PDL BioPharma Inc. (PDLI) Q4 2018 Earnings Conference Call Transcript

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PDL BioPharma Inc. (NASDAQ: PDLI)Q4 2018 Earnings Conference CallMarch 14, 2019, 4:30 p.m. ET

Contents:

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  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the PDL BioPharma Quarterly Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we'll hold a Q&A session. (Operator Instructions) As a reminder, this conference is being recorded March 14, 2019.

I would now like to turn the conference over to Jody Cain. Please go ahead, ma'am.

Jody Cain -- Senior Vice President of Investor Relations

This is Jody Cain with LHA. Thank you all for participating in today's call. Please note that a slide presentation to accompany management's prepared remarks is available on the Investor Relations section of the PDL website at pdl.com. Joining me today from PDL BioPharma are Dominique Monnet, President and CEO; and Pete Garcia, the Company's Chief Financial Officer.

Please turn to Slide 2, and let me remind you that during this call, management will be making forward-looking statements regarding the Company's financial performance and other matters, and actual results may differ materially from those expressed in or implied by the forward-looking statements. Factors that may cause differences between current expectations and actual results are described in the Company's SEC filings, which are available at sec.gov and in the Investor Relations section of PDL.com. The forward-looking statements made during this call should be considered accurate only as of the date of the live broadcast, March 14, 2019. Although the Company may elect to update forward-looking statements from time-to-time in the future, the Company specifically disclaims any duty or obligation to do so, even as new information becomes available or other events occur in the future.

I'll now turn the call over to Dominique Monnet. Dominique?

Dominique Monnet -- President and Chief Executive Officer

Thanks, Jody. I'm pleased to be addressing everyone on my first call as CEO of PDL. I would like to take this opportunity to thank John McLaughlin, our departing CEO, for his leadership at PDL for a critical 10-year period for the Company. I am delighted that John will continue to serve on our Board of Directors. The whole PDL team wishes him all the best in his well-deserved retirement, which knowing, John will remain very active.

Let me turn to business and review briefly our financial highlights on Slide 3. We are reporting revenues of $45 million for the fourth quarter 2018 with product sales of $26 million. Noden products accounted for $19 million of product revenues and LENSAR Laser Systems made up the remaining $7 million. Product revenues in the fourth quarter of 2018 accounted for 58% of total revenues, up from 48% of total revenues in the fourth quarter of 2017. GAAP net income for the quarter was $16 million, or $0.11 per fully diluted share.

For the full year 2018, revenues were $198 million and included product revenues of $105 million, $81 million from Noden products and $24 million from LENSAR. GAAP net loss for 2018 was $69 million with non-GAAP net income of $57 million. We ended the year with approximately $395 million of cash on our balance sheet. Pete Garcia will provide additional details on our financials in a few minutes.

Please turn to Slide 4. During the fourth quarter, in preparation for the transition of the CEO responsibilities, we engaged our Board of Directors to refine our strategy for shareholder value creation. Our strategic focus remains to build through acquisitions, partnership, or licensing transaction, a portfolio carefully selected, actively managed biopharma companies. We will add value by deploying our capital and expertise to nurture these assets and maximize their potential. This strategy will enable us to grow product revenues and ultimately profit from operations. For clarity, biopharma, in these presentations, refers to both prescription biologics and pharmaceutical products.

We have revised our business development focus and we agreed to target commercial stage assets with multi-year sales growth potential as well as biopharma products that are in late stage clinical development. This opens PDL to a range of opportunities that meet our criteria of generating profitable revenue growth, delivering attractive risk-reward returns on our invested capital, and leveraging our expertise in the biopharma space.

Our primary goal is to build growing and profitable revenue streams from the portfolio of operating company cash flows and at the right conditions, we may capture further market value from these assets through optimally timed exit strategies, which contains a form of a sale or spin-off or an IPO. Our strategy does not include making further passive investments in the form of royalty or debt financing unless they are part of an M&A transaction.

We are committed to this strategy as our primary means of growing our share price and creating value for shareholders. We continue to evaluate a steady flow of potential transactions against our strict investment criteria. We remain highly disciplined in our selection of target opportunities and we are deliberate in our diligence process. We have the necessary resources to succeed with this strategy. Our high-quality team at PDL has an established track record of consummating successful transaction and delivering shareholder value through rigorous strategic planning and operational execution. Each member of PDL's executive team brings 20 to 35 years of relevant biopharma experience.

