INCLINE VILLAGE, Nev.,
Aug. 6, 2020 /PRNewswire/ -- PDL
BioPharma, Inc. ("PDL" or "the Company") (Nasdaq: PDLI) reports
financial results for the three and six months ended June 30, 2020 and provides an update on important
milestones achieved in the execution of its monetization plan:
"I am pleased with the significant progress we have made over
the past couple of months in the execution of our monetization
strategy," commented PDL's President and CEO Dominique Monnet. "We continue to focus on
maximizing the net proceeds from the monetization of our assets for
our stockholders, and I believe the actions we have taken so far
have served them well. I would like to thank the PDL Board and
team, our advisors and our LENSAR and Noden colleagues for their
continued engagement, dedication and support."
- On May 21, 2020, the Company
distributed 100% of its shares of Evofem Biosciences, Inc.
("Evofem") common stock to the PDL stockholders.
- On July 17, 2020, the Company
announced that its majority owned subsidiary, LENSAR, Inc.
("LENSAR"), confidentially submitted a registration statement on
Form 10 to the Securities and Exchange Commission relating to a
potential spin-off of LENSAR as a stand-alone publicly traded
company. The Company continues to pursue various strategic
alternatives for LENSAR in addition to a spin-off.
- On July 30, 2020, the Company
announced the signing of a definitive agreement for the sale of
100% of the outstanding stock in its wholly owned subsidiaries
Noden Pharma DAC and Noden Pharma USA (collectively "Noden"). The total value of
the transaction will result in payments to PDL of up to
$48.25 million in cash. Upon closing,
which we expect to occur by mid-August, PDL will be released of its
guarantee to Novartis under Noden's supply agreement.
In February 2020, the Board of
Directors of PDL BioPharma (the "Board") approved a Plan of
Complete Liquidation ("Plan of Liquidation"). The Company is
seeking stockholder approval at its 2020 Annual Meeting of
Stockholders on August 19, 2020 to
dissolve the Company under Delaware state law. If stockholders approve
the dissolution proposal, the Board would have the authority to
cause the Company to file a Certificate of Dissolution to begin the
process of winding down and dissolving the Company if and when the
Board decides that it would serve best the interest of PDL
stockholders.
As announced previously, the Company has engaged financial
advisors and initiated processes either to sell its remaining
assets separately or to sell the Company as a whole. The Company
intends to pursue its monetization strategy in a disciplined and
cost-effective manner seeking to maximize net proceeds to
stockholders. While the Company cannot provide a definitive
timeline for the liquidation process, it is targeting to complete
the monetization or distribution of its key assets over the next 12
months.
Discontinued Operations Classified as Assets Held for
Sale
As a result of the Company's plans to monetize its assets and
the actions put in place in the first quarter of 2020, as of
March 31, 2020 the assets held for
sale and discontinued operations criteria were met for the
Company's royalty assets and for its Pharmaceutical segment, which
consisted of Noden. The royalty assets are a component of the
Income Generating Assets segment. In the second quarter of 2020,
upon the distribution of the Evofem common stock to the Company's
stockholders, the discontinued operations criteria were met for the
Strategic Positions segment. The Strategic Positions segment was
comprised solely of the Company's investment in Evofem.
During the period in which a component meets the assets held for
sale and discontinued operations criteria, an entity must present
the assets and liabilities of the discontinued operation separately
in the asset and liability sections of the balance sheet for the
current and comparative reporting periods. The prior period balance
sheet is reclassified for the held for sale items. For statements
of operations, the current and prior periods report the results of
operations of the component in discontinued operations.
Second Quarter Financial Highlights
- Total revenues were $5.2 million,
consisting primarily of LENSAR product, lease and service
revenues.
- LENSAR revenues were $5.1
million, a decrease of 31% over the prior-year period, with
procedure volume also declining 31%.
- Net cash from all royalty rights was $11.5 million, down 43% from $20.1 million for the prior-year period.
- Revenue from our Pharmaceutical segment was $8.2 million, compared with $10.4 million for the prior-year period.
- GAAP net loss was $50.0 million.
Non-GAAP net loss was $23.0 million.
A reconciliation of GAAP to non-GAAP financial results can be found
in Table 4 at the end of this news release.
