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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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94-3023969
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of Class
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Name of Exchange on which Registered
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Common Stock, par value $0.01 per share
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The Nasdaq Stock Market LLC
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PART I
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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PART II
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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Item 16
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•
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Wellstat Diagnostics
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•
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Depomed
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•
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Viscogliosi Brothers
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•
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University of Michigan
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•
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AcelRx
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•
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KYBELLA
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Licensee
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Product Names
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Genentech
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Avastin
®
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Herceptin
®
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Xolair
®
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Lucentis
®
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Perjeta
®
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Kadcyla
®
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•
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completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;
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•
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submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;
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•
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approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;
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•
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performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each indication;
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•
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submission to the FDA of an NDA;
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•
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satisfactory completion of an FDA advisory committee review, if applicable;
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•
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satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practice, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and
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•
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FDA review and approval of the NDA.
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•
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Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness.
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•
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Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
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•
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Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the
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•
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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
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•
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fines, warning letters or holds on post-approval clinical trials;
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•
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refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;
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•
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product seizure or detention, or refusal to permit the import or export of products; or
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•
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injunctions or the imposition of civil or criminal penalties.
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•
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The Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use of the European Medicines Agency, or EMA, and which is valid throughout the entire territory of the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.
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•
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National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in another Member State through the Mutual Recognition Procedure. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure.
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•
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we may be unable to acquire additional pharmaceutical products, medical devices and/or income generating assets on terms that would allow us to make an appropriate level of return from the asset;
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•
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our products and asset investments may be less successful in the marketplace than may be necessary to generate an appropriate level of return from the asset; or
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•
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we may be forced to undertake more risk in obtaining the assets we pursue.
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•
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the receipt of regulatory clearance of marketing claims for the uses that we may in the future develop;
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•
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the establishment and demonstration of the advantages and safety of our laser technology;
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•
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pricing and reimbursement policies of government and third party payers such as insurance companies, health maintenance organizations and other health plan administrators;
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the effectiveness of sales and marketing efforts.
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•
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international regulatory requirements for drug marketing and pricing in foreign countries;
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•
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varied standards of care in various countries that could complicate the commercial success of products;
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•
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varied drug import and export rules;
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•
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varying standards for the protection of intellectual property rights which may result in reduced or compromised exclusivity in certain countries;
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•
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unexpected changes in tariffs, trade barriers and regulatory requirements;
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•
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varied reimbursement systems and different competitive drugs indicated to treat the indications for which Noden Products are being commercialized;
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•
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economic weakness, including inflation, or political instability in particular foreign economies and markets;
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compliance with tax, employment, immigration and labor laws applicable to foreign operations;
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compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act, and other anti-corruption and anti-bribery laws;
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foreign taxes and duties;
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foreign currency fluctuations and other obligations incident to doing business in another country;
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workforce uncertainty in countries where labor unrest is more common than in the United States;
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reliance on management, contract services organizations and other third parties that may be less experienced with manufacturing and commercialization than the party from whom the Noden Products were acquired;
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potential liability resulting from product liability laws or the activities of foreign distributors; and
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business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters.
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inability to identify and enter into a manufacturing and supply agreement with a third party manufacturer having the appropriate capabilities to cost-effectively and timely manufacture products at the sales levels that we anticipate;
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reduced control and additional burdens of oversight as a result of using third party manufacturers for all aspects of manufacturing activities, including regulatory compliance and quality control and assurance;
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termination or non-renewal of manufacturing and supply agreements with third parties in a manner or at a time that may negatively impact commercialization activities; and
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disruption in the operations of third party manufacturers or suppliers unrelated to our products, including the bankruptcy of the manufacturer or supplier or a catastrophic event affecting the third manufacturers or suppliers.
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the timing and availability of generic product or devices competition for our products or devices, and our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices;
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potential challenges or design arounds to product, use or manufacturing related patents which provide exclusivity for products and assets before their expiration by generic pharmaceutical manufacturers;
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the size of the market for our products or devices, and our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices;
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the extent and effectiveness of the sales and marketing and distribution support our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices and the implementation of a new sales force and commercial infrastructure with commercial experience in connection with the commercialization of our products or devices;
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the existence of novel or superior products or devices to our products or devices, or our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices;
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the availability of reduced pricing and discounts applicable to our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices;
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stocking and inventory management practices related to our products or our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices;
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limitations on indications for which our products or devices or our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices can be marketed; the competitive landscape for approved products or devices and developing therapies that compete with our products or devices or our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices;
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the ability of patients to be able to afford our products or devices, or our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices or obtain health care coverage that covers those products or devices;
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acceptance of, and ongoing satisfaction with, our products or devices and our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices by the care providers, patients receiving therapy and third party payors; or
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the unfavorable outcome of any potential litigation relating to our products or devices and our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices.
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an annual, non-tax deductible fee payable by any entity that manufactures or imports specified branded prescription drugs payable to the federal government based on each company’s market share of prior year total sales of branded products to certain federal healthcare programs;
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imposed an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, with limited exceptions (described in more detail below), although the effective rate paid may be lower. Through a series of legislative amendments, the tax was suspended for 2016 through 2019. Absent further legislative action, the device excise tax will be reinstated on medical device sales starting January 1, 2020; implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models;
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•
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an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
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•
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a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
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•
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extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;
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•
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expansion of eligibility criteria for Medicaid programs in certain states;
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•
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a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries under their coverage gap period, as a
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•
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expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
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•
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a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
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a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
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•
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regulatory authorities may withdraw approvals of such product;
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regulatory authorities may require additional warnings on the label;
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•
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we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
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we could be sued and held liable for harm caused to patients; and
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our reputation may suffer.
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comply with FDA regulations or similar regulations of comparable foreign regulatory authorities;
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provide accurate information to the FDA or comparable foreign regulatory authorities;
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comply with manufacturing standards applicable to our products;
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comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities;
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comply with the FCPA, the UK Bribery Act, and other anti-bribery laws;
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report financial information or data and our business affairs accurately;
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or disclose unauthorized activities to us.
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•
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the FDA’s disagreement with the design or implementation of our clinical trials;
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negative or ambiguous results from our clinical trials;
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results that may not meet the level of statistical significance required by the FDA for approval or clearance;
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serious and unexpected drug-related adverse events experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;
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•
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our inability to demonstrate to the satisfaction of the FDA that our product candidates are safe and effective for the proposed indication or, in the case of our medical devices, are substantially equivalent to our proposed predicate device;
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•
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the FDA’s disagreement with the interpretation of data from preclinical studies or clinical trials;
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•
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our inability to demonstrate that the clinical and other benefits of our product candidates outweigh any safety or other perceived risks;
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•
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the FDA’s requirement for additional preclinical studies or clinical trials;
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•
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the FDA’s disagreement regarding the formulation, labeling or the specifications of our product candidates;
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•
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the FDA’s agency’s failure to approve the manufacturing processes or facilities of third-party manufacturers with which we contract; or
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•
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the potential for approval policies or regulations of the FDA to significantly change in a manner rendering our clinical data insufficient for approval.
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•
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restrictions on the marketing or manufacturing of our product candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;
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•
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fines, warning letters or holds on clinical trials;
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•
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refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals;
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•
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product seizure or detention, or refusal to permit the import or export of our product candidates; and
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•
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injunctions or the imposition of civil or criminal penalties.
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•
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the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. The U.S. government has interpreted this law broadly to apply to the marketing and sales activities of manufacturers. Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Violations of the federal Anti-Kickback Statute may result in civil monetary penalties up to $74,792 for each violation, plus up to three times the remuneration involved. Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations can also result in criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to 10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid;
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•
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federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third party payors that are false or fraudulent. Private individuals can bring False Claims Act ‘‘qui tam’’ actions, on behalf of the government and such individuals, commonly known as ‘‘whistleblowers,’’ may share in amounts paid by the entity to the government in fines or settlement. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties ranging from $11,181 to $22,363 for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;
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•
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the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;
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The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
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•
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HIPAA, as amended by the Health Information for Economic and Clinical Health Act of 2009 (“HITECH”), and its implementing regulations, which imposes certain requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their business associates that perform services for them that involve individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information, without appropriate authorization, including mandatory contractual terms as well as directly applicable privacy and security standards and requirements. Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties up to $55,910 per violation, not to exceed $1.68 million per calendar year for non-compliance of an identical provision, and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. State attorneys general can also bring a civil action to enjoin a HIPAA violation or to obtain statutory damages on behalf of residents of his or her state;
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•
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the federal physician sunshine requirements under the ACA, which requires manufacturers of drugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare and Medicaid Services (“CMS”), information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members. Applicable manufacturers are required to submit annual reports to CMS. Failure to submit required information may result in civil monetary penalties of $11,052 per failure up to an aggregate of $165,786 per year (or up to an aggregate of $1.105 million per year for ‘‘knowing failures’’), for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission, and may result in liability under other federal laws or regulations;
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guidelines promulgated by the Office of Inspector General of the U.S. Department of Health and Human Services related to pharmaceutical company regulatory compliance programs and the PhRMA Code on Interactions with Healthcare Professionals, as amended;
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foreign and state law equivalents of each of the above federal laws, such as the FCPA, anti-kickback and false claims laws that may apply to items or services reimbursed by any third party payor, including commercial insurers;
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state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;
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state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and
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state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways, thus complicating compliance efforts.
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expect to purchase our common stock in the open market and/or enter into various derivatives and/or enter into various derivative transactions with respect to our common stock; and
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may enter into or unwind various derivatives and/or purchase or sell our common stock in secondary market transactions.
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the jurisdictions in which profits are determined to be earned and taxed;
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•
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the resolution of issues arising from tax audits with various tax authorities;
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changes in valuation of our deferred tax assets and liabilities;
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increases in expenses not deductible for tax purposes, including write-offs of acquired intangibles and impairment of goodwill in connection with acquisitions;
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changes in availability of tax credits, tax holidays, and tax deductions;
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changes in share-based compensation; and
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changes in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles.
