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•	On October 22, 2015, Genentech/Roche reported that YTD 2015 worldwide sales were CHF 4.968 billion and increased by 9%.

◦	EU: Growth driven by ovarian and cervical cancer.

◦	US: Sales driven by uptake in lung, ovarian and cervical cancer.

◦	Japan: Growth driven by all indications.

◦	International: Growth by Latin America (+29%) and China.

•	On October 22, 2015, Genentech/Roche reported that YTD 2015 worldwide sales were CHF 4.879 billion and increased by 10%.

◦	US: Strong volume growth in first line metastatic breast cancer due to longer treatment times.

◦	EU: Stable sales with continuing conversion to subcutaneous formulation.

◦	International: Strong growth in all regions, especially Latin America and China.

•	On October 22, 2015, Genentech/Roche reported that YTD 2015 US sales were CHF 932 million and increased by 25%.

◦	Growth in allergic asthma and chronic idiopathic urticaria (hives) due to longer treatment duration.

•	On October 27, 2015, Novartis reported that 3Q15 ex-US sales were $184 million and increased by 4%.

•	On October 21, 2015, Biogen reported that 3Q15 worldwide sales were $480 million, up from $463 million in 2Q15.

•	Biogen also reported that it did not meet its primary endpoint in a Phase 3 trial in patients with secondary, progressive multiple sclerosis, which could have been an expansion to its label.

•	On October 22, 2015, Genentech/Roche reported that YTD 2015 worldwide sales were CHF 1.035 billion and increased by 66%.

◦	US: Driven by first line metastatic breast cancer and by neoadjuvant. Benefiting from increase in overall survival in first line metastatic breast cancer when combined with Herceptin and docetaxel which data were added to US label in 1Q15.

◦	EU: Driven by first line metastatic breast cancer and by neoadjuvant, which was approved in 3Q15.

◦	International: Growth in all regions.

◦	Japan: Continued uptake in first line metastatic breast cancer.

•	On October 22, 2015, Genentech/Roche reported that YTD 2015 worldwide sales were CHF 558 million and increased by 57%.

◦	US: Slight increase in patient share in second line metastatic breast cancer.

◦	EU: Strong uptake in recently launched countries, such as Italy and France.

◦	International: Growth driven by Brazil.

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◦	Japan: Reimbursement granted in 1H15.

•	On October 23, 2015, Genentech/Roche reported that Kadcyla failed to show a benefit in second line HER2+ gastric cancer when compared to taxane.

•	On October 22, 2015, Lilly re-affirmed in its 3Q earnings call that data from its Phase 3 trial in patients with mild Alzheimer’s Disease are expected in late 2016, that the Data Safety and Monitoring Board will not take an interim look at efficacy prior to that time, and that it would file for approval in 1H2017 if data were positive.

•	Summary: Private company dedicated to development, manufacture and sale of third generation small point of care diagnostic systems that can perform a wide variety of tests utilizing electrochemical luminescence technology.

•	Deal: $44 million senior secured transaction whereby Wellstat is required to repay outstanding principal and a specific target internal rate of return at maturity or upon the occurrence of certain key events. Target IRR is 26% if before end of 2016 and 30% if repayment is after 2016. PDL receives 12% royalty on sales of product. Term is up to 2021.

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Status: The investment bank of Duff & Phelps is running a sale process. A drug developed by Wellstat Therapeutics for a very rare condition was recently approved which has triggered a payment by Astra Zeneca for the FDA expedited review voucher associated with such approval. PDL has commenced legal proceedings in New York to attach this payment and other Wellstat and Wohlstadter non-Diagnostics’ assets.

•	Summary: Public company developing and commercializing catheters utilizing imaging technology for peripheral blockages and occlusions. They have two approved products, one for total blockages in blood vessels in the leg and the other for partial blockages in blood vessels in the leg.

•	Deal: $20 million hybrid loan and royalty structure at 12.0% interest which was interest only until 2Q16 with full repayment by April 2018. 1.8% royalty on sales. Early repayment dropped the royalty to 0.9% and mandatory minimum, quarterly royalty payments are required.

•	Status: On September 22, 2015, Avinger repaid the loan (including principal, interest and fees), but the 0.9% royalty remains payable on all of its products (subject to certain minimum payments). On October 14, 2015, Avinger announced 510(k) clearance for its second product for partial occlusions in the leg.