Revenue Highlights
- Total revenues for the second quarter of 2020 were $5.2 million and consisted primarily of LENSAR
product, lease and service revenues.
- Product revenue from LENSAR was $5.1
million, a 31% decrease from the second quarter of 2019.
LENSAR procedure volume for the second quarter of 2020 also
declined 31% from the prior-year period, primarily due to lower
system sales and procedures driven by the negative impact of the
COVID-19 pandemic and the associated decline in elective surgical
procedures. LENSAR operating results are expected to improve as
elective surgical procedures progressively ramp to pre-COVID-19
levels as the pandemic subsides.
- Total revenues for the first half of 2020 were $11.2 million, compared with $14.2 million for the first half of 2019.
-
- Revenues from LENSAR for the six months ended June 30, 2020 decreased by $3.0 million, or 21%, to $11.1 million from $14.1
million for the six months ended June
30, 2019. LENSAR procedure volume for the six months ended
June 30, 2020 declined by 18% from
the prior-year period.
Operating Expense Highlights
- Operating expenses from continuing operations of the Company
include general and administrative expenses for corporate overhead.
A significant amount of these costs had historically not been
allocated to individual segments.
- Operating expenses for the three months ended June 30, 2020 were $19.0
million, a $2.3 million
increase from $16.7 million for the
three months ended June 30, 2019. The
increase was primarily a result of:
-
- higher general and administrative expenses, primarily due to
increased professional fees associated with the ongoing
monetization efforts,
- higher research & development expenses in our Medical
Devices segment as LENSAR pursues its next-generation workstation,
ALLY™, which integrates an enhanced femtosecond laser
with a phacoemulsification system in a compact, mobile workstation,
partially offset by
- lower cost of product revenue, due to decreased sales in our
Medical Devices segment, and
- lower sales and marketing expenses in our Medical Devices
segment.
- Operating expenses for the six months ended June 30, 2020 were $56.7
million, a $25.1 million
increase from $31.6 million for the
six months ended June 30, 2019. The
increase was primarily a result of:
-
- provisions under our Wind-Down Retention Plan, which, as a
result of the adoption of the Plan of Liquidation, accelerated the
vesting of outstanding stock awards for employees in the first
quarter of 2020,
- higher general and administrative expenses of $5.5 million, or 32% from the prior period,
primarily due to increased professional fees, and
- higher research & development expenses in our Medical
Devices segment, partially offset by
- lower cost of product revenue, due to decreased sales in our
Medical Devices segment.
Discontinued Operations Highlights
- Loss from discontinued operations for the three months ended
June 30, 2020 was $37.4 million, a $40.9
million decrease from the $3.5
million of income recognized for the three months ended
June 30, 2019. The change was
primarily a result of:
-
- A $58.4 million change in the
fair value of our equity affiliate from an unrecognized gain of
$45.5 million in the three months
ended June 30, 2019, compared with a
$12.9 million loss in the three
months ended June 30, 2020.
- A $16.8 million loss recorded in
the three months ended June 30, 2020
associated with reducing the estimated fair value of Noden as
informed by negotiations and terms for the disposition of the
entity.
- A $2.2 million, or 22%, decline
in revenue from our Pharmaceutical segment for the three months
ended June 30, 2020, compared with the same period in the
prior year. The decrease in revenue from our Pharmaceutical segment
is primarily due to lower net revenues in the United States.
-
- The decrease in revenue from our Pharmaceutical segment in the
U.S. for the three months ended June 30, 2020 is due to the
increased sales of our authorized generic and lower sales of our
branded Tekturna®, compared with the second quarter of
2019.
- U.S. market share for branded Tekturna® and the
authorized generic of Tekturna of approximately 65% at June 30, 2020 declined from 68% as of
March 31, 2020.
These amounts were partially offset by:
-
- Revenue from our royalty right assets of negative $16.3 million in the three months ended
June 30, 2020, compared with a
negative $40.4 million for the three
months ended June 30, 2019. The
difference was primarily due to a larger decrease in fair value in
the second quarter of 2019 primarily resulting from the
$60.0 million AcelRx write-down,
compared with a $22.9 million write
down in the three months ended June 30,
2020 for certain royalty assets, as informed by bids
received during our monetization process.
