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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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Trading Symbol
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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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PDLI
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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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Investment
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Investment Type
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Segment
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Deployed Capital 3
(in millions)
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Assertio Therapeutics, Inc. (“Assertio”) 1
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Royalty
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Income Generating Assets
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$
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260.5
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The Regents of the University of Michigan (“U-M”)
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Royalty
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Income Generating Assets
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$
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65.6
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AcelRx Pharmaceuticals, Inc. (“AcelRx”)
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Royalty
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Income Generating Assets
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$
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65.0
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Viscogliosi Brothers, LLC (“VB”)
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Royalty
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Income Generating Assets
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$
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15.5
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KYBELLA®
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Royalty
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Income Generating Assets
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$
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9.5
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CareView Communications, Inc. (“CareView”)
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Debt
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Income Generating Assets
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$
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20.0
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Wellstat Diagnostics, LLC (“Wellstat Diagnostics”) 2
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Royalty/debt hybrid
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Income Generating Assets
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$
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44.0
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1
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Formerly Depomed, Inc.
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2
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Also known as Defined Diagnostic, LLC. The Wellstat Diagnostics investment also includes our note receivable with Hyperion Catalysis International, Inc. (“Hyperion”).
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3
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Excludes transaction costs.
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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 a new drug application, or 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 (“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 product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
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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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international regulatory requirements for drug and medical device 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 and medical device 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 and medical devices indicated to treat the indications for which LENSAR 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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widespread outbreak of health epidemics that could impact international sales and operations;
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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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•
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potential liability resulting from product liability laws or the activities of foreign distributors; and
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•
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business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters.
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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 for our licensees’, borrowers’ and royalty-agreement counterparties’ products or devices and commercial infrastructure with respect to 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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•
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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 healthcare 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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manufacturers and importers of certain branded prescription drugs with annual sales of more than $5 million made to or covered by specified federal healthcare programs are required to pay an annual, non-tax deductible fee based on each company’s market share of all such sales in the prior year;
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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 for brand and generic drugs;
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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 condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. Subsequent legislative amendments have increased the point-of-sale discounted to 70%, effective 2019;
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•
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expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program, commonly referred to as the “340B Program”;
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•
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a new requirement to annually report drug samples that manufacturers and distributors provide to physicians, also known as the “Physicians Payment Sunshine Act”; and
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•
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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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•
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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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•
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comply with manufacturing standards applicable to our products;
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•
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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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•
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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; or
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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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•
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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 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 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 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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•
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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 for each violation and, in certain circumstances, criminal penalties with fines for each 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 require 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 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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•
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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 and medical device company regulatory compliance programs and the PhRMA Code on Interactions with Healthcare Professionals and the AdvaMed Code of Ethics, as amended;
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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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changes in valuation of our deferred tax assets and liabilities;
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•
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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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•
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changes in availability of tax credits, tax holidays, and tax deductions;
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•
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changes in share-based compensation; and
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•
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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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•
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strengthen the rules on placing devices on the market and reinforce surveillance once they are available;
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•
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establish explicit provisions on manufacturers’ responsibilities for the follow‑up of the quality, performance and safety of devices placed on the market;
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•
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improve the traceability of medical devices throughout the supply chain to the end‑user or patient through a unique identification number;
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•
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set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU;
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•
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strengthened rules for the assessment of certain high‑risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
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•
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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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12/31/2014
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12/31/2015
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12/31/2016
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12/31/2017
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12/31/2018
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12/31/2019
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||||||||||||
PDL BioPharma, Inc.
|
$
|
100.00
|
|
|
$
|
50.20
|
|
|
$
|
30.98
|
|
|
$
|
40.04
|
|
|
$
|
42.38
|
|
|
$
|
48.55
|
|
Nasdaq Composite Index
|
$
|
100.00
|
|
|
$
|
140.56
|
|
|
$
|
112.25
|
|
|
$
|
133.67
|
|
|
$
|
121.24
|
|
|
$
|
200.49
|
|
Nasdaq Biotechnology Index
|
$
|
100.00
|
|
|
$
|
122.81
|
|
|
$
|
133.19
|
|
|
$
|
172.11
|
|
|
$
|
165.84
|
|
|
$
|
121.92
|
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product revenue, net
|
|
$
|
85,835
|
|
|
$
|
105,448
|
|
|
$
|
84,123
|
|
|
$
|
31,669
|
|
|
$
|
—
|
|
Royalty rights - change in fair value
|
|
(31,042
|
)
|
|
85,256
|
|
|
162,327
|
|
|
16,196
|
|
|
68,367
|
|
|||||
Royalties from Queen et al. patents
|
|
9
|
|
|
4,536
|
|
|
36,415
|
|
|
166,158
|
|
|
485,156
|
|
|||||
Interest revenue
|
|
—
|
|
|
2,337
|
|
|
17,744
|
|
|
30,404
|
|
|
36,202
|
|
|||||
License and other
|
|
(45
|
)
|
|
533
|
|
|
19,451
|
|
|
(126
|
)
|
|
723
|
|
|||||
Total revenues
|
|
54,757
|
|
|
198,110
|
|
|
320,060
|
|
|
244,301
|
|
|
590,448
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product revenue (excluding intangible asset amortization and impairment)
|
|
53,619
|
|
|
48,460
|
|
|
30,537
|
|
|
4,065
|
|
|
—
|
|
|||||
Amortization of intangible assets
|
|
6,306
|
|
|
15,831
|
|
|
24,689
|
|
|
12,028
|
|
|
—
|
|
|||||
General and administrative expenses
|
|
45,598
|
|
|
45,420
|
|
|
45,641
|
|
|
39,790
|
|
|
36,090
|
|
|||||
Sales and marketing
|
|
8,482
|
|
|
17,139
|
|
|
17,683
|
|
|
538
|
|
|
—
|
|
|||||
Research and development
|
|
7,308
|
|
|
2,955
|
|
|
7,381
|
|
|
3,820
|
|
|
—
|
|
|||||
Impairment of intangible assets
|
|
22,490
|
|
|
152,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Asset impairment loss
|
|
10,768
|
|
|
8,200
|
|
|
—
|
|
|
3,735
|
|
|
—
|
|
|||||
Acquisition-related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,564
|
|
|
—
|
|
|||||
Loss on extinguishment of notes receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,075
|
|
|
3,979
|
|
|||||
Change in fair value of anniversary payment and contingent consideration
|
|
—
|
|
|
(41,631
|
)
|
|
349
|
|
|
(3,716
|
)
|
|
—
|
|
|||||
Total operating expenses
|
|
154,571
|
|
|
248,704
|
|
|
126,280
|
|
|
114,899
|
|
|
40,069
|
|
|||||
Operating (loss) income
|
|
(99,814
|
)
|
|
(50,594
|
)
|
|
193,780
|
|
|
129,402
|
|
|
550,379
|
|
|||||
Non-operating income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity affiliate - change in fair value
|
|
36,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on bargain purchase
|
|
—
|
|
|
—
|
|
|
9,309
|
|
|
—
|
|
|
—
|
|
|||||
Other non-operating expense, net
|
|
(10,328
|
)
|
|
(5,328
|
)
|
|
(18,562
|
)
|
|
(20,032
|
)
|
|
(20,241
|
)
|
|||||
Non-operating income (expense), net
|
|
26,074
|
|
|
(5,328
|
)
|
|
(9,253
|
)
|
|
(20,032
|
)
|
|
(20,241
|
)
|
|||||
(Loss) income before income taxes
|
|
(73,740
|
)
|
|
(55,922
|
)
|
|
184,527
|
|
|
109,370
|
|
|
530,138
|
|
|||||
Income tax (benefit) expense
|
|
(3,049
|
)
|
|
12,937
|
|
|
73,826
|
|
|
45,711
|
|
|
197,343
|
|
|||||
Net (loss) income
|
|
(70,691
|
)
|
|
(68,859
|
)
|
|
110,701
|
|
|
63,659
|
|
|
332,795
|
|
|||||
Less: Net (loss) income attributable to noncontrolling interests
|
|
(280
|
)
|
|
—
|
|
|
(47
|
)
|
|
53
|
|
|
—
|
|
|||||
Net (loss) income attributable to PDL’s stockholders
|
|
$
|
(70,411
|
)
|
|
$
|
(68,859
|
)
|
|
$
|
110,748
|
|
|
$
|
63,606
|
|
|
$
|
332,795
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income per basic share
|
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.04
|
|
Net (loss) income per diluted share
|
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.71
|
|
|
$
|
0.39
|
|
|
$
|
2.03
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared and paid
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.10
|
|
|
$
|
0.60
|
|
|
|
December 31,
|
||||||||||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Cash, cash equivalents, short-term investments and restricted investments
|
|
$
|
193,451
|
|
|
$
|
394,590
|
|
|
$
|
532,114
|
|
|
$
|
242,141
|
|
|
$
|
220,352
|
|
Working capital
|
|
$
|
268,202
|
|
|
$
|
464,747
|
|
|
$
|
447,334
|
|
|
$
|
267,716
|
|
|
$
|
245,969
|
|
Total assets
|
|
$
|
716,119
|
|
|
$
|
963,736
|
|
|
$
|
1,243,123
|
|
|
$
|
1,215,387
|
|
|
$
|
1,012,205
|
|
Long-term obligations, less current portion
|
|
$
|
77,148
|
|
|
$
|
181,487
|
|
|
$
|
204,124
|
|
|
$
|
329,649
|
|
|
$
|
279,512
|
|
Retained earnings
|
|
$
|
670,832
|
|
|
$
|
828,547
|
|
|
$
|
945,614
|
|
|
$
|
857,116
|
|
|
$
|
810,036
|
|
Total stockholders’ equity
|
|
$
|
593,278
|
|
|
$
|
729,779
|
|
|
$
|
845,890
|
|
|
$
|
755,423
|
|
|
$
|
695,952
|
|
Investment
|
|
Investment Type
|
|
Segment
|
|
Deployed Capital 4
(in millions)
|
||
|
|
|
|
|
|
|
||
LENSAR, Inc. (“LENSAR”)
|
|
Converted equity and loan
|
|
Medical Devices
|
|
$
|
47.0
|
|
Evofem
|
|
Equity
|
|
Strategic Positions
|
|
$
|
60.0
|
|
Noden 1
|
|
Equity and loan
|
|
Pharmaceutical
|
|
$
|
191.2
|
|
CareView communications, Inc. (“CareView”)
|
|
Debt
|
|
Income Generating Assets
|
|
$
|
20.0
|
|
Wellstat Diagnostics, LLC (“Wellstat Diagnostics”) 2
|
|
Royalty/debt hybrid
|
|
Income Generating Assets
|
|
$
|
44.0
|
|
Assertio Therapeutics, Inc. (“Assertio”) 3
|
|
Royalty
|
|
Income Generating Assets
|
|
$
|
260.5
|
|
The Regents of the University of Michigan (“U-M”)
|
|
Royalty
|
|
Income Generating Assets
|
|
$
|
65.6
|
|
AcelRx Pharmaceuticals, Inc. (“AcelRx”)
|
|
Royalty
|
|
Income Generating Assets
|
|
$
|
65.0
|
|
Viscogliosi Brothers, LLC (“VB”)
|
|
Royalty
|
|
Income Generating Assets
|
|
$
|
15.5
|
|
KYBELLA
|
|
Royalty
|
|
Income Generating Assets
|
|
$
|
9.5
|
|
1
|
Noden Pharma DAC and Noden Pharma USA, Inc. (together, and including their respective subsidiaries, “Noden”)
|
2
|
Also known as Defined Diagnostic, LLC. The Wellstat Diagnostics investment also includes our note receivable with Hyperion Catalysis International, Inc. (“Hyperion”).