We have a strong liquid balance sheet that allows for the quick deployment of funds to secure transaction. We can act quickly and decisively. Finally, we may be flexible with regard to deal structures, including acquisitions, licensing or various forms of partnerships. In addition to our capital, our experience, nimbleness, flexibility, and speed are all important competitive factors that have enabled us to be very credible in the transactions we have been pursuing.

Turning to Slide 5, what do we have to offer to the other parties through the transaction? First, the assurance that their vision for their products and technology will be securely funded. For late development stage asset, which means high quality Phase III program that we support competitive labels and compelling payer value propositions. For launch of commercial stage assets, it means the necessary operational investment to maximize revenue potential and growth.

Second, we had extensive experience in commercializing product across a wide range of the criteria in the biotech and pharma spaces, in the US as well as internationally. We didn't have an existing commercial infrastructure and wish to (inaudible) individual products that we seek to acquire to license the rights. We see our ability to build commercial structure, specifically designed and dedicated to these products at least during the launch stages as a transactional advantage. Finally, as much as we are seeking assets with potential, we could expand our growth, we could accelerate, we are also looking for talent. We would prefer to build on a talented team than having to establish a commercial organization from scratch. But we certainly know how to do the latter, if required.

Now turning to an update on Noden Pharma on Slide 6. We announced in mid-2018 that Anchen Pharmaceuticals, a subsidiary of Par Pharmaceutical developed a generic formulation of aliskiren and we have reached a settlement with Paragraph IV filing, thereby Anchen agreed to delay the launch of its generic of Tekturna until March 2019. Aliskiren is both expensive and difficult to manufacture and we believe that Anchen's product is a sole third-party generic competitor that Tekturna will face. As far as we know, the FDA has not yet approved Anchen's ANDA, but we anticipate they will shortly.

As a result of these early generic competition, Noden's focus is no longer to grow Tekturna, but to maximize net operating income from the product's commercialization. In the US, it resulted in three actions; the discontinuation of Noden's US contract sales force of 60 sales representatives last August that resulted in expense savings of $3.5 million to $4 million per quarter; transitioning to a program of non-personnel promotion in partnership with Archer Healthcare which has proven to be quite cost effective; finally, the launch last week of our authorized generic of Tekturna of 150 milligram and 300 milligram tablets in partnership with Prasco Laboratories, the industry leader in the commercialization of AGs. So, launch of our AG of Tekturna was timed to secure us the benefit of being first to market. We believe this provides Noden and Prasco with a distinctive competitive advantage.

Let me note that the launch does not include an authorized generic version of Tekturna HCT. In conjunction with the resolution of our litigation with Par and Anchen, Par agreed that it would not launch its generic version of aliskiren hydrochlorothiazide until the expiration of Noden's patents in 2028. Tekturna HCT accounts for 21% of the sales of the Tekturna franchise in 2018. I am pleased to report that the new prescription trend for Tekturna, this graph you see on the right of that slide, has remained fairly stable since the discontinuation of our sales force last August. As a result of our repositioning of Tekturna as third line option for patients who do not tolerate ACE inhibitors or ARBs, physicians appear to have found a clear place for it in their step treatment of hypertension.

We anticipate revenues may decline slowly, but we are confident that the savings realized in sales and marketing as well as Prasco's first-in market position will continue to deliver positive net cash flows from Tekturna operations. Together with Prasco, we look forward to continuing to serve the needs of US patients who depend on Tekturna to control their blood pressure.

Noden will continue to manufacture and commercialize prescription aliskiren product under the Tekturna and Tekturna HCT brands in the US and the Rasilez and Rasilez HCT brands in international markets. Ex-US net income from the sales of the regulated products have met or exceeded our expectation in 2018 and we are looking forward to the imminent launch in China through our partners Lee's Pharma Holding. For the quarter, Noden was again profitable on GAAP basis with net income of $10.5 million.

