INCLINE VILLAGE, Nev.,
Nov. 6, 2019 /PRNewswire/ -- PDL
BioPharma, Inc. ("PDL" or "the Company") (Nasdaq: PDLI) reports
financial results for the three and nine months ended September 30, 2019:
Third Quarter Financial Highlights
- Total revenues were $44.2
million, including $20.3
million in product revenue and $23.9
million in revenue from royalty rights - change in fair
value.
- LENSAR revenues were $8.1
million, up 22% over the prior-year period.
- U.S. market share for branded Tekturna and authorized generic
of Tekturna remained steady at approximately 73%.
- Net cash royalties from all royalty rights were $25.6 million, up from $19.1 million in the prior-year period.
- GAAP net loss was $17.8 million.
Non-GAAP net income was $10.4
million. A reconciliation of GAAP to non-GAAP financial
results can be found in Table 3 at the end of this news
release.
- Completed $100 million share
repurchase program by repurchasing 1.3 million shares of common
stock in the open market for $4.1
million.
"Third quarter revenues exceeded $44
million driven by continued growth from the LENSAR Laser
System and strong contributions from our royalty assets, both of
which are tracking ahead of our previous guidance range," said
Dominique Monnet, president and CEO
of PDL. "LENSAR's quarterly revenues reached a record $8 million, up 22% over the prior-year period and
up 27% year-to-date. Through PDL-funded R&D investments, LENSAR
has continued to advance its best-in-class technology for the
treatment of cataracts and the management of astigmatism. LENSAR's
technology benefits have been increasingly recognized by ophthalmic
surgeons, as indicated by steady and robust year-over-year
procedure volume growth since the product was launched in mid-2012.
Procedure volume for the first nine months of 2019 is on pace to
continue this trend.
"We are also pleased with progress at Evofem Biosciences, which
is on track to resubmit the Amphora® NDA in the fourth
quarter," he added. "Given this timeframe, we anticipate Amphora's
commercial launch for the prevention of pregnancy in 2020, subject
to FDA approval. We believe our strategic investment in Evofem
allows our shareholders to benefit from the significant near-term
and longer-term commercial potential of Amphora. It may also
present a strategic position for PDL's potential expansion into the
underserved women's health market.
"We completed our $100 million
share buy-back program during the third quarter, which represents
the Company's largest single investment year-to-date. We are also
continuing our efforts to reduce our operating expenses, with
general and administrative expenses (G&A) down 16%
year-to-date."
Revenue Highlights
- Total third quarter revenues were $44.2
million and included $20.3
million in product revenue and $23.9
million in revenue from royalty rights - change in fair
value.
-
- Product revenue from the LENSAR Laser System was $8.1 million, a 22% increase from the third
quarter of 2018. Revenue generated outside the U.S. accounted for
the majority of the revenue increase. LENSAR procedure volume for
the third quarter of 2019 increased 28% from the prior-year
period.
- Product revenue from Noden was $12.2
million compared with $17.8
million in the prior-year period. Revenue was split evenly
between the U.S. and rest of the world at $6.1 million, compared with $9.7 million and $8.0
million, respectively, in the prior-year period. The U.S.
market share for branded Tekturna and the authorized generic of
Tekturna was 73%, relatively unchanged from the second quarter of
2019.
- Net royalty revenues from acquired royalty rights, which
include cash royalties received and a change in fair value of the
royalty rights assets, were $23.9
million compared with $42.2
million in the prior-year period. The decrease in royalty
revenue is primarily related to the increase in fair value in the
prior year period that resulted from the acquisition of additional
Glumetza® royalty rights from Assertio Therapeutics in
that period. PDL received $25.6
million in net cash royalties from all of its royalty rights
in the third quarter of 2019, up from $19.1
million in the year-ago quarter.
- Total revenues for the first nine months of 2019 were
$60.6 million and included
$64.9 million in product revenue and
negative $4.3 million in revenue from
royalty rights – change in fair value.
-
- Product revenue from the LENSAR Laser System was $22.2 million, a 27% increase from the prior-year
period. Revenue generated outside of the U.S. accounted for the
majority of the increase. LENSAR procedure volume for the first
nine months of 2019 increased 30% from the prior-year period.
- Product revenue from the Noden Products was $42.6 million compared with $62.0 million for the prior-year period. Sales
for the first nine months of 2019 were comprised of $21.0 million in the U.S. and $21.6 million in the rest of the world, compared
with $30.6 million and $31.4 million, respectively, in the prior-year
period. The decline in sales of branded Tekturna in the U.S. is due
primarily to the launch of an authorized generic of Tekturna in the
U.S. and the launch of a third-party generic of aliskiren late in
the first quarter of 2019. The decline in sales in the rest of the
world is due to lower sales volume of Rasilez in certain
territories, in part reflecting additional measures to maximize
product profitability.
