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•	Total revenues were $44.2 million, including $20.3 million in product revenue and $23.9 million in revenue from royalty rights - change in fair value.

•	LENSAR revenues were $8.1 million, up 22% over the prior-year period.

•	U.S. market share for branded Tekturna and authorized generic of Tekturna remained steady at approximately 73%.

•	Net cash royalties from all royalty rights were $25.6 million, up from $19.1 million in the prior-year period.

•	GAAP net loss was $17.8 million. Non-GAAP net income was $10.4 million. A reconciliation of GAAP to non-GAAP financial results can be found in Table 3 at the end of this news release.

•	Completed $100 million share repurchase program by repurchasing 1.3 million shares of common stock in the open market for $4.1 million.

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•	Total third quarter revenues were $44.2 million and included $20.3 million in product revenue and $23.9 million in revenue from royalty rights - change in fair value.

◦	Product revenue from the LENSAR Laser System was $8.1 million, a 22% increase from the third quarter of 2018. Revenue generated outside the U.S. accounted for the majority of the revenue increase. LENSAR procedure volume for the third quarter of 2019 increased 28% from the prior-year period.

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Product revenue from Noden was $12.2 million compared with $17.8 million in the prior-year period. Revenue was split evenly between the U.S. and rest of the world at $6.1 million, compared with $9.7 million and $8.0 million, respectively, in the prior-year period. The U.S. market share for branded Tekturna and the authorized generic of Tekturna was 73%, relatively unchanged from the second quarter of 2019.

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Net royalty revenues from acquired royalty rights, which include cash royalties received and a change in fair value of the royalty rights assets, were $23.9 million compared with $42.2 million in the prior-year period. The decrease in royalty revenue is primarily related to the increase in fair value in the prior year period that resulted from the acquisition of additional Glumetza® royalty rights from Assertio Therapeutics in that period. PDL received $25.6 million in net cash royalties from all of its royalty rights in the third quarter of 2019, up from $19.1 million in the year-ago quarter.

•	Total revenues for the first nine months of 2019 were $60.6 million and included $64.9 million in product revenue and negative $4.3 million in revenue from royalty rights - change in fair value.

◦	Product revenue from the LENSAR Laser System was $22.2 million, a 27% increase from the prior-year period. Revenue generated outside of the U.S. accounted for the majority of the increase. LENSAR procedure volume for the first nine months of 2019 increased 30% from the prior-year period.

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Product revenue from the Noden Products was $42.6 million compared with $62.0 million for the prior-year period. Sales for the first nine months of 2019 were comprised of $21.0 million in the U.S. and $21.6 million in the rest of the world, compared with $30.6 million and $31.4 million, respectively, in the prior-year period. The decline in sales of branded Tekturna in the U.S. is due primarily to the launch of an authorized generic of Tekturna in the U.S. and the launch of a third-party generic of aliskiren late in the first quarter of 2019. The decline in sales in the rest of the world is due to lower sales volume of Rasilez in certain territories, in part reflecting additional measures to maximize product profitability.

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Revenue from royalty rights - change in fair value was negative $4.3 million for the first nine months of 2019, compared with $66.1 million in the prior-year period. The decrease is primarily related to a non-cash adjustment to the AcelRx royalty asset fair value of negative $60.0 million in the second quarter of 2019. PDL received $58.3 million in net cash royalties from its royalty rights in the first nine months of 2019.

◦	Interest revenue decreased by $2.3 million from the prior-year period due to modifications to the Company’s agreement with CareView Communications, which deferred interest payments for the first nine months of 2019.

◦	Royalties from PDL’s licensees to the Queen et al. patents were less than $0.1 million for the first nine months of 2019, compared with $4.5 million for the prior-year period, reflecting the runout of the royalties on the sales of Tysabri®.

