|
ý
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the quarterly period ended March 31, 2017
|
¨
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For transition period from to
|
|
|
Delaware
|
94-3023969
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
Large accelerated filer
ý
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Emerging growth company
¨
|
(Do not check if a smaller reporting company)
|
||||
|
|
|
|
|
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
¨
|
|
Page
|
|
PART I - FINANCIAL INFORMATION
|
||
|
|
|
ITEM 1.
|
FINANCIAL STATEMENTS (unaudited)
|
|
|
|
|
|
Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2017 and 2016
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016
|
|
|
|
|
|
Condensed Consolidated Balance Sheets at March 31, 2017 and December 31, 2016
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016
|
|
|
|
|
|
Notes to the Condensed Consolidated Financial Statements
|
|
|
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
|
|
||
PART II - OTHER INFORMATION
|
||
|
|
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
|
|
|
|
ITEM 1A.
|
RISK FACTORS
|
|
|
|
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
|
|
|
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
|
|
|
|
ITEM 5.
|
OTHER INFORMATION
|
|
|
|
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
SIGNATURES
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
|
||||
Royalties from Queen et al. patents
|
|
$
|
14,156
|
|
|
$
|
121,455
|
|
Royalty rights - change in fair value
|
|
13,146
|
|
|
(27,102
|
)
|
||
Interest revenue
|
|
5,457
|
|
|
8,964
|
|
||
Product revenue, net
|
|
12,581
|
|
|
—
|
|
||
License and other
|
|
100
|
|
|
(193
|
)
|
||
Total revenues
|
|
45,440
|
|
|
103,124
|
|
||
|
|
|
|
|
||||
Operating expenses
|
|
|
|
|
|
|
||
Cost of product revenue (excluding intangible asset amortization)
|
|
2,552
|
|
|
—
|
|
||
Amortization of intangible assets
|
|
6,015
|
|
|
—
|
|
||
General and administrative
|
|
12,576
|
|
|
9,846
|
|
||
Sales and marketing
|
|
2,584
|
|
|
—
|
|
||
Research and development
|
|
1,766
|
|
|
—
|
|
||
Change in fair value of anniversary payment and contingent consideration
|
|
1,442
|
|
|
—
|
|
||
Total operating expenses
|
|
26,935
|
|
|
9,846
|
|
||
Operating income
|
|
18,505
|
|
|
93,278
|
|
||
|
|
|
|
|
||||
Non-operating expense, net
|
|
|
|
|
|
|
||
Interest and other income, net
|
|
212
|
|
|
113
|
|
||
Interest expense
|
|
(4,971
|
)
|
|
(4,550
|
)
|
||
Total non-operating expense, net
|
|
(4,759
|
)
|
|
(4,437
|
)
|
||
|
|
|
|
|
||||
Income before income taxes
|
|
13,746
|
|
|
88,841
|
|
||
Income tax expense
|
|
6,552
|
|
|
32,954
|
|
||
Net income
|
|
7,194
|
|
|
55,887
|
|
||
Less: Net income/(loss) attributable to noncontrolling interests
|
|
(47
|
)
|
|
—
|
|
||
Net income attributable to PDL’s shareholders
|
|
$
|
7,241
|
|
|
$
|
55,887
|
|
|
|
|
|
|
||||
Net income per share
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.04
|
|
|
$
|
0.34
|
|
Diluted
|
|
$
|
0.04
|
|
|
$
|
0.34
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
||
Basic
|
|
163,745
|
|
|
163,701
|
|
||
Diluted
|
|
163,992
|
|
|
163,835
|
|
||
Cash dividends declared per common share
|
|
$
|
—
|
|
|
$
|
0.05
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Net income
|
|
$
|
7,194
|
|
|
$
|
55,887
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||
Change in unrealized gains on investments in available-for-sale securities:
|
|
|
|
|
||||
Change in fair value of investments in available-for-sale securities, net of tax
|
|
—
|
|
|
107
|
|
||
Adjustment for net (gains) losses realized and included in net income, net of tax
|
|
—
|
|
|
(124
|
)
|
||
Total change in unrealized gains on investments in available-for-sale securities, net of tax
(a)
|
|
—
|
|
|
(17
|
)
|
||
Change in unrealized gains (losses) on cash flow hedges:
|
|
|
|
|
||||
Adjustment to royalties from Queen et al. patents for net (gains) losses realized and included in net income, net of tax
|
|
—
|
|
|
(1,821
|
)
|
||
Total change in unrealized losses on cash flow hedges, net of tax
(b)
|
|
—
|
|
|
(1,821
|
)
|
||
