PR Newswire
INCLINE VILLAGE, Nev., Nov. 6, 2018
INCLINE VILLAGE, Nev., Nov. 6, 2018 /PRNewswire/ -- PDL BioPharma, Inc. ("PDL" or "the Company") (NASDAQ: PDLI) reports financial results for the three and nine months ended September 30, 2018 including:
Third Quarter Financial Highlights
"Our third quarter revenues increased 8% from the prior year to $68 million, reflecting higher product sales and $42 million in royalty rights revenue that included an increase in fair value of the royalty rights from Assertio Therapeutics, formerly known as Depomed, as a result of our purchase of the remaining interest in royalty payments of this asset," said John P. McLaughlin, CEO of PDL. "We benefitted from a particularly strong showing during the quarter from the type 2 diabetes drug Glumetza®, and I'm pleased to report that overall the Assertio asset has performed substantially better than we expected. With Tekturna®, we are cautiously optimistic about the transition to a non-personal promotion campaign from a direct sales model, which we completed mid-way through the third quarter. Tekturna sales remained stable throughout the quarter, with the new sales strategy reducing costs and increasing profitability."
"We announced a new $100 million share repurchase program in late September after completing the previous program early in the third quarter," he added. "While to date we have been unable to execute any share buybacks under the new program due to blackout periods, we plan to begin aggressively repurchasing shares once the blackout is lifted."
"After serving as CEO for more than 10 years, I have informed the board of directors of my intention to retire as CEO at year-end 2018 while continuing to serve on the board," said McLaughlin. "It has been a pleasure to serve PDL and its shareholders. I'm gratified to announce our plan for PDL President, Dominique Monnet, to succeed me as CEO effective December 31, 2018 and to simultaneously join the PDL board. Dominique is a seasoned industry veteran with a track record of commercial success in biopharmaceutical development and has been an integral part of our management team for more than a year. I'm confident in Dominique's leadership abilities and am delighted to be transferring the CEO responsibilities to his very capable hands."
Mr. Monnet joined PDL as President in September 2017, bringing more than 30 years of leadership experience in the biotech and pharmaceutical industries. He was instrumental in overseeing global commercialization operations, including successful new product launches, while serving in senior management positions at Alexion Pharmaceuticals, Amgen and Schering-Plough.
"It is a privilege to succeed John as we continue to execute our strategy to accelerate PDL's growth and deliver value to our shareholders," said Monnet. "Under John's leadership, PDL built a very strong balance sheet and an impressive track-record of investments. As a result, we are exceptionally well positioned to pursue exciting acquisition and partnership opportunities and invest and nurture companies and products that have the potential to grow, succeed and return superior shareholder value. I am delighted that John has agreed to remain on the Board, and I look forward to my continued partnership with the teams at PDL, Noden and Lensar."
Revenue Highlights
Operating Expense Highlights
Stock Repurchase Programs
Other Financial Highlights
Conference Call and Webcast Details
PDL will hold a conference call to discuss financial results and provide a business update at 4:30 p.m. Eastern time today, November 6, 2018. Slides to accompany the conference call are available in the Investor Relations section of www.pdl.com.
To access the live conference call via phone, please dial 844-535-4071 from the U.S. and Canada or 706-679-2458 internationally. The conference ID is 6461756. A telephone replay will be available beginning approximately one hour after the call through one week following the call and may be accessed by dialing 855-859-2056 from the U.S. and Canada or 404-537-3406 internationally. The replay passcode is 6461756.
To access the live and subsequently archived webcast of the conference call, go to the Company's website at www.pdl.com and go to the Investor Relations section and select "Events & Presentations."
About PDL BioPharma, Inc.
We seek to provide a significant return for our stockholders by acquiring and managing a portfolio of companies, products, royalty agreements and debt facilities in the biotechnology, pharmaceutical and medical device industries. In 2012 we began providing alternative sources of capital through royalty monetizations and debt facilities, and in 2016 we began acquiring commercial-stage products and launching specialized companies dedicated to the commercialization of these products. To date, we have consummated 17 of such transactions, of which nine are active and outstanding. We have one debt transaction outstanding, representing deployed capital of $20.0 million: CareView; we have one hybrid royalty/debt transaction outstanding, representing deployed capital of $44.0 million: Wellstat Diagnostics; and we have five royalty transactions outstanding, representing deployed capital of $416.1 million, respectively: KYBELLA®, AcelRx, University of Michigan, Viscogliosi Brothers and Depomed (now Assertio Therapeutics). Our equity and loan investments in the Noden Products represent deployed capital of $191.2 million, respectively, and our converted equity and loan investment in LENSAR represents deployed capital of $40.0 million.