-
- The royalty right assets in our Income Generating Assets
segment generated cash flows of $11.5
million and a loss from the net change in fair value of
$27.8 million in the three months
ended June 30, 2020, compared with cash flows of $20.1 million and a loss in the net change in
fair value of $60.5 million in the
three month period ended June 30, 2019.
- See Table 3 for a rollforward of royalty assets for the second
quarter of 2020, compared with the comparable period in 2019.
- Loss from discontinued operations for the six months ended
June 30, 2020 was $50.2 million, a $68.7
million decrease from the $18.6
million of income recognized for the six months ended
June 30, 2019. The unfavorable change
was primarily a result of:
-
- A $72.2 million change in the
fair value of our equity affiliate from an unrecognized gain of
$45.5 million in the six months ended
June 30, 2019, compared with a
$26.7 million loss in the six months
ended June 30, 2020.
- A $23.5 million write down of our
Pharmaceutical segment in the current year due to a decrease in the
estimated fair value of the entity.
- A $7.2 million, or 24%, decline
in revenue from our Pharmaceutical segment for the six months ended
June 30, 2020, compared with the same period in the prior
year.
These amounts were partially offset by:
- Revenue from our royalty right assets in our Income Generating
Assets segment of negative $6.9
million for the six months ended June
30, 2020, compared with negative $28.1 million for the corresponding period of the
prior year. The difference was primarily due to a larger decrease
in fair value in the second quarter of 2019 resulting from the
$60 million AcelRx write-down
compared with the six months ended June 30,
2020, which includes the fair value adjustments for certain
royalty assets as informed by the bids received during our
monetization process.
-
- The royalty right assets generated cash flows of $25.0 million in the current period, compared
with $32.7 million in the prior-year
period.
Other Financial Highlights
- On a GAAP basis, the net loss attributable to PDL's
shareholders for the second quarter of 2020 was $50.0 million, or $0.43 per share, compared with a GAAP net loss
attributable to PDL's shareholders of $4.4
million, or $0.04 per share,
for the prior-year period. Non-GAAP net loss attributable to PDL's
shareholders was $23.0 million for
the second quarter of 2020, compared with non-GAAP net income for
PDL's shareholders of $12.7 million
for the second quarter of 2019.
- On a GAAP basis, the net loss attributable to PDL's
shareholders for the first half of 2020 was $81.7 million, or $0.68 per share, compared with GAAP net income
attributable to PDL's shareholders of $2.3
million, or $0.02 per share,
for the prior-year period. Non-GAAP net loss attributable to PDL's
shareholders was $29.7 million for
the first half of 2020, compared with non-GAAP net income for PDL's
shareholders of $24.5 million for the
first half of 2019.
- PDL had cash and cash equivalents from continuing operations of
$105.4 million as of June 30, 2020, compared with $169.0 million as of December 31, 2019.
-
- The $63.6 million reduction was
primarily the result of common stock repurchases of $39.4 million, the net cash used for the
repurchase of convertible debt of $18.0
million and net cash used in operations of $33.8 million. This reduction was partially
offset by the proceeds from royalty rights of $25.0 million.
Stock and Convertible Note Repurchase Program
- In January 2020, PDL began
repurchasing shares of its common stock in the open market pursuant
to the 10b5-1 program entered into in December 2019 following a $275 million repurchase plan approved by the
Board. In the first half of 2020, the Company acquired 12.3 million
shares of its common stock for $39.4
million, at an average cost of $3.20 per share, including commissions.
- Under this same program, in the first half of 2020, the Company
also repurchased $15.9 million par
value of convertible notes.
- In consideration of the impact and uncertainty introduced by
the COVID-19 pandemic on the Company's monetization process, the
Company discontinued its 10b5-1 program on May 31, 2020.
- Through June 30, 2020, the total
amount spent of the $275 million
Board authorized repurchase program, including the value of the
Company's stock issued in connection with the December 2019 convertible debt exchange, was
$213.0 million.
- As of July 31, 2020, the Company
had approximately 114.0 million shares of common stock
outstanding.
Conference Call and Webcast
PDL will hold a conference call to discuss financial results and
provide a business update at 4:30 p.m.
Eastern time today. Slides to accompany the conference call
will be available in the Investor Relations section of
https://www.pdl.com/.