Total other comprehensive income/(loss), net of tax
|
|
—
|
|
|
(1,838
|
)
|
||
Comprehensive income
|
|
7,194
|
|
|
54,049
|
|
||
Less: Comprehensive income/(loss) attributable to noncontrolling interests
|
|
(47
|
)
|
|
—
|
|
||
Comprehensive income attributable to PDL’s shareholders
|
|
$
|
7,241
|
|
|
$
|
54,049
|
|
|
March 31,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
|
(unaudited)
|
|
(Note 1)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
314,327
|
|
|
$
|
147,154
|
|
Short-term investments
|
19,991
|
|
|
19,987
|
|
||
Receivables from licensees and other
|
21,679
|
|
|
40,120
|
|
||
Notes receivable
|
103,622
|
|
|
111,182
|
|
||
Investments-other
|
75,000
|
|
|
75,000
|
|
||
Inventory
|
3,533
|
|
|
2,884
|
|
||
Prepaid and other current assets
|
5,867
|
|
|
1,704
|
|
||
Total current assets
|
544,019
|
|
|
398,031
|
|
||
Property and equipment, net
|
846
|
|
|
38
|
|
||
Royalty rights - at fair value
|
293,801
|
|
|
402,318
|
|
||
Notes and other receivables, long-term
|
157,403
|
|
|
159,768
|
|
||
Long-term deferred tax assets
|
11,658
|
|
|
19,257
|
|
||
Intangible assets, net
|
222,527
|
|
|
228,542
|
|
||
Other assets
|
7,519
|
|
|
7,433
|
|
||
Total assets
|
$
|
1,237,773
|
|
|
$
|
1,215,387
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
17,956
|
|
|
$
|
7,016
|
|
Accrued liabilities
|
36,800
|
|
|
30,575
|
|
||
Accrued income taxes
|
9,309
|
|
|
4,723
|
|
||
Anniversary payment
|
88,493
|
|
|
88,001
|
|
||
Convertible notes payable
|
122,692
|
|
|
—
|
|
||
Total current liabilities
|
275,250
|
|
|
130,315
|
|
||
Convertible notes payable
|
112,426
|
|
|
232,443
|
|
||
Contingent consideration
|
43,600
|
|
|
42,650
|
|
||
Other long-term liabilities
|
43,561
|
|
|
54,556
|
|
||
Total liabilities
|
474,837
|
|
|
459,964
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, par value $0.01 per share, 10,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share, 350,000 shares authorized; 163,724 and 165,538 shares issued and outstanding at March 31, 2017, and December 31, 2016, respectively
|
1,637
|
|
|
1,655
|
|
||
Additional paid-in capital
|
(113,707
|
)
|
|
(107,628
|
)
|
||
Treasury stock, at cost
|
(1,305
|
)
|
|
—
|
|
||
Retained earnings
|
872,078
|
|
|
857,116
|
|
||
Total PDL’s stockholders’ equity
|
758,703
|
|
|
751,143
|
|
||
Noncontrolling interests
|
4,233
|
|
|
4,280
|
|
||
Total stockholders’ equity
|
762,936
|
|
|
755,423
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,237,773
|
|
|
$
|
1,215,387
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
7,194
|
|
|
$
|
55,887
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Amortization of convertible notes and term loan offering costs
|
2,675
|
|
|
2,461
|
|
||
Amortization of intangible assets
|
6,015
|
|
|
—
|
|
||
Change in fair value of royalty rights - at fair value
|
(13,146
|
)
|
|
27,102
|
|
||
Change in fair value of derivative asset
|
(100
|
)
|
|
329
|
|
||
Change in fair value of anniversary payment and contingent consideration
|
1,442
|
|
|
—
|
|
||
Other amortization, depreciation and accretion of embedded derivative
|
66
|
|
|
9
|
|
||
Gain on sale of available-for-sale securities
|
(44
|
)
|
|
(136
|
)
|
||
Inventory obsolesence
|
112
|
|
|
—
|
|
||
Stock-based compensation expense
|
1,112
|
|
|
786
|
|
||
Deferred income taxes
|
15,321
|
|
|
(8,215
|
)
|
||
Changes in assets and liabilities, net of affects of business acquired:
|
|
|
|
|
|
||
Accounts receivable
|
12,441
|
|
|
—
|
|
||
Receivables from licensees and other
|
6,000
|
|
|
—
|
|
||
Prepaid and other current assets
|
(2,073
|
)
|
|
(430
|
)
|
||
Accrued interest on notes receivable
|
(75
|
)
|
|
(1,951
|
)
|
||
Inventory
|
(761
|
)
|
|
—
|
|
||
Other assets
|
16
|
|
|
(2,439
|
)
|
||
Accounts payable
|
10,932
|
|
|
268
|
|
||
Accrued liabilities
|
4,944
|
|
|
(1,169
|
)
|
||
Accrued income taxes
|
4,586
|
|
|
17,647
|
|
||
Other long-term liabilities
|
(10,875
|
)
|
|
2,357
|
|
||
Net cash provided by operating activities
|
45,782
|
|
|
92,506
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
||
Purchase of investments
|
(15,975
|
)
|
|
—
|
|
||
Proceeds from sales of available-for-sale securities
