PDL: Cook Williams Communications, Inc

The following excerpt is from the company's SEC filing.

775-832-8500

360-668-3701

Peter.Garcia@pdl.com

jennifer@cwcomm.org

PDL BioPharma Announces

Fourth

Quarter and Full Year 2015 Financial Results

- Record Annual and Quarterly Revenues Achieved -

- Nine Percent Annual EPS Growth -

INCLINE VILLAGE, NV,

February 22, 2016

– PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today reported financial results for the

fourth

quarter and twelve months ended

December 31, 2015

Total revenues in 2015 increased

two percent

$590.4 million

$581.2 million
< br> in 2014. Revenues for the year ended December 31, 2015 included

$485.2 million

in royalties from PDL's licensees to the Queen et al. patents,

$68.4 million

in net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets, which included approximately $43.4 million in net cash royalty payments,

$36.2 million

in interest revenue from notes receivable debt financings to late-stage healthcare companies, and

$0.7 million

in realized gains from the sale of PDL's investment in AxoGen Inc. common stock. During the years ended December 31, 2015 and 2014, our Queen et al. royalty revenues consisted of royalties and maintenance fees earned on sales of products under license agreements associated with our Queen et al. patents. During the years ended December 31, 2015 and 2014, royalty rights - change in fair value consisted of revenues associated with the change in estimated fair value of our royalty right assets, primarily Depomed, Inc., The Regents of the University of Michigan, Viscogliosi Brothers, LLC, ARIAD Pharmaceuticals Inc. and AcelRx Pharmaceuticals, Inc. The full year 2015 revenue growth over the full year 2014 is driven by increased sales of Perjeta

, Xolair

, and Kadcyla

by PDL's licensees, an increase in the estimated fair value of the acquired royalty rights from the Company's purchase of Depomed's diabetes-related royalties, as well as a foreign exchange gain and lower rebate paid to Novartis AG for Lucentis

, partially offset by decreased interest revenues due to the early payoff of the AxoGen and Durata Therapeutics, Inc. notes receivables.

Total revenues for the fourth quarter of 2015 increased 52 percent, to

$178.1 million

$117.1 million

in the fourth quarter of 2014. Revenues for the fourth quarter of 2015 included

$121.2 million

in royalty payments from PDL's licensees to the Queen et al. patents,

$49.1 million

in net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets, which included approximately $34.4 million in net cash royalty payments,

$7.6 million

$0.1 million

in realized gains from the sale of PDL's investment in AxoGen common stock. The fourth quarter of 2015 revenue growth over the fourth quarter of 2014 is driven by the change in estimated fair value of our royalty right assets, primarily Depomed, Inc.

Operating expenses in 2015 were

$40.1 million

, compared with

$34.9 million

in 2014. Operating expenses in the fourth quarter of 2014 were

$16.5 million

, compared with $17.7 million in 2014. The increase in operating expenses for the year ended December 31, 2015, when compared to the year ended December 31, 2014, was a result of total restructuring costs of $7.9 million in connection with the LENSAR notes receivable extinguishment, which is comprised of a loss on extinguishment of notes receivable of $4.0 million primarily related to a lower estimated fair value of the ALPHAEON Class A common stock, and additional general and administrative expenses of $3.9 million for closing and legal fees related to the LENSAR notes receivable restructuring, and other legal expenses mostly related to $1.2 million in funding the ongoing operation management of Wellstat Diagnostics, partially offset by a decrease in professional services from asset acquisition expenses. The decrease in operating expenses for the quarter ended December 31, 2015, when compared to the quarter ended December 31, 2014, was a result of a decrease in professional services from asset acquisition expenses and a decrease in compensation related expenses,

partially offset by the LENSAR restructuring loss and other closing fees, and an increase for legal expenses mostly related to Wellstat ongoing operation management.

Net income in 2015 was

$332.8 million

per diluted share as compared with net income in 2014 of

$322.2 million

per diluted share. Net income for the fourth quarter of 2015 was

$100.6 million

per diluted share, as compared with net income of $55.1 million in the same period of 2014, or $0.32 per diluted share.

Net cash provided by operating activities in 2015 was

$301.5 million

$292.3 million

in the same period in 2014. PDL had cash, cash equivalents and short-term investments of

$220.4 million

$293.7 million

, respectively. The

was primarily attributable to the extinguishment of convertible notes of

, purchase of royalty rights at fair value of

$115.0 million

, payment of dividends of

$98.3 million

, repayment of a portion of the March 2015 Term Loan of

$75.0 million

, purchase of notes receivable of

$35.2 million

, and payment of debt issuance costs related to the February 2018 Note issuance of

$0.6 million

, partially offset by proceeds from the March 2015 Term Loan of

$100.0 million

, proceeds from royalty rights of

, repayment of notes receivables of

$25.2 million

, sale of investments of

$1.9 million

, and cash generated by operating activities of

Recent Developments

In December 2015, Lion Buyer, a wholly owned subsidiary of ALPHAEON assumed $42.0 million in loans as part of the borrowings under PDL’s prior credit agreement with LENSAR and changed its name to LENSAR, LLC in connection with ALPHAEON's acquisition of substantially all of the assets of LENSAR. In addition, ALPHAEON issued 1.7 million shares of its Class A common stock to PDL for an estimated fair value of $3.84 per share.

In December 2015 and January 2016, PDL and Direct Flow Medical modified the existing credit agreement. PDL funded an additional $5.0 million to Direct Flow Medical in the form of a short-term secured promissory note that we expect will be converted into a loan under the credit agreement with substantially the same interest and payment terms as the existing loans.

