PDL BioPharma Announces First Quarter 2018 Financial Results
PDL BioPharma Announces First Quarter 2018 Financial Results
INCLINE VILLAGE, Nev., May 9, 2018 /PRNewswire/ -- PDL BioPharma, Inc. (PDL or the Company) (NASDAQ: PDLI) today reported financial results for the first quarter ended March 31, 2018 including:
-- Total revenues of $38.5 million for the three months ended March 31,
2018.
-- GAAP diluted EPS of $0.01 for the three months ended March 31, 2018.
-- GAAP net income attributable to PDL's shareholders of $1.6 million for
the three months ended March 31, 2018.
-- Non-GAAP net income attributable to PDL's shareholders of $13.4 million
for the three months ended March 31, 2018. A full reconciliation of all
components of the GAAP to non-GAAP financial results can be found in
Table 3 at the end of the release.
Revenue Highlights
-- Total revenues of $38.5 million for the three months ended March 31,
2018 included:
-- Product revenues of $23.3 million, which consisted of $18.3 million
from sales of Tekturna(®) and Tekturna HCT(®) in the United
States, Rasilez(®) and Rasilez HCT(®) in the rest of the world
(collectively, the Noden Products) and $5.0 million for product
sales of the LENSAR(®) Laser System;
-- Net royalty payments from acquired royalty rights and a change in
fair value of the royalty rights assets of $11.1 million, which
consisted of the change in estimated fair value of our royalty right
assets, primarily related to the Depomed royalty asset;
-- Royalties from PDL's licensees to the Queen et al. patents of $2.8
million, which consisted of royalties earned on sales of
Tysabri(®); and
-- Interest revenue from note receivable investment to CareView
Communications of $0.7 million.
-- Total revenues decreased by 15 percent or $6.9 million for the three
months ended March 31, 2018, when compared to the same period in 2017.
The evolution of our revenues reflects PDL's strategic shift to a
specialty biopharmaceutical business model and the residual decline in
royalty income from our expired Queen et al. patents.
-- The 85 percent increase in product revenues was derived from the
sales of the Noden Products and the LENSAR Laser System, the latter
of which PDL did not begin to recognize until May 2017. Product
revenues accounted for approximately 61 percent of total revenues
compared to approximately 28 percent in the first quarter of 2017.
Rasilez and Rasilez HCT revenues were $7.8 million, which was the
first full quarter of revenue recognized from the ex-U.S.
commercialization by Noden, having assumed commercialization from
Novartis in November 2017;
-- PDL received $18.6 million in net cash royalties from its royalty
rights in the first quarter of 2018, compared to $13.5 million for
the same period of 2017. The increase in cash royalties is mainly
due to royalties from Glumetza(®) sold by Valeant Pharmaceuticals
International, Inc., partially offset by the decrease of royalties
from ARIAD Pharmaceuticals, Inc. as royalties ceased when the asset
was sold in the first quarter of 2017;
-- Royalties from PDL's licensees to the Queen et al. patents were 80
percent or $11.4 million lower than in the first quarter of 2017 as
product supply of Tysabri(®) manufactured prior to patent expiry in
the United States have been extinguished and ex-U.S. product
supplies are rapidly being exhausted; and
-- The decrease in interest revenues was primarily due to the sale of
the kaléo, Inc. note receivable in September 2017.
Operating Expense Highlights
-- Operating expenses were $34.2 million for the three months ended March
31, 2018, compared to $26.9 million for the same period of 2017. The
increase in operating expenses for the three months ended March 31,
2018, as compared to the same period in 2017, was primarily a result of
Noden Products and LENSAR contributing additional cost of product
revenue of $5.6 million and $2.4 million, respectively, which was the
result of increased revenue and recognition of costs of goods for
ex-U.S. revenue from Noden Products and increased revenue from LENSAR,
which PDL did not begin to recognize until May 2017. Sales and marketing
expenses at Noden and LENSAR increased an additional $1.4 million and
$1.5 million, respectively, and research and development expenses
increased an additional $0.6 million due to LENSAR clinical studies.
These increases were partially offset by a decrease in the fair value of
acquisition-related contingent consideration of $2.0 million, a decrease
in research and development costs for the completion of a pediatric
trial for Tekturna and a decrease in general and administration asset
management and legal expenses related to the Merck litigation.
Recent Developments
Stock Repurchase Program
-- From April 1, 2018 to May 8, 2018, the Company repurchased approximately
2.8 million shares of its common stock under the share repurchase
program at a weighted average price of $3.03 per share for a total of
$8.4 million.
-- Since the inception of the share repurchase program in March 2018, the
Company has repurchased approximately 4.2 million shares of its common
stock for a total of $12.6 million.
-- Approximately $12.4 million remains available under the current share
repurchase program.