|
16,015
|
|
|
273
|
|
||
Proceeds from royalty rights - at fair value
|
13,494
|
|
|
17,221
|
|
||
Sale of royalty rights - at fair value
|
108,169
|
|
|
—
|
|
||
Purchase of notes receivable
|
—
|
|
|
(5,000
|
)
|
||
Proceeds from sales of assets held for sale
|
7,890
|
|
|
—
|
|
||
Purchase of property and equipment
|
(534
|
)
|
|
—
|
|
||
Net cash provided by investing activities
|
129,059
|
|
|
12,494
|
|
||
Cash flows from financing activities
|
|
|
|
|
|
||
Repayment of term loan
|
—
|
|
|
(25,000
|
)
|
||
Cash dividends paid
|
(21
|
)
|
|
(8,233
|
)
|
||
Repurchase and retirement of common stock
|
(7,647
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(7,668
|
)
|
|
(33,233
|
)
|
||
Net increase in cash and cash equivalents
|
167,173
|
|
|
71,767
|
|
||
Cash and cash equivalents at beginning of the period
|
147,154
|
|
|
218,883
|
|
||
Cash and cash equivalents at end of period
|
$
|
314,327
|
|
|
$
|
290,650
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
|
|
||
Cash paid for income taxes
|
$
|
120
|
|
|
$
|
22,000
|
|
Cash paid for interest
|
$
|
2,529
|
|
|
$
|
5,001
|
|
|
|
|
|
||||
Supplemental schedule of non-cash investing and financing activities
|
|
|
|
||||
Warrants received for notes receivable
|
$
|
—
|
|
|
$
|
443
|
|
Repurchase of common stock, settled in April 2017
|
$
|
868
|
|
|
$
|
—
|
|
Fixed assets purchase, not yet paid
|
$
|
(288
|
)
|
|
$
|
—
|
|
Asset held for sale reclassified from notes receivable to other assets
|
$
|
10,000
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
Net Income per Basic and Diluted Share:
|
|
2017
|
|
2016
|
||||
(in thousands except per share amounts)
|
|
|
|
|
||||
Numerator
|
|
|
|
|
||||
Income attributable to PDL’s shareholders used to compute net income per basic and diluted share
|
|
$
|
7,241
|
|
|
$
|
55,887
|
|
|
|
|
|
|
||||
Denominator
|
|
|
|
|
|
|
||
Total weighted average shares used to compute net income attributable to PDL’s shareholders, per basic share
|
|
163,745
|
|
|
163,701
|
|
||
Restricted stock outstanding
|
|
247
|
|
|
134
|
|
||
Shares used to compute net income attributable to PDL’s shareholders, per diluted share
|
|
163,992
|
|
|
163,835
|
|
||
|
|
|
|
|
||||
Net income attributable to PDL’s shareholders per share - basic
|
|
$
|
0.04
|
|
|
$
|
0.34
|
|
Net income attributable to PDL’s shareholders per share - diluted
|
|
$
|
0.04
|
|
|
$
|
0.34
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Certificates of deposit
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
75,000
|
|
||||||||
Commercial paper
|
|
—
|
|
|
19,991
|
|
|
—
|
|
|
19,991
|
|
|
—
|
|
|
19,987
|
|
|
—
|
|
|
19,987
|
|
||||||||
Warrants
|
|
—
|
|
|
178
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||||||
Royalty rights - at fair value
|
|
—
|
|
|
—
|
|
|
293,801
|
|
|
293,801
|
|
|
—
|
|
|
—
|
|
|
402,318
|
|
|
402,318
|
|
||||||||
Total
|
|
$
|
45
|
|
|
$
|
95,169
|
|
|
$
|
293,801
|
|
|
$
|
389,015
|
|
|
$
|
4
|
|
|
$
|
95,065
|
|
|
$
|
402,318
|
|
|
$
|
497,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Anniversary payment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88,493
|
|
|
$
|
88,493
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88,001
|
|
|
$
|
88,001
|
|
Contingent consideration
|
|
—
|
|
|
—
|
|
|
43,600
|
|
|
43,600
|
|
|
—
|
|
|
—
|
|
|
42,650
|
|
|
42,650
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
132,093
|
|
|
$
|
132,093
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130,651
|
|
|
$
|
130,651
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Fair Value as of
|
|
Change of
|
|
Royalty Rights -
|
|
Fair Value as of
|
||||||||
(in thousands)
|
|
December 31, 2016
|
|
Ownership
|
|
Change in Fair Value
|
|
March 31, 2017
|
||||||||
Depomed
|
|
$
|
164,070
|
|
|
$
|
—
|
|
|
$
|
(2,432
|
)
|
|
$
|
161,638
|
|
VB
|
|
14,997
|
|
|
—
|
|
|
174
|
|
|
15,171
|
|
||||
U-M
|
|
35,386
|
|
|
—
|
|
|
299
|
|
|
35,685
|
|
||||
ARIAD
|
|
108,631
|
|
|
(108,169
|
)
|
|
(462
|
)
|
|
—
|
|
||||
AcelRx
|
|
67,483
|
|
|
—
|
|
|
2,113
|
|
|
69,596
|
|
||||
Avinger
|
|
1,638
|
|
|
—
|
|
|
(248
|
)
|
|
1,390
|
|
||||
KYBELLA
|
|
10,113
|
|
|
—
|
|
|