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not be engaged or hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities and not own or propose to acquire “investment securities” with a value of more than 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis; or
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•
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be able to rely on an exception from the definition of “investment company” under the ’40 Act or an exemptive rule.
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High
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Low
|
||||
2017
|
|
|
|
||||
First Quarter
|
$
|
2.39
|
|
|
$
|
1.96
|
|
Second Quarter
|
$
|
2.63
|
|
|
$
|
2.00
|
|
Third Quarter
|
$
|
3.43
|
|
|
$
|
2.15
|
|
Fourth Quarter
|
$
|
3.55
|
|
|
$
|
2.70
|
|
2016
|
|
|
|
||||
First Quarter
|
$
|
3.57
|
|
|
$
|
2.58
|
|
Second Quarter
|
$
|
3.84
|
|
|
$
|
2.94
|
|
Third Quarter
|
$
|
3.62
|
|
|
$
|
2.69
|
|
Fourth Quarter
|
$
|
3.77
|
|
|
$
|
1.93
|
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
||||||||||||
PDL BioPharma, Inc.
|
$
|
100.00
|
|
|
$
|
129.34
|
|
|
$
|
126.33
|
|
|
$
|
64.93
|
|
|
$
|
40.07
|
|
|
$
|
51.79
|
|
Nasdaq Biotechnology Index
|
$
|
100.00
|
|
|
$
|
174.05
|
|
|
$
|
230.33
|
|
|
$
|
244.29
|
|
|
$
|
194.95
|
|
|
$
|
228.29
|
|
Nasdaq Composite Index
|
$
|
100.00
|
|
|
$
|
141.63
|
|
|
$
|
162.09
|
|
|
$
|
173.33
|
|
|
$
|
187.19
|
|
|
$
|
242.29
|
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Royalties from Queen et al. patents
|
|
$
|
36,415
|
|
|
$
|
166,158
|
|
|
$
|
485,156
|
|
|
$
|
486,888
|
|
|
$
|
430,219
|
|
Royalty rights - change in fair value
|
|
162,327
|
|
|
16,196
|
|
|
68,367
|
|
|
45,742
|
|
|
5,565
|
|
|||||
Interest revenue
|
|
17,744
|
|
|
30,404
|
|
|
36,202
|
|
|
48,020
|
|
|
18,976
|
|
|||||
Product revenue, net
|
|
84,123
|
|
|
31,669
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
License and other
|
|
19,451
|
|
|
(126
|
)
|
|
723
|
|
|
575
|
|
|
1,500
|
|
|||||
Total revenues
|
|
320,060
|
|
|
244,301
|
|
|
590,448
|
|
|
581,225
|
|
|
456,260
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product revenue, (excluding intangible amortization)
|
|
30,537
|
|
|
4,065
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amortization of intangible assets
|
|
24,689
|
|
|
12,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
General and administrative expenses
|
|
45,641
|
|
|
39,790
|
|
|
36,090
|
|
|
34,914
|
|
|
29,755
|
|
|||||
Sales and marketing
|
|
17,683
|
|
|
538
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Research and development
|
|
7,381
|
|
|
3,820
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Change in fair value of anniversary payment and contingent consideration
|
|
349
|
|
|
(3,716
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition-related costs
|
|
—
|
|
|
3,564
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on extinguishment of notes receivable
|
|
—
|
|
|
51,075
|
|
|
3,979
|
|
|
—
|
|
|
—
|
|
|||||
Asset impairment loss
|
|
—
|
|
|
3,735
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
|
126,280
|
|
|
114,899
|
|
|
40,069
|
|
|
34,914
|
|
|
29,755
|
|
|||||
Operating income
|
|
193,780
|
|
|
129,402
|
|
|
550,379
|
|
|
546,311
|
|
|
426,505
|
|
|||||
Gain on bargain purchase
|
|
9,309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other non-operating expense, net
|
|
(18,561
|
)
|
|
(20,032
|
)
|
|
(20,241
|
)
|
|
(45,039
|
)
|
|
(24,629
|
)
|
|||||
Non-operating expense, net
|
|
(9,253
|
)
|
|
(20,032
|
)
|
|
(20,241
|
)
|
|
(45,039
|
)
|
|
(24,629
|
)
|
|||||
Income before income taxes
|
|
184,527
|
|
|
109,370
|
|
|
530,138
|
|
|
501,272
|
|
|
401,876
|
|
|||||
Income tax expense
|
|
73,826
|
|
|
45,711
|
|
|
197,343
|
|
|
179,028
|
|
|
137,346
|
|
|||||
Net income
|
|
110,701
|
|
|
63,659
|
|
|
332,795
|
|
|
322,244
|
|
|
264,530
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
(47
|
)
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to PDL’s stockholders
|
|
$
|
110,748
|
|
|
$
|
63,606
|
|
|
$
|
332,795
|
|
|
$
|
322,244
|
|
|
$
|
264,530
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per basic share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.04
|
|
|
$
|
2.04
|
|
|
$
|
1.89
|
|
Net income per diluted share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.03
|
|
|
$
|
1.86
|
|
|
$
|
1.66
|
|
Dividends per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared and paid
|
|
$
|
—
|
|
|
$
|
0.10
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
|
December 31,
|
||||||||||||||||||
(in thousands)
|
|
2017
1
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cash, cash equivalents, short-term investments and restricted investments
|
|
$
|
532,114
|
|
|
$
|
242,141
|
|
|
$
|
220,352
|
|
|
$
|
293,687
|
|
|
$
|
99,540
|
|
Working capital
|
|
$
|
447,334
|
|
|
$
|
267,716
|
|
|
$
|
245,969
|
|
|
$
|
167,914
|
|
|
$
|
(299,727
|
)
|
Total assets
|
|
$
|
1,243,123
|
|
|
$
|
1,215,387
|
|
|
$
|
1,012,205
|
|
|
$
|
954,946
|
|
|
$
|
540,858
|
|
Long-term obligations, less current portion
|
|
$
|
204,124
|
|
|
$
|
329,649
|
|
|
$
|
279,512
|
|
|
$
|
306,977
|
|
|
$
|
23,042
|
|
Retained earnings
|
|
$
|
945,614
|
|
|
$
|
857,116
|
|
|
$
|
810,036
|
|
|
$
|
575,740
|
|
|
$
|
350,151
|
|
Total stockholders’ equity
|
|
$
|
845,890
|
|
|
$
|
755,423
|
|
|
$
|
695,952
|
|
|
$
|
460,437
|
|
|
$
|
113,489
|
|
1
|
Reflects the provisional estimated amounts recorded in recognition of the enactment of the 2017 Tax Act. See Note 17 to the Consolidated Financial Statements included in Part II, Item 8 of this report for further details.
|
•
|
Our net income for the years ended
December 31, 2017
,
2016
and
2015
was
$110.7 million
,
$63.6 million
and
$332.8 million
, respectively;
|
•
|
At
December 31, 2017
, we had cash, cash equivalents and short-term investments of
$532.1 million
as compared with
$242.1 million
at
December 31, 2016
;
|
•
|
At
December 31, 2017
, we had
$1,243.1 million
in total assets as compared with
$1,215.4 million
at
December 31, 2016
; and
|
•
|
At
December 31, 2017
, we had
$397.2 million
in total liabilities as compared with
$460.0 million
at
December 31, 2016
.