Other Financial Highlights
-- PDL had cash, cash equivalents, short-term investments and other
investments of $405.1 million at March 31, 2018, compared to $532.1
million at December 31, 2017. The change in cash balance for the quarter
was primarily a result of PDL retiring the remaining $126.4 million of
principal of its 4.0% Convertible Senior Notes due 2018 at their stated
maturity by making a payment to the noteholders of $129.0 million, which
included $2.6 million of accrued interest.
Conference Call and Webcast Details
PDL will hold a conference call to discuss financial results at 4:30 p.m. Eastern Time today, May 9, 2018.
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 1798597. 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 one week following the call, and may be accessed by dialing (855) 859-2056 from the United States and Canada or (404) 537-3406 internationally. The replay passcode is 1798597.
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 the Investor Relations section and select "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.
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 monetization 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 seventeen 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 $396.1 million: KYBELLA(®), AcelRx, University of Michigan, Viscogliosi Brothers and Depomed. Our equity and loan investment in Noden represents deployed capital of $179.0 million, 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, filed with the Securities and Exchange Commission on March 16, 2018. 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
(In thousands, except per share amounts)
Three Months Ended
March 31,
2018 2017
---- ----
Revenues
Royalties
from
Queen et
al.
patents $2,783 $14,156
Royalty
rights -
change in
fair
value 11,091 13,146
Interest
revenue 749 5,457
Product
revenue,
net 23,324 12,581
License
and other 571 100
--- ---
Total
revenues 38,518 45,440
------ ------
Operating Expenses
Cost of
product
revenue
(excluding
intangible
amortization) 10,566 2,552
Amortization
of
intangible
assets 6,293 6,015
General
and
administrative
expenses 11,661 12,576
Sales and
marketing 5,513 2,584
Research
and
development 793 1,766
Change in
fair
value of
anniversary
payment
and
contingent
consideration (600) 1,442
Total
operating
expenses 34,226 26,935
------ ------
Operating
income 4,292 18,505
----- ------
Non-operating expense,
net
Interest
and other
income,
net 1,914 212
Interest
expense (3,585) (4,971)
Total non-
operating
expense,
net (1,671) (4,759)
------ ------
Income
before
income
taxes 2,621 13,746
Income tax
expense 1,019 6,552
----- -----
Net income 1,602 7,194
Less: Net
income/
(loss)
attributable
to
noncontrolling
interests - (47)
Net income
attributable
to PDL's
shareholders $1,602 $7,241
====== ======
Net income per share
Basic $0.01 $0.04
===== =====
Diluted $0.01 $0.04
===== =====
Shares
used to
compute
income
per basic
share 151,473 163,745
======= =======
Shares
used to
compute
income
per
diluted
share 152,579 163,992
======= =======
Cash
dividends
declared
per
common
share $ - $ -
=== === === ===
TABLE 2
PDL BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In thousands)
March 31, December 31,
2018 2017
---- ----
Cash, cash equivalents and short-term investments $405,078 $532,114
Total notes receivable $70,811 $70,737
Total royalty rights - at fair value $341,691 $349,223
Total assets $1,100,401 $1,243,123
Total convertible notes payable $119,166 $243,481
Total stockholders' equity $843,109 $845,890
TABLE 3
PDL BIOPHARMA, INC.
GAAP to NON-GAAP RECONCILIATION:
NET INCOME AND DILUTED EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share amount)
A reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows:
Three Months Ended
March 31,
2018 2017
---- ----
GAAP net income attributed to PDL's shareholders as reported $1,602 $7,241
Adjustments to Non-GAAP net income (as detailed below) 11,776 5,971
Non-GAAP net income attributed to PDL's shareholders $13,378 $13,212
------- -------
An itemized reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows:
Three Months Ended
March 31,
2018 2017
---- ----
GAAP net income attributed to PDL's shareholders as reported $1,602 $7,241
------ ------
Adjustments:
Mark-to-market adjustment to fair value assets 7,532 348
Non-cash interest revenues (74) (75)
Non-cash stock-based compensation expense 957 1,112
Non-cash debt offering costs 2,132 2,675
Mark-to-market adjustment on warrants held (71) (100)
Amortization of the intangible assets 6,293 6,015
Mark-to-market adjustment of anniversary payment and contingent consideration (600) 1,442
Income tax effect related to above items (4,393) (5,446)
------ ------
Total adjustments 11,776 5,971
------ -----
Non-GAAP net income $13,378 $13,212
======= =======
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) mark-to-market adjustment related to acquisition-related contingent considerations, (7) amortization of intangible assets, and to adjust (7) 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.
CONTACT: Peter Garcia, PDL BioPharma, Inc., 775-832-8500, Peter.Garcia@pdl.com, or Jennifer Williams, Cook Williams Communications, Inc., 360-668-3701, jennifer@cwcomm.org
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SOURCE PDL BioPharma, Inc.