208
|
|
|
10,321
|
|
||||
|
|
$
|
402,318
|
|
|
$
|
(108,169
|
)
|
|
$
|
(348
|
)
|
|
$
|
293,801
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Liabilities
|
||||||||||
|
|
|
|
|
||||||
(in thousands)
|
|
Anniversary Payment
|
|
Contingent Consideration
|
||||||
Fair value as of December 31, 2016
|
|
$
|
(88,001
|
)
|
|
$
|
(42,650
|
)
|
||
|
|
|
|
|
|
|
||||
|
Total net change in fair for the period
|
|
(492
|
)
|
|
(950
|
)
|
|||
|
|
|
|
|
|
|
||||
Fair value as of March 31, 2017
|
|
$
|
(88,493
|
)
|
|
$
|
(43,600
|
)
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Total change in fair value for the period included in earnings for royalty right assets held at the end of the reporting period
|
|
$
|
13,146
|
|
|
$
|
(27,102
|
)
|
|
|
|
|
|
||||
Total change in fair value for the period included in earnings for liabilities held at the end of the reporting period
|
|
$
|
(1,442
|
)
|
|
$
|
—
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Carrying Value
|
|
Fair Value
Level 2
|
|
Fair Value
Level 3
|
|
Carrying Value
|
|
Fair Value
Level 2
|
|
Fair Value
Level 3
|
||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wellstat Diagnostics note receivable
|
|
$
|
50,191
|
|
|
$
|
—
|
|
|
$
|
51,397
|
|
|
$
|
50,191
|
|
|
$
|
—
|
|
|
$
|
52,260
|
|
Hyperion note receivable
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
||||||
LENSAR note receivable
|
|
43,909
|
|
|
—
|
|
|
43,900
|
|
|
43,909
|
|
|
—
|
|
|
43,900
|
|
||||||
Direct Flow Medical note receivable
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
||||||
kaléo note receivable
|
|
146,670
|
|
|
—
|
|
|
143,511
|
|
|
146,685
|
|
|
—
|
|
|
142,539
|
|
||||||
CareView note receivable
|
|
19,055
|
|
|
—
|
|
|
20,035
|
|
|
18,965
|
|
|
—
|
|
|
19,200
|
|
||||||
Total
|
|
$
|
261,025
|
|
|
$
|
—
|
|
|
$
|
260,043
|
|
|
$
|
270,950
|
|
|
$
|
—
|
|
|
$
|
269,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
February 2018 Notes
|
|
$
|
122,692
|
|
|
$
|
123,918
|
|
|
$
|
—
|
|
|
$
|
121,595
|
|
|
$
|
123,918
|
|
|
$
|
—
|
|
December 2021 Notes
|
|
112,426
|
|
|
132,096
|
|
|
—
|
|
|
110,848
|
|
|
122,063
|
|
|
—
|
|
||||||
Total
|
|
$
|
235,118
|
|
|
$
|
256,014
|
|
|
$
|
—
|
|
|
$
|
232,443
|
|
|
$
|
245,981
|
|
|
$
|
—
|
|
Asset
|
|
Valuation
Technique
|
|
Unobservable
Input
|
|
March 31, 2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
Wellstat Diagnostics
|
|
|
|
|
|
|
|
|
Intellectual Property
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
13%
|
|
13%
|
|
|
|
|
Royalty amount
|
|
$55-74 million
|
|
$54-74 million
|
Real Estate Property
|
|
Market Approach
|
|
|
|
|
|
|
|
|
|
|
Annual appreciation rate
|
|
4%
|
|
4%
|
|
|
|
|
Estimated realtor fee
|
|
6%
|
|
6%
|
|
|
|
|
Estimated disposal date
|
|
12/31/2017
|
|
12/31/2017
|
Direct Flow Medical
|
|
|
|
|
|
|
|
|
All Assets
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
N/A
|
|
27%
|
|
|
|
|
Implied revenue multiple
|
|
N/A
|
|
6.9
|
LENSAR
|
|
|
|
|
|
|
|
|
All Assets
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
15.5%
|
|
25%
|
|
|
|
|
Implied revenue multiple
|
|
1.5-3.0
|
|
2.5
|
|
|
|
|
|
|
Reported as:
|
||||||||||
|
|
Amortized Cost
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
314,282
|
|
|
$
|
314,282
|
|
|
$
|
314,282
|
|
|
$
|
—
|
|
Money market funds
|
|
45
|
|
|
45
|
|
|
45
|
|
|
—
|
|
||||
Commercial paper
|
|
19,991
|
|
|
19,991
|
|
|
—
|
|
|
19,991
|
|
||||
Total
|
|
$
|
334,318
|
|
|
$
|
334,318
|
|
|
$
|
314,327
|
|
|
$
|
19,991
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
147,150
|
|
|
$
|
147,150
|
|
|
$
|
147,150
|
|
|
$
|
—
|
|
Money market funds
|
|
4
|
|
|
4
|
|
|
4
|
|
|
—
|
|
||||
Commercial paper
|
|
19,987
|
|
|
19,987
|
|
|
—
|
|
|
19,987
|
|
||||
Total
|
|
$
|
167,141
|
|
|
$
|
167,141
|
|
|
$
|
147,154
|
|
|
$
|
19,987
|
|
|
|
|
|
Three Months Ended March 31,
|
||||
Licensee
|
|
Product Name
|
|
2017
|
|
2016
|
||
Genentech
|
|
Avastin
|
|
—
|
%
|
|
38
|
%
|
|
|
Herceptin
|
|
—
|
%
|
|
38
|
%
|
|
|
Xolair
|
|
—
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
||
Biogen
|
|
Tysabri
®
|
|
31
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
||
Depomed
|