- Revenue from royalty rights - change in fair value was negative
$4.3 million for the first nine
months of 2019, compared with $66.1
million in the prior-year period. The decrease is primarily
related to a non-cash adjustment to the AcelRx royalty asset fair
value of negative $60.0 million in
the second quarter of 2019. PDL received $58.3 million in net cash royalties from its
royalty rights in the first nine months of 2019.
- Interest revenue decreased by $2.3
million from the prior-year period due to modifications to
the Company's agreement with CareView Communications, which
deferred interest payments for the first nine months of 2019.
- Royalties from PDL's licensees to the Queen et al. patents were
less than $0.1 million for the first
nine months of 2019, compared with $4.5
million for the prior-year period, reflecting the runout of
the royalties on the sales of Tysabri®.
Operating Expense Highlights
- Operating expenses for the third quarter of 2019 were
$34.7 million, a $3.6 million increase from the third quarter of
2018. The increase was primarily due to a $3.6 million increase in research and development
(R&D) expenses associated with product development and patent
licensing for LENSAR, and a $3.1
million, or 26%, increase in cost of product revenue,
$2.4 million of which related to a
termination provision in a Noden supply agreement amended in
June 2019 involving end of contract
fees, most of which were incurred in the third quarter of 2019.
These increases were partially offset by a $1.1 million, or 8%, decline in G&A expenses,
primarily due to lower professional fees, and a $1.8 million, or 51%, decline in sales and
marketing expenses reflecting savings from the change in the
Company's marketing strategy for the Noden Products.
- Operating expenses for the first nine months of 2019 were
$90.6 million, a $146.5 million decrease from the prior-year
period. The decrease was primarily a result of the net impact of:
the $152.3 million impairment of the
Noden Products intangible assets in the second quarter of 2018 and
related reductions to the Noden Products contingent liability and
amortization expense associated with those intangible assets which,
in aggregate, accounted for $139.1
million of the decrease; a $6.4
million, or 16%, decline in G&A expenses primarily due
to lower professional and asset management fees; and a $7.9 million, or 55%, decline in sales and
marketing expenses reflecting savings from the change in the
Company's marketing strategy for the Noden Products. These
decreases were partially offset by an increase in R&D expenses
of $3.9 million associated with
product development and patent licensing for LENSAR.
Other Financial Highlights
- On a GAAP basis, the net loss attributable to PDL's
shareholders for the third quarter of 2019 was $17.8 million, or $0.16 per share, compared with GAAP net income
attributable to PDL's shareholders of $25.6
million, or $0.18 per share on
a diluted basis, for the prior-year period. Noteworthy items
reflected in the third quarter net loss include pre-tax charges of
$3.9 million for the convertible debt
exchange, a $3.6 million increase to
R&D expense, primarily the result of the acquisition of LENSAR
intellectual property, a $2.4 million
manufacturing charge for our Noden products and a $27.4 million loss due to the decrease in fair
value of our investment in Evofem, partially offset by a
$3.5 million gain recognized for the
sale of intangible assets. Non-GAAP net income attributable to
PDL's shareholders was $10.4 million
for the third quarter of 2019, compared with non-GAAP net income of
$13.1 million for the third quarter
of 2018.
- The GAAP net loss attributable to PDL's shareholders for the
first nine months of 2019 was $15.5
million, or $0.13 per share,
compared with a GAAP net loss attributable to PDL's shareholders of
$85.1 million or $0.58 per share, for the prior-year period.
Non-GAAP net income attributable to PDL's shareholders was
$34.9 million for the first nine
months of 2019, compared with non-GAAP net income of $44.2 million for the prior-year period.
- PDL had cash and cash equivalents of $294.3 million as of September 30, 2019, compared with cash and cash
equivalents of $394.6 million as of
December 31, 2018.
- The $100.3 million reduction in
cash and cash equivalents during the first nine months of 2019 was
primarily the result of common stock repurchases of $75.9 million, the Company's investment in Evofem
Biosciences of $60.0 million and
costs incurred in the exchange of convertible debt of $11.1 million, which extended the maturity date
of $86.1 million of our notes to
December 2024, and net cash used in
operations of $13.3 million. This was
partially offset by the proceeds from royalty rights of
$58.1 million and cash proceeds from
the sale of intangible assets of $5.0
million.
Stock Repurchase Programs
- In November 2018 PDL began
repurchasing shares of its common stock in the open market pursuant
to the
- $100.0 million share repurchase
program authorized by the Company's board of directors in
September 2018.
- During the third quarter of 2019, the Company completed the
stock repurchase program by repurchasing 1.3 million shares for an
aggregate purchase price of $4.1
million.
- Since initiating its first stock repurchase program in
March 2017, the Company has
repurchased 53.1 million shares for $155.0
million, at an average cost of $2.92 per share.