|
(Dollars in thousands, except for percentages)
|
|
2017
|
|
2016
|
|
Change from
Prior Year %
|
|
2015
|
|
Change from
Prior Year %
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Royalties from Queen et al. patents
|
|
$
|
36,415
|
|
|
$
|
166,158
|
|
|
(78
|
)%
|
|
$
|
485,156
|
|
|
(66
|
)%
|
Royalty rights - change in fair value
|
|
162,327
|
|
|
16,196
|
|
|
902
|
%
|
|
68,367
|
|
|
(76
|
)%
|
|||
Interest revenue
|
|
17,744
|
|
|
30,404
|
|
|
(42
|
)%
|
|
36,202
|
|
|
(16
|
)%
|
|||
Product revenue, net
|
|
84,123
|
|
|
31,669
|
|
|
166
|
%
|
|
—
|
|
|
N/M
|
|
|||
License and other
|
|
19,451
|
|
|
(126
|
)
|
|
N/M
|
|
|
723
|
|
|
(117
|
)%
|
|||
Total revenues
|
|
$
|
320,060
|
|
|
$
|
244,301
|
|
|
31
|
%
|
|
$
|
590,448
|
|
|
(59
|
)%
|
|
|
|
|
Change in
|
|
Royalty Rights -
|
||||||
(in thousands)
|
|
Cash Royalties
|
|
Fair Value
|
|
Change in Fair Value
|
||||||
Depomed
|
|
$
|
97,644
|
|
|
$
|
67,968
|
|
|
$
|
165,612
|
|
VB
|
|
1,276
|
|
|
(617
|
)
|
|
659
|
|
|||
U-M
|
|
3,662
|
|
|
(8,617
|
)
|
|
(4,955
|
)
|
|||
ARIAD
|
|
3,081
|
|
|
(462
|
)
|
|
2,619
|
|
|||
AcelRx
|
|
120
|
|
|
5,411
|
|
|
5,531
|
|
|||
Avinger
|
|
1,220
|
|
|
(1,242
|
)
|
|
(22
|
)
|
|||
KYBELLA
|
|
250
|
|
|
(7,367
|
)
|
|
(7,117
|
)
|
|||
|
|
$
|
107,253
|
|
|
$
|
55,074
|
|
|
$
|
162,327
|
|
|
|
|
|
Year Ended December 31,
|
|||||||
Licensee
|
|
Product Name
|
|
2017
|
|
2016
|
|
2015
|
|||
Genentech
|
|
Avastin
|
|
—
|
%
|
|
16
|
%
|
|
27
|
%
|
|
|
Herceptin
|
|
—
|
%
|
|
16
|
%
|
|
26
|
%
|
|
|
|
|
|
|
|
|
|
|||
Biogen
|
|
Tysabri
|
|
11
|
%
|
|
24
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|||
Depomed
|
|
Glumetza, Janumet XR, Jentadueto XR, Invokamet XR and Synjardy XR
|
|
52
|
%
|
|
13
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|||
Noden
|
|
Tekturna, Tekturna HCT, Rasilez and Rasilez HCT
|
|
22
|
%
|
|
13
|
%
|
|
—
|
%
|
(in thousands)
|
|
Discount and Distribution Fees
|
|
Government Rebates and Chargebacks
|
|
Assistance and Other Discounts
|
|
Product Return
|
|
Total
|
||||||||||
Balance at January 1, 2017:
|
|
$
|
2,475
|
|
|
$
|
5,514
|
|
|
$
|
2,580
|
|
|
$
|
1,769
|
|
|
$
|
12,338
|
|
Allowances for current period sales
|
|
8,952
|
|
|
19,541
|
|
|
8,934
|
|
|
3,691
|
|
|
41,118
|
|
|||||
Allowances for prior period sales
|
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|||||
Credits/payments for current period sales
|
|
(5,530
|
)
|
|
(10,823
|
)
|
|
(5,256
|
)
|
|
(1,145
|
)
|
|
(22,754
|
)
|
|||||
Credits/payments for prior period sales
|
|
(2,475
|
)
|
|
(5,776
|
)
|
|
(2,080
|
)
|
|
(1,011
|
)
|
|
(11,342
|
)
|
|||||
Balance at December 31, 2017
|
|
$
|
3,422
|
|
|
$
|
8,709
|
|
|
$
|
4,178
|
|
|
$
|
3,304
|
|
|
$
|
19,613
|
|
|
|
|
|
Change in
|
|
Royalty Rights -
|
||||||
(in thousands)
|
|
Cash Royalties
|
|
Fair Value
|
|
Change in Fair Value
|
||||||
Depomed
|
|
$
|
59,342
|
|
|
$
|
(27,796
|
)
|
|
$
|
31,546
|
|
VB
|
|
1,468
|
|
|
(2,135
|
)
|
|
(667
|
)
|
|||
U-M
|
|
3,013
|
|
|
(34,799
|
)
|
|
(31,786
|
)
|
|||
ARIAD
|
|
7,508
|
|
|
8,590
|
|
|
16,098
|
|
|||
AcelRx
|
|
8
|
|
|
46
|
|
|
54
|
|
|||
Avinger
|
|
1,220
|
|
|
(905
|
)
|
|
315
|
|
|||
KYBELLA
|
|
23
|
|
|
613
|
|
|
636
|
|
|||
|
|
$
|
72,582
|
|
|
$
|
(56,386
|
)
|
|
$
|
16,196
|
|
(Dollars in thousands, except for percentages)
|
|
2017
|
|
2016
|
|
Change from Prior Year %
|
|
2015
|
|
Change from Prior Year %
|
||||||||
Costs of product revenue, (excluding intangible amortization)
|
|
$
|
30,537
|
|
|
$
|
4,065
|
|
|
651
|
%
|
|
$
|
—
|
|
|
N/M
|
|
Amortization of intangible assets
|
|
24,689
|
|
|
12,028
|
|
|
105
|
%
|
|
—
|
|
|
N/M
|
|
|||
General and administrative
|
|
45,641
|
|
|
39,790
|
|
|
15
|
%
|
|
36,090
|
|
|
10
|
%
|
|||
Sales and marketing
|
|
17,683
|
|
|
538
|
|
|
3,187
|
%
|
|
—
|
|
|
N/M
|
|
|||
Research and development
|
|
7,381
|
|
|
3,820
|
|
|
93
|
%
|
|
—
|
|
|
N/M
|
|
|||
Change in fair value of anniversary payment and contingent consideration
|
|
349
|
|
|
(3,716
|
)
|
|
(109
|
)%
|
|
—
|
|
|
N/M
|
|
|||
Asset impairment loss
|
|
—
|
|
|
3,735
|
|
|
(100
|
)%
|
|
—
|
|
|
N/M
|
|
|||
Acquisition-related costs
|
|
—
|
|
|
3,564
|
|
|
(100
|
)%
|
|
—
|
|
|
N/M
|
|
|||
Loss on extinguishment of notes receivable
|
|
—
|
|
|
51,075
|
|
|
(100
|
)%
|
|
3,979
|
|
|
1,184
|
%
|
|||
Total operating expenses
|
|
$
|
126,280
|
|
|
$
|
114,899
|
|
|
10
|
%
|
|
$
|
40,069
|
|
|
187
|
%
|
Percentage of total revenues
|
|
39
|
%
|
|
47
|
%
|
|
|
|
7
|
%
|
|
|
(Dollars in thousands, except for percentages)
|
|
2017
|
|
2016
|
|
Change from Prior Year %
|
|
2015
|
|
Change from Prior Year %
|
||||||||
Interest and other income, net
|
|
$
|
1,659
|
|
|
$
|
588
|
|
|
182
|
%
|
|
$
|
368
|
|
|
60
|
%
|
Interest expense
|
|
(20,221
|
)
|
|
(18,267
|
)
|
|
11
|
%
|
|
(27,059
|
)
|
|
(32
|
)%
|
|||
Gain (loss) on bargain purchase
|
|
9,309
|
|
|
—
|
|
|
N/M
|
|
|
—
|
|
|
—
|
%
|
|||
Gain (loss) on extinguishment of debt
|
|
—
|
|
|
(2,353
|
)
|
|
(100
|
)%
|
|
6,450
|
|
|
(136
|
)%
|
|||
Total non-operating expense, net
|
|
$
|
(9,253
|
)
|
|
$
|
(20,032
|
)
|
|
(54
|
)%
|
|
$
|
(20,241
|
)
|
|
(1
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income per basic share
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.04
|
|
Net income per diluted share
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.03
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Less Than
|
|
|
|
|
|
More than
|
|
|
||||||||||
(in thousands)
|
|
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
5 years
|
|
Total
|
||||||||||
Operating leases
(1)
|
|
$
|
1,133
|
|
|
$
|
2,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,844
|
|
Convertible notes
(2)
|
|
130,993
|
|
|
162,375
|
|
|
—
|
|
|
—
|
|
|
293,368
|
|
|||||
Inventory
(3)
|
|
75,564
|
|
|
105,795
|
|
|
—
|
|
|
—
|
|
|
181,359
|
|
|||||
Contingent consideration
(4)
|
|
—
|
|
|
55,000
|
|
|
40,000
|
|
|
—
|
|
|
95,000
|
|
|||||
Total contractual obligations
|
|
$
|
207,690
|
|
|
$
|
325,881
|
|
|
$
|
40,000
|
|
|
$
|
—
|
|
|
$
|
573,571
|
|
(in thousands)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Total
|
|
Fair Value
|
|
||||||||||||
Convertible notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Rate
|
|
$
|
126,447
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150,000
|
|
|
$
|
276,447
|
|
|
$
|
274,159
|
|
(1)
|
Average Interest Rate
|
|
2.80
|
%
|
|
2.75
|
%
|
|
2.75
|
%
|
|
2.75
|
%
|
|
|
|
|
|
(1)
|
The fair value of the remaining payments under our February 2018 Notes and the December 2021 Notes was estimated based on the trading value of these notes at
December 31, 2017
.
