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•	Total revenues of $46.6 million.

•	GAAP net loss attributable to PDL’s shareholders of $112.3 million or $(0.76) per share.

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GAAP net loss includes a one-time $133.3 million, net of tax, non-cash accounting charge related to the impairment of an intangible asset from Noden Pharma DAC, due to the increased probability of a generic version of aliskiren being launched in the United States by Anchen, offset by a $19.7 million, net of tax, non-cash decrease in the fair value of the contingent liability related to a reduced estimate of the probability in paying milestones to Novartis for Tekturna®.

•	Non-GAAP net income attributable to PDL’s shareholders of $14.7 million. A reconciliation of GAAP to non-GAAP financial results can be found in Table 3 at the end of this news release.

•	Cash, cash equivalents, short-term investments and other investments of $395.7 million as of June 30, 2018.

•	Repurchased 6.8 million shares of common stock in the open market during the quarter for $19.4 million.

•	Total revenues of $46.6 million for the three months ended June 30, 2018 included:

◦	Product revenues of $31.8 million, which consisted of $25.9 million from sales of Tekturna® and Tekturna HCT® in the United States and Rasilez® and Rasilez HCT® in the rest of the world (collectively, the Noden Products), and $5.9 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 $12.8 million, which consisted of the change in estimated fair value of our royalty right assets, primarily related to the Depomed royalty asset;

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◦	Royalties from PDL’s licensees to the Queen et al. patents of $1.2 million, which consisted of royalties earned on sales of Tysabri®; and

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

•	Total revenues for the second quarter of 2018 were $46.6 million, compared with $143.8 million for the second quarter of 2017, reflecting PDL’s strategic shift to a pharmaceutical business model and the decline in royalty income from the expired Queen et al. patents.

◦	Product revenues were $31.8 million, a 69% increase from $18.8 million for the prior year due to 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 68% of total revenues compared with 13% in the second quarter of 2017;

◦	Product revenues from Noden Products were $10.4 million in the U.S. and $15.5 million in the rest of the world.

◦	PDL recognized $12.8 million in revenue from royalty rights - change in fair value, compared with $83.7 million in the prior-year period. The decrease was primarily due to a higher prior year royalty rights - change in fair value as a result of the increase in fair value of the Depomed, Inc. royalty asset in the second quarter of 2017 based upon revised future cash flows;

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PDL received $19.4 million in net cash royalties from its royalty rights for the second quarter of 2018, compared with $34.6 million for the prior-year period. The decrease is mainly due to the launch of the authorized generic for Glumetza® in February 2017 sold by a subsidiary of Bausch Health Companies Inc. (formerly Valeant Pharmaceuticals International, Inc.) and included a retroactive payment in the second quarter of 2017;

◦	Royalties from PDL’s licensees to the Queen et al. patents of $1.2 million, compared with $16.3 million for the second quarter of 2017 as product supply of Tysabri® manufactured prior to patent expiry in the U.S. have been extinguished and ex-U.S. product supplies are rapidly being depleted; and

◦	Interest revenues decreased primarily due to the sale of the kaléo, Inc. note receivable in September 2017.

◦	Product revenues were $55.1 million, a 75% increase from $31.4 million for the prior-year period. Product revenues for 2018 consisted of $44.2 million from sales of the Noden Products and $10.9 million for product sales of the LENSAR® Laser System;

◦	PDL recognized $23.9 million in net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets, compared with $96.9 million for the prior-year period;

◦	PDL received $38.0 million in net cash royalties from its royalty rights year-to-date 2018, compared with $48.1 million for the prior-year period;

◦	Royalties from PDL’s licensees to the Queen et al. patents of $4.0 million, compared with $30.4 million for the prior-year period; and

◦	Interest revenue from note receivable investment to CareView Communications of $1.5 million.

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Operating expenses for the three months ended June 30, 2018 of $171.7 million increased $140.6 million from $31.1 million for the three months ended June 30, 2017. The increase was a result of the impairment of the Noden intangible asset of $152.3 million due to the increased probability of a generic version of aliskiren being launched in the United States, partially offset by the $22.5 million decrease in fair value of the contingent liability related to reduced estimate in the probabilities in paying milestones to Novartis for Tekturna.