To access the live conference call via phone, please dial (866)
777-2509 from the United States or
(412) 312-5413 internationally. The conference ID is 10146007. A
telephone replay will be available for one week beginning
approximately one hour after the completion of the call and can be
accessed by dialing (877) 344-7529 from the U.S., (855) 669-9658
from Canada or (412) 317-0088
internationally. The replay passcode is 10146007.
To access the live and subsequently archived webcast of the
conference call, go to the Investor Relations section of
https://www.pdl.com/ and select "Events & Presentations."
About PDL BioPharma, Inc.
Throughout its history, PDL's mission has been to improve the
lives of patients by aiding in the successful development of
innovative therapeutics and healthcare technologies. PDL BioPharma
was founded in 1986 as Protein Design Labs, Inc. when it pioneered
the humanization of monoclonal antibodies, enabling the discovery
of a new generation of targeted treatments that have had a profound
impact on patients living with different cancers as well as a
variety of other debilitating diseases. In 2006, the Company
changed its name to PDL BioPharma, Inc.
As of December 2019, PDL ceased
making additional strategic transactions and investments and is
pursuing a formal process to unlock the value of its portfolio by
monetizing its assets and ultimately distributing net proceeds to
stockholders.
For more information please visit https://www.pdl.com/
NOTE: PDL, PDL BioPharma, the PDL logo and associated logos and
the PDL BioPharma logo are trademarks or registered trademarks of,
and are proprietary to, PDL BioPharma, Inc. which reserves all
rights therein. Noden, Noden Pharma, Tekturna, Tekturna HCT,
Rasilez and Rasilez HCT and associated logos are trademarks or
registered trademarks of, and are proprietary to, Noden Pharma DAC,
which reserves all right therein. LENSAR and associated logos are
trademarks or registered trademarks of, and are proprietary to,
LENSAR, 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, including as it relates to the Company's Plan of
Liquidation, dissolution and continued operations. 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, including
the implementation or success of the Company's monetization
strategy/Plan of Liquidation, are disclosed in the risk factors
contained in the Company's Annual Report on Form 10-K, filed with
the Securities and Exchange Commission (the "SEC") on March 11, 2020, 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.
Important Additional Information and Where to Find It
The Company has filed a definitive proxy statement (the "2020
Proxy Statement") with the SEC in connection with the solicitation
of proxies for the 2020 Annual Meeting. STOCKHOLDERS ARE URGED TO
READ THE 2020 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE
COMPANY WILL FILE WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION.
Stockholders may obtain, free of charge, copies of the 2020
Proxy Statement, any amendments or supplements thereto and any
other documents in connection with the 2020 Annual Meeting at the
SEC's website (http://www.sec.gov), at the Company's website
(http://investor.pdl.com/investor-relations/sec-filings) or by
contacting Okapi Partners by phone (for stockholders, banks and
brokers) at 877-259-6290 or (all others outside the U.S.) at
212-297-0720, by email at info@okapipartners.com or by mail at
Okapi Partners LLC, 1212 Avenue of the Americas, 24th Floor,
New York, NY 10036.
Participants in the Solicitation
The Company, its directors and certain of its executive officers
and other employees may be deemed to be participants in the
solicitation of proxies from stockholders in connection with the
2020 Annual Meeting. Additional information regarding the identity
of these potential participants, and their direct or indirect
interests, by security holdings or otherwise, are forth in the 2020
Proxy Statement and other materials filed with the SEC in
connection with the 2020 Annual Meeting. To the extent holdings of
the Company's securities by such potential participants (or the
identity of such participants) have changed since the information
printed in the 2020 Proxy Statement, such information has been or
will be reflected on Statements of Change in Ownership on Forms 3
and 4 filed with the SEC. You may obtain free copies of these
documents using the sources indicated above.