|
3
|
Formerly Depomed, Inc.
|
4
|
Excludes transaction costs.
|
•
|
Our net loss for the years ended December 31, 2019 and 2018 was $70.4 million and $68.9 million, respectively;
|
•
|
At December 31, 2019, we had cash and cash equivalents of $193.5 million as compared with $394.6 million at December 31, 2018;
|
•
|
At December 31, 2019, we had $716.1 million in total assets as compared with $963.7 million at December 31, 2018; and
|
•
|
At December 31, 2019, we had $122.8 million in total liabilities as compared with $234.0 million at December 31, 2018.
|
(Dollars in thousands)
|
|
2019
|
|
2018
|
|
Change from
Prior Year %
|
|||||
Revenues:
|
|
|
|
|
|
|
|||||
Product revenue, net
|
|
$
|
85,835
|
|
|
$
|
105,448
|
|
|
(19
|
)%
|
Royalty rights - change in fair value
|
|
(31,042
|
)
|
|
85,256
|
|
|
(136
|
)%
|
||
Royalties from Queen et al. patents
|
|
9
|
|
|
4,536
|
|
|
(100
|
)%
|
||
Interest revenue
|
|
—
|
|
|
2,337
|
|
|
N/M
|
|
||
License and other
|
|
(45
|
)
|
|
533
|
|
|
(108
|
)%
|
||
Total revenues
|
|
$
|
54,757
|
|
|
$
|
198,110
|
|
|
(72
|
)%
|
•
|
decreased royalty asset revenues due in part to a decrease in fair value of the AcelRx and Assertio royalty assets,
|
•
|
a decrease in product revenue from the sale of the Noden Products in our Pharmaceutical segment,
|
•
|
decreased interest revenue related to the CareView note receivable asset,
|
•
|
lower license and other revenue, partially offset by
|
•
|
an increase in product revenue from sales of the LENSAR Laser System in our Medical Devices segment.
|
(in thousands)
|
|
Discount and Distribution Fees
|
|
Government Rebates and Chargebacks
|
|
Assistance and Other Discounts
|
|
Product Return
|
|
Total
|
||||||||||
Balance as of December 31, 2018
|
|
$
|
3,094
|
|
|
$
|
8,901
|
|
|
$
|
3,457
|
|
|
$
|
4,681
|
|
|
$
|
20,133
|
|
Allowances for current period sales
|
|
5,090
|
|
|
12,104
|
|
|
5,003
|
|
|
1,720
|
|
|
23,917
|
|
|||||
Allowances for prior period sales
|
|
50
|
|
|
1,848
|
|
|
142
|
|
|
46
|
|
|
2,086
|
|
|||||
Credits/payments for current period sales
|
|
(3,813
|
)
|
|
(8,843
|
)
|
|
(4,186
|
)
|
|
(276
|
)
|
|
(17,118
|
)
|
|||||
Credits/payments for prior period sales
|
|
(3,076
|
)
|
|
(10,393
|
)
|
|
(3,411
|
)
|
|
(2,295
|
)
|
|
(19,175
|
)
|
|||||
Balance as of December 31, 2019
|
|
$
|
1,345
|
|
|
$
|
3,617
|
|
|
$
|
1,005
|
|
|
$
|
3,876
|
|
|
$
|
9,843
|
|
•
|
a decrease in the estimated fair value of the AcelRx and Assertio royalty assets in 2019,
|
•
|
decreasing royalties from the Queen et al. patents as the patents have expired,
|
•
|
the absence of interest revenue recognized from our CareView note receivable in 2019, and
|
•
|
lower license and other revenue.
|
|
|
Year Ended December 31, 2019
|
||||||||||
|
|
|
|
Change in
|
|
|
||||||
(in thousands)
|
|
Cash Royalties
|
|
Fair Value
|
|
Total
|
||||||
Assertio
|
|
$
|
72,225
|
|
|
$
|
(45,699
|
)
|
|
$
|
26,526
|
|
VB
|
|
966
|
|
|
(518
|
)
|
|
448
|
|
|||
U-M
|
|
5,664
|
|
|
(5,197
|
)
|
|
467
|
|
|||
AcelRx
|
|
307
|
|
|
(57,428
|
)
|
|
(57,121
|
)
|
|||
KYBELLA
|
|
110
|
|
|
(1,472
|
)
|
|
(1,362
|
)
|
|||
|
|
$
|
79,272
|
|
|
$
|
(110,314
|
)
|
|
$
|
(31,042
|
)
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
|
|
|
Change in
|
|
|
||||||
(in thousands)
|
|
Cash Royalties
|
|
Fair Value
|
|
Total
|
||||||
Assertio
|
|
$
|
71,502
|
|
|
$
|
12,333
|
|
|
$
|
83,835
|
|
VB
|
|
1,062
|
|
|
(272
|
)
|
|
790
|
|
|||
U-M
|
|
4,631
|
|
|
(1,174
|
)
|
|
3,457
|
|
|||
AcelRx
|
|
249
|
|
|
(2,514
|
)
|
|
(2,265
|
)
|
|||
Avinger
|
|
366
|
|
|
(396
|
)
|
|
(30
|
)
|
|||
KYBELLA
|
|
159
|
|
|
(690
|
)
|
|
(531
|
)
|
|||
|
|
$
|
77,969
|
|
|
$
|
7,287
|
|
|
$
|
85,256
|
|
|
|
|
|
Year Ended December 31,
|
||||
Source
|
|
Product Name
|
|
2019
|
|
2018
|
||
AcelRx
|
|
Zalviso
|
|
(104
|
)%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
||
Assertio
|
|
Glumetza, Janumet XR1, Jentadueto XR, Invokamet XR and Synjardy XR
|
|
48
|
%
|
|
42
|
%
|
|
|
|
|
|
|
|
||
LENSAR
|
|
LENSAR Laser System
|
|
56
|
%
|
|
12
|
%
|
|
|
|
|
|
|
|
||
Noden
|
|
Tekturna, Tekturna HCT, Rasilez and Rasilez HCT
|
|
101
|
%
|
|
41
|
%
|
1
|
Royalties received through the third quarter of 2018.
|
(Dollars in thousands)
|
|
2019
|
|
2018
|
|
Change from Prior Year %
|
|||||
Costs of product revenue (excluding intangible amortization and impairment)
|
|
$
|
53,619
|
|
|
$
|
48,460
|
|
|
11
|
%
|
Amortization of intangible assets
|
|
6,306
|
|
|
15,831
|
|
|
(60
|
)%
|
||
General and administrative
|
|
45,598
|
|
|
45,420
|
|
|
0
|
%
|
||
Sales and marketing
|
|
8,482
|
|
|
17,139
|
|
|
(51
|
)%
|
||
Research and development
|
|
7,308
|
|
|
2,955
|
|
|
147
|
%
|
||
Impairment of intangible assets
|
|
22,490
|
|
|
152,330
|
|
|
(85
|
)%
|
||
Asset impairment loss
|
|
10,768
|
|
|
8,200
|
|
|
31
|
%
|
||
Change in fair value of contingent consideration
|
|
—
|
|
|
(41,631
|
)
|
|
N/M
|
|
||
Total operating expenses
|
|
$
|
154,571
|
|
|
$
|
248,704
|
|
|
(38
|
)%
|
Percentage of total revenues
|
|
282
|
%
|
|
126
|
%
|
|
|
•
|
a $22.5 million impairment of the Noden intangible asset in the current year compared to a $152.3 million impairment in 2018,
|
•
|
lower amortization expense for the Noden intangible assets in 2019 resulting from the impairment recorded in 2018 due to the increased probability of a third-party generic form of aliskiren being launched in the United States,
|
•
|
lower sales and marketing expenses reflecting the cost savings from the change in our marketing strategy to a non-personal promotion strategy for the Noden Products in anticipation of a launch of a third-party generic form of aliskiren. This non-personal promotion strategy was subsequently discontinued upon the launch of our authorized generic form of Tekturna in the first quarter of 2019, partially offset by
|
•
|
the favorable adjustment to the Noden acquisition related contingent consideration, which was first reduced in the second quarter of 2018 prompted by the increased probability of a third-party generic form of aliskiren being launched in the United States and subsequently eliminated in the fourth quarter of 2018 when the launch was imminent,
|
•
|
an increase in research and development expenses in our Medical Devices segment primarily due to the exclusive licensing of intellectual property from a third party for $3.5 million in cash for use in developing its next generation technology,
|
•
|
higher cost of product revenue, due to increased sales in our Medical Devices segment and costs associated with the amended Novartis supply agreement in our Pharmaceutical segment,
|
•
|
a small increase in our general and administrative expenses, as detailed below, and
|
•
|
a $10.8 million impairment loss on the CareView note receivable recorded in 2019 compared to the $8.2 million impairment loss on the CareView note receivable recorded in 2018.