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Operating expenses for the third quarter of 2019 were $34.7 million, a $3.6 million increase from the third quarter of 2018. The increase was primarily due to a $3.6 million increase in research and development (R&D) expenses associated with product development and patent licensing for LENSAR, and a $3.1 million, or 26%, increase in cost of product revenue, $2.4 million of which related to a termination provision in a Noden supply agreement amended in June 2019 involving end of contract fees, most of which were incurred in the third quarter of 2019. These increases were partially offset by a $1.1 million, or 8%, decline in G&A expenses, primarily due to lower professional fees, and a $1.8 million, or 51%, decline in sales and marketing expenses reflecting savings from the change in the Company’s marketing strategy for the Noden Products.

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Operating expenses for the first nine months of 2019 were $90.6 million, a $146.5 million decrease from the prior-year period. The decrease was primarily a result of the net impact of: the $152.3 million impairment of the Noden Products intangible assets in the second quarter of 2018 and related reductions to the Noden Products contingent liability and amortization expense associated with those intangible assets which, in aggregate, accounted for

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On a GAAP basis, the net loss attributable to PDL’s shareholders for the third quarter of 2019 was $17.8 million, or $0.16 per share, compared with GAAP net income attributable to PDL’s shareholders of $25.6 million, or $0.18 per share on a diluted basis, for the prior-year period. Noteworthy items reflected in the third quarter net loss include pre-tax charges of $3.9 million for the convertible debt exchange, a $3.6 million increase to R&D expense, primarily the result of the acquisition of LENSAR intellectual property, a $2.4 million manufacturing charge for our Noden products and a $27.4 million loss due to the decrease in fair value of our investment in Evofem, partially offset by a $3.5 million gain recognized for the sale of intangible assets. Non-GAAP net income attributable to PDL’s shareholders was $10.4 million for the third quarter of 2019, compared with non-GAAP net income of $13.1 million for the third quarter of 2018.

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The GAAP net loss attributable to PDL’s shareholders for the first nine months of 2019 was $15.5 million, or $0.13 per share, compared with a GAAP net loss attributable to PDL’s shareholders of $85.1 million or $0.58 per share, for the prior-year period. Non-GAAP net income attributable to PDL’s shareholders was $34.9 million for the first nine months of 2019, compared with non-GAAP net income of $44.2 million for the prior-year period.

•	PDL had cash and cash equivalents of $294.3 million as of September 30, 2019, compared with cash and cash equivalents of $394.6 million as of December 31, 2018.

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The $100.3 million reduction in cash and cash equivalents during the first nine months of 2019 was primarily the result of common stock repurchases of $75.9 million, the Company’s investment in Evofem Biosciences of $60.0 million and costs incurred in the exchange of convertible debt of $11.1 million, which extended the maturity date of $86.1 million of our notes to December 2024, and net cash used in operations of $13.3 million. This was partially offset by the proceeds from royalty rights of $58.1 million and cash proceeds from the sale of intangible assets of $5.0 million.

•	In November 2018 PDL began repurchasing shares of its common stock in the open market pursuant to the

•	Since initiating its first stock repurchase program in March 2017, the Company has repurchased 53.1 million shares for $155.0 million, at an average cost of $2.92 per share.

•	As of October 31, 2019, the Company had approximately 114.2 million shares of common stock outstanding.

•	PDL is affirming 2019 financial guidance for Noden product revenue, which is expected to be in the range of

•	PDL now expects 2019 LENSAR product revenue to exceed $29 million and 2019 cash royalties to exceed

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•	GAAP net loss of $17.8 million or $0.16 per share.

•	Non-GAAP net income attributable to PDL’s shareholders of $10.4 million.

•	Cash and cash equivalents of $294.3 million as of September 30, 2019.

•	Investment in Evofem Biosciences resulted in a pre-tax loss for the quarter of $27.4 million due to the decrease in Evofem’s stock price during the third quarter of 2019. On a year to date basis, PDL’s investment in Evofem has resulted in a pre-tax gain of $18.1 million due to the increase in fair value.

•	Completed the $100 million share repurchase program by repurchasing 1.3 million shares of common stock in the open market during the third quarter of 2019 for $4.1 million.