•	Summary: Depomed is a publicly traded company focused predominantly on development and commercialization of treatments for pain. They had a sustained release technology that was licensed by a number of companies for use in orally available treatments for type II diabetes.

•	Deal: $240.5 million to acquire royalties and milestones associated with five type 2 diabetes products, both approved and unapproved. PDL to receive 100% of all associated royalties and milestones up to 2x ($481 million) its initial investment, after which all net payments will be shared evenly (50/50) between PDL and Depomed.

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Status: Valeant has increased the price of Glumetza by 500% and then 50% a few weeks later. Early and limited IMS data suggests that the effective price increase will be less than the nominal percents. PDL has not received any royalty payments from Valeant in the third quarter. While Valeant reported revenue for Glumetza of $53M for the period ending September 30, 2015, it had not provided monthly reporting or payments as contractually required. In late October 2015, Valeant issued reports and cash payments for the 3rd quarter 2015 with net royalties of $16.9 million due to PDL, which is included in PDL’s fair value assessment at quarter-end. PDL expects to exercise its royalty audit rights for Glumetza in the near future.

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•	Summary: Direct Flow is a private company developing and commercializing transcatheter heart valve technologies. It is approved in the EU and being investigated in US with estimated clearance in 2017.

•	Deal: Senior secured debt with initial provision of $35 million and additional $15 million funded in November 2014. Interest rate on tranche 1 was 15.5% which declined to 13.5% on all amounts after funding of the second tranche. Loans mature on November 5, 2018.

•	Status: Direct Flow has hired a new CEO and CFO.

•	Summary: Private medical device company commercializing laser technology for cataract treatment. Femtosecond laser approved in the US in March 2013 and in the EU in April 2013. Differentiating feature of LENSAR system is its use of 3-D imaging and liquid interface preventing accidental incision and allowing more accurate corneal incisions with more precise and uniform depth of incision.

•	Deal: Senior secured debt with initial provision of $40 million. Interest rate on the loans was 15.5% and is now 18.5%.

•	Status: Forbearance Agreement signed and PDL has advanced additional sums to LENSAR while it conducts a sale process. Current carrying value of the loan as of September 30, is $50.3 million.

•	Summary: Paradigm Spine is a private medical device company focused on development and commercialization of treatments for spinal conditions. Their lead product, CoFlex, is approved in US (with Level 1 data under a PMA) and 53 other countries. It is EBITDA positive.

•	Deal: Senior secured debt with initial provision of $50 million with potential for an additional $12.5 million upon the attainment of certain milestones. Interest rate is 13%. Loans mature on August 14, 2019.

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Status: The company recently released 4-year follow up data which confirmed continuing superiority to fusion. On October 27, 2015, PDL and Paradigm Spine amended the credit agreement and PDL provided an additional $4 million to Paradigm Spine for general corporate purposes and promotional activities. In addition, PDL committed to a second tranche of up to $3 million to be funded at the option of Paradigm Spine prior to June 30, 2016.

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Summary: kaleo is a private pharmaceutical company located in Virginia that uses its auto-injector delivery system for drugs. Their first product, Auvi-Q is a new system for delivery of epinephrine to treat severe allergic reactions that can be life-threatening i.e., anaphylaxis. Their second product, EVZIO, which was approved by the FDA on April 3, 2014, uses the same technology to deliver Naloxone for the treatment of patients who overdose on opioids.

•	Deal: PDL acquired $150 million worth of notes backed by 100% of royalties from sales of Auvi-Q by Sanofi and 10% of net sales of EVZIO by kaleo. The Notes pay interest at 13%.

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Status: On October 28, 2015, Sanofi initiated a voluntary nationwide recall of all Auvi-Q units effectively immediately. Sanofi is the exclusive licensee of kaleo for the manufacture and commercialization of Auvi-Q. While Sanofi has not identified the reason for the recall, press reports indicate that a small number of units have failed to deliver the correct amount of drug. It is not known at this time how long commercialization of Auvi-Q will be interrupted. The Notes carry interest at 13 percent per annum, paid quarterly in arrears on principal outstanding. As part of the transaction, kaleo was required to establish an interest reserve account of $20 million from the $150 million provided by PDL. The purpose of this interest reserve account is to cover any possible shortfalls in interest payments owed to PDL. As of this date, despite the recall of Auvi-Q, it is projected that the interest reserve account alone is sufficient to cover possible interest shortfalls until at least the first quarter of 2016. PDL will monitor the recall situation and how it may impact the ability of kaleo to meet its obligations under the Notes, but at this point it has been determined that there is no impairment.

