FREMONT, Calif., March 17 /PRNewswire-FirstCall/ -- PDL BioPharma, Inc. (PDL) is releasing revised financial tables in conjunction with the company’s filing of its 2005 Annual Report on Form 10-K, filed on March 16, 2006. The tables reflect certain revisions to the company’s 2005 GAAP financial results, principally related to the purchase accounting for its acquisition of ESP Pharma, Inc. in March 2005. PDL has also updated the number of shares used in calculations of basic and diluted net loss per share to reflect shares of common stock issued in connection with a collaboration.
These revisions have no effect on the Company’s full year 2006 non-GAAP forward looking financial guidance as provided on February 27, 2006.
A table showing the changes from PDL’s previously announced results for four quarters of fiscal 2005 is attached. Further information regarding these financial results and the revisions described above are in PDL’s Annual Report on Form 10-K for Fiscal 2005.
PDL BioPharma, Inc. is a biopharmaceutical company focused on discovering, developing and commercializing innovative therapies for severe or life-threatening illnesses.
The foregoing contains forward-looking statements involving risks and uncertainties and PDL’s actual results may differ materially from those, express or implied, in the forward-looking statements. The forward-looking statements include our expectations regarding financial results, our expectations regarding the continuation of existing and new collaborative agreements, the possibility that the off-patent branded products will be sold and the anticipated sale price for those products, and the timing of clinical developments as well as other statements regarding our expectations. Factors that may cause differences between current expectations and actual results include, but are not limited to, the following: The continued successful integration of ESP Pharma and Retavase as part of PDL, including the retention of the sales force; changes in our development plans as we and our collaborators consider development plans and alternatives; factors affecting the clinical timeline such as enrollment rates and availability of clinical materials; changes in the market due to alternative treatments or other actions by competitors; and variability in expenses particularly on a quarterly basis, due, in principal part, to total headcount of the organization and the timing of expenses. In addition, PDL revenues depend in part on the success and timing of sales of our licensees, including in particular the continued success of Avastin and Herceptin antibody products by Genentech, Inc. as well as the seasonality of sales of Synagis(R) from MedImmune, Inc. Quarterly revenues may be impacted by our ability to maintain and increase our revenues from collaborative arrangements such as our co- development agreements with Biogen Idec and Roche. Our revenues and expenses would be affected by new collaborations, material patent licensing arrangements or other strategic transactions.
Other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in our filings with the Securities and Exchange Commission. PDL expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
NOTE: PDL BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma, Inc.
The following tables reflect the adjustments to fiscal 2005 GAAP results and revised reconciliations to non-GAAP results.
PDL BIOPHARMA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Years ended December 31, 2005 As Furnished Revised GAAP Revisions(1) GAAP Revenues: Product sales, net $118,449 2,742 $121,191 Royalties 130,068 130,068 License and other 28,395 28,395 Total revenues 276,912 2,742 279,654 Costs and expenses: Cost of product sales 60,257 60,257 Research and development 172,039 172,039 Selling, general and administrative 82,295 91 82,386 Acquired in-process research and development 79,417 79,417 Other acquisition-related charges -- 19,434 19,434 Asset impairment charges 31,269 31,269 Total costs and expenses 425,277 19,525 444,802 Operating income (loss) (148,365) (16,783) (165,148) Interest and other income, net 9,616 9,616 Interest expense (10,177) (10,177) Income (loss) before income taxes (148,926) (16,783) (165,709) Income taxes expense 868 868 Net income (loss) $(149,794) $(16,783) $(166,577) Net income (loss) per basic share $(1.45) $(1.60) Net income (loss) per diluted share $(1.45) $(1.60) Shares used in computation of net income (loss) per basic share 103,311 104,326 Shares used in computation of net income (loss) per diluted share 103,311 104,326 (1) Revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press Release for the fourth quarter. See Note 1 to the Consolidated Financial Statements in our Form 10-K for the year ended December 31, 2005. PDL BIOPHARMA, INC. NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