TABLE
1
|
PDL BIOPHARMA,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
|
(unaudited)
|
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
Product revenue,
net
|
|
$
|
4,099
|
|
|
$
|
5,268
|
|
|
$
|
8,115
|
|
|
$
|
10,004
|
|
Lease
revenue
|
|
359
|
|
|
1,308
|
|
|
1,436
|
|
|
2,532
|
|
Service
revenue
|
|
690
|
|
|
846
|
|
|
1,582
|
|
|
1,612
|
|
Royalties from Queen
et al. patents
|
|
—
|
|
|
6
|
|
|
—
|
|
|
9
|
|
License and
other
|
|
63
|
|
|
30
|
|
|
73
|
|
|
(3)
|
|
Total
revenues
|
|
5,211
|
|
|
7,458
|
|
|
11,206
|
|
|
14,154
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of product
revenue (excluding intangible asset amortization)
|
|
2,639
|
|
|
4,929
|
|
|
5,499
|
|
|
8,729
|
|
Amortization of
intangible assets
|
|
335
|
|
|
344
|
|
|
637
|
|
|
662
|
|
Severance and
retention
|
|
3,579
|
|
|
—
|
|
|
22,313
|
|
|
—
|
|
General and
administrative
|
|
9,719
|
|
|
8,695
|
|
|
22,471
|
|
|
17,005
|
|
Sales and
marketing
|
|
1,237
|
|
|
1,861
|
|
|
2,487
|
|
|
3,435
|
|
Research and
development
|
|
1,465
|
|
|
886
|
|
|
3,321
|
|
|
1,796
|
|
Total operating
expenses
|
|
18,974
|
|
|
16,715
|
|
|
56,728
|
|
|
31,627
|
|
Operating loss
from continuing operations
|
|
(13,763)
|
|
|
(9,257)
|
|
|
(45,522)
|
|
|
(17,473)
|
|
Non-operating
expense, net
|
|
|
|
|
|
|
|
|
Interest and other
income, net
|
|
69
|
|
|
1,650
|
|
|
582
|
|
|
3,524
|
|
Interest
expense
|
|
(312)
|
|
|
(2,984)
|
|
|
(786)
|
|
|
(5,939)
|
|
Loss on extinguishment
of convertible notes
|
|
—
|
|
|
—
|
|
|
(606)
|
|
|
—
|
|
Total non-operating
expense, net
|
|
(243)
|
|
|
(1,334)
|
|
|
(810)
|
|
|
(2,415)
|
|
Loss from continuing
operations before income taxes
|
|
(14,006)
|
|
|
(10,591)
|
|
|
(46,332)
|
|
|
(19,888)
|
|
Income tax benefit
from continuing operations
|
|
(1,077)
|
|
|
(2,575)
|
|
|
(14,144)
|
|
|
(3,422)
|
|
Net loss from
continuing operations
|
|
(12,929)
|
|
|
(8,016)
|
|
|
(32,188)
|
|
|
(16,466)
|
|
(Loss) income from
discontinued operations before income taxes (including loss on
classification as held for sale of $16,143 and $28,904 for the
three and six months ended June 30, 2020, respectively)
|
|
(44,277)
|
|
|
4,830
|
|
|
(58,112)
|
|
|
23,517
|
|
Income tax expense
(benefit) of discontinued operations
|
|
(6,878)
|
|
|
1,328
|
|
|
(7,961)
|
|
|
4,948
|
|
(Loss) income from
discontinued operations
|
|
(37,399)
|
|
|
3,502
|
|
|
(50,151)
|
|
|
18,569
|
|
Net (loss)
income
|
|
(50,328)
|
|
|
(4,514)
|
|
|
(82,339)
|
|
|
2,103
|
|
Less: Net loss
attributable to noncontrolling interests
|
|
(357)
|
|
|
(95)
|
|
|
(645)
|
|
|
(158)
|
|
Net (loss) income
attributable to PDL's shareholders
|
|
$
|
(49,971)
|
|
|
$
|
(4,419)
|
|
|
$
|
(81,694)
|
|
|
$
|
2,261
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
per share - basic
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
$
|
(0.11)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.26)
|
|
|
$
|
(0.13)
|
|
Net (loss) income from
discontinued operations
|
|
(0.32)
|
|
|
0.03
|
|
|
(0.42)
|
|
|
0.15
|
|
Net (loss) income
attributable to PDL's shareholders
|
|
$
|
(0.43)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.68)
|
|
|
$
|
0.02
|
|
Net (loss) income
per share - diluted
