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

Second

Quarter 2016 Financial Results

INCLINE VILLAGE, NV,

August 4, 2016

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

second

quarter ended

June 30, 2016

including:

Total revenues of

$21.0 million

$124.2 million

for the three and six months ended June 30, 2016, respectively.

GAAP diluted EPS of

GAAP net income of

$4.1 milli on

$60.0 million

Non-GAAP diluted earnings per share (EPS) of

Non-GAAP net income of

$15.1 million

$100.2 million

The largest component of the difference in non-GAAP measure compared to GAAP is the exclusion of mark-to-market reduction in fair value of our investments in royalty rights. A full reconciliation of all components of the GAAP to non-GAAP quarterly financial results can be found in Table 4 at the end of this release.

Revenue Highlights

for the three months ended

included:

Royalties from PDL's licensees to the Queen et al. patents of

$14.2 million

, which consisted of royalties earned on sales of Tysabri

under a license agreement associated with the Queen et al. patents;

Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of negative

$0.9 million

, which consisted of the change in estimated fair value of our royalty right assets and primarily related to the Depomed, Inc., University of Michigan and Viscogliosi Brothers, LLC royalty rights acquisitions;

Interest revenue from notes receivable financings to late-stage healthcare companies of

$7.3 million

; and

License and other revenues of

$0.3 million

decreased

85 percent

, when compared to the same period in

The decrease in royalties from PDL's licensees to the Queen et al. patents is due to the expiration of the patent license agreement with Genentech, Inc. PDL continues to receive Queen et al. patent royalties on sales of Tysabri based on the sales of product manufactured prior to patent expiry, the amount and timing of which is uncertain.

The decrease in royalty rights - change in fair value was driven by the

$7.4 million

decrease in the fair value of the Depomed royalty rights assets primarily as a result of higher gross-to-net adjustments for Glumetza, and a

$7.6 million

decrease in the fair value of the University of Michigan royalty right asset as a result of a delay in national pricing and reimbursement decisions in the European Union and Japan.

PDL received

$14.7 million

in net cash royalty payments and milestone payments from its acquired royalty rights in the

quarter of 2016, compared to

$1.2 million

for the same period of

. Of these payments from its acquired royalty rights,

$6.0 million

was related to the FDA approval milestone for Jentadueto

The decrease in interest revenues was primarily due to ceasing to accrue interest due from Direct Flow Medical, Inc. as a result of the loan being impaired.

57 percent

for the six months ended

$55.3 million

decrease in the fair value of the Depomed royalty rights assets, and a

decrease in the fair value of the University of Michigan royalty right asset.

$31.9 million

in net cash royalty payments and milestone payments from its acquired royalty rights in the six months ended June 30, 2016, compared to

$2.1 million

The decrease in interest revenues was primarily due to reduced interest from Direct Flow Medical, Inc.

Operating Expense Highlights

Operating expenses were

$9.9 million

. The increase in operating expenses for the three months ended June 30, 2016, as compared to the same period in 2015, was primarily a result of acquisition-related costs of $3.0 million for the Noden Pharma DAC (Noden) transactions which were advanced to Noden, and are expected to be repaid to PDL by year end through an intercompany arrangement.

$19.8 million

. The increase in operating expenses for the six months ended June 30, 2016, as compared to the same period in 2015, was a result of the acquisition-related costs from the Noden transactions.

Other Financial Highlights

PDL had cash, cash equivalents, and investments of

$190.9 million

$220.4 million

at December 31, 2015.

was primarily attributable to the restriction of

$105.9 million

in cash for the Noden transactions, repayment of the March 2015 Term Loan for

$25.0 million

, payment of dividends of

$16.4 million

, and an additional note receivable purchase of

$5.0 million

, partially offset by proceeds from royalty right payments of

and cash generated by operating activities of

$94.8 million

Net cash provided by operating activities in the six months ended

, compared with

$155.9 million

in the same period in

Recent Developments

Noden Transactions

The acquisition of Tekturna

by Noden and PDL’s funding of the equity investment in Noden occurred on July 1, 2016.

PDL expects to make equity contributions to Noden Pharma DAC and an affiliate totaling $107 million in the first year of the transaction, which includes an initial equity investment of $75 million and an additional $32 million equity contribution commitment which will be made on the one-year anniversary of the closing of the transaction. In addition, PDL provided Noden with a loan and loan commitments of up to an aggregate of $75 million, the majority of which PDL expects will be repaid in the next 45 days once Noden secures a debt facility from a third party. PDL also may contribute additional amounts of funding depending on the total amount of debt obtained by Noden, and as needed for specified milestone payments or other purposes.