•	Summary: Viscogliosi Brothers have substantial stakes in a number of medtech companies, including Paradigm Spine.

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•	Deal: In return for payment of $15.5 million, PDL acquired right to Viscogliosi Brothers’ royalty on sales of Paradigm Spine’s approved spinal implant until PDL receives 2.3 times the cash advanced after which the royalties revert to the Viscogliosi Brothers.

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Status: The company recently released 4-year follow up data which confirmed continuing superiority to fusion. On October 27, 2015, PDL and Paradigm Spine amended the credit agreement and PDL provided an additional $4 million to Paradigm Spine for general corporate purposes and promotional activities. In addition, PDL committed to a second tranche of up to $3 million to be funded at the option of Paradigm Spine prior to June 30, 2016.

•	Summary: Cerdelga is an approved oral drug for adult patients with Gaucher Disease type 1, a rare and genetic condition, which was approved in the US on August 19, 2014 and an application for approval is pending in the EU. Genzyme, a Sanofi Company, developed and commercializes Cerdelga.

•	Deal: On November 6, 2014, PDL acquired 75% of the University of Michigan’s royalty interest in Cerdelga until the expiration of the licensed patents in return for $65.6 million.

•	Status: Cerdelga is doing well with recent approvals in EU and Japan. Performing according to PDL model in the U.S.

•	Summary: CareView commercializes a video system and virtual bed rails to monitor passively hospital patients at risk of falling.

•	Deal: On June 29, 2015, PDL agreed to loan up to $40 million in two tranches of $20 million each, payable upon attainment of a milestone by October 31, 2015 and a second milestone by June 30, 2017. Each of the Notes are for five years and pay interest at 13.5% and 13.0% on the tranches, respectively.

•	Status: On October 7, 2015, PDL and CareView amended the debt facility and funded $20 million of the first tranche based on an expanded definition of revenue generating activities. The milestones associated with the second tranche of $20 million, which relate to the placement of CareView systems and Consolidated EBITDA, still must be attained by June 30, 2017.

•	Summary: Ariad commercializes Iclusig for CML and is developing brigatinib for non-small cell lung cancer.

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Deal: On July 29, 2015, PDL agreed to loan up to $200 million with $50 million on execution, $50 million on the 12 month anniversary and up to $100 million in 6 to 12 months after signing. PDL will receive 2.5% of global net revenues from Iclusig for the first year of the agreement (5.0% after the first year through the end of 2018, and 6.5% from 2019 until PDL receives a specified targeted IRR). For the period after 2019, the royalty rate will increase to 7.5% if Ariad has drawn in excess of $150 million. Term is through December 31, 2033 (subject to the put and call options). Financial terms of put and call: Greater of IRR of 10% or 1.15x cash-on-cash (CoC) year 1 1.2x CoC year 2, 1.3x CoC year 3 and thereafter.

•	Status: Ariad was in play for a period of time but Baxalta was apparently unwilling to pay requested price. On September 15, 2015, Ariad announced completion of enrollment of its pivotal trial of brigatinib in ALK+ non-small cell lung cancers patients and that it expects to report data from this trial at ASCO in mid-2016.

•	Summary: Public company which develops and commercializes treatments for acute pain. Zalviso, its most advanced product, is a drug and device combination of a sublingual formulation of sufentanil and a patient controlled delivery device. In EU, it is approved in EU for treatment of moderate-to-severe post-operative pain and marketed by Grünenthal.

•	Deal: On September 21, 2015, PDL acquired 75% of royalties and 80% of first four commercial milestones due from Grünenthal. The term is the earlier of PDL gets 3x cash-on-cash or expiration of the obligation to pay royalties (2018 with potential extensions to 2033).

•	Status: On September 24, 2015, Zalviso was approved in EU. Grünenthal is expected to launch in 1H16 and PDL is expected to receive its share of royalties shortly thereafter.

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