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
$
|
(0.11)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.26)
|
|
|
$
|
(0.13)
|
|
Net (loss) income from
discontinued operations
|
|
(0.32)
|
|
|
0.03
|
|
|
(0.42)
|
|
|
0.15
|
|
Net (loss) income
attributable to PDL's shareholders
|
|
$
|
(0.43)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.68)
|
|
|
$
|
0.02
|
|
Weighted-average
shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
115,908
|
|
|
118,285
|
|
|
119,402
|
|
|
123,484
|
|
Diluted
|
|
115,908
|
|
|
118,285
|
|
|
119,402
|
|
|
123,484
|
|
TABLE
2
|
PDL BIOPHARMA,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
|
(Unaudited)
|
(In
thousands)
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
105,446
|
|
|
$
|
168,982
|
|
Notes
receivable
|
|
$
|
53,234
|
|
|
$
|
53,410
|
|
Assets held for
sale
|
|
$
|
289,426
|
|
|
$
|
447,857
|
|
Total
assets
|
|
$
|
520,656
|
|
|
$
|
717,206
|
|
Liabilities held for
sale
|
|
$
|
18,213
|
|
|
$
|
31,215
|
|
Convertible notes
payable
|
|
$
|
13,507
|
|
|
$
|
27,250
|
|
Total stockholder's
equity
|
|
$
|
420,001
|
|
|
$
|
593,278
|
|
TABLE
3
|
PDL BIOPHARMA,
INC.
|
CONDENSED ROYALTY
ASSET DATA
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
|
Cash
Royalties
|
|
Change In Fair
Value
|
|
Total
|
|
Cash
Royalties
|
|
Change In Fair
Value
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assertio
|
|
$
|
8,840
|
|
|
$
|
(3,278)
|
|
|
$
|
5,562
|
|
|
$
|
18,415
|
|
|
$
|
93
|
|
|
$
|
18,508
|
|
VB
|
|
209
|
|
|
(9,405)
|
|
|
(9,196)
|
|
|
227
|
|
|
137
|
|
|
364
|
|
U-M
|
|
2,349
|
|
|
(1,556)
|
|
|
793
|
|
|
1,371
|
|
|
(780)
|
|
|
591
|
|
AcelRx
|
|
77
|
|
|
(13,153)
|
|
|
(13,076)
|
|
|
93
|
|
|
(59,974)
|
|
|
(59,881)
|
|
KYBELLA
|
|
—
|
|
|
(387)
|
|
|
(387)
|
|
|
—
|
|
|
19
|
|
|
19
|
|
|
|
$
|
11,475
|
|
|
$
|
(27,779)
|
|
|
$
|
(16,304)
|
|
|
$
|
20,106
|
|
|
$
|
(60,505)
|
|
|
$
|
(40,399)
|
|
|
|
Six Months
Ended
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
|
Cash
Royalties
|
|
Change In Fair
Value
|
|
Total
|
|
Cash
Royalties
|
|
Change In Fair
Value
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assertio
|
|
$
|
20,017
|
|
|
$
|
(6,438)
|
|
|
$
|
13,579
|
|
|
$
|
29,383
|
|
|
$
|
(459)
|
|
|
$
|
28,924
|
|
VB
|
|
475
|
|
|
(9,199)
|
|
|
(8,724)
|
|
|
494
|
|
|
265
|
|
|
759
|
|
U-M
|
|
4,354
|
|
|
(2,948)
|
|
|
1,406
|
|
|
2,638
|
|
|
(1,316)
|
|
|
1,322
|
|
AcelRx
|
|
156
|
|
|
(12,952)
|
|
|
(12,796)
|
|
|
161
|
|
|
(57,886)
|
|
|
(57,725)
|
|
KYBELLA
|
|
42
|
|
|
(417)
|
|
|
(375)
|
|
|
50
|
|
|
(1,472)
|
|
|
(1,422)
|
|
|
|
$
|
25,044
|
|
|
$
|
(31,954)
|
|
|
$
|
(6,910)
|
|
|
$
|
32,726
|
|
|
$
|
(60,868)
|
|
|
$
|
(28,142)
|
|
|
|
Fair Value as
of
|
|
Royalty Rights
-
|
|
Fair Value as
of
|
|
|
December 31,
2019
|
|
Change in Fair
Value
|
|
June 30, 2020
(1)
|
|
|
|
|
|
|
|
Assertio
|
|
$
|
218,672
|
|
|
$
|
(6,438)
|
|
|
$
|
212,234
|
|
VB
|
|
13,590
|
|
|
(9,199)
|
|
|
4,391
|
|
U-M
|
|
20,398
|
|
|
(2,948)
|
|
|
17,450
|
|
AcelRx
|
|
12,952
|
|
|
(12,952)
|
|
|
—
|
|
KYBELLA
|
|
584
|
|
|
(417)
|
|
|
167
|
|
|
|
$
|
266,196
|
|
|
$
|
(31,954)
|
|
|
$
|
234,242
|
|
|
|
|
|
|
(1) Excludes the
aggregate estimated remaining costs to sell of $5.0
million.