|
|
|
Year Ended December 31, 2019
|
||||||||||||||
(in thousands)
|
|
Pharmaceutical
|
|
Medical Devices
|
|
Income Generating Assets
|
|
Total
|
||||||||
Compensation
|
|
$
|
1,858
|
|
|
$
|
4,109
|
|
|
$
|
16,656
|
|
|
$
|
22,623
|
|
Salaries and Wages (including taxes)
|
|
1,306
|
|
|
1,883
|
|
|
6,277
|
|
|
9,466
|
|
||||
Bonuses (including accruals)
|
|
344
|
|
|
1,260
|
|
|
3,643
|
|
|
5,247
|
|
||||
Equity
|
|
208
|
|
|
966
|
|
|
6,736
|
|
|
7,910
|
|
||||
Asset management
|
|
—
|
|
|
—
|
|
|
2,741
|
|
|
2,741
|
|
||||
Business development
|
|
—
|
|
|
—
|
|
|
1,282
|
|
|
1,282
|
|
||||
Accounting and tax services
|
|
1,115
|
|
|
759
|
|
|
4,400
|
|
|
6,274
|
|
||||
Other professional services
|
|
654
|
|
|
403
|
|
|
2,262
|
|
|
3,319
|
|
||||
Other
|
|
2,645
|
|
|
1,713
|
|
|
5,001
|
|
|
9,359
|
|
||||
Total general and administrative
|
|
$
|
6,272
|
|
|
$
|
6,984
|
|
|
$
|
32,342
|
|
|
$
|
45,598
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
(in thousands)
|
|
Pharmaceutical
|
|
Medical Devices
|
|
Income Generating Assets
|
|
Total
|
||||||||
Compensation
|
|
$
|
1,971
|
|
|
$
|
3,627
|
|
|
$
|
10,204
|
|
|
$
|
15,802
|
|
Salaries and Wages (including taxes)
|
|
1,506
|
|
|
1,871
|
|
|
6,193
|
|
|
9,570
|
|
||||
Bonuses (including accruals)
|
|
325
|
|
|
991
|
|
|
(203
|
)
|
|
1,113
|
|
||||
Equity
|
|
140
|
|
|
765
|
|
|
4,214
|
|
|
5,119
|
|
||||
Asset management
|
|
—
|
|
|
—
|
|
|
5,386
|
|
|
5,386
|
|
||||
Business development
|
|
203
|
|
|
—
|
|
|
1,168
|
|
|
1,371
|
|
||||
Accounting and tax services
|
|
1,528
|
|
|
39
|
|
|
4,288
|
|
|
5,855
|
|
||||
Other professional services
|
|
3,891
|
|
|
825
|
|
|
1,921
|
|
|
6,637
|
|
||||
Other
|
|
3,781
|
|
|
1,399
|
|
|
5,189
|
|
|
10,369
|
|
||||
Total general and administrative
|
|
$
|
11,374
|
|
|
$
|
5,890
|
|
|
$
|
28,156
|
|
|
$
|
45,420
|
|
(Dollars in thousands)
|
|
2019
|
|
2018
|
|
Change from Prior Year %
|
|||||
Interest and other income, net
|
|
$
|
6,030
|
|
|
$
|
6,065
|
|
|
(1
|
)%
|
Interest expense
|
|
(11,404
|
)
|
|
(12,157
|
)
|
|
(6
|
)%
|
||
Equity affiliate - change in fair value
|
|
36,402
|
|
|
—
|
|
|
N/M
|
|
||
Gain on sale of intangible assets
|
|
3,476
|
|
|
—
|
|
|
N/M
|
|
||
Gain on investments
|
|
—
|
|
|
764
|
|
|
N/M
|
|
||
Loss on exchange and extinguishment of convertible notes
|
|
(8,430
|
)
|
|
—
|
|
|
N/M
|
|
||
Total non-operating income (expense), net
|
|
$
|
26,074
|
|
|
$
|
(5,328
|
)
|
|
(589
|
)%
|
•
|
an increase to the fair value of our investment in common stock and warrants of Evofem subsequent to our acquisition earlier in 2019,
|
•
|
the decrease in interest expense, and
|
•
|
the gain recognized on the sale of our Direct Flow Medical, Inc. (“Direct Flow Medical”) intangible assets, partially offset by
|
•
|
the losses on the exchange and extinguishment of a portion of our December 2021 Notes and December 2024 Notes,
|
•
|
the absence of a realized gain on investments in 2019, and
|
•
|
lower interest and other income.
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Net (loss) per basic share
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
Net (loss) per diluted share
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
•
|
In our Medical Devices segment, the primary factor determining cash needs is the funding of operations, which we expect to continue to expand as the business grows, and enhancing our product offerings through the research and development of our next generation device which will integrate a femtosecond laser and a phacoemulsification system in a single, compact workstation.
|
•
|
In our Pharmaceutical segment, cash needs tend to be driven primarily by material purchases.
|
•
|
The cash needs of our Income Generating Assets segment tend to be driven by legal and professional service fees required for operating a publicly traded company, as well as the funding of potential repurchases of our common stock and convertible notes.
|
•
|
The current cash needs for our Strategic Positions segment are insignificant.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
Thereafter
|
|
Total
|
||||||||||
Operating leases 1
|
|
$
|
958
|
|
|
$
|
776
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,734
|
|
Convertible notes 2
|
|
843
|
|
|
20,329
|
|
|
13,636
|
|
|
—
|
|
|
34,808
|
|
|||||
Inventory 3
|
|
49,419
|
|
|
22,639
|
|
|
—
|
|
|
—
|
|
|
72,058
|
|
|||||
Total contractual obligations
|
|
$
|
51,220
|
|
|
$
|
43,744
|
|
|
$
|
13,636
|
|
|
$
|
—
|
|
|
$
|
108,600
|
|
(in thousands)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Total
|
|
Fair Value
|
|
||||||||||||||
Convertible notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed Rate
|
|
$
|
—
|
|
|
$
|
19,170
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,500
|
|
|
$
|
30,670
|
|
|
$
|
33,931
|
|
(1)
|
Average Interest Rate
|
|
3.64
|
%
|
|
3.69
|
%
|
|
5.13
|
%
|
|
5.13
|
%
|
|
5.13
|
%
|
|
|
|
|
|
(1)
|
The fair value of the remaining payments under our December 2021 Notes and December 2024 Notes was estimated based on the trading value of these notes at December 31, 2019.
|
Item
|
Page
|
|
|
/s/ PricewaterhouseCoopers LLP
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
193,451
|
|
|
$
|
394,590
|
|
Accounts receivable, net
|
13,552
|
|
|
21,648
|
|
||
Notes receivable
|
52,583
|
|
|
63,042
|
|
||
Inventory
|
39,773
|
|
|
18,942
|
|
||
Prepaid and other current assets
|
14,536
|
|
|
18,995
|
|
||
Total current assets
|
313,895
|
|
|
517,217
|
|
||
Property and equipment, net
|
5,520
|
|
|
7,387
|
|
||
Royalty rights - at fair value
|
266,196
|
|
|
376,510
|
|
||
Investment in equity affiliate
|
82,267
|
|
|
—
|
|
||
Notes and other receivables, long-term
|
827
|
|
|
771
|
|
||
Long-term deferred tax assets
|
—
|
|
|
1,539
|
|
||
Intangible assets, net
|
23,298
|
|
|
51,319
|
|
||
Other assets
|
24,116
|
|
|
8,993
|
|
||
Total assets
|
$
|
716,119
|
|
|
$
|
963,736
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
17,370
|
|
|
$
|
13,142
|
|
Accrued liabilities
|
28,306
|
|
|
39,312
|
|
||
Accrued income taxes
|
17
|
|
|
16
|
|
||
Total current liabilities
|
45,693
|
|
|
52,470
|
|
||
Convertible notes payable
|
27,250
|
|
|
124,644
|
|
||
Other long-term liabilities
|
49,898
|
|
|
56,843
|
|
||
Total liabilities
|
122,841
|
|
|
233,957
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 15)
|
|
|
|
||||
|
|
|
|
||||
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; 124,303 and 136,513 shares issued and outstanding at December 31, 2019 and 2018, respectively
|
1,243
|
|
|
1,365
|
|
||
Additional paid-in capital
|
(78,875
|
)
|
|
(98,030
|
)
|
||
Treasury stock, at cost (zero and 750 shares held)
|
—
|
|
|
(2,103
|
)
|
||
Retained earnings
|
670,832
|
|
|
828,547
|
|
||
Total PDL’s stockholders’ equity
|
593,200
|
|
|
729,779
|
|
||
Noncontrolling interests
|
78
|
|
|
—
|
|
||
Total stockholders’ equity
|
593,278
|
|
|
729,779
|
|
||
Total liabilities and stockholders’ equity
|
$
|
716,119
|
|
|
$
|
963,736
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product revenue, net
|
$
|
85,835
|
|
|
$
|
105,448
|
|
|
$
|
84,123
|
|
Royalty rights - change in fair value
|
(31,042
|
)
|
|
85,256
|
|
|
162,327
|
|
|||
Royalties from Queen et al. patents
|
9
|
|
|
4,536
|
|
|
36,415
|
|
|||
Interest revenue
|
—
|
|
|
2,337
|
|
|
17,744
|
|
|||
License and other
|
(45
|
)
|
|
533
|
|
|
19,451
|
|
|||
Total revenues
|
54,757
|
|
|
198,110
|
|
|
320,060
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of product revenue (excluding intangible asset amortization and impairment)
|
53,619
|
|
|
48,460
|
|
|
30,537
|
|
|||
Amortization of intangible assets
|
6,306
|
|
|
15,831
|
|
|
24,689
|
|
|||
General and administrative
|
45,598
|
|
|
45,420
|
|
|
45,641
|
|
|||
Sales and marketing
|
8,482
|
|
|
17,139
|
|
|
17,683
|
|
|||
Research and development
|
7,308
|
|
|
2,955
|
|
|
7,381
|
|
|||
Impairment of intangible assets
|
22,490
|
|
|
152,330
|
|
|
—
|
|
|||
Asset impairment loss
|
10,768
|
|
|
8,200
|
|
|
—
|
|
|||
Change in fair value of anniversary payment and contingent consideration
|
—
|
|
|
(41,631
|
)
|
|
349
|
|
|||
Total operating expenses
|
154,571
|
|
|
248,704
|
|
|
126,280
|
|
|||
Operating (loss) income
|
(99,814
|
)
|
|
(50,594
|
)
|
|
193,780
|
|
|||
Non-operating income (expense), net
|
|
|
|
|
|
||||||
Interest and other income, net
|
6,030
|
|
|
6,065
|
|
|
1,659
|
|
|||
Interest expense
|
(11,404
|
)
|
|
(12,157
|
)
|
|
(20,221
|
)
|
|||
Equity affiliate - change in fair value
|
36,402
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of intangible assets
|
3,476
|
|
|
—
|
|
|
—
|
|
|||
Gain on bargain purchase
|
—
|
|
|
—
|
|
|
9,309
|
|
|||
Gain on investments
|
—
|
|
|
764
|
|
|
—
|
|
|||
Loss on exchange and extinguishment of convertible notes
|
(8,430
|
)
|
|
—
|
|
|
—
|
|
|||