- As of October 31, 2019, the
Company had approximately 114.2 million shares of common stock
outstanding.
Financial Guidance
- PDL is affirming 2019 financial guidance for Noden product
revenue, which is expected to be in the range of $50 million to $55
million.
- PDL now expects 2019 LENSAR product revenue to exceed
$29 million and 2019 cash royalties
to exceed $65 million. This compares
with previous guidance for LENSAR product revenue, which was
expected to be in the range of $27
million to $29 million, and
cash royalties expected to be in the range of $60 million to $65
million.
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
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 3195828. A telephone replay will be available
beginning approximately one hour after the call through one week
following the call, and can be accessed by dialing 855-859-2056
from the U.S. and Canada or
404-537-3406 internationally. The replay passcode is 3195828.
To access the live and subsequently archived webcast of the
conference call, go to the Investor Relations section of
www.pdl.com and select "Events & Presentations."
About PDL BioPharma, Inc.
PDL's mission is to improve the lives of patients and create
value for our shareholders and our people by applying our capital
and expertise for the successful development and commercialization
of innovative therapeutics by our partner companies. We deliver on
our mission by entering into strategic transactions involving
innovative late clinical-stage or early commercial-stage
therapeutics with attractive revenue growth potential. For more
information please visit 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. 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 15, 2019
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
|
|
|
|
|
|
|
Product revenue,
net
|
|
$
|
20,345
|
|
|
$
|
24,387
|
|
|
$
|
64,868
|
|
|
$
|
79,472
|
|
Royalty rights -
change in fair value
|
|
23,865
|
|
|
42,184
|
|
|
(4,277)
|
|
|
66,117
|
|
Royalties from Queen
et al. patents
|
|
—
|
|
|
533
|
|
|
9
|
|
|
4,534
|
|
Interest
revenue
|
|
—
|
|
|
754
|
|
|
—
|
|
|
2,254
|
|
License and
other
|
|
(45)
|
|
|
40
|
|
|
(48)
|
|
|
614
|
|
Total
revenues
|
|
44,165
|
|
|
67,898
|
|
|
60,552
|
|
|
152,991
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Cost of product
revenue, (excluding intangible amortization and
impairment)
|
|
15,033
|
|
|
11,926
|
|
|
40,191
|
|
|
37,016
|
|
Amortization of
intangible assets
|
|
1,575
|
|
|
1,577
|
|
|
4,745
|
|
|
14,254
|
|
General and
administrative
|
|
12,092
|
|
|
13,211
|
|
|
33,037
|
|
|
39,401
|
|
Sales and
marketing
|
|
1,712
|
|
|
3,469
|
|
|
6,515
|
|
|
14,367
|
|
Research and
development
|
|
4,310
|
|
|
672
|
|
|
6,065
|
|
|
2,149
|
|
Impairment of
intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152,330
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
302
|
|
|
—
|
|
|
(22,433)
|
|
Total operating
expenses
|
|
34,722
|
|
|
31,157
|
|
|
90,553
|
|
|
237,084
|
|
Operating income
(loss)
|
|
9,443
|
|
|
36,741
|
|
|
(30,001)
|
|
|
(84,093)
|
|
|
|
|
|
|
|
|
|
|
Non-operating
(expense) income, net
|
|
|
|
|
|
|
|
|
Interest and other
income, net
|
|
1,460
|
|
|
1,581
|
|
|
4,984
|
|
|
4,871
|
|
Interest
expense
|
|
(3,011)
|
|
|
(2,866)
|
|
|
(8,950)
|
|
|
(9,262)
|
|
Equity affiliate -
change in fair value
|
|
(27,378)
|
|
|
—
|
|
|
18,109
|
|
|
—
|
|
Gain on sale of
intangible assets
|
|
3,476
|
|
|
—
|
|
|
3,476
|
|
|
—
|
|
Loss on exchange of
convertible notes
|
|
(3,900)
|
|
|
—
|
|
|
(3,900)
|
|
|
—
|
|
Total non-operating
(expense) income, net
|
|
(29,353)
|
|
|
(1,285)
|
|
|
13,719
|
|
|
(4,391)
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
(19,910)
|
|
|
35,456
|
|
|
(16,282)
|
|
|
(88,484)
|
|
Income tax (benefit)
expense
|
|
(1,944)
|
|
|
9,900
|
|
|
(419)
|
|
|
(3,346)
|
|
Net (loss)
income
|
|
|
(17,966)
|
|
|
|
25,556
|
|
|
|
(15,863)
|
|
|
|
(85,138)
|
|
Less: net loss
attributable to noncontrolling interests
