SEC Filing | PDL BioPharma, Inc.

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pdli20130906_8k.htm

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): September 9, 2013

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		(I.R.S. Employer Identification No.)
Incorporation)

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))

Item 7.01 Regulation FD Disclosure.

Press Release

On September 9, 2013, PDL BioPharma, Inc. (the Company) issued a press release with revenue guidance for the third quarter ending September 30, 2013. A copy of the press release is attached hereto as Exhibit 99.1.

Detailed Product Sales, Royalties and Manufacturing

On September 9, 2013, the Company distributed to analysts covering the Company’s securities and posted to its website a summary of certain information underlying the Company’s receipt of royalty payments (the Information Sheet) to assist those analysts and its stockholders in valuing the Company’s securities. The Information Sheet is based on information provided to the Company by its licensees and includes reported net sales revenues by licensed product, royalty revenue by licensed product and where certain licensed products are manufactured and sold. A copy of the Information Sheet is attached hereto as Exhibit 99.2

Limitation of Incorporation by Reference

In accordance with General Instruction B.2. of Current Report on Form 8-K, the information in Item 7.01 of this report, including Exhibits 99.1 and 99.2, is furnished 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. Such information will not be deemed an admission as to the materiality of any such information that is required to be disclosed solely by Regulation FD.

Cautionary Statements

This filing, the press release, the Information Sheet and the Company’s statements herein and in the attached press release include and constitute “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 royalty assets or business and limit the Company’s ability to pay dividends, purchase income generating assets and take other corporate actions are disclosed in the “Risk Factors” contained in the Company’s 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2013, as updated by 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.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.		Description
99.1		Press Release

99.2		Information Sheet

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, Chief Financial Officer and
		Chief Accounting Officer

Dated: September 9, 2013

Exhibit Index

Exhibit No.		Description
99.1		Press Release

99.2		Information Sheet

ex99-1.htm

Exhibit 99.1

Contacts:
Peter S. 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 Provides Third Quarter 2013 Revenue Guidance of $97 Million

INCLINE VILLAGE, NV, September 9, 2013 – PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today announced revenue guidance for the third quarter ending September 30, 2013, of approximately $97 million, as compared with actual revenue of $85 million for the third quarter of 2012, an approximate 14 percent increase.

The forecasted growth in revenues is driven by increased second quarter 2013 sales for Avastin^®, Herceptin^®, Lucentis^®, Xolair^®, Kadcyla^®, Perjeta^®, and Actemra^® for which PDL receives royalties in the third quarter of 2013. Sales of Avastin^®, Herceptin^®, Lucentis^®, Xolair^®, Perjeta^®, and Kadcyla^® (the Genentech Products) are subject to a tiered royalty rate for product that is made or sold in the United States and a flat royalty rate of three percent for product that is manufactured and sold outside of the United States (ex-US manufactured and sold). The net sales thresholds and the applicable royalty rates for the Genentech Products are outlined below:

Genentech Products Made or Sold in US	Royalty Rate
Net sales up to $1.5 billion	3.0%
Net sales between $1.5 billion and up to $2.5 billion	2.5%
Net sales between $2.5 billion and up to $4.0 billion	2.0%
Net sales exceeding $4.0 billion	1.0%

Genentech Products Made and Sold ex-US
Net sales	3.0%

The third quarter royalty payment received from Genentech included royalties based on worldwide sales.

Revenue guidance for the third quarter of 2013 is net of an estimated payment due under our February 2011 settlement agreement with Novartis AG (Novartis). PDL pays to Novartis certain amounts based on net sales of Lucentis, made by Novartis, during calendar year 2011 and beyond. The amount paid is less than we receive in royalties on such sales.

Reported worldwide sales for Avastin sales increased approximately 13 percent in the second quarter of 2013 when compared to the same period in 2012. Ex-U.S. manufactured and sold Avastin sales represented 38 percent of total Avastin sales in the second quarter of 2013 as compared with 29 percent in the second quarter of 2012.

Reported worldwide sales for Herceptin increased approximately 1 percent in the second quarter of 2013 when compared to the same period in 2012. Ex-U.S. manufactured and sold Herceptin sales represented 38 percent of total Herceptin sales in the second quarter of 2013 as compared with 37 percent in the second quarter of 2012.

Reported worldwide sales for Lucentis increased approximately 9 percent in the second quarter of 2013 when compared to the same period in 2012. All sales of Lucentis were from inventory produced in the United States.