We use certain non-GAAP financial measures in evaluating our operating performance. These non-GAAP financial results are based upon earnings before interest income, interest expense, income taxes, depreciation and amortization (EBITDA), further adjusted
(In thousands, except per share data) Year ended December 31, 2005 Revised Revised GAAP Adjustments Non-GAAP Revenues: Product sales, net $121,191 $121,191 (4) Royalties 130,068 130,068 License and other 28,395 28,395 Total revenues 279,654 -- 279,654 Costs and expenses: Cost of product sales 60,257 (35,434) (1) 24,823 Research and development 172,039 (16,396) (2) 155,643 Selling, general and administrative 82,386 (2,094) (3) 80,292 Acquired in-process research and development 79,417 (79,417) -- Other acquisition-related charges 19,434 (19,434) (4) -- Asset impairment charges 31,269 (31,269) (5) -- Total costs and expenses 444,802 (184,044) 260,758 Operating income (loss) (165,148) 184,044 18,896 Interest and other income, net 9,616 (9,664) (6) (48) Interest expense (10,177) 10,177 -- Income (loss) before income taxes (165,709) 184,557 18,848 Income taxes expense 868 (868) -- Net income (loss) $(166,577) $185,425 $18,848 Net income (loss) per basic share $(1.60) $ 0.18 Net income (loss) per diluted share $(1.60) $ 0.17 Shares used in computation of net income (loss) per basic share 104,326 104,326 Shares used in computation of net income (loss) per diluted share 104,326 109,222 (1) Amortization of intangible assets for our marketed products in 2005. (2) Depreciation expenses for our fixed assets ($14.2M in 2005, $11.0M in 2004), amortization of intangible assets associated with the Eos Biotechnology, Inc. acquisition and the re-acquisition from Roche of rights to Zenapax ($2.1M in 2005, $2.5M in 2004), r (3) Depreciation expenses for our fixed assets ($1.2M in 2005, $0.8M in 2004), and stock-based compensation ($0.8M in 2005, $0.6M in 2004). (4) Revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press Release for the fourth q (5) Asset impairment charges for off-patent brands of $15.5M and write- off of option to re-acquire rights to manufacture and market Zenapax for acute renal transplant rejection of $15.8M in 2005. (6) Interest income. PDL BIOPHARMA, INC. NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
We use certain non-GAAP financial measures in evaluating our operating performance. These non-GAAP financial results are based upon earnings before interest income, interest expense, income taxes, depreciation and amortization (EBITDA), further adjusted
(In thousands, except per share data) Year ended December 31, 2004 GAAP Adjustments Non-GAAP Revenues: Product sales, net $-- $-- Royalties 83,807 83,807 License and other 12,217 12,217 Total revenues 96,024 96,024 Costs and expenses: Cost of product sales -- Research and development 122,563 (14,280) (2) 108,283 Selling, general and administrative 31,806 (1,519) (3) 30,287 Acquired in-process research and development -- -- Other acquisition-related charges -- -- Asset impairment charges -- -- Total costs and expenses 154,369 (15,799) 138,570 Operating income (loss) (58,345) 15,799 (42,546) Interest and other income, net 10,212 (9,739) (5) 473 Interest expense (5,028) 5,028 -- Income (loss) before income taxes (53,161) 11,088 (42,073) Income taxes expense 80 (80) -- Net income (loss) $(53,241) $11,168 $(42,073) Net income (loss) per basic share $(0.56) $(0.44) Net income (loss) per diluted share $(0.56) $(0.44) Shares used in computation of net income (loss) per basic share 94,982 94,982 Shares used in computation of net income (loss) per diluted share 94,982 94,982 (1) Amortization of intangible assets for our marketed products in 2005. (2) Depreciation expenses for our fixed assets ($14.2M in 2005, $11.0M in 2004), amortization of intangible assets associated with the Eos Biotechnology, Inc. acquisition and the re-acquisition from Roche of rights to Zenapax ($2.1M in 2005, $2.5M in 2004), r (3) Depreciation expenses for our fixed assets ($1.2M in 2005, $0.8M in 2004), and stock-based compensation ($0.8M in 2005, $0.6M in 2004). (4) Revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press Release for the fourth q (5) Asset impairment charges for off-patent brands of $15.5M and write- off of option to re-acquire rights to manufacture and market Zenapax for acute renal transplant rejection of $15.8M in 2005. (6) Interest income. QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share data) 2005 Quarter Ended December 31 September 30 As As Revenues: Revised(1) Furnished Revised(1) reported Product sales $39,012 $39,012 $43,144 $43,144 Royalties 33,373 33,373 26,003 26,003 License and other 