|
Item
|
Page
|
|
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
527,266
|
|
|
$
|
147,154
|
|
Short-term investments
|
4,848
|
|
|
19,987
|
|
||
Accounts receivable, net
|
31,183
|
|
|
40,120
|
|
||
Notes receivable
|
53,613
|
|
|
111,182
|
|
||
Investments-other
|
—
|
|
|
75,000
|
|
||
Inventory
|
9,147
|
|
|
2,884
|
|
||
Prepaid and other current assets
|
14,386
|
|
|
1,704
|
|
||
Total current assets
|
640,443
|
|
|
398,031
|
|
||
Property and equipment, net
|
7,222
|
|
|
38
|
|
||
Royalty rights - at fair value
|
349,223
|
|
|
402,318
|
|
||
Notes and other receivables, long-term
|
17,124
|
|
|
159,768
|
|
||
Long-term deferred tax assets
|
2,432
|
|
|
19,257
|
|
||
Intangible assets, net
|
215,823
|
|
|
228,542
|
|
||
Other assets
|
10,856
|
|
|
7,433
|
|
||
Total assets
|
$
|
1,243,123
|
|
|
$
|
1,215,387
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
19,785
|
|
|
$
|
7,016
|
|
Accrued liabilities
|
45,881
|
|
|
30,575
|
|
||
Accrued income taxes
|
1,377
|
|
|
4,723
|
|
||
Anniversary payment
|
—
|
|
|
88,001
|
|
||
Convertible notes payable
|
126,066
|
|
|
—
|
|
||
Total current liabilities
|
193,109
|
|
|
130,315
|
|
||
Convertible notes payable
|
117,415
|
|
|
232,443
|
|
||
Contingent consideration
|
42,000
|
|
|
42,650
|
|
||
Other long-term liabilities
|
44,709
|
|
|
54,556
|
|
||
Total liabilities
|
397,233
|
|
|
459,964
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 13)
|
|
|
|
||||
|
|
|
|
||||
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; 153,775 and 165,538 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
1,538
|
|
|
1,655
|
|
||
Additional paid-in capital
|
(102,443
|
)
|
|
(107,628
|
)
|
||
Accumulated other comprehensive income
|
1,181
|
|
|
—
|
|
||
Retained earnings
|
945,614
|
|
|
857,116
|
|
||
Total PDL’s stockholders’ equity
|
845,890
|
|
|
751,143
|
|
||
Noncontrolling interests
|
—
|
|
|
4,280
|
|
||
Total stockholders’ equity
|
845,890
|
|
|
755,423
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,243,123
|
|
|
$
|
1,215,387
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Royalties from Queen et al. patents
|
$
|
36,415
|
|
|
$
|
166,158
|
|
|
$
|
485,156
|
|
Royalty rights - change in fair value
|
162,327
|
|
|
16,196
|
|
|
68,367
|
|
|||
Interest revenue
|
17,744
|
|
|
30,404
|
|
|
36,202
|
|
|||
Product revenue, net
|
84,123
|
|
|
31,669
|
|
|
—
|
|
|||
License and other
|
19,451
|
|
|
(126
|
)
|
|
723
|
|
|||
Total revenues
|
320,060
|
|
|
244,301
|
|
|
590,448
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of product revenue, (excluding intangible amortization)
|
30,537
|
|
|
4,065
|
|
|
—
|
|
|||
Amortization of intangible assets
|
24,689
|
|
|
12,028
|
|
|
—
|
|
|||
General and administrative
|
45,641
|
|
|
39,790
|
|
|
36,090
|
|
|||
Sales and marketing
|
17,683
|
|
|
538
|
|
|
—
|
|
|||
Research and development
|
7,381
|
|
|
3,820
|
|
|
—
|
|
|||
Change in fair value of anniversary payment and contingent consideration
|
349
|
|
|
(3,716
|
)
|
|
—
|
|
|||
Asset impairment loss
|
—
|
|
|
3,735
|
|
|
—
|
|
|||
Acquisition-related costs
|
—
|
|
|
3,564
|
|
|
—
|
|
|||
Loss on extinguishment of notes receivable
|
—
|
|
|
51,075
|
|
|
3,979
|
|
|||
Total operating expenses
|
126,280
|
|
|
114,899
|
|
|
40,069
|
|
|||
Operating income
|
193,780
|
|
|
129,402
|
|
|
550,379
|
|
|||
Non-operating expense, net
|
|
|
|
|
|
||||||
Interest and other income, net
|
1,659
|
|
|
588
|
|
|
368
|
|
|||
Interest expense
|
(20,221
|
)
|
|
(18,267
|
)
|
|
(27,059
|
)
|
|||
Gain on bargain purchase
|
9,309
|
|
|
—
|
|
|
—
|
|
|||
Gain (loss) on extinguishment of debt
|
—
|
|
|
(2,353
|
)
|
|
6,450
|
|
|||
Total non-operating expense, net
|
(9,253
|
)
|
|
(20,032
|
)
|
|
(20,241
|
)
|
|||
Income before income taxes
|
184,527
|
|
|
109,370
|
|
|
530,138
|
|
|||
Income tax expense
|
73,826
|
|
|
45,711
|
|
|
197,343
|
|
|||
Net income
|
110,701
|
|
|
63,659
|
|
|
332,795
|
|
|||
Less: Net income/(loss) attributable to noncontrolling interests
|
(47
|
)
|
|
53
|
|
|
—
|
|
|||
Net income attributable to PDL’s stockholders
|
$
|
110,748
|
|
|
$
|
63,606
|
|
|
$
|
332,795
|
|
|
|
|
|
|
|
||||||
Net income per share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.04
|
|
Diluted
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.03
|
|
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
155,394
|
|
|
163,805
|
|
|
163,386
|
|
|||
Diluted
|
156,257
|
|
|
164,192
|
|
|
163,554
|
|
|||
Cash dividends declared per common share
|
$
|
—
|
|
|
$
|
0.10
|
|
|
$
|
0.60
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
110,701
|
|
|
$
|
63,659
|
|
|
$
|
332,795
|
|
|
|
|
|
|
|
|
||||||
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
|
|
1,181
|
|
|
122
|
|
|
783
|
|
|||
Adjustment for net (gains) losses realized and included in net income, net of tax
|
|
—
|
|
|
(557
|
)
|
|
(712
|
)
|
|||
Total change in unrealized gains on investments in available-for-sale securities, net of tax
(a)
|
|
1,181
|
|
|
(435
|
)
|
|
71
|
|
|||
Change in unrealized gains (losses) on cash flow hedges:
|
|
|
|
|
|
|
||||||
Change in fair value of cash flow hedges, net of tax
|
|
—
|
|
|
—
|
|
|
4,626
|
|
|||
Adjustment to royalties from Queen et al. patents for net (gains) losses realized and included in net income, net of tax
|
|
—
|
|
|
(1,821
|
)
|
|
(5,390
|
)
|
|||
Total change in unrealized losses on cash flow hedges, net of tax
(b)
|
|
—
|
|
|
(1,821
|
)
|
|
(764
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
|
1,181
|
|
|
(2,256
|
)
|
|
(693
|
)
|
|||
Comprehensive income
|
|
111,882
|
|
|
61,403
|
|
|
332,102
|
|
|||
Less: Comprehensive income/(loss) attributable to noncontrolling interests
|
|
(47
|
)
|
|
53
|
|
|
—
|
|
|||
Comprehensive income attributable to PDL’s stockholders
|
|
$
|
111,929
|
|
|
$
|
61,350
|
|
|
$
|
332,102
|
|
|
PDL’s Stockholders Equity
|
|
|
|
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other Comprehensive
Income (Loss)
|
|
Non-controlling Interest
|
|
Total
Stockholders’ Equity |
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2014
|
162,186,482
|
|
|
$
|
1,622
|
|
|
$
|
(119,874
|
)
|
|
$
|
575,740
|
|
|
$
|
2,949
|
|
|
$
|
—
|
|
|
$
|
460,437
|
|
Issuance of common stock, net
|
758,533
|
|
|
8
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Extinguishment of convertible debt
|
1,341,600
|
|
|
13
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2,045
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,045
|
|
||||||
Tax benefit from stock options
|
—
|
|
|
—
|
|
|
(233
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(98,499
|
)
|
|
—
|
|
|
—
|
|
|
(98,499
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
332,795
|
|
|
—
|
|
|
—
|
|
|
332,795
|
|
||||||
Change in unrealized gains and losses on investments in available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||||
Changes in unrealized gains and losses on cash flow hedges, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(764
|
)
|
|
—
|
|
|
(764
|
)
|
||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
332,102
|
|
||||||||||||
Balance at December 31, 2015
|
164,286,615
|
|
|
1,643
|
|
|
(117,983
|
)
|
|
810,036
|
|
|
2,256
|
|
|
—
|
|
|
695,952
|
|
||||||
Issuance of common stock, net
|
1,251,832
|
|
|
12
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of convertible debt
|
—
|
|
|
—
|
|
|
25,465
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,465
|
|
||||||
Purchase of purchased call options, net of tax
|
—
|
|
|
—
|
|
|
(14,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,400
|
)
|
||||||
Sale of subsidiary shares to non-controlling interest
|
—
|
|
|
—
|
|
|
(3,977
|
)
|
|
—
|
|
|
—
|
|
|
4,227
|
|
|
250
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,741
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,741
|
|
||||||
Tax benefit from stock options
|
—
|
|
|
—
|
|
|
(462
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(462
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,526
|
)
|
|
—
|
|
|
—
|
|
|
(16,526
|
)
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
63,606
|
|
|
—
|
|
|
53
|
|
|
63,659
|
|
||||||
Change in unrealized gains and losses on investments in available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(435
|
)
|
|
—
|
|
|
(435
|
)
|
||||||
Changes in unrealized gains and losses on cash flow hedges, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,821
|
)
|
|
—
|
|
|
(1,821
|
)
|
||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
61,403
|
|
||||||||||||
Balance at December 31, 2016
|
165,538,447
|
|
|
1,655
|
|
|
(107,628
|
)
|
|
857,116
|
|
|
—
|
|
|
4,280
|
|
|
755,423
|
|
||||||
Issuance of common stock, net
|
1,582,698
|
|
|
16
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,138
|
|
||||||
Repurchase and retirement of common stock
|
(13,346,389
|
)
|
|
(133
|
)
|
|
—
|
|
|
(29,867
|
)
|
|
—
|
|
|
—
|
|
|
(30,000
|
)
|
||||||
Acquisition of Noden common stock
|
—
|
|
|
—
|
|
|
2,063
|
|
|
—
|
|
|
—
|
|
|
(4,233
|
)
|
|
(2,170
|
)
|
||||||
Cumulative effect from change in accounting principles
|
—
|
|
|
—
|
|
|
—
|
|
|
7,617
|
|
|
—
|
|
|
—
|
|
|
7,617
|
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
110,748
|
|
|
—
|
|
|
(47
|
)
|
|
110,701
|
|
||||||
Change in unrealized gains and losses on investments in available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,181
|
|
|
—
|
|
|
1,181
|
|
||||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
111,882
|
|
||||||||||||
Balance at December 31, 2017
|
153,774,756
|
|
|
$
|
1,538
|
|
|
$
|
(102,443
|
)
|
|
$
|
945,614
|
|
|
$
|
1,181
|
|
|
$
|
—
|
|
|
$
|
845,890
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
110,701
|
|
|
$
|
63,659
|
|
|
$
|
332,795
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization of convertible notes and term loan offering costs
|
11,038
|
|
|
10,009
|
|
|
12,963
|
|
|||
Amortization of intangible assets
|
24,689
|
|
|
12,028
|
|
|
—
|
|
|||
Asset impairment loss
|
—
|
|
|
3,735
|
|
|
—
|
|
|||
Change in fair value of royalty rights - at fair value
|
(162,327
|
)
|
|
(16,196
|
)
|
|
(68,367
|
)
|
|||
Change in fair value of derivative asset
|
49
|
|
|
906
|
|
|
(985
|
)
|
|||
Change in fair value of anniversary payment and contingent consideration
|
349
|
|
|
(3,716
|
)
|
|
—
|
|
|||
Other amortization, depreciation and accretion of embedded derivative
|
2,366
|
|
|
18
|
|
|
40
|
|
|||
Inventory write-down
|
2,012
|
|