Total non-operating income (expense), net
|
26,074
|
|
|
(5,328
|
)
|
|
(9,253
|
)
|
|||
(Loss) income before income taxes
|
(73,740
|
)
|
|
(55,922
|
)
|
|
184,527
|
|
|||
Income tax (benefit) expense
|
(3,049
|
)
|
|
12,937
|
|
|
73,826
|
|
|||
Net (loss) income
|
(70,691
|
)
|
|
(68,859
|
)
|
|
110,701
|
|
|||
Less: Net (loss) income attributable to noncontrolling interests
|
(280
|
)
|
|
—
|
|
|
(47
|
)
|
|||
Net (loss) income attributable to PDL’s stockholders
|
$
|
(70,411
|
)
|
|
$
|
(68,859
|
)
|
|
$
|
110,748
|
|
|
|
|
|
|
|
||||||
Net (loss) income per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.71
|
|
Diluted
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.71
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
118,631
|
|
|
145,669
|
|
|
155,394
|
|
|||
Diluted
|
118,631
|
|
|
145,669
|
|
|
156,257
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(70,691
|
)
|
|
$
|
(68,859
|
)
|
|
$
|
110,701
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, 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
|
|
—
|
|
|
(578
|
)
|
|
1,181
|
|
|||
Adjustment for net (gains) losses realized and included in net (loss) income, net of tax
|
|
—
|
|
|
(603
|
)
|
|
—
|
|
|||
Total change in unrealized gains (losses) on investments in available-for-sale securities, net of tax(a)
|
|
—
|
|
|
(1,181
|
)
|
|
1,181
|
|
|||
Comprehensive (loss) income
|
|
(70,691
|
)
|
|
(70,040
|
)
|
|
111,882
|
|
|||
Less: Comprehensive (loss) income attributable to noncontrolling interests
|
|
(280
|
)
|
|
—
|
|
|
(47
|
)
|
|||
Comprehensive (loss) income attributable to PDL’s stockholders
|
|
$
|
(70,411
|
)
|
|
$
|
(70,040
|
)
|
|
$
|
111,929
|
|
|
PDL’s Stockholders Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other Comprehensive
Income (Loss)
|
|
Non-controlling Interest
|
|
Total
Stockholders’ Equity |
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||||||
Balance at December 31, 2016
|
165,538,447
|
|
|
$
|
1,655
|
|
|
$
|
—
|
|
|
$
|
(107,628
|
)
|
|
$
|
857,116
|
|
|
$
|
—
|
|
|
$
|
4,280
|
|
|
$
|
755,423
|
|
Issuance of common stock, net of forfeitures
|
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
|
|
|||||||
Issuance of common stock, net of forfeitures
|
(601,668
|
)
|
|
(6
|
)
|
|
—
|
|
|
6
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
4,407
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,407
|
|
|||||||
Repurchase and retirement of common stock
|
(16,660,566
|
)
|
|
(167
|
)
|
|
(2,103
|
)
|
|
—
|
|
|
(48,266
|
)
|
|
—
|
|
|
—
|
|
|
(50,536
|
)
|
|||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,859
|
)
|
|
—
|
|
|
—
|
|
|
(68,859
|
)
|
|||||||
Change in unrealized gains and losses on investments in available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,181
|
)
|
|
—
|
|
|
(1,181
|
)
|
|||||||
Total comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,040
|
)
|
|||||||
Balance at December 31, 2018
|
136,512,522
|
|
|
1,365
|
|
|
(2,103
|
)
|
|
(98,030
|
)
|
|
828,547
|
|
|
—
|
|
|
—
|
|
|
729,779
|
|
|||||||
Issuance of common stock, net of forfeitures
|
729,191
|
|
|
7
|
|
|
—
|
|
|
(7
|
)
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
6,907
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,907
|
|
|||||||
Repurchase and retirement of common stock
|
(26,321,293
|
)
|
|
(263
|
)
|
|
2,103
|
|
|
—
|
|
|
(87,312
|
)
|
|
—
|
|
|
—
|
|
|
(85,472
|
)
|
|||||||
Transfer of subsidiary shares to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
426
|
|
|
—
|
|
|
—
|
|
|
358
|
|
|
784
|
|
|||||||
Exchange of convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,963
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,963
|
)
|
|||||||
Issuance of common stock in connection with repurchase of convertible notes
|
13,382,196
|
|
|
134
|
|
|
—
|
|
|
45,767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,901
|
|
|||||||
Capped call transactions
|
—
|
|
|
—
|
|
|
—
|
|
|
3,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,025
|
|
|||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,411
|
)
|
|
—
|
|
|
(280
|
)
|
|
(70,691
|
)
|
|||||||
Total comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,691
|
)
|
|||||||
Balance at December 31, 2019
|
124,302,616
|
|
|
$
|
1,243
|
|
|
$
|
—
|
|
|
$
|
(78,875
|
)
|
|
$
|
670,832
|
|
|
$
|
—
|
|
|
$
|
78
|
|
|
$
|
593,278
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(70,691
|
)
|
|
$
|
(68,859
|
)
|
|
$
|
110,701
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Amortization of convertible notes conversion options and debt issuance costs
|
7,237
|
|
|
7,609
|
|
|
11,038
|
|
|||
Accreted interest on convertible note principal
|
79
|
|
|
—
|
|
|
—
|
|
|||
Amortization of intangible assets
|
6,306
|
|
|
15,831
|
|
|
24,689
|
|
|||
Amortization of right-of-use assets
|
886
|
|
|
—
|
|
|
—
|
|
|||
Impairment of intangible asset
|
22,490
|
|
|
152,330
|
|
|
—
|
|
|||
Asset impairment loss
|
10,768
|
|
|
8,200
|
|
|
—
|
|
|||
Change in fair value of royalty rights - at fair value
|
31,042
|
|
|
(85,256
|
)
|
|
(162,327
|
)
|
|||
Change in fair value of equity affiliate
|
(31,641
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of derivative assets
|
(4,715
|
)
|
|
(33
|
)
|
|
49
|
|
|||
Change in fair value of anniversary payment and contingent consideration
|
—
|
|
|
(41,631
|
)
|
|
349
|
|
|||
Other amortization, depreciation and accretion of embedded derivative
|
2,901
|
|
|
3,696
|
|
|
2,366
|
|
|||
Loss on exchange and extinguishment of convertible notes
|
8,430
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of intangible assets
|
(3,476
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of available-for-sale securities
|
—
|
|
|
(764
|
)
|
|
(108
|
)
|
|||
Loss on disposal of property and equipment
|
1,200
|
|
|
66
|
|
|
—
|
|
|||
Escrow receivable
|
—
|
|
|
—
|
|
|
(1,400
|
)
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
(9,309
|
)
|
|||
Stock-based compensation expense
|
7,119
|
|
|
4,758
|
|
|
3,138
|
|
|||
Deferred income taxes
|
(10,617
|
)
|
|
13,846
|
|
|
39,172
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
8,195
|
|
|
9,349
|
|
|
11,008
|
|
|||
Prepaid and other current assets
|
4,464
|
|
|
(5,025
|
)
|
|
(9,100
|
)
|
|||
Accrued interest on notes receivable
|
—
|
|
|
—
|
|
|
1,475
|
|
|||
Inventory
|
(21,923
|
)
|
|
(9,508
|
)
|
|
892
|
|
|||
Other assets
|
(156
|
)
|
|
(2,120
|
)
|
|
(1,400
|
)
|
|||
Accounts payable
|
4,191
|
|
|
(6,642
|
)
|
|
10,840
|
|
|||
Accrued liabilities
|
(9,341
|
)
|
|
(7,449
|
)
|
|
13,120
|
|
|||
Accrued income taxes
|
1
|
|
|
(1,361
|
)
|
|
(3,346
|
)
|
|||
Other long-term liabilities
|
4,808
|
|
|
(462
|
)
|
|
(1,223
|
)
|
|||
Net cash (used in) provided by operating activities
|
(32,443
|
)
|
|
(13,425
|
)
|
|
40,624
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(23,213
|
)
|
|||
Investment in equity affiliate
|
(60,000
|
)
|
|
—
|
|
|
—
|
|
|||
Maturities of investments-other
|
—
|
|
|
—
|
|
|
75,000
|
|
|||
Payment of contingent consideration
|
—
|
|
|
(858
|
)
|
|
—
|
|
|||
Proceeds from sales of available-for-sale securities
|
—
|
|
|
4,116
|
|
|
39,956
|
|
|||
Purchase of royalty rights - at fair value
|
—
|
|
|
(20,000
|
)
|
|
—
|
|
|||
Proceeds from royalty rights - at fair value
|
79,272
|
|
|
77,969
|
|
|
107,253
|
|
|||
Purchase of intangible assets
|
(1,700
|
)
|
|
—
|
|
|
—
|
|
|||
Sale of royalty rights - at fair value
|
—
|
|
|
—
|
|
|
108,169
|
|
|||
Proceeds from the sale of intangible assets
|
5,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment of notes receivable
|
—
|
|
|
—
|
|
|
144,829
|
|
|||
Proceeds from sales of assets held for sale
|
—
|
|
|
—
|
|
|
8,190
|
|
|||
Purchase of property and equipment
|
(763
|
)
|
|
(4,523
|
)
|
|
(1,297
|
)
|
|||
Net cash provided by investing activities
|
21,809
|
|
|
56,704
|
|
|
458,887
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Repurchase of convertible notes
|
(97,889
|
)
|
|
—
|
|
|
—
|
|
|||
Repayment of convertible notes
|
—
|
|
|
(126,447
|
)
|
|
—
|
|
|||
Payment to exchange convertible notes
|
(7,451
|
)
|
|
—
|
|
|
—
|
|
|||
Capped call transactions
|
3,025
|
|
|
—
|
|
|
—
|
|
|||
Payment of anniversary payment
|
—
|
|
|
—
|
|
|
(87,007
|
)
|
|||
Payment of contingent consideration
|
(1,071
|
)
|
|
—
|
|
|
—
|
|
|||
Cash paid for purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
(2,170
|
)
|
|||
Repurchase of Company common stock
|
(86,898
|
)
|
|
(49,109
|
)
|
|
(30,000
|
)
|
|||
Cash dividends paid
|
(9
|
)
|
|
(48
|
)
|
|
(222
|
)
|
|||
Net settlement of stock-based compensation awards
|
(212
|
)
|
|
(351
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(190,505
|
)
|
|
(175,955
|
)
|
|
(119,399
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(201,139
|
)
|
|
(132,676
|
)
|
|
380,112
|
|
|||
Cash and cash equivalents at beginning of the year
|