|
Glumetza, Janumet XR, Jentadueto XR and Invokamet XR
|
|
14
|
%
|
|
N/M
|
|
|
|
|
|
|
|
|
||
N/M
|
|
Tekturna, Tekturna HCT, Rasilez and Rasilez HCT
|
|
28
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
||
kaléo
|
|
Interest revenues
|
|
10
|
%
|
|
5
|
%
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
(In thousands)
|
|
|
|
|
||||
Net gain (loss) recognized in OCI, net of tax
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
Gain (loss) reclassified from accumulated OCI into “Queen et al. royalty revenue,” net of tax
(2)
|
|
$
|
—
|
|
|
$
|
1,821
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2017
|
|
2016
|
||||
Work in process
|
|
$
|
2,406
|
|
|
$
|
1,625
|
|
Finished goods
|
|
1,127
|
|
|
1,259
|
|
||
Total inventory
|
|
$
|
3,533
|
|
|
$
|
2,884
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired products rights
(1)
|
|
$
|
216,690
|
|
|
$
|
(16,252
|
)
|
|
$
|
200,438
|
|
|
$
|
216,690
|
|
|
$
|
(10,834
|
)
|
|
$
|
205,856
|
|
Customer relationships
(1)
|
|
23,880
|
|
|
(1,791
|
)
|
|
22,089
|
|
|
23,880
|
|
|
(1,194
|
)
|
|
22,686
|
|
||||||
|
|
$
|
240,570
|
|
|
$
|
(18,043
|
)
|
|
$
|
222,527
|
|
|
$
|
240,570
|
|
|
$
|
(12,028
|
)
|
|
$
|
228,542
|
|
Fiscal Year
|
|
Amount
|
||
2017 (Remaining nine months)
|
|
$
|
18,043
|
|
2018
|
|
24,057
|
|
|
2019
|
|
24,057
|
|
|
2020
|
|
24,057
|
|
|
2021
|
|
24,057
|
|
|
2022
|
|
24,057
|
|
|
Thereafter
|
|
84,199
|
|
|
Total purchased intangible assets
|
|
$
|
222,527
|
|
(in thousands)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Compensation
|
|
$
|
4,199
|
|
|
$
|
3,131
|
|
Interest
|
|
2,321
|
|
|
2,554
|
|
||
Dividend payable
|
|
122
|
|
|
21
|
|
||
Legal
|
|
1,083
|
|
|
1,594
|
|
||
Accrued rebates, chargebacks and other revenue reserves
|
|
17,066
|
|
|
12,338
|
|
||
Refund to manufacturer
|
|
8,909
|
|
|
8,909
|
|
||
Other
|
|
3,100
|
|
|
2,028
|
|
||
Total
|
|
$
|
36,800
|
|
|
$
|
30,575
|
|
(in thousands)
|
|
Discount and Distribution Fees
|
|
Government Rebates and Chargebacks
|
|
Assistance and Other Discounts
|
|
Product Return
|
|
Total
|
||||||||||
Balance at December 31, 2016:
|
|
$
|
2,475
|
|
|
$
|
5,514
|
|
|
$
|
2,580
|
|
|
$
|
1,769
|
|
|
$
|
12,338
|
|
Allowances for current period sales
|
|
2,243
|
|
|
4,939
|
|
|
2,264
|
|
|
1,235
|
|
|
10,681
|
|
|||||
Allowances for prior period sales
|
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|||||
Credits/payments for current period sales
|
|
(453
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(453
|
)
|
|||||
Credits/payments for prior period sales
|
|
(1,451
|
)
|
|
(3,746
|
)
|
|
(556
|
)
|
|
—
|
|
|
(5,753
|
)
|
|||||
Balance at March 31, 2017
|
|
$
|
2,814
|
|
|
$
|
6,960
|
|
|
$
|
4,288
|
|
|
$
|
3,004
|
|
|
$
|
17,066
|
|
|
|
|
|
Principal Balance Outstanding
|
|
Carrying Value
|
|
||||||||
|
|
|
|
March 31,
|
|
March 31,
|
|
December 31,
|
|
||||||
Description
|
|
Maturity Date
|
|
2017
|
|
2017
|
|
2016
|
|
||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
||||||
Convertible Notes
|
|
|
|
|
|
|
|
|
|
||||||
February 2018 Notes
|
|
February 1, 2018
|
|
$
|
126,447
|
|
|
$
|
122,692
|
|
|
$
|
121,595
|
|
|
December 2021 Notes
|
|
December 1, 2021
|
|
$
|
150,000
|
|
|
112,426
|
|
|
110,848
|
|
|
||
Total
|
|
|
|
|
|
|
$
|
235,118
|
|
|
$
|
232,443
|
|
|
•
|
During any fiscal quarter ending after the quarter ended June 30, 2014, if the last reported sale price of the Company’s common stock for at least
20
trading days in a period of
30
consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter exceeds
130%
of the conversion price for the notes on the last day of such preceding fiscal quarter;
|
•
|
During the five business-day period immediately after any five consecutive trading-day period in which the trading price per
$1,000
principal amount of notes for each trading day of that measurement period was less than
98%
of the product of the last reported sale price of the Company’s common stock and the conversion rate for the notes for each such day;
|
•
|
Upon the occurrence of specified corporate events as described further in the indenture; or
|
•
|
At any time on or after August 1, 2017.