Reported worldwide sales for Tysabri^®, a Biogen Idec product, decreased approximately 1 percent for the second quarter of 2013 compared to the same period in 2012. Tysabri royalties are determined at a flat rate as a percentage of sales regardless of location of manufacture or sale.

The sales information presented above is based on information provided by PDL’s licensees in their quarterly reports to the Company as well as from public disclosures made by PDL’s licensees.

About PDL BioPharma

PDL pioneered the humanization of monoclonal antibodies and, by doing so, enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases. Today, PDL is focused on intellectual property asset management, investing in new income generating assets and maximizing value for its shareholders. For more information, please visit www.pdl.com.

NOTE: PDL BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma, Inc.

Forward-looking Statements

This press release contains forward-looking statements. 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. Factors that may cause differences between current expectations and actual results include, but are not limited to, the following:

●

The expected rate of growth in royalty-bearing product sales by PDL’s existing licensees;

●

The relative mix of royalty-bearing Genentech products manufactured and sold outside the U.S. versus made or sold in the U.S.;

●

The ability of our licensees to receive regulatory approvals to market and launch new royalty-bearing products and whether such products, if launched, will be commercially successful;

●

The productivity of acquired income generating assets may not fulfill our revenue forecasts and, if secured by collateral, we may be undersecured and unable to recuperate our capital expenditures in the transaction;

●

Changes in any of the other assumptions on which PDL’s projected royalty revenues are based;

●

The outcome of pending litigation or disputes, including PDL’s current dispute with Genentech related to ex-U.S. sales of Genentech licensed products;

●

The change in foreign currency exchange rate;

●

Positive or negative results in PDL’s attempt to acquire income generating assets; and

●

The failure of licensees to comply with existing license agreements, including any failure to pay royalties due.

Other factors that may cause PDL's actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in PDL's filings with the SEC, including the "Risk Factors" sections of its annual report filed with the SEC. Copies of PDL's filings with the SEC may be obtained at the "Investors" section of PDL's website at www.pdl.com. PDL expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in PDL's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based for any reason, except as required by law, even as new information becomes available or other events occur in the future. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.

ex99-2.htm

Exhibit 99.2

Royalty Revenue by Product ($ in 000's) *

Avastin	Q1		Q2		Q3		Q4		Total
2013		33,234		46,720		32,224		-		112,177
2012		23,215		41,670		25,955		30,041		120,882
2011		22,283		41,967		23,870		22,886		111,006
2010		16,870		44,765		29,989		24,922		116,547
2009		13,605		35,161		21,060		15,141		84,966
2008		9,957		30,480		19,574		12,394		72,405
2007		8,990		21,842		17,478		9,549		57,859
2006		10,438		15,572		15,405		12,536		53,952

Herceptin	Q1		Q2		Q3		Q4		Total
2013		30,287		47,353		30,961		-		108,602
2012		25,702		44,628		30,433		28,307		129,070
2011		25,089		42,209		31,933		21,812		121,042
2010		23,402		38,555		27,952		25,441		115,350
2009		16,003		32,331		26,830		18,615		93,779
2008		14,092		34,383		28,122		20,282		96,880
2007		19,035		28,188		22,582		14,802		84,608
2006		15,142		19,716		21,557		20,354		76,769

Lucentis	Q1		Q2		Q3		Q4		Total
2013		12,032		30,066		13,536		-		55,633
2012		10,791		27,938		12,552		11,097		62,377
2011		8,878		24,313		12,157		10,750		56,099
2010		7,220		19,091		10,841		8,047		45,198
2009		4,621		12,863		8,123		6,152		31,759
2008		3,636		11,060		7,631		4,549		26,876
2007		2,931		6,543		6,579		3,517		19,570
2006		-		-		289		3,335		3,624

Xolair	Q1		Q2		Q3		Q4		Total
2013		5,930		10,025		7,334		-		23,288
2012		5,447		8,609		6,504		6,145		26,705
2011		4,590		7,621		5,916		5,823		23,949
2010		3,723		6,386		4,980		4,652		19,741
2009		2,665		5,082		4,085		3,722		15,553
2008		1,488		4,866		3,569		2,927		12,850
2007		1,684		3,942		3,332		2,184		11,142
2006		2,263		2,969		3,041		2,495		10,768

Perjeta	Q1		Q2		Q3		Q4		Total
2013		340		1,414		748		-		2,502
2012		-		-		58		250		308
2011		-		-		-		-		-
2010		-		-		-		-		-
2009		-		-		-		-		-
2008		-		-		-		-		-
2007		-		-		-		-		-
2006		-		-		-		-		-