•	The Medical Devices segment consists of revenue derived from the LENSAR® Laser System sales made by the Company’s LENSAR subsidiary, and associated costs of operating the business. LENSAR is a medical device company focused on delivering next generation femtosecond cataract laser technology used for refractive cataract surgery.

•	Product revenue from the LENSAR® Laser System was $8.1 million, a 22% increase from the third quarter of 2018, and a 9% increase from the second quarter of 2019. Revenue generated outside the U.S. accounted for the majority of the revenue increases.

▪	LENSAR procedure volume for the three months ended September 30, 2019 increased by 28% from the prior-year period and decreased 4% from the second quarter of 2019.

•	Gross margin on LENSAR revenue in the third quarter of 2019 was 41 percent.

•	In the second quarter of 2019 the Company invested $60.0 million in Evofem. In connection with this investment the Company appointed one board member and one observer to Evofem’s board of directors. Evofem is a clinical-stage biopharmaceutical company committed to developing and commercializing innovative products to address unmet needs in women's sexual and reproductive health.

•	For the three months ended September 30, 2019, the Company recognized a pre-tax loss of $27.4 million from its investment in Evofem due to the decrease in Evofem’s stock price during the period. On a year to date basis, PDL’s investment in Evofem has resulted in a pre-tax gain of $18.1 million.

•	As of September 30, 2019, the Company owned approximately 29 percent of Evofem’s common stock.

•	The Company’s Pharmaceutical segment consists of revenue derived from the Noden Products and associated costs of operating the business.

•	Noden net revenue for the third quarter of 2019 was $12.2 million compared with $17.8 million for the third quarter of 2018. Sales in the third quarter of 2019 were comprised of $6.1 million in the United States and $6.1 million in the rest of the world, compared with $9.7 million and $8.1 million, respectively, in the prior-year period.

◦	Sales of branded Tekturna in the U.S. declined due to the Company’s first quarter 2019 launch of an authorized generic and the launch of a third-party generic form of aliskiren late in the first quarter of 2019.

◦	Branded Tekturna and the authorized generic of Tekturna maintained a 73% U.S. market share at the end of the third quarter of 2019, which is relatively unchanged from the second quarter of 2019.

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◦	Sales of Rasilez and Rasilez HCT in the rest of the world declined primarily due to lower sales volume of Rasilez in certain territories.

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Gross margins on revenue in the third quarter of 2019 were 16 percent, 71 percent in the U.S. and a negative 39 percent ex-U.S. on Rasilez® and Rasilez HCT®. The Rasilez® and Rasilez HCT® gross margins in the third quarter of 2019 were impacted by a termination provision in a Noden supply agreement amended in June 2019 involving end of contract fees that resulted in a one-time manufacturing cost primarily recorded in the third quarter of 2019.

•	Through September 30, 2019, the Company has received cash royalty payments of $433 million from the $260.5 million investment.

◦	For the third quarter of 2019, the Company received $23.6 million in cash royalty payments on Assertio royalty assets.

•	Glumetza (and AG version) royalty: 50 percent 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® U.S., 2026 for Jentadueto XR® and Synjardy XR®, and 2027 for Invokamet XR® ex-US. Royalties on the sale of Janumet® ended in the third quarter of 2018.

•	Through September 30, 2019, the Company has received cash royalty payments of $28.3 million from non-Assertio royalty assets, of which $2.0 million in cash royalty payments were received in the third quarter of 2019.

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•	In November 2018, PDL began repurchasing shares of its common stock pursuant to the $100.0 million share repurchase program authorized by the Company’s board of directors in September 2018. During the third quarter of 2019, the Company completed the stock repurchase program by repurchasing 1.3 million shares for an aggregate purchase price of $4.1 million.

•	Since initiating its first stock repurchase program in March 2017, the Company has repurchased a total of 53.1 million shares for $155.0 million, at an average cost of $2.92 per share.

•	As of October 31, 2019, the Company had approximately 114.2 million shares of common stock outstanding.

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