PDL BioPharma Reports Q3 Results

PDL BioPharma, Inc. (PDL) (NASDAQ:PDLI) has announced its financial results for the third quarter and nine months ending on September 30, 2015.
According to the press release:

Total revenues were $124.6 million for the three months ended September 30, 2015, compared to $164.6 million for the same period of 2014, and $412.4 million for the nine months ended September 30, 2015, compared to $464.2 million for the same period of 2014. During the three and nine months ended September 30, 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 three and nine months ended September 30, 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., AcelRx Pharmaceuticals, Inc. and Avinger, Inc. Revenues for the quarter endedSeptember 30, 2015 included $119.2 million in royalty and license payments from PDL’s licensees to the Queen et al. patents, negative $4.3 million in the change in estimated fair value of the royalty rights assets, which included approximately a positive $6.9 million in net cash royalty rights payments, $9.1 million in interest revenue from notes receivable debt financings to late-stage healthcare companies, and $0.6 million in realized gains from the sale of AxoGen, Inc. common stock. Revenues for the nine months ended September 30, 2015 included $363.9 million in royalty and license payments from PDL’s licensees to the Queen et al. patents, $19.3 million in net royalty payments from acquired royalty rights and a change in estimated fair value of the royalty rights assets, which included approximately $9.0 million in net cash royalty rights payments, $28.6 million in interest revenue from notes receivable debt financings to late-state healthcare companies, and $0.6 million in realized gains from the sale of AxoGen, Inc. common stock.
Total revenues decreased by 24% and 11%, respectively, for the three and nine months ended September 30, 2015, when compared to the same periods in 2014. The decrease is primarily driven by the decrease in the Depomed royalty rights cash proceeds related to Valeant Pharmaceuticals International, Inc. sales of Glumetza, decreased interest revenues due to the early payoff of the AxoGen and Durata notes receivables, and decreased Actemra royalties as a result of the conclusion of the Actemra license agreement. The decrease in the Depomed royalty rights proceeds in the quarter ending September 30, 2015 is a result of no royalty payments being made by Valeant during the quarter. While Valeant reported revenue for Glumetza of $53 million for the period ending September 30, 2015, it had not provided monthly reporting or payments per its contractual obligations during this period. In late October 2015, Valeant issued reports and cash payments for the third quarter of 2015 with net royalties of $16.9 million due to PDL, which are included in PDL’s fair value assessment at the end of the third quarter. PDL expects to exercise its royalty audit right for Glumetza in the near future.

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