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PDL BioPharma Provides First Quarter 2014 Revenue Guidance Of $133 Million





INCLINE VILLAGE, Nev., March 11, 2014 /PRNewswire/ -- PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today announced revenue guidance for the first quarter ending March 31, 2014, of approximately $133 million, as compared with actual revenue of $91.8 million for the first quarter of 2013, an approximate 45 percent increase.

The forecasted growth in revenues is driven by increased fourth quarter 2013 sales for Avastin ®, Herceptin ®, Xolair ®, Kadcyla ®, Perjeta ®, and Actemra ® for which PDL receives royalties in the first quarter of 2014, along with a higher fixed royalty rate in 2014 over the blended fixed and tiered 2013 rate, the addition of the royalty payments from PDL's purchase of Depomed's diabetes-related royalties, and a $5 million retroactive payment from Genentech related to our settlement agreement.

Queen et al. Royalties

On January 31, 2014, we entered into a settlement agreement with Genentech and Roche which resolves all outstanding legal disputes between the parties, including our Nevada litigation with Genentech relating to an August 2010 facsimile sent by Genentech on behalf of Roche and Novartis asserting its products do not infringe on PDL's Supplementary Protection Certificates, and our arbitration proceedings with Genentech related to the audit of royalties on sales.

Under the terms of the settlement agreement, effective retroactively to August 15, 2013, Genentech will pay a fixed royalty rate of 2.125 percent on worldwide sales of all its licensed products, as compared to the previous tiered royalty rate in the U.S and the fixed rate on all ex-U.S. based manufactured and sold licensed products. Pursuant to the Settlement Agreement, Genentech and Roche confirmed that Avastin, Herceptin, Lucentis, Xolair and Perjeta are licensed products as defined in the relevant license agreements between the parties, and further agreed that Kadcyla and Gazyva are licensed products. Genentech will pay these royalties on all worldwide sales of Avastin, Herceptin, Xolair, Perjeta and Kadcyla occurring on or before December 31, 2015. With respect to Lucentis, Genentech will owe no royalties on U.S. sales occurring after June 30, 2013, and will pay a royalty of 2.125 percent on all ex-U.S. sales occurring on or before December 28, 2014. The royalty term for Gazyva remains unchanged from the existing license agreement pertaining thereto.

The first quarter 2014 royalty payment received from Genentech included royalties based on fourth quarter 2013 worldwide sales at the revised fixed royalty rate and also includes a $5 million retroactive settlement payment on a portion of their third quarter 2013 worldwide sales.

Revenue guidance for the first quarter of 2014 is net of an estimated payment due under our February 2011 settlement agreement with Novartis AG (Novartis). PDL pays to Novartis certain amounts based on net sales of Lucentis, made by Novartis, during calendar year 2011 and beyond. The amount paid is less than we receive in royalties on such sales.

The sales information presented above is based on information provided by PDL's licensees in their quarterly reports to the Company as well as from public disclosures made by PDL's licensees.

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