394,590
|
|
|
527,266
|
|
|
147,154
|
|
|||
Cash and cash equivalents at end the year
|
$
|
193,451
|
|
|
$
|
394,590
|
|
|
$
|
527,266
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash (refunded) paid for income taxes
|
$
|
(2,689
|
)
|
|
$
|
3,805
|
|
|
$
|
43,366
|
|
Cash paid for interest
|
$
|
4,265
|
|
|
$
|
6,654
|
|
|
$
|
9,286
|
|
Supplemental schedule of non-cash investing and financing activities
|
|
|
|
|
|
||||||
Convertible notes due December 2021 exchanged for convertible notes due December 2024
|
$
|
86,053
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock used to settle convertible notes payable
|
$
|
45,901
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Assets held for sale reclassified from other assets to intangible assets
|
$
|
—
|
|
|
$
|
1,811
|
|
|
$
|
—
|
|
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
|
Transportation equipment
|
|
3 years
|
Furniture and fixtures
|
|
7 years
|
Equipment under lease
|
|
Greater of lease term or 5-10 years
|
|
|
|
|
|
|
Reported as:
|
||||||
(in thousands)
|
|
Amortized Cost
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
||||||
December 31, 2019
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
62,187
|
|
|
$
|
62,187
|
|
|
$
|
62,187
|
|
Money market funds
|
|
131,264
|
|
|
131,264
|
|
|
131,264
|
|
|||
Total
|
|
$
|
193,451
|
|
|
$
|
193,451
|
|
|
$
|
193,451
|
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
|
||||||
Cash
|
|
$
|
167,871
|
|
|
$
|
167,871
|
|
|
$
|
167,871
|
|
Money market funds
|
|
226,719
|
|
|
226,719
|
|
|
226,719
|
|
|||
Total
|
|
$
|
394,590
|
|
|
$
|
394,590
|
|
|
$
|
394,590
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
|
$
|
131,264
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
131,264
|
|
|
$
|
226,719
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
226,719
|
|
Corporate securities 1
|
|
82,267
|
|
|
—
|
|
|
—
|
|
|
82,267
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Warrants 2
|
|
—
|
|
|
14,152
|
|
|
—
|
|
|
14,152
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||||||
Royalty rights - at fair value
|
|
—
|
|
|
—
|
|
|
266,196
|
|
|
266,196
|
|
|
—
|
|
|
—
|
|
|
376,510
|
|
|
376,510
|
|
||||||||
Total
|
|
$
|
213,531
|
|
|
$
|
14,152
|
|
|
$
|
266,196
|
|
|
$
|
493,879
|
|
|
$
|
226,719
|
|
|
$
|
62
|
|
|
$
|
376,510
|
|
|
$
|
603,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration, current 3
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,071
|
|
|
$
|
1,071
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,071
|
|
|
$
|
1,071
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Total change in fair value for the period included in earnings for royalty right assets held at the end of the reporting period
|
|
$
|
(31,042
|
)
|
|
$
|
85,256
|
|
|
|
|
|
|
||||
Total change in fair value for the period included in earnings for liabilities held at the end of the reporting period
|
|
$
|
—
|
|
|
$
|
41,631
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(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
|
|
|
$
|
—
|
|
|
$
|
55,389
|
|
|
$
|
50,191
|
|
|
$
|
—
|
|
|
$
|
57,322
|
|
Hyperion note receivable
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
||||||
CareView note receivable
|
|
690
|
|
|
—
|
|
|
690
|
|
|
11,458
|
|
|
—
|
|
|
11,458
|
|
||||||
Total
|
|
$
|
52,081
|
|
|
$
|
—
|
|
|
$
|
57,279
|
|
|
$
|
62,849
|
|
|
$
|
—
|
|
|
$
|
69,980
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 2021 Notes
|
|
$
|
16,950
|
|
|
$
|
20,978
|
|
|
$
|
—
|
|
|
$
|
124,644
|
|
|
$
|
151,356
|
|
|
$
|
—
|
|
December 2024 Notes
|
|
10,300
|
|
|
12,953
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
27,250
|
|
|
$
|
33,931
|
|
|
$
|
—
|
|
|
$
|
124,644
|
|
|
$
|
151,356
|
|
|
$
|
—
|
|
Asset
|
|
Valuation
Technique
|
|
Unobservable
Input
|
|
December 31,
2019
|
|
December 31,
2018 |
|
|
|
|
|
|
|
|
|
Wellstat Diagnostics
|
|
|
|
|
|
|
|
|
Wellstat Diagnostics Guarantors intellectual property
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
12%
|
|
12%
|
|
|
|
|
Undiscounted royalty amount
|
|
$21 million
|
|
$21 million
|
Settlement Amount
|
|
Income Approach
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
15%
|
|
15%
|
|
|
|
|
Undiscounted settlement amount
|
|
$28 million
|
|
$34 million
|
Real Estate Property
|
|
Market Approach
|
|
|
|
|
|
|
|
|
|
|
Estimated annual appreciation
|
|
—%
|
|
4%
|
|
|
|
|
Estimated realtor fee
|
|
6%
|
|
6%
|
|
|
|
|
Undiscounted market value
|
|
$16 million
|
|
$16 million
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Operating lease cost
|
|
$
|
919
|
|
|
$
|
1,188
|
|
Short-term lease cost
|
|
81
|
|
|
50
|
|
||
Total lease cost
|
|
$
|
1,000
|
|
|
$
|
1,238
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
||||
Operating cash flows from operating leases
|
|
$
|
921
|
|
|
$
|
1,188
|
|
Right-of-use-assets obtained in exchange for lease obligations:
|
|
|
|
|
||||
Operating leases
|
|
$
|
2,534
|
|
|
N/A
|
Operating Leases
|
|
Classification
|
|
December 31, 2019
|
||
|
|
|
|
|
||
Operating lease ROU assets
|
|
Other assets
|
|
$
|
1,638
|
|
|
|
|
|
|
||
Operating lease liabilities, current
|
|
Accrued liabilities
|
|
$
|
918
|
|
Operating lease liabilities, long-term
|
|
Other long-term liabilities
|
|
754
|
|
|
Total operating lease liabilities
|
|
Total operating lease liabilities
|
|
$
|
1,672
|
|
|
|
|
|
|
||
Weighted-average remaining lease term
|
|
1.9 years
|
|
|||
Weighted-average discount rate
|
|
6.4
|
%
|
Fiscal Year
|
|
Amount
|
||
|
|
|
||
2020
|
|
$
|
958
|
|
2021
|
|
686
|
|
|
2022
|
|
90
|
|
|
2023
|
|
—
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total operating lease payments
|
|
1,734
|
|
|
Less: imputed interest
|
|
62
|
|
|
Total operating lease liabilities
|
|
$
|
1,672
|
|
Fiscal Year
|
|
Amount
|
||
|
|
|
||
2019
|
|
$
|
1,140
|
|
2020
|
|
1,003
|
|
|
2021
|
|
559
|
|
|
2022
|
|
—
|
|
|
2023
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
2,702
|
|
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
Classification
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
|
||||
Sales-type lease selling price
|
|
Product revenue, net
|
|
$
|
542
|
|
|
$
|
746
|
|
Cost of underlying asset
|
|
|
|
(109
|
)
|
|
(344
|
)
|
||
Operating profit
|
|
$
|
433
|
|
|
$
|
402
|
|
||
|
|
|
|
|
|
|
||||
Interest income on the lease receivable
|
|
Interest and other income, net
|
|
$
|
53
|
|
|
$
|
51
|
|
|
|
|
|
|
|
|
||||
Initial direct costs incurred
|
|
Operating expense
|
|
$
|
(35
|
)
|
|
$
|
(41
|
)
|
|
|
|
|
|
|
|
||||
Operating lease income
|
|
Product revenue, net
|
|
$
|
5,180
|
|
|
$
|
7,264
|
|
(in thousands)
|
|
Classification
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
|
|
||||
Lease payment receivable, current
|
|
Accounts receivable, net and Notes receivable, current
|
|
$
|
502
|
|
|
$
|
472
|
|
Lease payment receivable, long-term
|
|
Notes receivable, long-term and Other assets
|
|
827
|
|
|
753
|
|
||
Total lease payment receivable
|
|
$
|
1,329
|
|
|
$
|
1,225
|
|
(in thousands)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Equipment under lease
|
|
$
|
6,652
|
|
|
$
|
6,529
|
|
Less accumulated depreciation
|
|
(5,231
|
)
|
|
(3,665
|
)
|
||
Equipment under lease, net
|
|
$
|
1,421
|
|
|
$
|
2,864
|
|
Fiscal Year
|
|
Amount
|
||
|
|
|
||
2020
|
|
$
|
538
|
|
2021
|
|
396
|
|
|
2022
|
|
350
|
|
|
2023
|
|
126
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total undiscounted cash flows
|
|
1,410
|
|
|
Present value of lease payments (recognized as lease receivables)
|
|
1,329
|
|
|
Difference between undiscounted and discounted cash flows
|
|
$
|
81
|
|
Fiscal Year
|
|
Amount
|
||
|
|
|
||
2020
|
|
$
|
2,287
|
|
2021
|
|
1,218
|
|
|
2022
|
|
426
|
|
|
2023
|
|
81
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total undiscounted cash flows
|
|
$
|
4,012
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Leasehold improvements
|
|
$
|
350
|
|
|
$
|
322
|
|
Manufacturing equipment
|
|
1,749
|
|
|
1,669
|
|
||
Computer and office equipment
|
|
9,991
|
|
|
9,451
|
|
||
Furniture and fixtures
|
|
175
|
|
|
162
|
|
||
Equipment under lease
|
|
6,652
|
|
|
6,529
|
|
||
Transportation equipment
|
|
67
|
|
|
67
|
|
||
Total
|
|
18,984
|
|
|
18,200
|
|
||
Less accumulated depreciation
|
|
(17,058
|
)
|
|
(14,203
|
)
|
||
Construction in progress
|
|
3,594
|
|
|
3,390
|
|
||
Property and equipment, net
|
|
$
|
5,520
|
|
|
$
|
7,387
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(in thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired products rights 1
|
|
$
|
9,108
|
|
|
$
|
—
|
|
|
$
|
9,108
|
|
|
$
|
36,143
|
|
|
$
|
(2,258
|
)
|
|
$
|
33,885
|
|
Customer relationships 1, 2, 4
|
|
5,049
|
|
|
(884
|
)
|
|
4,165
|
|
|
8,028
|
|
|
(782
|
)
|
|
7,246
|
|
||||||
Acquired technology 2, 3, 5
|
|
11,500
|
|
|
(1,741
|
)
|
|
9,759