|
|
(182)
|
|
|
—
|
|
|
(340)
|
|
|
—
|
|
Net (loss) income
attributable to PDL's shareholders
|
|
$
|
(17,784)
|
|
|
$
|
25,556
|
|
|
$
|
(15,523)
|
|
|
$
|
(85,138)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
per share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.16)
|
|
|
$
|
0.18
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.58)
|
|
Diluted
|
|
$
|
(0.16)
|
|
|
$
|
0.18
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.58)
|
|
|
|
|
|
|
|
|
|
|
Shares used to
compute income per basic share
|
|
112,986
|
|
|
143,171
|
|
|
119,966
|
|
|
147,159
|
|
Shares used to
compute income per diluted share
|
|
112,986
|
|
|
144,224
|
|
|
119,966
|
|
|
147,159
|
|
TABLE
2
PDL BIOPHARMA,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
2018
|
Cash and cash
equivalents
|
|
$
|
294,270
|
|
|
$
|
394,590
|
|
Notes
receivable
|
|
$
|
64,008
|
|
|
$
|
63,813
|
|
Royalty rights - at
fair value
|
|
$
|
313,943
|
|
|
$
|
376,510
|
|
Investment in equity
affiliate
|
|
$
|
67,200
|
|
|
$
|
—
|
|
Total
assets
|
|
$
|
865,145
|
|
|
$
|
963,736
|
|
Total convertible
notes payable
|
|
$
|
132,484
|
|
|
$
|
124,644
|
|
Total stockholders'
equity
|
|
$
|
637,434
|
|
|
$
|
729,779
|
|
TABLE
3
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
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net (loss)
income attributed to PDL's stockholders as reported
|
|
$
|
(17,784)
|
|
|
$
|
25,556
|
|
|
$
|
(15,523)
|
|
|
$
|
(85,138)
|
|
Adjustments to
Non-GAAP net income (as detailed below)
|
|
28,157
|
|
|
(12,429)
|
|
|
50,391
|
|
|
129,354
|
|
Non-GAAP net income
attributed to PDL's stockholders
|
|
$
|
10,373
|
|
|
$
|
13,127
|
|
|
$
|
34,868
|
|
|
$
|
44,216
|
|
|
|
|
|
|
|
|
|
|
An itemized
reconciliation between net (loss) income on a GAAP basis and on a
non-GAAP basis is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP net (loss)
income attributed to PDL's stockholders, as reported
|
|
$
|
(17,784)
|
|
|
$
|
25,556
|
|
|
$
|
(15,523)
|
|
|
$
|
(85,138)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Mark-to-market
adjustment to fair value - royalty assets
|
|
1,699
|
|
|
(23,128)
|
|
|
62,567
|
|
|
(9,068)
|
|
Mark-to-market
adjustment to equity affiliate - common stock
|
|
21,333
|
|
|
—
|
|
|
(16,574)
|
|
|
—
|
|
Non-cash interest
revenues
|
|
—
|
|
|
(79)
|
|
|
—
|
|
|
(229)
|
|
Non-cash stock-based
compensation expense
|
|
2,059
|
|
|
2,596
|
|
|
5,403
|
|
|
4,814
|
|
Non-cash debt
offering costs
|
|
1,900
|
|
|
1,834
|
|
|
5,776
|
|
|
5,745
|
|
Non-cash depreciation
and amortization expense
|
|
646
|
|
|
1,033
|
|
|
2,295
|
|
|
3,061
|
|
Mark-to-market
adjustment on warrants held
|
|
6,090
|
|
|
(40)
|
|
|
(1,487)
|
|
|
(114)
|
|
Impairment of
intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152,330
|
|
Non-cash amortization
of intangible assets
|
|
1,575
|
|
|
1,577
|
|
|
4,745
|
|
|
14,254
|
|
Mark-to-market
adjustment of contingent consideration
|
|
—
|
|
|
302
|
|
|
—
|
|
|
(22,433)
|
|
Income tax effect
related to above items
|
|
(7,145)
|
|
|
3,476
|
|
|
(12,334)
|
|
|
(19,006)
|
|
Total
adjustments
|
|
28,157
|
|
|
(12,429)
|
|
|
50,391
|
|
|
129,354
|
|
Non-GAAP net
income
|
|
$
|
10,373
|
|
|
$
|
13,127
|
|
|
$
|
34,868
|
|
|
$
|
44,216
|
|
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 re-measurement 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 interest revenue from notes receivable (4)
non-cash stock-based compensation expense, (5) non-cash interest
expense related to PDL debt offering costs, (6) mark-to-market
adjustments related to warrants held, (7) non-cash amortization of
intangible assets, (8) mark-to-market adjustment related to
acquisition-related contingent consideration, (9) non-cash
depreciation and amortization expense and (10) 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.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/pdl-biopharma-reports-2019-third-quarter-financial-results-300953207.html
SOURCE PDL BioPharma, Inc.