Noden closed its transaction relating to a purchase agreement

with Novartis AG (Novartis) to acquire exclusive worldwide rights to manufacture, market, and sell the branded prescription

medicine product sold under the name Tekturna

and Tekturna HCT

in the United States and Rasilez

and Rasilez HCT

in the rest

of the world. The product's active ingredient is aliskiren, which is indicated for the treatment of hypertension. The

drug was previously marketed by Novartis and had global sales in 2015 of $154 million.

PDL has a majority equity interest ownership in Noden. Given this majority ownership by PDL, the financial statements of Noden will be consolidated with PDL beginning in Q3 2016, and is expected to be accretive to PDL's cash earnings.

ARIAD Royalty Agreement Second Tranche Payment

On July 28, 2016, PDL funded the second tranche of $50.0 million due on the first anniversary of the closing date under the terms of the ARIAD Royalty Agreement.

As a result of the second tranche payment, PDL’s royalty percentage will increase to 5.0% of the U.S. and European net revenues of Iclusig and 5.0% of the payments ARIAD receives elsewhere in the world until December 31, 2018.  Beginning January 1, 2019 and thereafter, the royalty rate will increase to 6.5% in all jurisdictions.

Dividend Policy

On August 3, 2016, the PDL board of directors decided to eliminate the quarterly cash dividend payment.

Conference Call and Webcast Details

PDL will hold a conference call to discuss financial results at 4:30 p.m. Eastern Time today, August 4, 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 56339819. 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 August 11, 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 56339819.

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 seeks to acquire pharmaceutical products through equity investments and also provide growth capital and financing solutions to late-stage public and private healthcare companies, including immediate financial monetization of royalty streams to companies, academic institutions, and inventors. PDL has committed over $1.4 billion and funded approximately $1.1 billion 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 and managing 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 has received 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 on

February 23, 2016, as updated by subsequent periodic 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 INCOME DATA

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Six Months Ended

Revenues

Royalties from Queen et al. patents

14,232

116,884

135,687

244,694

Royalty rights - change in fair value

12,216

(27,957

23,578

16,307

19,500

21,047

138,066

124,171

287,772

Operating Expenses

General and administrative expenses

16,797

15,095

Acquisition-related costs

Total operating expenses

19,756

Operating income

11,137

130,637

104,415

272,677

Non-operating expense, net

Interest and other income, net

Interest expense

(4,461

(7,199

(9,011

(15,809

Total non-operating expense, net

(4,332

(7,078

(8,769

(15,602

Income before income taxes

123,559

95,646

257,075

Income tax expense

45,295

35,611

94,313

Net income

78,264

60,035

162,762

Net income per share

Diluted

Shares used to compute income per basic share

163,791

163,544

163,729

163,188

Shares used to compute income per diluted share

164,029

165,384

163,920

167,376

Cash dividends declared per common share

TABLE 2

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

Cash, cash equivalents and investments

190,854

220,352

Total notes receivable

372,182

364,905

Total royalty rights - at fair value

339,338

399,204

Total assets

1,049,191

1,012,205

Total term loan payable

24,966

Total convertible notes payable

232,847

228,862

Total stockholders' equity

738,652

695,952

TABLE 3

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW DATA

Adjustments to reconcile net income to net cash provided by (used in) operating activities

25,969

(7,263

Changes in assets and liabilities

94,752

155,900

TABLE 4

GAAP to NON-GAAP RECONCILIATION:

NET INCOME AND DILUTED EARNINGS PER SHARE

(In thousands, except per share amount)

A reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows:

GAAP net income as reported

Adjustments to Non-GAAP net income (as detailed below)

10,984

(5,694

40,164

(10,734

15,132

72,570

100,199

152,028

A reconciliation between diluted earnings per share on a GAAP basis and on a non-GAAP basis is as follows:

GAAP earnings per share - Diluted

Non-GAAP earnings per share - Diluted

An itemized reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows:

Adjustments:

Mark-to-market adjustment to fair value assets

15,543

(11,063

59,866

(21,487

Non-cash interest revenues

(1,303

(2,276

(3,408

Non-cash stock-based compensation expense

Non-cash debt offering costs

Mark-to-market adjustment on warrants held

Income tax effect related to above items

(7,023

(23,791

Total adjustments

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“ and “Non-GAAP earnings per share - Diluted” are not based on any standardized methodology prescribed by GAAP and represent GAAP net income and GAAP earnings per share - diluted 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, and to adjust (6) 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.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

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