|
|
|
11,011
|
|
|
(1,203
|
)
|
|
9,808
|
|
||||||
Acquired trademarks 2
|
|
570
|
|
|
(304
|
)
|
|
266
|
|
|
570
|
|
|
(190
|
)
|
|
380
|
|
||||||
|
|
$
|
26,227
|
|
|
$
|
(2,929
|
)
|
|
$
|
23,298
|
|
|
$
|
55,752
|
|
|
$
|
(4,433
|
)
|
|
$
|
51,319
|
|
Fiscal Year
|
|
Amount
|
||
2020
|
|
$
|
2,753
|
|
2021
|
|
2,721
|
|
|
2022
|
|
2,616
|
|
|
2023
|
|
2,553
|
|
|
2024
|
|
2,530
|
|
|
Thereafter
|
|
10,125
|
|
|
Total remaining estimated amortization expense
|
|
$
|
23,298
|
|
(in thousands)
|
|
Amount
|
||
|
|
|
||
Equipment and inventory
|
|
$
|
848
|
|
Fixed assets
|
|
67
|
|
|
Intangible assets (customer relationships)
|
|
1,845
|
|
|
Total identifiable assets
|
|
$
|
2,760
|
|
|
|
|
||
Consideration paid at closing, cash
|
|
$
|
1,200
|
|
Conversion consideration
|
|
920
|
|
|
Contingent consideration
|
|
640
|
|
|
Total fair value of consideration
|
|
$
|
2,760
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Accrued rebates, chargebacks and other revenue reserves
|
|
$
|
9,843
|
|
|
$
|
20,133
|
|
Deferred revenue
|
|
3,907
|
|
|
8,811
|
|
||
Compensation
|
|
7,354
|
|
|
4,468
|
|
||
Interest
|
|
70
|
|
|
344
|
|
||
Legal
|
|
931
|
|
|
623
|
|
||
Other
|
|
6,201
|
|
|
4,933
|
|
||
Total
|
|
$
|
28,306
|
|
|
$
|
39,312
|
|
(in thousands)
|
|
Discount and Distribution Fees
|
|
Government Rebates and Chargebacks
|
|
Assistance and Other Discounts
|
|
Product Returns
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of December 31, 2018
|
|
$
|
3,094
|
|
|
$
|
8,901
|
|
|
$
|
3,457
|
|
|
$
|
4,681
|
|
|
$
|
20,133
|
|
Allowances for current period sales
|
|
5,090
|
|
|
12,104
|
|
|
5,003
|
|
|
1,720
|
|
|
23,917
|
|
|||||
Allowances for prior period sales
|
|
50
|
|
|
1,848
|
|
|
142
|
|
|
46
|
|
|
2,086
|
|
|||||
Credits/payments for current period sales
|
|
(3,813
|
)
|
|
(8,843
|
)
|
|
(4,186
|
)
|
|
(276
|
)
|
|
(17,118
|
)
|
|||||
Credits/payments for prior period sales
|
|
(3,076
|
)
|
|
(10,393
|
)
|
|
(3,411
|
)
|
|
(2,295
|
)
|
|
(19,175
|
)
|
|||||
Balance as of December 31, 2019
|
|
$
|
1,345
|
|
|
$
|
3,617
|
|
|
$
|
1,005
|
|
|
$
|
3,876
|
|
|
$
|
9,843
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Contractual coupon interest
|
|
$
|
—
|
|
|
$
|
422
|
|
|
$
|
5,058
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
88
|
|
|
1,022
|
|
|||
Amortization of debt discount
|
|
—
|
|
|
293
|
|
|
3,449
|
|
|||
Total
|
|
$
|
—
|
|
|
$
|
803
|
|
|
$
|
9,529
|
|
•
|
During any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ended June 30, 2017, if the last reported sale price of Company common stock for at least 20 trading days (whether or not consecutive), in the
|
•
|
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 December 2021 Notes Indenture.
|
(in thousands)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Principal amount of the December 2021 Notes
|
|
$
|
19,170
|
|
|
$
|
150,000
|
|
Unamortized discount of liability component
|
|
(2,220
|
)
|
|
(25,356
|
)
|
||
Net carrying value of the December 2021 Notes
|
|
$
|
16,950
|
|
|
$
|
124,644
|
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Contractual coupon interest
|
|
$
|
3,390
|
|
|
$
|
4,125
|
|
Amortization of debt issuance costs
|
|
64
|
|
|
76
|
|
||
Amortization of debt discount
|
|
459
|
|
|
542
|
|
||
Amortization of conversion feature
|
|
5,973
|
|
|
6,611
|
|
||
Total
|
|
$
|
9,886
|
|
|
$
|
11,354
|
|
•
|
During any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ended December 31, 2019, 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 original principal amount of notes for each
|
•
|
Upon the occurrence of specified corporate events or upon a redemption of the notes, in each case as described in the December 2024 Notes Indenture; or
|
•
|
On or after June 1, 2024, at the option of the holder prior to the second scheduled trading day preceding December 1, 2024.
|
(in thousands)
|
|
December 31, 2019
|
||
|
|
|
||
Principal amount of the December 2024 Notes
|
|
$
|
11,500
|
|
Unamortized discount of liability component
|
|
(1,200
|
)
|
|
Net carrying value of the December 2024 Notes
|
|
$
|
10,300
|
|
|
|
Year Ended
|
||
(in thousands)
|
|
December 31, 2019
|
||
|
|
|
||
Contractual coupon interest
|
|
$
|
598
|
|
Accretion Interest on outstanding principal
|
|
517
|
|
|
Amortization of debt issuance costs
|
|
53
|
|
|
Amortization of conversion feature
|
|
350
|
|
|
Total
|
|
$
|
1,518
|
|
(in thousands)
|
|
December 2021 Notes
|
|
December 2024 Notes
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
2020
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2021
|
|
19,170
|
|
|
—
|
|
|
19,170
|
|
|||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2024
|
|
—
|
|
|
11,500
|
|
|
11,500
|
|
|||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
19,170
|
|
|
$
|
11,500
|
|
|
$
|
30,670
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Uncertain tax positions
|
|
$
|
37,574
|
|
|
$
|
31,706
|
|
Deferred tax liability
|
|
484
|
|
|
13,847
|
|
||
Accrued lease liability
|
|
10,700
|
|
|
10,700
|
|
||
Long-term incentive
|
|
—
|
|
|
125
|
|
||
Other
|
|
1,140
|
|
|
465
|
|
||
Total
|
|
$
|
49,898
|
|
|
$
|
56,843
|
|
(in thousands)
|
|
Unrealized gains
(losses) on
available-for-
sale securities
|
|
Total Accumulated
Other
Comprehensive
Income
|
||||
|
|
|
|
|
||||
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
|
|
||
|
|
|
|
|
||||
Activity for the year ended December 31, 2018
|
|
(1,181
|
)
|
|
(1,181
|
)
|
||
Ending Balance at December 31, 2018
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Activity for the year ended December 31, 2019
|
|
—
|
|
|
—
|
|
||
Ending Balance at December 31, 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
Stock-based Compensation
|
|
2019
|
|
2018
|
|
2017
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Employees and directors
|
|
$
|
6,907
|
|
|
$
|
4,758
|
|
|
$
|
3,138
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
|
|
||||
Range of expected term (in years)
|
|
3.5
|
-
|
6.1
|
|
3.5
|
-
|
6.0
|
|
3.7
|
||
Range of risk-free interest rate
|
|
1.5%
|
-
|
3.0%
|
|
2.7%
|
-
|
3.0%
|
|
2.0%
|
||
Expected volatility
|
|
40%
|
|
40%
|
|
44%
|
Title of Plan
|
|
Total Shares of Common Stock Authorized
|
|
Total Shares of Common Stock Issued
|
|
Total Shares of Common Stock Available for Grant
|
|||
|
|
|
|
|
|
|
|||
2005 Equity Incentive Plan
|
|
26,200,000
|
|
|
15,889,993
|
|
|
10,310,007
|
|
|
|
Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|||||||
Outstanding at beginning of year
|
|
6,908
|
|
|
$
|
2.76
|
|
|
9.1
|
|
$
|
1,099
|
|
Granted
|
|
5,796
|
|
|
$
|
3.58
|
|
|
|
|
|
||
Forfeited
|
|
(1,052
|
)
|
|
$
|
3.27
|
|
|
|
|
|
||
Outstanding at end of year
|
|
11,652
|
|
|
$
|
3.12
|
|
|
8.5
|
|
$
|
3,473
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at end of year
|
|
3,154
|
|
|
$
|
2.77
|
|
|
8.1
|
|
$
|
1,526
|
|
|
2019
|
|||||
|
Number of shares
|
|
Weighted-average grant-date fair value per share
|
|||
|
(in thousands)
|
|
|
|||
Unvested at beginning of year
|
723
|
|
|
$
|
2.79
|
|
Awards granted
|
917
|
|
|
$
|
3.62
|
|
Awards vested
|
(519
|
)
|
|
$
|
2.79
|
|
Withheld related to net settlement
|
(64
|
)
|
|
$
|
2.78
|
|
Forfeited
|
(124
|
)
|
|
$
|
3.18
|
|
Unvested at end of year
|
933
|
|
|
$
|
3.56
|
|
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||||||
(in thousands)
|
Medical Devices
|
|
Pharmaceutical
|
|
Medical Devices
|
|
Pharmaceutical
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Primary geographical markets:
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
10,155
|
|
|
$
|
26,034
|
|
|
$
|
7,425
|
|
|
$
|
41,900
|
|
Europe
|
3,438
|
|
|
22,816
|
|
|
2,451
|
|
|
25,259
|
|
||||
Asia
|
11,536
|
|
|
6,243
|
|
|
7,136
|
|
|
13,637
|
|
||||
Other
|
433
|
|
|
—
|
|
|
377
|
|
|
—
|
|
||||
Total revenue from contracts with customers 1
|
$
|
25,562
|
|
|
$
|
55,093
|
|
|
$
|
17,389
|
|
|
$
|
80,796
|
|
(in thousands)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Receivables, current and non-current, net
|
|
$
|
10,777
|
|
|
$
|
20,655
|
|
Contract assets
|
|
$
|
3,512
|
|
|
$
|
2,595
|
|
Contract liabilities
|
|
$
|
4,024
|
|
|
$
|
8,938
|
|
(in thousands)
|
|
Medical Devices
|
|
Pharmaceutical
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Contract assets at December 31, 2018
|
|
$
|
—
|
|
|
$
|
2,595
|
|
|
$
|
2,595
|
|
Contract assets recognized
|
|
—
|
|
|
12,259
|
|
|
12,259
|
|
|||
Payments received
|
|
—
|
|
|
(11,342
|
)
|
|
(11,342
|
)
|
|||
Contract assets at December 31, 2019
|
|
$
|
—
|
|
|
$
|
3,512
|
|
|
$
|
3,512
|
|
(in thousands)
|
|
Medical Devices
|
|
Pharmaceutical
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Contract liabilities at December 31, 2018
|
|
$
|
1,167
|
|
|
$
|
7,771
|
|
|
$
|
8,938
|
|
Additions
|
|
916
|
|
|
2,123
|
|
|
3,039
|
|
|||
Amounts recognized in revenue