NOTE: PDL, PDL BioPharma, the PDL logo and the PDL BioPharma logo are trademarks or registered trademarks of, and are proprietary, to PDL BioPharma, Inc. which reserves all rights therein.
Forward-looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those, express or implied, in these forward-looking statements. Important factors that could impair the value of the Company's assets and business are disclosed in the risk factors contained in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2018 and subsequent filings. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.
TABLE 1 | ||||||||||||||||
PDL BIOPHARMA, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | ||||||||||||||||
Royalties from Queen et al. patents | $ | 533 | $ | 1,443 | $ | 4,534 | $ | 31,884 | ||||||||
Royalty rights - change in fair value | 42,184 | 35,353 | 66,117 | 132,224 | ||||||||||||
Interest revenue | 754 | 6,051 | 2,254 | 16,968 | ||||||||||||
Product revenue, net | 24,387 | 20,067 | 79,472 | 51,477 | ||||||||||||
License and other | 40 | (165) | 614 | 19,471 | ||||||||||||
Total revenues | 67,898 | 62,749 | 152,991 | 252,024 | ||||||||||||
Operating Expenses | ||||||||||||||||
Cost of product revenue (excluding intangible amortization and impairment) | 11,926 | 5,565 | 37,016 | 12,632 | ||||||||||||
Amortization of intangible assets | 1,577 | 6,275 | 14,254 | 18,438 | ||||||||||||
General and administrative expenses | 13,211 | 11,989 | 39,401 | 35,853 | ||||||||||||
Sales and marketing | 3,469 | 4,994 | 14,367 | 11,194 | ||||||||||||
Research and development | 672 | 605 | 2,149 | 6,652 | ||||||||||||
Impairment of intangible assets | — | — | 152,330 | — | ||||||||||||
Change in fair value of anniversary payment and contingent consideration | 302 | 700 | (22,433) | 3,349 | ||||||||||||
Total operating expenses | 31,157 | 30,128 | 237,084 | 88,118 | ||||||||||||
Operating income (loss) | 36,741 | 32,621 | (84,093) | 163,906 | ||||||||||||
Non-operating expense, net | ||||||||||||||||
Interest and other income, net | 1,581 | 238 | 4,871 | 726 | ||||||||||||
Interest expense | (2,866) | (5,096) | (9,262) | (15,082) | ||||||||||||
Gain (loss) on bargain purchase | — | (2,276) | — | 3,995 | ||||||||||||
Total non-operating expense, net | (1,285) | (7,134) | (4,391) | (10,361) | ||||||||||||
Income (loss) before income taxes | 35,456 | 25,487 | (88,484) | 153,545 | ||||||||||||
Income tax expense (benefit) | 9,900 | 4,755 | (3,346) | 65,180 | ||||||||||||
Net income (loss) | 25,556 | 20,732 | (85,138) | 88,365 | ||||||||||||
Less: Net loss attributable to noncontrolling interests | — | — | — | (47) | ||||||||||||
Net income (loss) attributable to PDL's shareholders | $ | 25,556 | $ | 20,732 | $ | (85,138) | $ | 88,412 | ||||||||
Net income (loss) per share | ||||||||||||||||
Basic | $ | 0.18 | $ | 0.14 | $ | (0.58) | $ | 0.56 | ||||||||
Diluted | $ | 0.18 | $ | 0.14 | $ | (0.58) | $ | 0.56 | ||||||||
Shares used to compute income per basic share | 143,171 | 151,146 | 147,159 | 156,802 | ||||||||||||
Shares used to compute income per diluted share | 144,224 | 152,317 | 147,159 | 157,529 |
TABLE 2 | ||||||||
PDL BIOPHARMA, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEET DATA | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
Cash, cash equivalents and short-term investments | $ | 400,984 | $ | 532,114 | ||||
Total notes receivable | $ | 70,966 | $ | 70,737 | ||||
Total royalty rights - at fair value | $ | 378,291 | $ | 349,223 | ||||
Total assets | $ | 984,427 | $ | 1,243,123 | ||||
Total convertible notes payable | $ | 122,780 | $ | 243,481 | ||||
Total stockholders' equity | $ | 739,387 | $ | 845,890 |
TABLE 3 | ||||||||||||||||
PDL BIOPHARMA, INC. | ||||||||||||||||
GAAP to NON-GAAP RECONCILIATION: | ||||||||||||||||