|
342
|
|
|
—
|
|
|||
Allowance for doubtful accounts
|
76
|
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of notes receivable
|
—
|
|
|
51,075
|
|
|
3,979
|
|
|||
(Gain) loss on extinguishment of convertible notes
|
—
|
|
|
2,353
|
|
|
(6,450
|
)
|
|||
Gain on sale of available-for-sale securities
|
(108
|
)
|
|
(882
|
)
|
|
(997
|
)
|
|||
Escrow receivable
|
(1,400
|
)
|
|
—
|
|
|
—
|
|
|||
Bargain purchase gain
|
(9,309
|
)
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
3,138
|
|
|
3,742
|
|
|
2,045
|
|
|||
Deferred income taxes
|
39,172
|
|
|
(10,676
|
)
|
|
17,251
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
5,877
|
|
|
(34,120
|
)
|
|
—
|
|
|||
Receivables from licensees and other
|
5,055
|
|
|
(6,000
|
)
|
|
300
|
|
|||
Prepaid and other current assets
|
(9,100
|
)
|
|
(1,526
|
)
|
|
(42
|
)
|
|||
Accrued interest on notes receivable
|
1,475
|
|
|
(2,764
|
)
|
|
(2,246
|
)
|
|||
Inventory
|
(1,120
|
)
|
|
(3,227
|
)
|
|
—
|
|
|||
Other assets
|
(1,400
|
)
|
|
(757
|
)
|
|
(865
|
)
|
|||
Accounts payable
|
10,840
|
|
|
6,621
|
|
|
76
|
|
|||
Accrued liabilities
|
13,120
|
|
|
22,729
|
|
|
(1,048
|
)
|
|||
Accrued income taxes
|
(3,346
|
)
|
|
1,352
|
|
|
79
|
|
|||
Deferred tax liability
|
—
|
|
|
(787
|
)
|
|
—
|
|
|||
Other long-term liabilities
|
(1,223
|
)
|
|
3,800
|
|
|
12,937
|
|
|||
Net cash provided by operating activities
|
40,624
|
|
|
101,718
|
|
|
301,465
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Acquisition of business, net of cash
|
—
|
|
|
(109,938
|
)
|
|
—
|
|
|||
Purchases of investments
|
(23,213
|
)
|
|
(22,952
|
)
|
|
—
|
|
|||
Purchase of investments - other
|
—
|
|
|
(75,000
|
)
|
|
—
|
|
|||
Maturities of investments-other
|
75,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales of available-for-sale securities
|
39,956
|
|
|
4,680
|
|
|
1,947
|
|
|||
Purchase of royalty rights - at fair value
|
—
|
|
|
(59,500
|
)
|
|
(115,000
|
)
|
|||
Proceeds from royalty rights - at fair value
|
107,253
|
|
|
72,582
|
|
|
43,407
|
|
|||
Sale of royalty rights - at fair value
|
108,169
|
|
|
—
|
|
|
—
|
|
|||
Purchase of notes receivable
|
—
|
|
|
(9,010
|
)
|
|
(35,235
|
)
|
|||
Repayment of notes receivable
|
144,829
|
|
|
54,653
|
|
|
25,242
|
|
|||
Proceeds from sales of assets held for sale
|
8,190
|
|
|
—
|
|
|
—
|
|
|||
Purchase of property and equipment
|
(1,297
|
)
|
|
(25
|
)
|
|
(9
|
)
|
|||
Net cash provided by (used in) investing activities
|
458,887
|
|
|
(144,510
|
)
|
|
(79,648
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from term loan
|
—
|
|
|
—
|
|
|
100,000
|
|
|||
Repayment of term loan
|
—
|
|
|
(25,000
|
)
|
|
(75,000
|
)
|
|||
Repurchase of convertible notes
|
—
|
|
|
(120,000
|
)
|
|
(220,397
|
)
|
|||
Payment of debt issuance costs
|
—
|
|
|
(3,204
|
)
|
|
(607
|
)
|
|||
Proceeds from issuance of convertible notes
|
—
|
|
|
150,000
|
|
|
—
|
|
|||
Purchase of call options
|
—
|
|
|
(14,400
|
)
|
|
—
|
|
|||
Payment of anniversary payment
|
(87,007
|
)
|
|
—
|
|
|
—
|
|
|||
Cash received from noncontrolling interest holder
|
—
|
|
|
250
|
|
|
—
|
|
|||
Cash paid for purchase of noncontrolling interest
|
(2,170
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase and retirement of common stock
|
(30,000
|
)
|
|
—
|
|
|
—
|
|
|||
Cash dividends paid
|
(222
|
)
|
|
(16,583
|
)
|
|
(98,307
|
)
|
|||
Net cash used in financing activities
|
(119,399
|
)
|
|
(28,937
|
)
|
|
(294,311
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
380,112
|
|
|
(71,729
|
)
|
|
(72,494
|
)
|
|||
Cash and cash equivalents at beginning of the year
|
147,154
|
|
|
218,883
|
|
|
291,377
|
|
|||
Cash and cash equivalents at end the year
|
$
|
527,266
|
|
|
$
|
147,154
|
|
|
$
|
218,883
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
43,366
|
|
|
$
|
50,000
|
|
|
$
|
168,000
|
|
Cash paid for interest
|
$
|
9,286
|
|
|
$
|
11,410
|
|
|
$
|
16,987
|
|
Supplemental schedule of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Stock issued to settle debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,794
|
|
Conversion of notes receivable to common stock investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,567
|
|
Warrants received for notes receivable
|
$
|
—
|
|
|
$
|
2,342
|
|
|
$
|
—
|
|
Accrued Anniversary Payment associated with the acquisition of a business
|
$
|
—
|
|
|
$
|
87,007
|
|
|
$
|
—
|
|
Accrued contingent consideration associated with the acquisition of a business
|
$
|
—
|
|
|
$
|
47,360
|
|
|
$
|
—
|
|
Asset held for sale reclassified from notes receivable to other assets
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Extinguishment of notes receivable
|
$
|
43,909
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Leasehold improvements
|
|
Lesser of useful life or term of lease
|
Manufacturing equipment
|
|
3-5 years
|
Computer and office equipment
|
|
3 years
|
Furniture and fixtures
|
|
7 years
|
Equipment under lease
|
|
Greater of lease term or 5-10 years
|
Net Income per Basic and Diluted Share
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator
|
|
|
|
|
|
||||||
Income attributable to the Company’s stockholders used to compute net income per diluted share
|
$
|
110,748
|
|
|
$
|
63,606
|
|
|
$
|
332,795
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Total weighted-average shares used to compute net income per basic share
|
155,394
|
|
|
163,805
|
|
|
163,386
|
|
|||
Effect of dilutive stock options
|
—
|
|
|
—
|
|
|
16
|
|
|||
Restricted stock awards
|
863
|
|
|
387
|
|
|
152
|
|
|||
Shares used to compute net income per diluted share
|
156,257
|
|
|
164,192
|
|
|
163,554
|
|
|||
|
|
|
|
|
|
||||||
Net income per basic share
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.04
|
|
Net income per diluted share
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.03
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
|
$
|
417,563
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
417,563
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Certificates of deposit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
75,000
|
|
||||||||
Corporate securities
|
|
4,848
|
|
|
—
|
|
|
—
|
|
|
4,848
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Commercial paper
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,987
|
|
|
—
|
|
|
19,987
|
|
||||||||
Warrants
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||||||
Royalty rights - at fair value
|
|
—
|
|
|
—
|
|
|
349,223
|
|
|
349,223
|
|
|
—
|
|
|
—
|
|
|
402,318
|
|
|
402,318
|
|
||||||||
Total
|
|
$
|
422,411
|
|
|
$
|
29
|
|
|
$
|
349,223
|
|
|
$
|
771,663
|
|
|
$
|
4
|
|
|
$
|
95,065
|
|
|
$
|
402,318
|
|
|
$
|
497,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Anniversary payment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88,001
|
|
|
$
|
88,001
|
|
Contingent consideration
|
|
—
|
|
|
—
|
|
|
42,000
|
|
|
42,000
|
|
|
—
|
|
|
—
|
|
|
42,650
|
|
|
42,650
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,000
|
|
|
$
|
42,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130,651
|
|
|
$
|
130,651
|
|
|
|
Year Ended December 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
|
|
$
|
162,327
|
|
|
$
|
16,196
|
|
|
|
|
|
|
||||
Total change in fair value for the period included in earnings for liabilities held at the end of the reporting period
|
|
$
|
(349
|
)
|
|
$
|
3,716
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in thousands)
|
|
Carrying Value
|
|
Fair Value
Level 2
|
|
Fair Value
Level 3
|
|
Carrying Value
|
|
Fair Value
Level 2
|
|
Fair Value
Level 3
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wellstat Diagnostics note receivable
|
|
$
|
50,191
|
|
|
$
|
—
|
|
|
$
|
51,308
|
|
|
$
|
50,191
|
|
|
$
|
—
|
|
|
$
|
52,260
|
|
Hyperion note receivable
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
||||||
LENSAR note receivable
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,909
|
|
|
—
|
|
|
43,900
|
|
||||||
Direct Flow Medical note receivable
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
||||||
kaléo note receivable
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146,685
|
|
|
—
|
|
|
142,539
|
|
||||||
CareView note receivable
|
|
19,346
|
|
|
—
|
|
|
18,750
|
|
|
18,965
|
|
|
—
|
|
|
19,200
|
|
||||||
Total
|
|
$
|
70,737
|
|
|
$
|
—
|
|
|
$
|
71,258
|
|
|
$
|
270,950
|
|
|
$
|
—
|
|
|
$
|
269,099
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
February 2018 Notes
|
|
$
|
126,066
|
|
|
$
|
126,131
|
|
|
$
|
—
|
|
|
$
|
121,595
|
|
|
$
|
123,918
|
|
|
$
|
—
|
|
December 2021 Notes
|
|
117,415
|
|
|
148,028
|
|
|
—
|
|
|
110,848
|
|
|
122,063
|
|
|
—
|
|
||||||
Total
|
|
$
|
243,481
|
|
|
$
|
274,159
|
|
|
$
|
—
|
|
|
$
|
232,443
|
|
|
$
|
245,981
|
|
|
$
|
—
|
|
Asset
|
|
Valuation
Technique
|
|
Unobservable
Input
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
Wellstat Diagnostics
|
|
|
|
|
|
|
|
|
Wellstat Guarantors Intellectual Property
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
12%
|
|
13%
|
|
|
|
|
Royalty amount
|
|
$21 million
|
|
$55-74 million
|
Settlement Amount
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
15%
|
|
-
|
|
|
|
|
Settlement amount
|
|
$32 million
|
|
-
|
Real Estate Property
|
|
Market Approach
|
|
|
|
|
|
|
|
|
|
|
Annual appreciation rate
|
|
4%
|
|
4%
|
|
|
|
|
Estimated realtor fee
|
|
6%
|
|
6%
|
|
|
|
|
Estimated disposal date
|
|
6/30/2019
|
|
12/31/2017
|
|
|
|
|
|
|
|
|
|
CareView
|
|
|
|
|
|
|
|
|
Note receivable cash flows
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
17.5%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Direct Flow Medical
|
|
|
|
|
|
|
|
|
All Assets
|
|
Income Approach
Market Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
N/A
|
|
27%
|
|
|
|
|
Implied revenue multiple
|
|
N/A
|
|
6.9
|
LENSAR
|
|
|
|
|
|
|
|
|
All Assets
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
N/A
|
|
25%
|
|
|
|
|
Implied revenue multiple
|
|
N/A
|
|
2.5
|
|
|
Year Ended December 31,
|
|||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|||
Income Generating Assets:
|
|
|
|
|
|
|
|||
Genentech
|
|
—
|
|
|
43
|
%
|
|
70
|
%
|
Biogen
|
|
11
|
%
|
|
24
|
%
|
|
9
|
%
|
Depomed
|
|
52
|
%
|
|
13
|
%
|
|
9
|
%
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Net gain (loss) recognized in OCI, net of tax
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,626
|
|
Gain (loss) reclassified from accumulated OCI into “Queen et al.