|
|
(1,008
|
)
|
|
(6,945
|
)
|
|
(7,953
|
)
|
|||
Contract liabilities at December 31, 2019
|
|
$
|
1,075
|
|
|
$
|
2,949
|
|
|
$
|
4,024
|
|
|
|
Twelve months ended
|
|
|
|
|
||||||
(in thousands)
|
|
December 31, 2020
|
|
Thereafter
|
|
Total
|
||||||
|
|
|
|
|
|
|
||||||
Pharmaceutical product sales
|
|
$
|
2,326
|
|
|
$
|
—
|
|
|
$
|
2,326
|
|
Medical device sales
|
|
$
|
5,473
|
|
|
$
|
6,280
|
|
|
$
|
11,753
|
|
Revenues by segment
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Medical Devices
|
|
$
|
30,742
|
|
|
$
|
24,652
|
|
Strategic Positions
|
|
—
|
|
|
—
|
|
||
Pharmaceutical
|
|
55,093
|
|
|
80,796
|
|
||
Income Generating Assets
|
|
(31,078
|
)
|
|
92,662
|
|
||
Total revenues
|
|
$
|
54,757
|
|
|
$
|
198,110
|
|
(Loss) income by segment
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Medical Devices
|
|
$
|
(5,230
|
)
|
|
$
|
(5,086
|
)
|
Strategic Positions
|
|
28,758
|
|
|
—
|
|
||
Pharmaceutical
|
|
(19,048
|
)
|
|
(98,368
|
)
|
||
Income Generating Assets
|
|
(74,891
|
)
|
|
34,595
|
|
||
Total net (loss) income
|
|
$
|
(70,411
|
)
|
|
$
|
(68,859
|
)
|
Long-lived assets by segment
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Medical Devices
|
|
$
|
2,435
|
|
|
$
|
3,545
|
|
Strategic Positions
|
|
—
|
|
|
—
|
|
||
Pharmaceutical
|
|
2,960
|
|
|
3,682
|
|
||
Income Generating Assets
|
|
125
|
|
|
160
|
|
||
Total long-lived assets
|
|
$
|
5,520
|
|
|
$
|
7,387
|
|
|
|
Year Ended December 31,
|
|||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|
|||
AcelRx
|
|
(104
|
)%
|
|
(1
|
)%
|
|
2
|
%
|
Assertio
|
|
48
|
%
|
|
42
|
%
|
|
52
|
%
|
Biogen
|
|
—
|
%
|
|
2
|
%
|
|
11
|
%
|
LENSAR
|
|
56
|
%
|
|
12
|
%
|
|
5
|
%
|
Noden
|
|
101
|
%
|
|
41
|
%
|
|
22
|
%
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current income tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
3,750
|
|
|
$
|
2,169
|
|
|
$
|
31,338
|
|
State
|
|
2,141
|
|
|
1,029
|
|
|
2,843
|
|
|||
Foreign
|
|
1,677
|
|
|
(4,107
|
)
|
|
529
|
|
|||
Total current
|
|
7,568
|
|
|
(909
|
)
|
|
34,710
|
|
|||
Deferred income tax (benefit) expense
|
|
|
|
|
|
|
||||||
Federal
|
|
(11,062
|
)
|
|
11,497
|
|
|
36,911
|
|
|||
State
|
|
445
|
|
|
1,313
|
|
|
2,591
|
|
|||
Foreign
|
|
—
|
|
|
1,036
|
|
|
(386
|
)
|
|||
Total deferred
|
|
(10,617
|
)
|
|
13,846
|
|
|
39,116
|
|
|||
Total provision
|
|
$
|
(3,049
|
)
|
|
$
|
12,937
|
|
|
$
|
73,826
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Tax at U.S. statutory rate on (loss) income before income taxes
|
|
$
|
(15,485
|
)
|
|
$
|
(11,744
|
)
|
|
$
|
64,589
|
|
Change in valuation allowance
|
|
5,570
|
|
|
11,226
|
|
|
1,807
|
|
|||
State taxes
|
|
2,149
|
|
|
1,376
|
|
|
1,496
|
|
|||
Change in uncertain tax positions
|
|
1,513
|
|
|
809
|
|
|
681
|
|
|||
Foreign income
|
|
—
|
|
|
1,048
|
|
|
3,231
|
|
|||
Foreign rate differential
|
|
1,603
|
|
|
8,936
|
|
|
1,356
|
|
|||
Change in tax rate reform
|
|
—
|
|
|
—
|
|
|
716
|
|
|||
True-ups
|
|
249
|
|
|
939
|
|
|
—
|
|
|||
Other
|
|
1,352
|
|
|
347
|
|
|
(50
|
)
|
|||
Total
|
|
$
|
(3,049
|
)
|
|
$
|
12,937
|
|
|
$
|
73,826
|
|
|
|
December 31,
|
||||||
(in thousands)
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
19,789
|
|
|
$
|
11,713
|
|
Research and other tax credits
|
|
1,448
|
|
|
1,580
|
|
||
Intangible assets
|
|
—
|
|
|
2,203
|
|
||
Stock-based compensation
|
|
1,781
|
|
|
1,130
|
|
||
Accruals
|
|
1,969
|
|
|
2,362
|
|
||
Debt modifications
|
|
7,189
|
|
|
4,661
|
|
||
Capital loss carryforward
|
|
1,213
|
|
|
1,866
|
|
||
Other
|
|
9,609
|
|
|
6,642
|
|
||
Total deferred tax assets
|
|
42,998
|
|
|
32,157
|
|
||
Valuation allowance
|
|
(22,143
|
)
|
|
(13,271
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
|
20,855
|
|
|
18,886
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Debt modifications
|
|
(308
|
)
|
|
(2,981
|
)
|
||
Intangible assets
|
|
(20,720
|
)
|
|
(28,214
|
)
|
||
Other
|
|
(311
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
|
(21,339
|
)
|
|
(31,195
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(484
|
)
|
|
$
|
(12,309
|
)
|
|
|
December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at the beginning of the year
|
|
$
|
80,783
|
|
|
$
|
79,179
|
|
|
$
|
59,429
|
|
Increases related to tax positions from prior fiscal years
|
|
3,927
|
|
|
1,604
|
|
|
783
|
|
|||
Increases related to tax positions taken during current fiscal year
|
|
—
|
|
|
—
|
|
|
18,967
|
|
|||
Decreases related to tax positions from prior fiscal years
|
|
(497
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at the end of the year
|
|
$
|
84,213
|
|
|
$
|
80,783
|
|
|
$
|
79,179
|
|
Net (Loss) Income per Basic and Diluted Share
|
Year Ended December 31,
|
||||||||||
(in thousands, except per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator
|
|
|
|
|
|
||||||
(Loss) income attributable to the PDL’s stockholders used to compute net (loss) income per basic and diluted share
|
$
|
(70,411
|
)
|
|
$
|
(68,859
|
)
|
|
$
|
110,748
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
||||||
Total weighted-average shares used to compute net (loss) income attributable to PDL's stockholders, per basic share
|
118,631
|
|
|
145,669
|
|
|
155,394
|
|
|||
Restricted stock outstanding
|
—
|
|
|
—
|
|
|
863
|
|
|||
Shares used to compute net (loss) income attributable to PDL’s stockholders, per diluted share
|
118,631
|
|
|
145,669
|
|
|
156,257
|
|
|||
|
|
|
|
|
|
||||||
Net (loss) income attributable to PDL’s stockholders, per share - basic
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.71
|
|
Net (loss) income attributable to PDL’s stockholders, per share - diluted
|
$
|
(0.59
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.71
|
|
(in thousands)
|
|
Amount
|
||
|
|
|
||
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
|
|
|
|
Three Months Ended
|
||||||||||||||
(in thousands, except per share data)
|
|
December 31,
2019
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
||||||||
Total revenues
|
|
$
|
(5,795
|
)
|
|
$
|
44,165
|
|
|
$
|
(22,526
|
)
|
|
$
|
38,913
|
|
Net (loss) income attributable to PDL’s stockholders
|
|
$
|
(54,888
|
)
|
|
$
|
(17,784
|
)
|
|
$
|
(4,419
|
)
|
|
$
|
6,680
|
|
Net (loss) income per basic share
|
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
Net (loss) income per diluted share
|
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.05
|
|
|
|
Three Months Ended
|
||||||||||||||
(in thousands, except per share data)
|
|
December 31,
2018
|
|
September 30,
2018
|
|
June 30,
2018
|
|
March 31,
2018
|
||||||||
Total revenues
|
|
$
|
45,119
|
|
|
$
|
67,898
|
|
|
$
|
46,575
|
|
|
$
|
38,518
|
|
Net income (loss) attributable to PDL’s stockholders
|
|
$
|
16,279
|
|
|
$
|
25,556
|
|
|
$
|
(112,296
|
)
|
|
$
|
1,602
|
|
Net income (loss) per basic share
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
(0.76
|
)
|
|
$
|
0.01
|
|
Net income (loss) per diluted share
|
|
$
|
0.11
|
|
|
$
|
0.18
|
|
|
$
|
(0.76
|
)
|
|
$
|
0.01
|
|
(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#
|
|
|
|
10.1*
|
|
|
|
10.2*
|
|
|
|
10.3*
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
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#*
|
|
|
|
10.72#*
|
|
|
|
10.73#*
|
|
|
|
10.74#*
|
|
|
|
10.75#*
|
|
|
|
10.76#*
|
|
|
|
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/ DOMINIQUE MONNET
|
|
|
|
(Dominique Monnet)
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
March 11, 2020
|
|
Signature
|
Title
|
Date
|
|
|
|
/S/ DOMINIQUE MONNET
|
President and Chief Executive Officer
(Principal Executive Officer)
|
March 11, 2020
|
(Dominique Monnet)
|
|
|
|
|
|
/S/ EDWARD A. IMBROGNO
|
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
March 11, 2020
|
(Edward A. Imbrogno)
|
|
|
|
|
|
ALAN BAZAAR
|
Director
|
March 11, 2020
|
(Alan Bazaar)
|
|
|
|
|
|
/S/ DAVID GRYSKA
|
Director
|
March 11, 2020
|
(David Gryska)
|
|
|
|
|
|
/S/ NATASHA A. HERNDAY
|
Director
|
March 11, 2020
|
(Natasha A. Hernday)
|
|
|
|
|
|
/S/ JOHN P. MCLAUGHLIN
|
Director
|
March 11, 2020
|
(John P. McLaughlin)
|
|
|
|
|
|
/S/ ELIZABETH O’FARRELL
|
Director
|
March 11, 2020
|
(Elizabeth O’Farrell)
|
|
|
|
|
|
/S/ PAUL W. SANDMAN
|
Director
|
March 11, 2020
|
(Paul W. Sandman)
|
|
|
|
|
|
/S/ SHLOMO YANAI
|
Director
|
March 11, 2020
|
(Shlomo Yanai)
|
|
|
•
|
a provision in our charter that our board of directors will be a classified board pursuant to which one-third of our directors will be elected each year to serve for a three-year term;
|
•
|
a bylaw limiting the persons who may call special meetings of stockholders to our board of directors; and
|
•
|
bylaws establishing an advance written notice procedure for stockholders seeking to nominate candidates for election to the board of directors or for proposing matters which can be acted upon at stockholders’ meetings.