|
(In thousands)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Principal amount of the February 2018 Notes
|
|
$
|
126,447
|
|
|
$
|
126,447
|
|
Unamortized discount of liability component
|
|
(3,755
|
)
|
|
(4,852
|
)
|
||
Net carrying value of the February 2018 Notes
|
|
$
|
122,692
|
|
|
$
|
121,595
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Contractual coupon interest
|
|
$
|
1,265
|
|
|
$
|
2,464
|
|
Amortization of debt issuance costs
|
|
249
|
|
|
438
|
|
||
Amortization of debt discount
|
|
848
|
|
|
1,550
|
|
||
Total
|
|
$
|
2,362
|
|
|
$
|
4,452
|
|
•
|
During any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ending March 31, 2017, if the last reported sale price of Company common stock for at least
20
trading days (whether or not consecutive), in the period of
30
consecutive trading days, ending on, and including, the last trading day of the immediately preceding fiscal quarter, exceeds
130%
of the conversion price for the notes on each applicable trading day;
|
•
|
During the five business-day period immediately after any five consecutive trading-day period, which the Company refers to as the measurement period, in which the trading price per
$1,000
principal amount of notes for each trading day of that measurement period was less than
98%
of the product of the last reported sale price of Company common stock and the conversion rate for the notes for each such trading day; or
|
•
|
Upon the occurrence of specified corporate events as described in the indenture.
|
(In thousands)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Principal amount of the December 2021 Notes
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
Unamortized discount of liability component
|
|
(37,574
|
)
|
|
(39,152
|
)
|
||
Net carrying value of the December 2021 Notes
|
|
$
|
112,426
|
|
|
$
|
110,848
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Contractual coupon interest
|
|
$
|
1,031
|
|
|
$
|
—
|
|
Amortization of debt issuance costs
|
|
18
|
|
|
—
|
|
||
Amortization of debt discount
|
|
130
|
|
|
—
|
|
||
Amortization of conversion feature
|
|
1,430
|
|
|
—
|
|
||
Total
|
|
$
|
2,609
|
|
|
$
|
—
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2017
|
|
2016
|
||||
(In thousands)
|
|
|
|
|
||||
Accrued lease liability
|
|
$
|
10,700
|
|
|
$
|
10,700
|
|
Long-term incentive accrual
|
|
2,739
|
|
|
1,995
|
|
||
Uncertain tax positions
|
|
29,973
|
|
|
41,591
|
|
||
Dividend payable
|
|
149
|
|
|
270
|
|
||
Total
|
|
$
|
43,561
|
|
|
$
|
54,556
|
|
|
|
|
|
Restricted Stock Awards
|
||||||
(In thousands except per share amounts)
|
|
Shares Available for Grant
|
|
Number of Shares Outstanding
|
|
Weighted Average Grant-date Fair Value Per Share
|
||||
Balance at December 31, 2016
|
|
3,432
|
|
|
1,472
|
|
|
$
|
3.96
|
|
Granted
|
|
(1,524
|
)
|
|
1,524
|
|
|
$
|
2.06
|
|
Balance at March 31, 2017
|
|
1,908
|
|
|
2,996
|
|
|
$
|
2.99
|
|
Consideration paid in cash at closing
|
|
$
|
109,938
|
|
Discounted anniversary payment
|
|
87,007
|
|
|
Fair value of contingent consideration
|
|
47,360
|
|
|
Total fair value of consideration transferred
|
|
$
|
244,305
|
|
Acquired product rights
|
|
$
|
216,690
|
|
Customer relationships
|
|
23,880
|
|
|
Goodwill
|
|
3,735
|
|
|
Net intangible assets
|
|
$
|
244,305
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
(in thousands)
|
|
|
|
|
||||
Pro forma revenues
|
|
$
|
45,440
|
|
|
$
|
138,847
|
|
Pro forma net income
|
|
$
|
7,241
|
|
|
$
|
61,393
|
|
Pro forma net income per share - basic
|
|
$
|
0.04
|
|
|
$
|
0.38
|
|
Pro forma net income per share - diluted
|
|
$
|
0.04
|
|
|
$
|
0.37
|
|
•
|
Adjustment to recognize incremental amortization expense based on the fair value of intangibles acquired;
|
•
|
Eliminate transaction costs and non-recurring charges directly related to the acquisition that were included in the historical results of operations for the Company; and
|
•
|
Adjustment to recognize pro forma income tax based on income tax benefit on the amortization of intangible asset at the statutory tax rate of Ireland (
12.5%
), and the income tax benefit on the interest expense at the statutory tax rate of the United States (
35.0%
).