Kadcyla	Q1		Q2		Q3		Q4		Total
2013		-		551		830		-		1,381
2012		-		-		-		-		-
2011		-		-		-		-		-
2010		-		-		-		-		-
2009		-		-		-		-		-
2008		-		-		-		-		-
2007		-		-		-		-		-
2006		-		-		-		-		-

Tysabri	Q1		Q2		Q3		Q4		Total
2013		12,965		13,616		11,622		-		38,203
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

Actemra	Q1		Q2		Q3		Q4		Total
2013		2,631		2,816		2,939		-		8,386
2012		1,705		2,074		2,145		2,462		8,385
2011		913		1,136		1,401		1,460		4,910
2010		1,587		237		315		688		2,827
2009		585		537		909		1,197		3,228
2008		44		-		146		369		559
2007		32		-		-		17		49
2006		-		-		-		-		-

* As reported to PDL by its licensees

Totals may not sum due to rounding

Reported Net Sales Revenue by Product ($ in 000's) *

Avastin	Q1		Q2		Q3		Q4		Total
2013		1,653,108		1,694,678		1,746,135		-		5,093,921
2012		1,502,757		1,573,727		1,551,327		1,662,977		6,290,788
2011		1,597,461		1,582,705		1,581,095		1,469,994		6,231,255
2010		1,506,788		1,596,892		1,594,707		1,646,218		6,344,605
2009		1,345,487		1,295,536		1,439,730		1,514,053		5,594,806
2008		980,715		1,084,930		1,180,427		1,239,382		4,485,454
2007		678,068		746,587		797,013		875,084		3,096,752
2006		439,318		516,052		570,551		592,897		2,118,817

Herceptin	Q1		Q2		Q3		Q4		Total
2013		1,681,574		1,744,145		1,681,860		-		5,107,579
2012		1,515,255		1,625,313		1,663,695		1,650,495		6,454,759
2011		1,391,568		1,559,975		1,642,898		1,432,771		6,027,211
2010		1,270,846		1,349,512		1,300,934		1,409,310		5,330,602
2009		1,210,268		1,133,993		1,226,435		1,278,626		4,849,323
2008		1,105,426		1,195,215		1,211,982		1,186,806		4,699,428
2007		891,761		949,556		979,602		1,015,033		3,835,952
2006		529,585		659,719		761,099		803,576		2,753,979

Lucentis	Q1		Q2		Q3		Q4		Total
2013		1,203,179		1,171,423		1,200,791		-		3,575,394
2012		1,079,092		1,086,543		1,097,541		1,109,695		4,372,871
2011		887,757		943,418		1,052,809		1,075,015		3,958,999
2010		721,967		698,890		745,376		804,684		2,970,917
2009		462,103		469,736		555,296		615,212		2,102,347
2008		363,615		393,682		460,167		454,922		1,672,386
2007		224,820		219,579		299,995		322,300		1,066,695
2006		-		-		10,689		157,742		168,431

Xolair	Q1		Q2		Q3		Q4		Total
2013		341,309		365,778		391,900		-		1,098,987
2012		310,234		314,638		347,796		340,431		1,313,100
2011		267,754		277,642		310,874		314,911		1,171,182
2010		228,859		225,878		251,055		263,389		969,179
2009		184,669		181,086		211,006		219,693		796,454
2008		137,875		169,521		177,179		183,753		668,329
2007		129,172		130,700		144,250		147,754		551,876
2006		95,241		99,354		112,608		118,002		425,204

Perjeta	Q1		Q2		Q3		Q4		Total
2013		34,008		55,076		66,353		-		155,437
2012		-		-		5,080		25,000		30,079
2011		-		-		-		-		-
2010		-		-		-		-		-
2009		-		-		-		-		-
2008		-		-		-		-		-
2007		-		-		-		-		-
2006		-		-		-		-		-

Kadcyla	Q1		Q2		Q3		Q4		Total
2013		-		21,459		73,626		-		95,085
2012		-		-		-		-		-
2011		-		-		-		-		-
2010		-		-		-		-		-
2009		-		-		-		-		-
2008		-		-		-		-		-
2007		-		-		-		-		-
2006		-		-		-		-		-

Tysabri	Q1		Q2		Q3		Q4		Total
2013		434,677		451,358		387,407		-		1,273,442
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

Actemra	Q1		Q2		Q3		Q4		Total
2013		87,703		91,374		97,961		-		277,038
2012		56,662		66,624		71,505		82,053		276,843
2011		30,433		35,370		46,709		48,671		161,183
2010		52,908		5,405		10,493		22,919		91,725
2009		19,504		17,920		30,313		39,888		107,625
2008		1,452		1,377		5,981		12,305		21,115
2007		-		-		-		1,137		1,137
2006		-		-		-		-		-