royalty revenue,” net of tax
(2)
|
|
$
|
—
|
|
|
$
|
1,821
|
|
|
$
|
5,390
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Leasehold improvements
|
|
$
|
321
|
|
|
$
|
153
|
|
Manufacturing equipment
|
|
1,393
|
|
|
—
|
|
||
Computer and office equipment
|
|
10,141
|
|
|
8,995
|
|
||
Furniture and fixtures
|
|
137
|
|
|
60
|
|
||
Equipment under lease
|
|
6,700
|
|
|
—
|
|
||
Total
|
|
18,692
|
|
|
9,208
|
|
||
Less accumulated depreciation
|
|
(11,474
|
)
|
|
(9,170
|
)
|
||
Construction in progress
|
|
4
|
|
|
—
|
|
||
Property and equipment, net
|
|
$
|
7,222
|
|
|
$
|
38
|
|
|
|
December 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
|
|
|
$
|
(32,503
|
)
|
|
$
|
184,187
|
|
|
$
|
216,690
|
|
|
$
|
(10,834
|
)
|
|
$
|
205,856
|
|
Customer relationships
(1) (2)
|
|
26,080
|
|
|
(3,729
|
)
|
|
22,351
|
|
|
23,880
|
|
|
(1,194
|
)
|
|
22,686
|
|
||||||
Acquired technology
(2)
|
|
9,200
|
|
|
(409
|
)
|
|
8,791
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Acquired trademarks
(2)
|
|
570
|
|
|
(76
|
)
|
|
494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
252,540
|
|
|
$
|
(36,717
|
)
|
|
$
|
215,823
|
|
|
$
|
240,570
|
|
|
$
|
(12,028
|
)
|
|
$
|
228,542
|
|
Fiscal Year
|
|
Amount
|
||
2018
|
|
$
|
24,990
|
|
2019
|
|
24,969
|
|
|
2020
|
|
24,951
|
|
|
2021
|
|
24,934
|
|
|
2022
|
|
24,843
|
|
|
Thereafter
|
|
91,136
|
|
|
Total remaining estimated amortization expense
|
|
$
|
215,823
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Compensation
|
|
$
|
6,043
|
|
|
$
|
3,131
|
|
Interest
|
|
2,451
|
|
|
2,554
|
|
||
Deferred revenue
|
|
9,741
|
|
|
—
|
|
||
Refund to manufacturer
|
|
647
|
|
|
8,909
|
|
||
Accrued rebates, chargebacks and other revenue reserves
|
|
19,613
|
|
|
12,338
|
|
||
Dividend payable
|
|
79
|
|
|
21
|
|
||
Customer advances
|
|
3,198
|
|
|
—
|
|
||
Legal
|
|
595
|
|
|
1,594
|
|
||
Other
|
|
3,514
|
|
|
2,028
|
|
||
Total
|
|
$
|
45,881
|
|
|
$
|
30,575
|
|
(in thousands)
|
|
Discount and Distribution Fees
|
|
Government Rebates and Chargebacks
|
|
Assistance and Other Discounts
|
|
Product Return
|
|
Total
|
||||||||||
Balance at January 1, 2017:
|
|
$
|
2,475
|
|
|
$
|
5,514
|
|
|
$
|
2,580
|
|
|
$
|
1,769
|
|
|
$
|
12,338
|
|
Allowances for current period sales
|
|
8,952
|
|
|
19,541
|
|
|
8,934
|
|
|
3,691
|
|
|
41,118
|
|
|||||
Allowances for prior period sales
|
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|||||
Credits/payments for current period sales
|
|
(5,530
|
)
|
|
(10,823
|
)
|
|
(5,256
|
)
|
|
(1,145
|
)
|
|
(22,754
|
)
|
|||||
Credits/payments for prior period sales
|
|
(2,475
|
)
|
|
(5,776
|
)
|
|
(2,080
|
)
|
|
(1,011
|
)
|
|
(11,342
|
)
|
|||||
Balance at December 31, 2017
|
|
$
|
3,422
|
|
|
$
|
8,709
|
|
|
$
|
4,178
|
|
|
$
|
3,304
|
|
|
$
|
19,613
|
|
Fiscal Years
|
|
Amount
|
||
2018
|
|
$
|
1,133
|
|
2019
|
|
1,140
|
|
|
2020
|
|
1,006
|
|
|
2021
|
|
565
|
|
|
2022
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
3,844
|
|
(in thousands)
|
|
February 2018
Notes
|
|
December 2021
Notes
|
|
Term Loan
|
|
Total
|
||||||||
Balance at December 31, 2015
|
|
$
|
228,862
|
|
|
$
|
—
|
|
|
$
|
24,966
|
|
|
$
|
253,828
|
|
Issuance and exchange
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
150,000
|
|
||||
Payment
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
(25,000
|
)
|
||||
Repurchase
|
|
(120,000
|
)
|
|
—
|
|
|
—
|
|
|
(120,000
|
)
|
||||
Non-cash Discount
|
|
—
|
|
|
(3,204
|
)
|
|
—
|
|
|
(3,204
|
)
|
||||
Non-cash conversion feature
|
|
—
|
|
|
(36,653
|
)
|
|
—
|
|
|
(36,653
|
)
|
||||
Amortization
|
|
12,733
|
|
|
705
|
|
|
34
|
|
|
13,472
|
|
||||
Balance at December 31, 2016
|
|
121,595
|
|
|
110,848
|
|
|
—
|
|
|
232,443
|
|
||||
Amortization
|
|
4,471
|
|
|
6,567
|
|
|
—
|
|
|
11,038
|
|
||||
Balance at December 31, 2017
|
|
$
|
126,066
|
|
|
$
|
117,415
|
|
|
$
|
—
|
|
|
$
|
243,481
|
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Contractual coupon interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
—
|
|
|
13
|
|
|||
Amortization of debt discount
|
|
—
|
|
|
—
|
|
|
76
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Contractual coupon interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,938
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
—
|
|
|
435
|
|
|||
Amortization of debt discount
|
|
—
|
|
|
—
|
|
|
1,815
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,188
|
|
•
|
During any fiscal quarter ending after the quarter ending 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, 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 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)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Principal amount of the February 2018 Notes
|
|
$
|
126,447
|
|
|
$
|
126,447
|
|
Unamortized discount of liability component
|
|
(381
|
)
|
|
(4,852
|
)
|
||
Net carrying value of the February 2018 Notes
|
|
$
|
126,066
|
|
|
$
|
121,595
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Contractual coupon interest
|
|
$
|
5,058
|
|
|
$
|
9,338
|
|
|
$
|
11,786
|
|
Amortization of debt issuance costs
|
|
1,022
|
|
|
2,863
|
|
|
2,980
|
|
|||
Amortization of debt discount
|
|
3,449
|
|
|
9,870
|
|
|
10,160
|
|
|||
Total
|
|
$
|
9,529
|
|
|
$
|
22,071
|
|
|
$
|
24,926
|
|
•
|
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)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Principal amount of the December 2021 Notes
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
Unamortized discount of liability component
|
|
(32,585
|
)
|
|
(39,152
|
)
|
||
Net carrying value of the December 2021 Notes
|
|
$
|
117,415
|
|
|
$
|
110,848
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Contractual coupon interest
|
|
$
|
4,125
|
|
|
$
|
447
|
|
Amortization of debt issuance costs
|
|
74
|
|
|
10
|
|
||
Amortization of debt discount
|
|
526
|
|
|
75
|
|
||
Amortization of conversion feature
|
|
5,967
|
|
|
620
|
|
||
Total
|
|
$
|
10,692
|
|
|
$
|
1,152
|
|
(in thousands)
|
|
February 2018
Notes
|
|
December 2021 Notes
|
|
Total
|
||||||
2018
|
|
$
|
126,447
|
|
|
$
|
—
|
|
|
$
|
126,447
|
|
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2021
|
|
—
|
|
|
150,000
|
|
|
150,000
|
|
|||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Accrued lease liability
|
|
$
|
10,700
|
|
|
$
|
10,700
|
|
Long-term incentive
|
|
1,729
|
|
|
1,995
|
|
||
Deferred tax liability
|
|
1,208
|
|
|
—
|
|
||
Uncertain tax position
|
|
30,682
|
|
|
41,591
|
|
||
Dividend payable
|
|
47
|
|
|
270
|
|
||
Other
|
|
343
|
|
|
—
|
|
||
Total
|
|
$
|
44,709
|
|
|
$
|
54,556
|
|
|
|
Year Ended December 31,
|
||||||||||
Stock-based Compensation
|
|
2017
|
|
2016
|
|
2015
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Employees and directors
|
|
$
|
3,138
|
|
|
$
|
3,679
|
|
|
$
|
1,952
|
|
Non-employees
|
|
—
|
|
|
63
|
|
|
93
|
|
|||
Total
|
|
$
|
3,138
|
|
|
$
|
3,742
|
|
|
$
|
2,045
|
|
Title of Plan
|
|
Total Shares of Common Stock Authorized
|
|
Total Shares of Common Stock Issued
|
|
Total Shares of Common Stock
Subject to
Outstanding Awards
|
|
Total Shares of Common Stock Available for Grant
|
||||
2005 Equity Incentive Plan
(1)
|
|
6,200,000
|
|
|
4,110,197
|
|
|
—
|
|
|
2,089,803
|
|
(1)
|
As of
December 31, 2017
, there were
2,065,232
shares of unvested restricted stock awards outstanding as issued from the 2005 Equity Incentive Plan.