|
•
|
before that person became an interested stockholder, our board of directors approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination;
|
•
|
upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding stock held by persons who are both directors and officers of our corporation or by certain employee stock plans; or
|
•
|
on or following the date on which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least 66 2/3% of our outstanding voting stock excluding shares held by the interested stockholder.
|
LANDLORD
|
|
TENANT
|
Mountain Bluebird Investments, LLC
A Nevada limited liability company
By: /s/ James DeMartini
Name: James DeMartini
Its: Manager
|
|
PDL BioPharma, Inc.
A Delaware corporation
By: /s/ Dominique Monnet
Name: Dominique Monnet
Its: President and CEO
|
PDL BIOPHARMA, INC.
|
|
PARTICIPANT
|
||
|
|
|
|
|
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
|
|
|
|
|
|
|
Date:
|
|
|
Date:
|
|
1.
|
Definitions and Construction.
|
|
|
|
|
|
|
Date of Grant:
|
|
|
|
|
|
|
|
|
|
Number of Option Shares:
|
|
|
|
|
|
|
|
|
|
Exercise Price per Share:
|
|
|
|
|
|
|
|
|
|
Total Shares Purchased:
|
|
|
|
|
|
|
|
|
|
Total Exercise Price (Total Shares X Price per Share)
|
$
|
|
|
|
|
|
|
|
|
Cash:
|
$
|
|
|
|
|
|
|
|
|
Check:
|
$
|
|
|
|
|
|
|
|
|
Other:
|
|
Contact Plan Administrator
|
|
My address is:
|
|
|
|
|
|
|
|
|
|
|
|
My Social Security Number is:
|
|
|
|
Very truly yours,
|
|
|
|
|
|
(Signature)
|
Receipt of the above is hereby acknowledged.
|
|
||
|
|
|
|
PDL BIOPHARMA, INC.
|
|
||
|
|
|
|
By:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
Dated:
|
|
|
|
PDL BIOPHARMA, INC.
|
|
PARTICIPANT
|
||
By:
|
|
|
By:
|
|
Print Name:
|
|
|
Print Name:
|
|
Title:
|
|
|
|
|
|
|
|
|
|
Date:
|
|
|
Date:
|
|
Participant:
|
|
|
|
Original Date of Grant:
|
|
|
|
Number of Option Shares Granted:
|
|
|
|
Exercise Price at Date of Grant:
|
|
|
|
Option Expiration Date:
|
|
|
|
Capitalization Adjustment Exercise Price Supplement:
|
Where a Change in Control has occurred which is the result of the stockholders of the Company or the Board having approved a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, and the Company declares one or more distributions in furtherance of such dissolution or liquidation, consistent with Section 10(a) of the Plan, vesting of the Options subject to this notice shall accelerate as of the date of such Change in Control and the herein referenced Options shall become immediately vested, and thereafter, the Exercise Price of the herein referenced Option shall be reduced on a dollar-for-dollar basis with each distribution paid to the Company’s shareholders until the Exercise Price reaches the par value of the Shares subject to the herein referenced Option.
|
|
|
Exercise Date Supplement:
|
Notwithstanding Section 7 of the Stock Option Agreement, where a Change in Control has occurred which is the result of the stockholders of the Company or the Board having approved a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, consistent with Section 10(b) of the Plan, the Option may be exercised at any time until the later of the date of dissolution or liquidation of the Company, provided that, in the event that Participant resigns without good reason (as defined in any agreement with the Company), Participant shall be entitled to exercise the Options granted herein for a period of three (3) months from resignation.
|
1.
|
Definitions and Construction.
|
|
|
|
|
|
|
Date of Grant:
|
|
September 11, 2017
|
|
|
|
|
|
|
|
Number of Option Shares:
|
|
|
|
|
|
|
|
|
|
Exercise Price per Share:
|
|
|
|
|
|
|
|
|
|
Total Shares Purchased:
|
|
|
|
|
|
|
|
|
|
Total Exercise Price (Total Shares X Price per Share)
|
$
|
|
|
|
|
|
|
|
|
Cash:
|
$
|
|
|
|
|
|
|
|
|
Check:
|
$
|
|
|
|
|
|
|
|
|
Other:
|
|
Contact Plan Administrator
|
|
My address is:
|
|
|
|
|
|
|
|
|
|
|
|
My Social Security Number is:
|
|
|
|
Very truly yours,
|
|
|
|
|
|
(Signature)
|
Receipt of the above is hereby acknowledged.
|
|
||
|
|
|
|
PDL BIOPHARMA, INC.
|
|
||
|
|
|
|
By:
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
Dated:
|
|
|
|
Participant:
|
|
|
|
Original Date of Grant:
|
|
|
|
Number of Option Shares Granted:
|
|
|
|
Exercise Price at Date of Grant:
|
|
|
|
Option Expiration Date:
|
|
|
|
Capitalization Adjustment Exercise Price Supplement:
|
Where a Change in Control has occurred which is the result of the stockholders of the Company or the Board having approved a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, and the Company declares one or more distributions in furtherance of such dissolution or liquidation, consistent with Section 10(a) of the Plan, vesting of the Options subject to this notice shall accelerate as of the date of such Change in Control and the herein referenced Options shall become immediately vested, and thereafter, the Exercise Price of the herein referenced Option shall be reduced on a dollar-for-dollar basis with each distribution paid to the Company’s shareholders until the Exercise Price reaches the par value of the Shares subject to the herein referenced Option.
|
|
|
Exercise Date Supplement:
|
Notwithstanding Section 7 of the Stock Option Agreement, where a Change in Control has occurred which is the result of the stockholders of the Company or the Board having approved a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company will otherwise occur, consistent with Section 10(b) of the Plan, the Option may be exercised at any time until the later of the date of dissolution or liquidation of the Company, provided that, in the event that Participant resigns without good reason (as defined in any agreement with the Company), Participant shall be entitled to exercise the Options granted herein for a period of three (3) months from resignation.
|
(a)
|
With respect to vested options, the True-Up Payment shall be payable on the same date that such dividend payments or cash distributions are made to the Company’s shareholders. Following payment of a True-Up Payment to a Participant under this subsection, the Participant will not have any right to any future True-Up Payments or any Equitable Adjustment with respect to the stock options for which the True-Up Payment is made.
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(b)
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With regard to unvested options, the True-Up Payment shall further include an amount corresponding to any cash dividends or other distributions declared after the exercise price thereof is reduced to the par value of the shares underlying the option, and shall be payable upon vesting of such options. Following payment of a True-Up Payment to a Participant under this subsection, the Participant shall not have any right to any future True-Up Payments or any Equitable Adjustment with respect to the stock options for which the True-Up Payment is made.
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(c)
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For the avoidance of doubt, regardless of whether a Participant has previously received a True-Up Payment with regard to any stock option grant, with regard to a grant of stock options for which a True-Up Payment has not yet been made, the Participant shall continue to be entitled to a True-Up Payment.
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(a)
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Where the option corresponding to the Post-Dissolution Option Right has an exercise price immediately prior to dissolution (the “Post-Dissolution Exercise Price”) which is greater than $0.01, and the cash dividend or other distribution is less than the Post-Dissolution Exercise Price, the holder shall not receive a payment, but the holder’s Post-Dissolution Exercise Price shall be reduced on a dollar-for-dollar basis in the amount of the cash dividend or other distribution;
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(b)
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Where the option corresponding to the Post-Dissolution Option Right has a Post-Dissolution Exercise Price which is greater than $0.01, and the cash dividend or other distribution exceeds the Post-Dissolution Exercise Price, the Participant holding such Post-Dissolution Option Right shall have the right to receive a lump sum cash payment in an amount equal to the number of Post-Dissolution Option Rights held multiplied by the per share amount of the portion of the cash dividend or other distribution that exceeds the Post-Dissolution Exercise Price minus $0.01, payable on the date of such cash dividend or other distribution;
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(c)
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In the event further cash dividends or other distributions are made after the lump sum cash payment made in accordance with Paragraph 7(b) above is made, or after the Post-Dissolution Exercise Price has been reduced to $0.01, the Participant holding a Post-Dissolution Option Right shall have the right to a further lump sum payment(s) equal to the number of Post-Dissolution Option Rights held multiplied by the per share amount of such further cash dividend(s) or other distribution(s), payable on the date of such cash dividend or other distribution.
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NAME OF SUBSIDIARY OR ORGANIZATION
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STATE OF INCORPORATION OR
FORMATION |
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Depo Sub Manager, LLC
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Delaware
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DFM, LLC
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Delaware
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LENSAR, Inc.
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Delaware
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Noden Pharma DAC
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Republic of Ireland
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Noden Pharma Schweiz GmbH
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Basel
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Noden Pharma USA, Inc.
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Delaware
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PDL Investment Holdings, LLC
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Delaware
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/s/ DOMINIQUE MONNET
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Dominique Monnet
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President and Chief Executive Officer
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(Principal Executive Officer)
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/s/ EDWARD A. IMBROGNO
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Edward A. Imbrogno
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Vice President and Chief Financial Officer
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(Principal Financial Officer)
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By:
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/s/ DOMINIQUE MONNET
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Dominique Monnet
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President and Chief Executive Officer
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(Principal Executive Officer)
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By:
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/s/ EDWARD A. IMBROGNO
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Edward A. Imbrogno
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Vice President and Chief Financial Officer
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(Principal Financial Officer)
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(1)
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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.
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