* 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

Manufacturing Location & Sales - Genentech / Roche & Novartis ($ in 000's) *

Avastin Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		724,483			679,914			710,501			664,109			750,491			716,337
US Made & ex-US Sold		532,979			428,976			281,905			161,369			165,651			360,177
ex-US Made & Sold		316,265			442,437			670,572			827,629			778,536			669,621
Total		1,573,727			1,551,327			1,662,977			1,653,108			1,694,678			1,746,135
US Made & Sold		46	%		44	%		43	%		40	%		44	%		41	%
US Made & ex-US Sold		34	%		28	%		17	%		10	%		10	%		21	%
ex-US Made & Sold		20	%		29	%		40	%		50	%		46	%		38	%

Herceptin Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		497,109			503,612			515,790			514,113			583,677			518,790
US Made & ex-US Sold		466,477			545,625			552,127			486,400			563,243			522,159
ex-US Made & Sold		661,727			614,459			582,578			681,060			597,225			640,911
Total		1,625,313			1,663,695			1,650,495			1,681,574			1,744,145			1,681,860
US Made & Sold		31	%		30	%		31	%		31	%		33	%		31	%
US Made & ex-US Sold		29	%		33	%		33	%		29	%		32	%		31	%
ex-US Made & Sold		41	%		37	%		35	%		41	%		34	%		38	%

Lucentis Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		412,131			385,746			381,592			392,207			419,030			449,834
US Made & ex-US Sold		674,411			711,795			728,103			810,972			752,393			750,958
ex-US Made & Sold		-			-			-			-			-			-
Total		1,086,543			1,097,541			1,109,695			1,203,179			1,171,423			1,200,791
US Made & Sold		38	%		35	%		34	%		33	%		36	%		37	%
US Made & ex-US Sold		62	%		65	%		66	%		67	%		64	%		63	%
ex-US Made & Sold		0	%		0	%		0	%		0	%		0	%		0	%

Xolair Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		193,600			211,702			210,892			207,976			218,860			236,180
US Made & ex-US Sold		-			-			-			-			-			-
ex-US Made & Sold		121,039			136,094			129,540			133,333			146,918			155,720
Total		314,638			347,796			340,431			341,309			365,778			391,900
US Made & Sold		62	%		61	%		62	%		61	%		60	%		60	%
US Made & ex-US Sold		0	%		0	%		0	%		0	%		0	%		0	%
ex-US Made & Sold		38	%		39	%		38	%		39	%		40	%		40	%

Perjeta Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		-			5,080			24,571			32,377			48,979			49,111
US Made & ex-US Sold		-			-			428			1,632			6,096			17,242
ex-US Made & Sold		-			-			-			-			-			-
Total		-			5,080			25,000			34,008			55,076			66,353
US Made & Sold		0	%		100	%		98	%		95	%		89	%		74	%
US Made & ex-US Sold		0	%		0	%		2	%		5	%		11	%		26	%
ex-US Made & Sold		0	%		0	%		0	%		0	%		0	%		0	%

Kadcyla Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		-			-			-			-			21,459			72,887
US Made & ex-US Sold		-			-			-			-			-			739
ex-US Made & Sold		-			-			-			-			-			-
Total		-			-			-			-			21,459			73,626
US Made & Sold		0	%		0	%		0	%		0	%		100	%		99	%
US Made & ex-US Sold		0	%		0	%		0	%		0	%		0	%		1	%
ex-US Made & Sold		0	%		0	%		0	%		0	%		0	%		0	%

Total Sales	2012 - Q2			2012 - Q3			2012 - Q4			2013 - Q1			2013 - Q2			2013 - Q3
US Made & Sold		1,827,323			1,786,053			1,843,345			1,810,783			2,042,496			2,043,139
US Made & ex-US Sold		1,673,867			1,686,395			1,562,564			1,460,373			1,487,383			1,651,276
ex-US Made & Sold		1,099,031			1,192,990			1,382,690			1,642,023			1,522,679			1,466,252
Total		4,600,221			4,665,438			4,788,598			4,913,178			5,052,559			5,160,667
US Made & Sold		40	%		38	%		38	%		37	%		40	%		40	%
US Made & ex-US Sold		36	%		36	%		33	%		30	%		29	%		32	%
ex-US Made & Sold		24	%		26	%		29	%		33	%		30	%		28	%

* 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