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Number of shares
(in thousands)
|
|
Weighted-average grant-date fair value per share
|
|
Number of shares
(in thousands)
|
|
Weighted-average grant-date fair value per share
|
|
Number of shares
(in thousands)
|
|
Weighted- average grant-date fair value per share
|
|||||||||
Unvested at beginning of year
|
1,472
|
|
|
$
|
3.96
|
|
|
586
|
|
|
$
|
7.13
|
|
|
277
|
|
|
$
|
8.39
|
|
Awards granted
|
1,917
|
|
|
$
|
2.15
|
|
|
1,264
|
|
|
$
|
3.31
|
|
|
522
|
|
|
$
|
6.40
|
|
Awards vested
|
(749
|
)
|
|
$
|
3.78
|
|
|
(366
|
)
|
|
$
|
6.65
|
|
|
(173
|
)
|
|
$
|
8.38
|
|
Forfeited
|
(575
|
)
|
|
$
|
3.00
|
|
|
(12
|
)
|
|
$
|
7.10
|
|
|
(40
|
)
|
|
$
|
7.79
|
|
Unvested at end of year
|
2,065
|
|
|
$
|
2.61
|
|
|
1,472
|
|
|
$
|
3.96
|
|
|
586
|
|
|
$
|
7.13
|
|
•
|
Expected term (in years):
3.7
|
•
|
Risk-free interest rate:
1.77
-1.96%
|
•
|
Volatility:
44%
|
•
|
Dividend yield:
0%
|
•
|
Weighted-average grant-date fair value:
$1.51
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current income tax expense
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
31,338
|
|
|
$
|
49,582
|
|
|
$
|
168,164
|
|
State
|
|
2,843
|
|
|
3,103
|
|
|
12,112
|
|
|||
Foreign
|
|
529
|
|
|
2,455
|
|
|
—
|
|
|||
Total current
|
|
34,710
|
|
|
55,140
|
|
|
180,276
|
|
|||
Deferred income tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
|
36,911
|
|
|
(8,476
|
)
|
|
16,910
|
|
|||
State
|
|
2,591
|
|
|
147
|
|
|
157
|
|
|||
Foreign
|
|
(386
|
)
|
|
(1,100
|
)
|
|
—
|
|
|||
Total deferred
|
|
39,116
|
|
|
(9,429
|
)
|
|
17,067
|
|
|||
Total provision
|
|
$
|
73,826
|
|
|
$
|
45,711
|
|
|
$
|
197,343
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Tax at U.S. statutory rate on income before income taxes
|
|
$
|
64,589
|
|
|
$
|
38,279
|
|
|
$
|
185,548
|
|
Change in valuation allowance
|
|
1,807
|
|
|
(744
|
)
|
|
2,286
|
|
|||
State taxes
|
|
1,496
|
|
|
74
|
|
|
1
|
|
|||
Change in uncertain tax positions
|
|
681
|
|
|
2,184
|
|
|
8,717
|
|
|||
Foreign income
|
|
3,231
|
|
|
5,668
|
|
|
—
|
|
|||
Foreign rate differential
|
|
1,356
|
|
|
(1,445
|
)
|
|
—
|
|
|||
Change in tax rate reform
|
|
716
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
(50
|
)
|
|
1,695
|
|
|
791
|
|
|||
Total
|
|
$
|
73,826
|
|
|
$
|
45,711
|
|
|
$
|
197,343
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
6,276
|
|
|
$
|
4,197
|
|
Research and other tax credits
|
|
1,414
|
|
|
1,833
|
|
||
Intangible assets
|
|
1,453
|
|
|
494
|
|
||
Stock-based compensation
|
|
547
|
|
|
835
|
|
||
Accruals
|
|
4,667
|
|
|
1,966
|
|
||
Capital loss carryforward
|
|
2,027
|
|
|
1,543
|
|
||
Other
|
|
5,878
|
|
|
13,020
|
|
||
Total deferred tax assets
|
|
22,262
|
|
|
23,888
|
|
||
Valuation allowance
|
|
(2,046
|
)
|
|
(1,543
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
|
20,216
|
|
|
22,345
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Deferred gain on repurchase of convertible notes
|
|
(117
|
)
|
|
(382
|
)
|
||
Debt modifications
|
|
(1,197
|
)
|
|
(122
|
)
|
||
Intangible assets
|
|
(16,932
|
)
|
|
(2,584
|
)
|
||
Other
|
|
(427
|
)
|
|
—
|
|
||
Unrealized gain on foreign currency hedge contracts and investments
|
|
(320
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
|
(18,993
|
)
|
|
(3,088
|
)
|
||
Net deferred tax assets
|
|
$
|
1,223
|
|
|
$
|
19,257
|
|
|
|
December 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at the beginning of the year
|
|
$
|
59,429
|
|
|
$
|
57,125
|
|
|
$
|
47,146
|
|
Increases related to tax positions from prior fiscal years
|
|
783
|
|
|
436
|
|
|
—
|
|
|||
Increases related to tax positions taken during current fiscal year
|
|
18,967
|
|
|
1,868
|
|
|
9,979
|
|
|||
Expiration of statute of limitations for the assessment of taxes from prior fiscal years
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at the end of the year
|
|
$
|
79,179
|
|
|
$
|
59,429
|
|
|
$
|
57,125
|
|
(in thousands)
|
|
Unrealized gain
(loss) on
available-for-
sale securities
|
|
Unrealized
gain (loss) on
cash flow
hedges
|
|
Total Accumulated
Other
Comprehensive
Income (Loss)
|
||||||
|
|
|
|
|
|
|
||||||
Beginning Balance at December 31, 2014
|
|
$
|
364
|
|
|
$
|
2,585
|
|
|
$
|
2,949
|
|
Activity for the year ended December 31, 2015
|
|
71
|
|
|
(764
|
)
|
|
(693
|
)
|
|||
Balance at December 31, 2015
|
|
435
|
|
|
1,821
|
|
|
2,256
|
|
|||
|
|
|
|
|
|
|
||||||
Activity for the year ended December 31, 2016
|
|
(435
|
)
|
|
(1,821
|
)
|
|
(2,256
|
)
|
|||
Balance at December 31, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Activity for the year ended December 31, 2017
|
|
1,181
|
|
|
—
|
|
|
1,181
|
|
|||
Ending Balance at December 31, 2017
|
|
$
|
1,181
|
|
|
$
|
—
|
|
|
$
|
1,181
|
|
(in thousands)
|
|
|
||
Acquired product rights
|
|
$
|
216,690
|
|
Customer relationships
|
|
23,880
|
|
|
Goodwill
|
|
3,735
|
|
|
Net intangible assets
|
|
$
|
244,305
|
|
(in thousands)
|
|
|
||
Cash
|
|
$
|
1,983
|
|
Tangible assets
|
|
18,647
|
|
|
Intangible assets
(1)
|
|
11,970
|
|
|
Net deferred tax assets
|
|
25,723
|
|
|
Total identifiable assets
|
|
58,323
|
|
|
Current liabilities
|
|
(6,673
|
)
|
|
Total liabilities assumed
|
|
(6,673
|
)
|
|
|
|
|
||
Net loss on derecognition of notes receivables
|
|
(10,615
|
)
|
|
Gain on bargain purchase, net of loss on extinguishment of notes receivable
|
|
(9,309
|
)
|
|
Total fair value of consideration
|
|
$
|
31,726
|
|
|
|
Year Ended
|
||||||
|
|
December 31,
|
||||||
(in thousands, except per share amounts)
|
|
2017
|
|
2016
|
||||
Pro forma revenues
|
|
$
|
325,605
|
|
|
$
|
335,112
|
|
Pro forma net income
|
|
$
|
107,193
|
|
|
$
|
55,897
|
|
Pro forma net income per share - basic
|
|
$
|
0.69
|
|
|
$
|
0.34
|
|
Pro forma net income per share - diluted
|
|
$
|
0.69
|
|
|
$
|
0.34
|
|
•
|
Adjustment to recognize incremental amortization expense based on the fair value of intangibles acquired;
|
•
|
Eliminate 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
|
|
Year Ended
|
||||||
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Income Generating Assets
|
|
$
|
235,937
|
|
|
$
|
212,632
|
|
Pharmaceutical
|
|
69,032
|
|
|
31,669
|
|
||
Medical Devices
|
|
15,091
|
|
|
—
|
|
||
Total revenues
|
|
$
|
320,060
|
|
|
$
|
244,301
|
|
Net income (net loss) by segment
|
|
Year Ended
|
||||||
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Income Generating Assets
|
|
$
|
125,759
|
|
|
$
|
59,085
|
|
Pharmaceutical
|
|
(5,755
|
)
|
|
4,521
|
|
||
Medical Devices
|
|
(9,256
|
)
|
|
—
|
|
||
Total net income
|
|
$
|