|
TABLE
4
|
PDL BIOPHARMA,
INC.
|
GAAP TO NON-GAAP
RECONCILIATION:
|
NET (LOSS)
INCOME
|
(Unaudited)
|
(In
thousands)
|
|
A reconciliation
between net (loss) income on a GAAP basis and on a non-GAAP basis
is as follows:
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
GAAP net (loss)
income attributed to PDL's stockholders
as reported
|
|
$
|
(49,971)
|
|
|
$
|
(4,419)
|
|
|
$
|
(81,694)
|
|
|
$
|
2,261
|
|
Adjustments to
Non-GAAP net income (as detailed below)
|
|
26,965
|
|
|
17,078
|
|
|
51,977
|
|
|
22,253
|
|
Non-GAAP net (loss)
income attributed to PDL's stockholders
|
|
$
|
(23,006)
|
|
|
$
|
12,659
|
|
|
$
|
(29,717)
|
|
|
$
|
24,514
|
|
|
|
An itemized
reconciliation between net (loss) income on a GAAP basis and on a
non-GAAP basis is as follows:
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
GAAP net (loss)
income attributed to PDL's stockholders as reported
|
|
$
|
(49,971)
|
|
|
$
|
(4,419)
|
|
|
$
|
(81,694)
|
|
|
$
|
2,261
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Mark-to-market
adjustment to fair value - royalty assets
|
|
27,779
|
|
|
60,505
|
|
|
31,954
|
|
|
60,868
|
|
Mark-to-market
adjustment to equity affiliate
|
|
6,533
|
|
|
(37,907)
|
|
|
17,867
|
|
|
(37,907)
|
|
Non-cash stock-based
compensation expense
|
|
244
|
|
|
2,175
|
|
|
18,518
|
|
|
3,344
|
|
Non-cash debt offering
costs
|
|
205
|
|
|
1,953
|
|
|
485
|
|
|
3,876
|
|
Non-cash depreciation
and amortization expense
|
|
134
|
|
|
521
|
|
|
891
|
|
|
1,649
|
|
Mark-to-market
adjustment on warrants held
|
|
6,268
|
|
|
(7,610)
|
|
|
8,721
|
|
|
(7,577)
|
|
Non-cash amortization
of intangible assets
|
|
335
|
|
|
1,598
|
|
|
1,026
|
|
|
3,170
|
|
Income tax effect
related to above items
|
|
(14,533)
|
|
|
(4,157)
|
|
|
(27,485)
|
|
|
(5,170)
|
|
Total
adjustments
|
|
26,965
|
|
|
17,078
|
|
|
51,977
|
|
|
22,253
|
|
Non-GAAP net (loss)
income
|
|
$
|
(23,006)
|
|
|
$
|
12,659
|
|
|
$
|
(29,717)
|
|
|
$
|
24,514
|
|
Use of Non-GAAP Financial Measures
We supplement our consolidated financial statements presented on
a GAAP basis by providing an additional measure which may be
considered a "non-GAAP" financial measure under applicable rules of
the Securities and Exchange Commission. We believe that the
disclosure of this non-GAAP financial measure 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 is 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 represents 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 remeasurement of
future discounted cash flows for each of the royalty rights assets
we have acquired, (2) market-to-mark adjustment to our equity
affiliate, (3) non-cash 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) non-cash
amortization of intangible assets, (7) non-cash depreciation and
amortization expense and (8) the related tax effect of all
reconciling items within our reconciliation. 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.