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Cost of product revenue for the three months ended June 30, 2018 increased as a result of the Noden Products and LENSAR contributing additional cost of product revenue of $8.4 million and $1.6 million, respectively, due to increased revenue from Noden Products and recognition of costs of goods for ex-U.S. revenue and increased revenue from LENSAR, which PDL did not begin to recognize until May 2017. General and administrative expenses of $14.5 million, increased compared with $11.3 million a year ago, with the increase due to a full quarter of expenses from LENSAR in 2018 versus a partial quarter as a result of its acquisition in May 2017, operation growth for Noden and expenses related to business development activities. Sales and marketing expenses were $5.4 million, compared with

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Operating expenses for the six months ended June 30, 2018 were $205.9 million, a $147.9 million increase from $58.0 million for the prior-year period, with the increase primarily a result of the impairment of the Noden intangible asset of $152.3 million, as well as a result of Noden and LENSAR contributing additional cost of product revenue of $14.0 million and $4.0 million, respectively, which was due to increased revenue in Noden and recognition of costs of goods for ex-U.S. revenue and increased revenue from LENSAR, which PDL did not begin to recognized until May 2017, partially offset by the decrease in fair value of the contingent liability.

•	PDL repurchased 8.2 million shares of its common stock under the $25.0 million share repurchase program during the six months ended June 30, 2018, for an aggregate purchase price of $23.6 million, or an average cost of $2.89 per share, including trading commission. All shares repurchased were retired.

•	From July 1, 2018 to July 5, 2018, the Company completed this stock repurchase program with the repurchase of 0.6 million shares of its common stock at a weighted average price of $2.44 per share, for a total of $1.4 million.

•	Since initiating its first stock repurchase program in March 2017, the Company has used $55.0 million to repurchase a total of 22.0 million shares of its common stock.

•	PDL had cash, cash equivalents, short-term investments and other investments of $395.7 million as of June 30, 2018, compared with $532.1 million as of December 31, 2017.

•	The reduction in cash balance for the six months ended June 30, 2018 was primarily a result of the retiring of the remaining $126.4 million of principal from PDL’s 4.0% Convertible Senior Notes due 2018, plus $2.6 million of accrued interest, and common stock repurchases of $23.6 million.

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•	Total revenues of $46.6 million.

•	GAAP net loss attributable to PDL’s shareholders of $112.3 million or $(0.76) per diluted share.

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GAAP net loss includes a one-time $133.3 million, net of tax, non-cash accounting charge related to the impairment of an intangible asset from Noden Pharma DAC, due to the increased probability of a generic version of aliskiren being launched in the United States, offset by a $19.7 million, net of tax, non-cash decrease in the fair value of the contingent liability related to a reduced estimate of the probability in paying milestones to Novartis for Tekturna®.

•	Non-GAAP net income attributable to PDL’s shareholders of $14.7 million.

•	Cash, cash equivalents, short-term investments and other investments of $395.7 million as of June 30, 2018.

•	Stock Repurchase Program

•	Depomed Royalty Rights

•	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 to acquire for Noden.

•	Noden net revenue for the quarter ended June 30, 2018 was $25.9 million, with $10.4 million in US revenue and $15.5 million in the rest of world, compared to $16.2 million for the same period in 2017.

•	Noden product revenues increased 60 percent and accounted for approximately 56 percent of total revenues compared to approximately 11 percent in the second quarter of 2017.

•	Gross margins on revenue in the second quarter were 58 percent, 92 percent in the U.S. on Tekturna and Tekturna HCT and 35 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 June 2018, Noden Pharma DAC entered into a settlement agreement with Anchen Pharmaceuticals, Inc. and its affiliates to resolve the patent litigation relating to Anchen’s Abbreviated New Drug Application (ANDA) seeking approval from the U.S. Food and Drug Administration to market a generic version of

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•	Based upon the patent settlement, Noden evaluated the ongoing value of the Noden asset group based upon the probability of a market entry by Anchen with a generic version of aliskiren in the United States and the associated cash flows and conducted a test for impairment.

•	Due to the increased probability of a generic version of aliskiren being launched in the United States in 2019 the Company revised its estimates of future revenues and as a result of this analysis determined that the sum of undiscounted cash flows was not greater than the carrying value of the assets

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Noden determined that long-lived assets with a carrying amount of $192.5 million were no longer recoverable and were in fact impaired and wrote them down to their estimated fair value of $40.1 million, resulting in a non-cash pre-tax impairment charge of $152.3 million as of June 30, 2018. This write-down is included in “Impairment of intangible asset” on the Condensed Consolidated Statements of Income. As of June 30, 2018, the remaining Noden Products intangible asset balance is $40.1 million and will be amortized straight-line over the remaining life of 8 years.

•	Offsetting the impairment was a $22.5 million decrease in fair value of the contingent liability related to reduced estimate in the probability in paying milestones to Novartis for Tekturna.

•	LENSAR Laser System revenue for the for the quarter ended June 30, 2018 was $5.9 million. PDL did not begin recognizing revenue from LENSAR until May 2017.

•	Gross margins on LENSAR revenue in the second quarter were 37 percent.

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•	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®.

•	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.

•	PDL recorded revenue of $1.2 million from Tysabri in Q2 2018.

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•	Royalties from PDL’s licensees to the Queen et al. patents were $15.1 million lower than in the second 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.

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