110,748
|
|
|
$
|
63,606
|
|
Long-lived assets by segment
|
|
Year Ended
|
||||||
|
|
December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Income Generating Assets
|
|
$
|
137
|
|
|
$
|
38
|
|
Pharmaceutical
|
|
822
|
|
|
—
|
|
||
Medical Devices
|
|
6,263
|
|
|
—
|
|
||
Total long-lived assets
|
|
$
|
7,222
|
|
|
$
|
38
|
|
|
|
Three Months Ended
|
||||||||||||||
(in thousands, except per share data)
|
|
December 31,
2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
||||||||
Total revenues
|
|
$
|
68,036
|
|
|
$
|
62,749
|
|
|
$
|
143,835
|
|
|
$
|
45,440
|
|
Net income attributable to PDL’s stockholders
|
|
$
|
22,336
|
|
|
$
|
20,732
|
|
|
$
|
60,439
|
|
|
$
|
7,241
|
|
Net income per basic share
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.39
|
|
|
$
|
0.04
|
|
Net income per diluted share
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.39
|
|
|
$
|
0.04
|
|
|
|
Three Months Ended
|
||||||||||||||
(in thousands, except per share data)
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
||||||||
Total revenues
|
|
$
|
66,492
|
|
|
$
|
53,638
|
|
|
$
|
21,047
|
|
|
$
|
103,124
|
|
Net income attributable to PDL’s stockholders
|
|
$
|
(10,336
|
)
|
|
$
|
13,907
|
|
|
$
|
4,148
|
|
|
$
|
55,887
|
|
Net income per basic share
|
|
$
|
(0.06
|
)
|
|
$
|
0.08
|
|
|
$
|
0.03
|
|
|
$
|
0.34
|
|
Net income per diluted share
|
|
$
|
(0.06
|
)
|
|
$
|
0.08
|
|
|
$
|
0.03
|
|
|
$
|
0.34
|
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
(1)
|
Financial Statements - See Index to Consolidated Financial Statements at Item 8 of this Annual Report on Form 10-K.
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits required by Item 601 of Regulation S-K
|
Exhibit
Number |
Exhibit Title
|
|
|
2.1
|
|
|
|
2.2
|
|
|
|
3.1
|
Restated Certificate of Incorporation effective March 23, 1993 (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K filed March 31, 1993)
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
3.6
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
10.1*
|
|
|
|
10.2*
|
|
|
|
10.3*
|
|
|
|
10.4*
|
|
|
|
10.5*
|
|
|
|
10.6*
|
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1 filed December 16, 1991)
|
|
|
10.7*
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15*
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19*
|
|
|
|
10.20*
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24
|
|
|
|
10.25*
|
|
|
|
10.26*
|
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
10.29
|
|
|
|
10.30
|
|
|
|
10.31
|
|
|
|
10.32
|
|
|
|
10.33
|
|
|
|
10.34
|
|
|
|
10.35
|
|
|
|
10.36*
|
|
|
|
10.37
|
|
|
|
10.38
|
|
|
|
10.39
|
|
|
|
10.40
|
|
|
|
10.41
|
|
|
|
10.42
|
|
|
|
10.43
|
|
|
|
10.44
|
|
|
|
10.45
|
|
|
|
10.46*
|
|
|
|
10.47*
|
|
|
|
10.48*
|
|
|
|
10.49*
|
|
|
|
10.50
|
|
|
|
10.51*
|
|
|
|
10.52*
|
|
|
|
10.53*
|
|
|
|
10.54
|
|
|
|
10.55
|
|
|
|
10.56*
|
|
|
|
10.57*
|
|
|
|
10.58
|
|
|
|
10.59
|
|
|
|
10.60
|
|
|
|
10.61
|
|
|
|
10.62
|
|
|
|
10.63
|
|
|
|
10.64
|
|
|
|
10.65
|
|
|
|
10.66
|
|
|
|
10.67
|
|
|
|
10.68
|
|
|
|
10.69
|
|
|
|
10.70
|
|
|
|
10.71#
|
|
|
|
12.1#
|
|
|
|
21.1#
|
|
|
|
23.1#
|
|
|
|
31.1#
|
|
|
|
31.2#
|
|
|
|
32.1#+
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
#
|
Filed herewith.
|
|
|
*
|
Management contract or compensatory plan or arrangement.
|
|
|
†
|
Certain information in this exhibit has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and 24b-2.
|
+
|
The certifications attached as Exhibit 32.1 accompany this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
PDL BIOPHARMA, INC.
|
|
|
|
|
|
|
By:
|
|
/S/ JOHN P. MCLAUGHLIN
|
|
|
|
John P. McLaughlin
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
Date:
|
March 16, 2018
|
|
Signature
|
Title
|
Date
|
|
|
|
/S/ JOHN P. MCLAUGHLIN
|
Chief Executive Officer (Principal Executive Officer)
|
March 16, 2018
|
(John P. McLaughlin)
|
|
|
|
|
|
/S/ PETER S. GARCIA
|
Vice President and Chief Financial Officer (Principal Financial Officer)
|
March 16, 2018
|
(Peter S. Garcia)
|
|
|
|
|
|
/S/ STEFFEN PIETZKE
|
Vice President, Finance and Chief Accounting Officer (Principal Accounting Officer)
|
March 16, 2018
|
(Steffen Pietzke)
|
|
|
|
|
|
/S/ PAUL EDICK
|
Director
|
March 16, 2018
|
(Paul Edick)
|
|
|
|
|
|
/S/ DAVID GRYSKA
|
Director
|
March 16, 2018
|
(David Gryska)
|
|
|
|
|
|
/S/ JODY S. LINDELL
|
Director
|
March 16, 2018
|
(Jody S. Lindell)
|
|
|
|
|
|
/S/ DR. SAMUEL SAKS
|
Director
|
March 16, 2018
|
(Dr. Samuel Saks)
|
|
|
|
|
|
/S/ PAUL W. SANDMAN
|
Director
|
March 16, 2018
|
(Paul W. Sandman)
|
|
|
|
|
|
/S/ HAROLD E. SELICK
|
Director
|
March 16, 2018
|
(Harold E. Selick)
|
|
|
LANDLORD
|
|
TENANT
|
||
932936, LLC
|
|
PDL BioPharma, Inc.
|
||
A Nevada limited liability company
|
|
A Delaware corporation
|
||
By:
|
/s/ Gregory S. Skinner
|
|
By:
|
/s/ Peter S. Garcia
|
Name: Gregory S. Skinner
|
|
Name: Peter S. Garcia
|
||
Its: Manager
|
|
Its: Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands, except for ratios)
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
$
|
401,876
|
|
|
$
|
501,272
|
|
|
$
|
530,138
|
|
|
$
|
109,370
|
|
|
$
|
184,527
|
|
Add: fixed charges
|
|
24,931
|
|
|
39,274
|
|
|
27,123
|
|
|
18,330
|
|
|
20,507
|
|
|||||
Earnings
|
|
$
|
426,807
|
|
|
$
|
540,546
|
|
|
$
|
557,261
|
|
|
$
|
127,700
|
|
|
$
|
205,034
|
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
1
|
|
$
|
24,871
|
|
|
$
|
39,211
|
|
|
$
|
27,059
|
|
|
$
|
18,267
|
|
|
$
|
20,221
|
|
Estimated interest portion of rent expense
2
|
|
60
|
|
|
63
|
|
|
64
|
|
|
63
|
|
|
286
|
|
|||||
Fixed charges
|
|
$
|
24,931
|
|
|
$
|
39,274
|
|
|
$
|
27,123
|
|
|
$
|
18,330
|
|
|
$
|
20,507
|
|
Ratio of earnings to fixed charges
|
|
17.12
|
|
|
13.76
|
|
|
20.55
|
|
|
6.97
|
|
|
10.00
|
|
NAME OF SUBSIDIARY OR ORGANIZATION
|
|
STATE OF INCORPORATION OR
FORMATION |
|
|
|
DFM, LLC
|
|
Delaware
|
LENSAR, Inc.
|
|
Delaware
|
Noden Pharma Canada ULC
|
|
Province of British Columbia
|
Noden Pharma DAC
|
|
Republic of Ireland
|
Noden Pharma Schweiz GmbH
|
|
Basel
|
Noden Pharma USA, Inc.
|
|
Delaware
|
PDL Investment Holdings, LLC
|
|
Delaware
|
/s/ JOHN P. MCLAUGHLIN
|
John P. McLaughlin
|
Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ PETER S. GARCIA
|
Peter S. Garcia
|
Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
|
By:
|
|
|
|
/s/ JOHN P. MCLAUGHLIN
|
|
|
John P. McLaughlin
|
|
|
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 Annual Report on Form 10-K 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-K), 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.
|