11,268 11,268 7,536 7,536 Total revenues 83,653 83,653 76,683 76,683 Costs and expenses: Cost of product sales 16,776 16,776 22,209 22,209 Research and development 46,959 46,959 49,480 49,480 Selling, general and administrative 28,119 28,028 26,795 26,795 Acquired in-process research and development(2) -- -- -- Other acquisition-related charges(3) 10,876 -- 5,816 -- Asset impairment charge(4) 16,044 16,044 15,225 15,225 Total costs and expenses 118,774 107,807 119,525 113,709 Gross profit from product sales 22,236 22,236 20,935 20,935 Operating income (loss) (35,121) (25,154) (42,842) (37,026) Interest and other income, net 2,781 2,781 2,027 2,027 Interest expense (2,655) (2,655) (2,671) (2,671) Loss before income taxes (34,995) (24,028) (43,486) (37,670) Income tax expense (benefit) (899) (899) 1,680 1,680 Net loss $(34,096) $(23,129) $(45,166) $(39,350) Basic and diluted net loss per share $(0.31) $(0.22) $(0.43) $(0.37) Shares used in computation of basic and diluted net loss per share 111,571 107,512 105,272 105,272 2005 (in thousands, except per share data) December 31 September 30 as as revised(1) furnished revised(1) reported Goodwill $57,783 N/A $56,714 $57,520 Total Assets 1,166,001 $1,170,262 1,176,171 1,176,977 Total Liabilities 639,936 N/A 625,003 625,003 Total Stockholders’ Equity 526,065 531,144 551,168 551,974 (1) Represents revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press ReleasE for the fourth quarter. See Note 1 to the Consolidated Financial Statements. (2) Represents acquired in-process research and development. The amount for 2005 relates to the ESP Pharma acquisition. For a description of these charges, see Notes 1, 4 and 6 to the Consolidated Financial Statements. (3) Represents product sales returns, accounts receivable allowances and other liabilities related to ESP Pharma operations prior to our acquisition of the business. See Note 1 to the Consolidated Financial Statements. (4) Represents non-cash charges related to the impairment of off-patent branded products and termination of reversion right. For a description of these charges, see Note 4 to the Consolidated Financial Statements. QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share data) 2005 Quarter Ended June 30 March 31 As As Revenues: Revised(1) Furnished Revised(1) reported Product sales $38,087 $35,345 $948 $948 Royalties 37,528 37,528 33,164 33,164 License and other 4,888 4,888 4,703 4,703 Total revenues 80,503 77,761 38,815 38,815 Costs and expenses: Cost of product sales 20,135 20,135 1,137 1,137 Research and development 40,339 40,339 35,261 35,261 Selling, general and administrative 19,806 19,806 7,666 7,666 Acquired in-process research and development(2) -- -- 79,417 79,417 Other acquisition-related charges(3) 2,742 -- -- -- Asset impairment charge(4) -- -- -- -- Total costs and expenses 83,022 80,280 123,481 123,481 Gross profit from product sales 17,952 15,210 -189 -189 Operating income (loss) (2,519) (2,519) (84,666) (84,666) Interest and other income, net 1,873 1,873 2,935 2,935 Interest expense (2,709) (2,709) (2,142) (2,142) Loss before income taxes (3,355) (3,355) (83,873) (83,873) Income tax expense (benefit) 65 65 22 22 Net loss $ (3,420) $ (3,420) $(83,895) $(83,895) Basic and diluted net loss per share $(0.03) $(0.03) $(0.87) $(0.87) Shares used in computation of basic and diluted net loss per share 103,705 103,705 96,754 96,754 2005 (in thousands, except per share data) June 30 March 31 as as revised(1) furnished revised(1) reported Goodwill $31,262 $67,359 $31,262 $67,359 Total Assets 1,018,799 1,054,896 1,012,680 1,048,777 Total Liabilities 577,303 577,303 578,234 578,234 Total Stockholders’ Equity 441,496 477,593 434,446 470,543 (1) Represents revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press ReleasE for the fourth quarter. See Note 1 to the Consolidated Financial Statements. (2) Represents acquired in-process research and development. The amount for 2005 relates to the ESP Pharma acquisition. For a description of these charges, see Notes 1, 4 and 6 to the Consolidated Financial Statements. (3) Represents product sales returns, accounts receivable allowances and other liabilities related to ESP Pharma operations prior to our acquisition of the business. See Note 1 to the Consolidated Financial Statements. (4) Represents non-cash charges related to the impairment of off-patent branded products and termination of reversion right. For a description of these charges, see Note 4 to the Consolidated Financial Statements.
PDL BioPharma, Inc.
CONTACT: Ami Knoefler, Corporate and Investor Relations, +1-510-284-8851,or ami.knoefler@pdl.com, or Jim Goff, Investor Relations, +1-510-574-1421,or james.goff@pdl.com, both of PDL BioPharma, Inc.
Web site: http://www.pdl.com//
