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•	Total revenues of $68.0 million and $320.1 million for the three and twelve months ended December 31, 2017, respectively.

•	GAAP diluted EPS of $0.15 and $0.71 for the three and twelve months ended December 31, 2017, respectively.

•	GAAP net income attributable to PDL’s shareholders of $22.3 million and $110.7 million for the three and twelve months ended December 31, 2017, respectively.

•	Non-GAAP net income attributable to PDL’s shareholders of $24.8 million and $100.7 million for the three and twelve months ended December 31, 2017. 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.

•	Total revenues of $68.0 million for the three months ended December 31, 2017 included:

◦	Royalties from PDL’s licensees to the Queen et al. patents of $4.5 million, which consisted of royalties earned on sales of Tysabri®;

◦	Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of $30.1 million, which consisted of the change in estimated fair value of our royalty right assets, primarily related to Depomed, Inc. (Depomed) royalty asset;

◦	Interest revenue from note receivable investment to CareView Communications of $0.8 million; and

◦	Product revenues of $32.6 million, which consisted of $25.1 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 $7.5 million for product sales of the LENSAR® Laser System.

•	Total revenues increased by 2 percent for the three months ended December 31, 2017, when compared to the same period in 2016.

◦	Royalties from PDL’s licensees to the Queen et al. patents were lower due to reduced sales of Tysabri that was manufactured prior to the patent expiry date;

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PDL received $32.8 million in net cash royalties from its royalty rights in the fourth quarter of 2017, compared to $25.3 million for the same period of 2016. The increase in cash royalties is mainly due to a one-time settlement payment from Valeant related to the royalty audit of Glumetza and the launch of the authorized generic for Glumetza® sold by Valeant Pharmaceuticals International, Inc. PDL received royalties on the authorized generic equivalents under the same terms as the branded Glumetza;

◦	The decrease in interest revenues was primarily due to the sale of the kaléo, Inc. note receivable in September 2017; and

◦	The increase in product revenues were derived from the sale of the LENSAR Laser System, which PDL did not begin to recognize until May 2017.

•	Total revenues increased by 31 percent for the year ended December 31, 2017, when compared to the year ended December 31, 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. and reduced royalties on Tysabri.

◦	The increase in royalty rights - change in fair value was primarily due to the year-to-date increase in fair value of the Depomed royalty asset by $134.1 million.

◦	PDL received $107.3 million in net cash royalties, including a one-time settlement payment from Valeant related to the royalty audit of Glumetza, from its royalty rights in the year ended December 31, 2017, compared to $72.6 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 and the sale of the kaléo, Inc. note receivable.

◦	Product revenue increased due to sales of the Noden Products, which PDL did not begin to recognize until the third quarter of 2016, and sales of the LENSAR Laser System, which PDL did not begin to recognize until May 2017.

◦	License and other revenue increased by $19.6 million primarily due to a one-time $19.5 million payment from Merck as part of the previously announced settlement agreement to resolve the patent infringement lawsuit related to Keytruda®.

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Operating expenses were $38.2 million for the three months ended December 31, 2017, compared to $74.2 million for the same period of 2016. The decrease in operating expenses for the three months ended December 31, 2017, as compared to the same period in 2016, was primarily a result of the prior year period loss on extinguishment of Direct Flow Medical notes receivable, partially offset by the increase in operating expenses related to the acquisitions and operations of Noden and LENSAR, contributing an additional $13.8 million of cost of product revenue and $6.0 million in sales and marketing expenses due to an increase in Noden’s sales force.

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Operating expenses were $126.3 million for the year ended December 31, 2017, compared to $114.9 million for the year ended December 31, 2016. The increase in operating expenses in 2017 was a result of the acquisitions and operations of Noden and LENSAR, contributing an additional $26.5 million of cost of product revenue, $12.7 million of intangible asset amortizations, $17.1 million in sales and marketing expenses, and $3.6 million in research and development costs for the completion of a pediatric trial for Tekturna. General administrative expenses increased by $5.9 million of which $7.5 million was related to Noden and $3.2 million was related to LENSAR, partially offset by a decrease of $51.1 million from the loss on extinguishment for the Direct Flow Medical notes receivable in 2016.

•	On February 1, 2018, PDL completed the retirement of the remaining $126.4 million of aggregate principal of its 4.0% Convertible Senior Notes due 2018 at their stated maturity by making a payment to the noteholders of $126.4 million, plus $2.6 million of accrued interest.

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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

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•	PDL had cash, cash equivalents, short-term investments and other investments of $532.1 million at December 31, 2017, compared to $242.1 million at December 31, 2016.

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•	Total revenues of $68.0 million and $320.1 million for the three and 12 months ended December 31, 2017, respectively.

•	GAAP diluted EPS of $0.15 and $0.71 for the three and 12 months ended December 31, 2017, respectively.

•	GAAP net income attributable to PDL’s shareholders of $22.3 million and $110.7 million for the three and 12 months ended December 31, 2017, respectively.

•	Non-GAAP net income attributable to PDL’s shareholders of $24.8 million and $100.7 million for the three and 12 months ended December 31, 2017.

•	PDL had cash, cash equivalents, short-term investments and other investments of $532.1 million at December 31, 2017, compared to $242.1 million at December 31, 2016.

•	PDL’s portfolio of assets has a net book value of $5.54 per share.

•	On February 1, 2018, PDL completed the retirement of the remaining $126.4 million of aggregate principal of its 4.0% Convertible Senior Notes due 2018 at their stated maturity by making a payment to the noteholders of $126.4 million, plus $2.6 million of accrued interest.

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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. In November 2017, we were notified by Biogen that product supply for Tysabri that was manufactured prior to patent expiry, and for which we would receive royalties on, had been extinguished in the United States and was rapidly being reduced in other countries. As a result, we anticipate royalties from product sales of Tysabri to be substantially lower in 2018 and cease after the first quarter of 2019.

•	PDL recorded revenue of $4.5 million from Tysabri® in Q4 2017.

•	Noden US is commercializing Tekturna® and Tekturna HCT® in the United States and Noden Pharma DAC, an Irish based company, is assuming commercialization responsibilities for Rasilez® and Rasilez HCT® in the rest of the world, starting in the second half 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 December 31, 2017 was $25.1 million, with $14.5 million in US revenue and $10.6 million in the rest of world.

◦	Gross margins on the US revenue in the fourth quarter were 79 percent.

◦	The $10.6 million of revenue for the ex-U.S. includes one month of net of cost of goods and a fee to Novartis through its transition services agreement and two months of revenue which excludes the Novartis profit transfer since EU and Switerland marketing authorizations have been transferred to Noden as of November 1, 2017.

◦	As a result, we will see higher revenues (as ex-US revenue were previously reported net of COGS and fees from Novartis), but we will also see an increase in reported cost of sales. 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

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•

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. Also in December, Noden entered into an agreement with Orphan Pacific for the distribution of Rasilez in Japan.

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

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On October 27, 2017, PDL and Depomed, Inc. entered into a settlement agreement with Valeant Pharmaceuticals International, Inc. to resolve all matters addressed in the lawsuit filed by Depomed on September 7, 2017 relating to underpayment of royalties by Valeant. Under the terms of the Settlement Agreement, the litigation will be dismissed, with prejudice, and Valeant paid a one-time, lump-sum payment of $13.0 million.  The cash from the settlement agreement was received in Q4 2017.

•	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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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.

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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 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. The Guarantors have not yet posted the required $300,000 bond to implement the injunction on PDL’s foreclosure.

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