|
Revenues by segment
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Income generating assets
|
|
$
|
32,859
|
|
|
$
|
103,124
|
|
Product sales
|
|
12,581
|
|
|
—
|
|
||
Total revenues
|
|
$
|
45,440
|
|
|
$
|
103,124
|
|
Income (loss) by segment
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Income generating assets
|
|
$
|
10,974
|
|
|
$
|
55,887
|
|
Product sales
|
|
(3,733
|
)
|
|
—
|
|
||
Total net income
|
|
$
|
7,241
|
|
|
$
|
55,887
|
|
Licensee
|
|
Product Names
|
Genentech
|
|
Avastin
|
|
|
Herceptin
|
|
|
Xolair
|
|
|
Lucentis
|
|
|
Perjeta
®
|
|
|
Kadcyla
®
|
|
|
|
Biogen
|
|
Tysabri
|
|
|
Three Months Ended
|
|
Change from Prior
|
||||||
|
|
March 31,
|
|
|||||||
|
|
2017
|
|
2016
|
|
Year %
|
||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||
Revenues
|
|
|
|
|
|
|
||||
Royalties from Queen et al. patents
|
|
$
|
14,156
|
|
|
$
|
121,455
|
|
|
(88%)
|
Royalty rights - change in fair value
|
|
13,146
|
|
|
(27,102
|
)
|
|
(149%)
|
||
Interest revenue
|
|
5,457
|
|
|
8,964
|
|
|
(39%)
|
||
Product revenue, net
|
|
12,581
|
|
|
—
|
|
|
N/M
|
||
License and other
|
|
100
|
|
|
(193
|
)
|
|
(152%)
|
||
Total revenues
|
|
$
|
45,440
|
|
|
$
|
103,124
|
|
|
(56%)
|
(in thousands)
|
|
Discount and Distribution Fees
|
|
Government Rebates and Chargebacks
|
|
Assistance and Other Discounts
|
|
Product Return
|
|
Total
|
||||||||||
Balance at December 31, 2016:
|
|
$
|
2,475
|
|
|
$
|
5,514
|
|
|
$
|
2,580
|
|
|
$
|
1,769
|
|
|
$
|
12,338
|
|
Allowances for current period sales
|
|
2,243
|
|
|
4,939
|
|
|
2,264
|
|
|
1,235
|
|
|
10,681
|
|
|||||
Allowances for prior period sales
|
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|||||
Credits/payments for current period sales
|
|
(453
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(453
|
)
|
|||||
Credits/payments for prior period sales
|
|
(1,451
|
)
|
|
(3,746
|
)
|
|
(556
|
)
|
|
—
|
|
|
(5,753
|
)
|
|||||
Balance at March 31, 2017
|
|
$
|
2,814
|
|
|
$
|
6,960
|
|
|
$
|
4,288
|
|
|
$
|
3,004
|
|
|
$
|
17,066
|
|
|
|
|
|
Change in
|
|
Royalty Rights -
|
||||||
|
|
Cash Royalties
|
|
Fair Value
|
|
Change in Fair Value
|
||||||
Depomed
|
|
$
|
8,853
|
|
|
$
|
(2,432
|
)
|
|
$
|
6,421
|
|
VB
|
|
381
|
|
|
174
|
|
|
555
|
|
|||
U-M
|
|
824
|
|
|
299
|
|
|
1,123
|
|
|||
ARIAD
|
|
3,081
|
|
|
(462
|
)
|
|
2,619
|
|
|||
AcelRx
|
|
20
|
|
|
2,113
|
|
|
2,133
|
|
|||
Avinger
|
|
305
|
|
|
(248
|
)
|
|
57
|
|
|||
KYBELLA
|
|
30
|
|
|
208
|
|
|
238
|
|
|||
|
|
$
|
13,494
|
|
|
$
|
(348
|
)
|
|
$
|
13,146
|
|
|
|
|
|
Three Months Ended
|
||||
|
|
|
|
March 31,
|
||||
Licensee
|
|
Product Name
|
|
2017
|
|
2016
|
||
Genentech
|
|
Avastin
|
|
—
|
%
|
|
38
|
%
|
|
|
Herceptin
|
|
—
|
%
|
|
38
|
%
|
|
|
Xolair
|
|
—
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
||
Biogen
|
|
Tysabri
|
|
31
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
||
Depomed
|
|
Glumetza, Janumet XR, Jentadueto XR and Invokamet XR
|
|
14
|
%
|
|
N/M
|
|
|
|
|
|
|
|
|
||
Novartis/Noden
|
|
Tekturna, Tekturna HCT, Rasilez and Rasilez HCT
|
|
28
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
||
kaléo
|
|
Interest revenues
|
|
10
|
%
|
|
5
|
%
|
|
|
Three Months Ended
|
|
Change from Prior
|
||||||
|
|
March 31,
|
|
|||||||
|
|
2017
|
|
2016
|
|
Year %
|
||||
(In thousands)
|
|
|
|
|
|
|
||||
Cost of product revenue, (excluding intangible amortization)
|
|
$
|
2,552
|
|
|
$
|
—
|
|
|
N/M
|
Amortization of intangible assets
|
|
6,015
|
|
|
—
|
|
|
N/M
|
||
General and administrative
|
|
12,576
|
|
|
9,846
|
|
|
28%
|
||
Sales and marketing
|
|
2,584
|
|
|
—
|
|
|
N/M
|
||
Research and development
|
|
1,766
|
|
|
—
|
|
|
N/M
|
||
Change in fair value of acquisition-related contingent consideration
|
|
1,442
|
|
|
—
|
|
|
N/M
|
||
Total operating expenses
|
|
$
|
26,935
|
|
|
$
|
9,846
|
|
|
174%
|
Percentage of total revenues
|
|
59
|
%
|
|
10
|
%
|
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income per share - basic
|
$
|
0.04
|
|
|
$
|
0.34
|
|
Net income per share - diluted
|
$
|
0.04
|
|
|
$
|
0.34
|
|
Fiscal Period
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased As Part of a Publicly Announced Program
|
|
Approximate Dollar Amount of Shares That May Yet be Purchased Under the Program
(1)
|
||||||
January 1, 2017
|
to
|
January 31, 2017
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
February 1, 2017
|
to
|
February 28, 2017
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||
March 1, 2017
|
to
|
March 31, 2017
|
|
3,938
|
|
2.16
|
|
|
3,938
|
|
21,486
|
|
||
Total during quarter ended March 31, 2017
|
|
3,938
|
|
$
|
2.16
|
|
|
3,938
|
|
$
|
21,486
|
|
Dated:
|
May 3, 2017
|
|
PDL BIOPHARMA, INC. (REGISTRANT)
|
|
|
|
|
|
|
|
|
/s/ John P. McLaughlin
|
|
|
John P. McLaughlin
|
|
|
President and Chief Executive Officer (Principal Executive Officer)
|
|
/s/ Peter S. Garcia
|
|
|
Peter S. Garcia
|
|
|
Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
/s/ Steffen Pietzke
|
|
|
Steffen Pietzke
|
|
|
Vice President, Finance and Chief Accounting Officer (Principal Accounting Officer)
|
|
#
|
Filed herewith.