PDL's $100.0 million term loan entered into on March 20, 2015 with the Royalty Bank of Canada was repaid with the final principal payment of $25.0 million plus accrued interest paid on February 12, 2016.

On February 18, 2016, PDL was advised that Sanofi and kaléo will terminate their license and development agreement later this year. At that time, all U.S. and Canadian commercial and manufacturing rights to Auvi-Q

will be returned to kaléo, and they intend to evaluate the timing and options for bringing Auvi-Q back to the market. PDL entered into a secured note purchase agreement with Accel 300, a wholly-owned subsidiary of kaléo, which as of December 31, 2015, had a principal balance of $144.8 million due to PDL. An interest reserve account previously set up as part of the note agreement will substantially cover interest payments due to PDL through the end of the second quarter of 2016, and kaléo has indicated that it intends to make payments due to PDL under the note agreement until Auvi-Q is returned to the market.

2016 Dividends

January 26, 2016

, our board of directors declared a quarterly dividend to be paid to our stockholders in the first quarter of 2016 of 

per share of common stock, payable on

March 11, 2016

to stockholders of record on

March 4, 2016

, the record date of the dividend payment. At the same time our board of directors elected to announce its future dividend plans on a quarter by quarter basis, rather than for the full year as was the previous practice, to allow greater flexibility and focus on long term growth. Our board of directors evaluates the financial condition of the Company and considers the economic outlook, profitability, corporate cash flow, the Company’s liquidity needs and the health and stability of credit markets when determining the dividend.

Conference Call Details

PDL will hold a conference call to discuss financial results at 4:30 p.m. Eastern Time today, February 22, 2016.

To access the live conference call via phone, please dial (800) 668-4132 from the United States and Canada or (224) 357-2196 internationally. The conference ID is 44070710. Please dial in approximately 10 minutes prior to the start of the call. A telephone replay will be available beginning approximately one hour after the call through February 29, 2016, and may be accessed by dialing (855) 859-2056 from the United States and Canada or (404) 537-3406 internationally. The replay passcode is 44070710.

To access the live and subsequently archived webcast of the conference call, go to the Company’s website at http://www.pdl.com and go to “Events & Presentations.” Please connect to the website at least 15 minutes prior to the call to allow for any software download that may be necessary.

About PDL BioPharma, Inc.

PDL manages a portfolio of patents and royalty assets, consisting of its Queen et al. patents, license agreements with various biotechnology and pharmaceutical companies, and royalty and other assets acquired. To acquire new income generating assets, PDL provides non-dilutive growth capital and financing solutions to late-stage public and private healthcare companies and offers immediate financial monetization of royalty streams to companies, academic institutions, and inventors. PDL has committed over $1 billion and funded approximately

$937 million

in these investments to date. PDL evaluates its investments based on the quality of the income generating assets and potential returns on investment. PDL is currently focused on acquiring new income generating assets, the management of its intellectual property and income generating assets, and maximizing value for its stockholders.

The Company was formerly known as Protein Design Labs, Inc. and changed its name to PDL BioPharma, Inc. in 2006. PDL was founded in 1986 and is headquartered in Incline Village, Nevada. PDL pioneered the humanization of monoclonal antibodies and, by doing so, enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases for which it receives significant royalty revenue.

PDL BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma, Inc.

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 royalty assets, restrict or impede the ability of the Company to invest in new royalty bearing assets and limit the Company's ability to pay dividends are disclosed in the risk factors contained in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission. 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.

PDL BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME DATA

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Twelve Months Ended

Royalties from Queen et al. patents

121,240

131,880

485,156

486,888

Royalty rights - change in fair value

49,069

(28,065

68,367

45,742

Interest revenue

13,260

36,202

48,020

License and other

178,058

117,075

590,448

581,225

Operating Expenses

General and administrative expenses

12,545

17,726

36,090

34,914

Loss on extinguishment of notes receivable

Total operating expenses

16,524

40,069

Operating income

161,534

99,349

550,379

546,311

Non-operating expense, net

Interest and other income, net

Interest expense

(5,349

(9,441

(27,059

(39,211

Gain (loss) on extinguishment of debt

(6,143

Total non-operating expense, net

(9,333

(20,241

(45,039

Income before income taxes

162,709

90,016

530,138

501,272

Income tax expense

62,135

34,945

197,343

179,028

100,574

55,071

332,795

322,244

Net income per share

Diluted

Shares used to compute income per basic share

163,601

161,174

163,386

158,224

Shares used to compute income per diluted share

163,801

169,863

163,554

173,110

Cash dividends declared per common share

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

Cash, cash equivalents and short-term investments

220,352

293,687

Total notes receivable

364,905

363,212

Total royalty rights - at fair value

399,204

259,244

Total assets

1,016,178

962,350

Total term loan payable

24,966

Total convertible notes payable

232,835

451,724

Total stockholders' equity

695,952

460,437

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW DATA

Adjustments to reconcile net income to net cash used in operating activities

(40,521

(38,598

Changes in assets and liabilities

301,465

292,281

The above information was disclosed in a filing to the SEC. To see the filing, click here. PDL BioPharma next reports earnings on February 22, 2016.

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Other recent filings from the company include the following:

PDL BioPharma's President just picked up 240,200 shares - Sept. 13, 2017
PDL BioPharma's President just declared 0 ownership of the company. - Sept. 13, 2017
Securities to be offered to employees in employee benefit plans - Sept. 12, 2017
PDL: Cook Williams Communications, Inc - Sept. 11, 2017
Current report, items 7.01 and 9.01 - Sept. 11, 2017

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