NET INCOME AND DILUTED EARNINGS PER SHARE | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
A reconciliation between net income (loss) on a GAAP basis and on a non-GAAP basis is as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP net income (loss) attributed to PDL's shareholders as reported | $ | 25,556 | $ | 20,732 | $ | (85,138) | $ | 88,412 | ||||||||
Adjustments to Non-GAAP net income (loss) (as detailed below) | (13,249) | 975 | 126,925 | (14,730) | ||||||||||||
Non-GAAP net income attributed to PDL's shareholders | $ | 12,307 | $ | 21,707 | $ | 41,787 | $ | 73,682 | ||||||||
An itemized reconciliation between net income (loss) on a GAAP basis and on a non-GAAP basis is as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP net income (loss) attributed to PDL's shareholders as reported | $ | 25,556 | $ | 20,732 | $ | (85,138) | $ | 88,412 | ||||||||
Adjustments: | ||||||||||||||||
Mark-to-market adjustment to fair value assets | (23,128) | (9,011) | (9,068) | (57,820) | ||||||||||||
Non-cash interest revenues | (79) | (670) | (229) | (823) | ||||||||||||
Non-cash stock-based compensation expense | 2,596 | 939 | 4,814 | 3,014 | ||||||||||||
Non-cash debt offering costs | 1,834 | 2,801 | 5,745 | 8,195 | ||||||||||||
Mark-to-market adjustment on warrants held | (40) | 165 | (114) | 29 | ||||||||||||
Impairment of intangible assets | — | — | 152,330 | — | ||||||||||||
Amortization of intangible assets | 1,577 | 6,275 | 14,254 | 18,438 | ||||||||||||
Mark-to-market adjustment of anniversary payment and contingent consideration | 302 | 700 | (22,433) | 3,349 | ||||||||||||
Income tax effect related to above items | 3,689 | (224) | (18,374) | 10,888 | ||||||||||||
Total adjustments | (13,249) | 975 | 126,925 | (14,730) | ||||||||||||
Non-GAAP net income | $ | 12,307 | $ | 21,707 | $ | 41,787 | $ | 73,682 |
Use of Non-GAAP Financial Measures
We supplement our consolidated financial statements presented on a GAAP basis by providing additional measures which may be considered "non-GAAP" financial measures under applicable SEC rules. We believe that the disclosure of these non-GAAP financial measures provides our investors with additional information that reflects the amounts and financial basis upon which our management assesses and operates our business. These non-GAAP financial measures are not in accordance with generally accepted accounting principles and should not be viewed in isolation or as a substitute for reported, or GAAP, net income, and diluted earnings per share, and are not a substitute for, or superior to, measures of financial performance performed in conformity with GAAP.
"Non-GAAP net income" is not based on any standardized methodology prescribed by GAAP and represent GAAP net income adjusted to exclude (1) mark-to-market adjustments related to the fair value election for our investments in royalty rights presented in our earnings, which include the fair value re-measurement of future discounted cash flows for each of the royalty rights assets we have acquired, (2) non-cash interest revenue from notes receivable (3) stock-based compensation expense, (4) non-cash interest expense related to PDL debt offering costs, (5) mark-to-market adjustments related to warrants held, (6) impairment of intangible assets, (7) amortization of intangible assets, (8) mark-to-market adjustment related to acquisition-related contingent considerations, and to adjust (9) the related tax effect of all reconciling items within our reconciliation of our GAAP to Non-GAAP net income. Non-GAAP financial measures used by PDL may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.
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SOURCE PDL BioPharma, Inc.
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