|
*
|
Management contract or compensatory plan or arrangement.
|
**
|
This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.
|
1.
|
Eligibility
|
2.
|
Performance Goals
|
3.
|
Incentive
|
4.
|
Adjustments
|
5.
|
Change in Control
|
6.
|
409A
|
7.
|
162(m)
|
8.
|
Miscellaneous
|
|
Title
|
Target Cash Payment
|
Value of Restricted Stock Award
|
John P. McLaughlin
|
President and Chief Executive Officer
|
$1,800,000
|
$1,200,000
|
Peter Garcia
|
Vice President, Chief Financial Officer
|
$650,768
|
$433,845
|
Christopher L. Stone
|
Vice President, General Counsel and Secretary
|
$655,980
|
$437,320
|
Danny Hart
|
Vice President, Business Development
|
$609,000
|
$406,000
|
Steffen Pietzke
|
Vice President, Finance & Chief Accounting Officer
|
$300,000
|
$200,000
|
Nathan Kryszak
|
Deputy General counsel and Assistant Secretary
|
$300,000
|
$200,000
|
Extended Year(s)
|
|
Monthly
|
|
3-Year Extended Term
|
1, 2 and 3 (36 Months)
|
|
$14,459.62
|
|
$520,546.32
|
LANDLORD
|
|
TENANT
|
||
932936, LLC
|
|
PDL BioPharma, Inc.
|
||
A Nevada limited liability company
|
|
A Delaware corporation
|
||
|
|
|
|
|
By:
|
/s/ Gregory S. Skinner
|
|
By:
|
/s/ Peter Garcia
|
Name: Gregory S. Skinner
|
|
Name: Peter Garcia
|
||
Its: Manager
|
|
Its: Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
|||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
$
|
327,133
|
|
|
$
|
401,876
|
|
|
$
|
501,272
|
|
|
$
|
530,138
|
|
|
$
|
106,670
|
|
|
$
|
13,746
|
|
Add: fixed charges
|
|
29,097
|
|
|
24,931
|
|
|
39,274
|
|
|
27,123
|
|
|
18,330
|
|
|
4,995
|
|
||||||
Earnings
|
|
$
|
356,230
|
|
|
$
|
426,807
|
|
|
$
|
540,546
|
|
|
$
|
557,261
|
|
|
$
|
125,000
|
|
|
$
|
18,741
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
1
|
|
$
|
29,036
|
|
|
$
|
24,871
|
|
|
$
|
39,211
|
|
|
$
|
27,059
|
|
|
$
|
18,267
|
|
|
$
|
4,971
|
|
Estimated interest portion of rent expense
2
|
|
61
|
|
|
60
|
|
|
63
|
|
|
64
|
|
|
63
|
|
|
24
|
|
||||||
Fixed charges
|
|
29,097
|
|
|
$
|
24,931
|
|
|
$
|
39,274
|
|
|
$
|
27,123
|
|
|
$
|
18,330
|
|
|
$
|
4,995
|
|
|
Ratio of earnings to fixed charges
|
|
12.24
|
|
|
17.12
|
|
|
13.76
|
|
|
20.55
|
|
|
6.82
|
|
|
3.75
|
|
Date:
|
May 3, 2017
|
|
|
|
|
/s/ John P. McLaughlin
|
|
|
John P. McLaughlin
President and Chief Executive Officer
(Principal Executive Officer)
|
|
Date:
|
May 3, 2017
|
|
|
|
|
/s/ Peter S. Garcia
|
|
|
Peter S. Garcia
Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
By:
|
|
|
|
/s/ JOHN P. MCLAUGHLIN
|
|
|
John P. McLaughlin
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
By:
|
|
|
|
/s/ PETER S. GARCIA
|
|
|
Peter S. Garcia
|
|
|
Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
(1)
|
This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of PDL BioPharma, Inc. under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to PDL BioPharma, Inc. and will be retained by PDL BioPharma, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
|