

12,202

11,749

12,255

47,439

2011
9,891

10,796

11,588

11,450

43,725

2010
8,791

8,788

8,735

9,440

35,754

2009
6,656

7,050

7,642

8,564

29,912

2008
3,883

5,042

5,949

6,992

21,866

2007
839

1,611

2,084

2,836

7,370

2006



237

237

* As reported to PDL by its licensees. Totals may not sum due to rounding.



Queen et al. Sales Revenue
Reported Licensee Net Sales Revenue by Product ($ in 000's) *
Tysabri
Q1
Q2
Q3
Q4
Total
2018
92,769




92,769

2017
471,877

398,382

194,563

177,379

1,242,201

2016
465,647

474,379

498,618

517,099

1,955,743

2015
479,526

453,786

451,898

467,735

1,852,945

2014
428,561

442,492

534,946

500,511

1,906,510

2013
434,677

451,358

387,407

403,334

1,676,776

2012
374,430

401,743

391,623

408,711

1,576,508

2011
329,696

356,876

388,758

381,618

1,456,948

2010
293,047

287,925

293,664

316,657

1,191,292

2009
221,854

229,993

257,240

285,481

994,569

2008
129,430

163,076

200,783

233,070

726,359

2007
30,468

48,715

71,972

94,521

245,675

2006



7,890

7,890

* As reported to PDL by its licensee. Dates in above charts reflect when PDL receives
royalties on sales. Sales occurred in the quarter prior to the dates in the above charts.
Totals may not sum due to rounding.
 


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