Turning to LENSAR on Slide 7, we are very pleased with the continued quarterly progress at LENSAR. You may recall, we began recognizing revenues from LENSAR in May of 2017. For the fourth quarter of 2018, LENSAR revenues of $7.2 million increased 8% over the third quarter. LENSAR reported a GAAP net loss of $1.7 million and a positive EBITDA of $200,000 for the quarter. As part of our investment in LENSAR, we were also able to utilize net operating losses which resulted in cash tax savings of $2.8 million in 2018. LENSAR is an exciting company led by an experienced and driven team with innovative technologies and exciting growth opportunities. We have helped to get it back on its feet and we may consider an exit if and when we believe that it would enable us to maximize its value for our shareholders. You may learn more about LENSAR on its informative website, LENSAR.com.

Our strong balance sheet afford us opportunity beyond strategic acquisitions for increasing shareholder value. Among these is the ability to pay down debt, which we did in the first quarter of 2018 by retiring $126 million of principal from our 4% convertible senior notes due 2018. We also have taken advantage of our undervalued stock price to continue repurchasing shares of PDL common stock in the open market.

On Slide 8 is a review of our stock repurchase program. We completed two share repurchase program between 2017 and mid-2018 for a total of $55 million at an average price of $2.49 per share. Last September, our Board authorized a $100 million share repurchase program. We have executed on this program repurchasing 8.7 million share of common stock in the open market during the fourth quarter at an average price of $2.94 per share or $25.5 million. Year-to-date, as of March 13, 2019, we have deployed $35.5 million to repurchase $10.7 million shares for total repurchases of $61 million, or 19.4 million shares at an average price of $3.15 per share, since instituting this latest repurchase program. We have used the stock repurchase program as an appropriate means of creating shareholder value given the current discrepancy between our share price and our book value.

As you can see on Slide 9, our book value stands at $5.70 per share based upon our Q4 financial results, an increase of $0.63 from last quarter as we've reduced our shares outstanding through our stock repurchase program. And while our stock prices increased nicely, more than 40% since our Q3 2018 reported financials in November, we still have ways to go to close the valuation gap. We have not lost sight of our strategic focus on creating long-term shareholder value with the execution of our BD and M&A strategy. Even with the execution of the $100 million stock repurchase program, we have substantial cash on hand to execute on our business strategy. We expect that cash flow generated by our current business will be in excess of our personal needs, thereby providing additional cash to invest in our future.

At this point, I'll turn the call over to Pete to give additional details on our financial results for the quarter and year. Pete?

Peter Garcia -- Vice President and Chief Financial Officer

Thank you, Dominique. Please turn to our income statement on Slide number 10. For the three months ended December 31, 2018, our GAAP net income was $16.3 million, or $0.11 per diluted share. Total revenues were $45.1 million for the period and consisted primarily of product revenues of $26 million and net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of $19.1 million.

Our total revenues of $45.1 million for the fourth quarter of 2018 compared with $68 million for the fourth quarter of 2017. The decrease reflects lower sales of Noden products in the US, in Q4, and a decrease in the fair value of royalty rights from Assertio, as, in 2017, it included some one-time gains and an increase in the fair value associated with Bausch Health adding an authorized generic of Glumetza. Additional decreases include the decline in royalties from the Queen et al. patents and no interest revenue from the CareView note in the 2018 fourth quarter. We modified the loan agreement with CareView by deferring interest payments. However, they're difficult financial situation and our valuation of their business led to an impairment charge that I will detail later in my discussion of operating expenses.

Product revenues for the fourth quarter of 2018 decreased 20% to $26 million from the prior year period and consisted of $18.8 million from Noden product sales and $7.2 million from LENSAR revenues. Revenue from the change in fair value of royalty rights were $19.1 million for Q4 of 2018, compared with $30.1 million for the prior year period. The decrease was primarily related to higher royalties in 2017, as a result of the launch of an authorized generic for Glumetza in February of 2017. We received $20.9 million in net cash royalties for the fourth quarter of 2018.

As expected, royalties from the Queen et al. patents for Tysabri were minimal in the quarter. This compares with $4.5 million in Queen et al. patent royalties in the fourth quarter of 2017. This brings a close to the Queen et al. patent royalties, as we do not expect to report any meaningful Tysabri royalty revenue in 2019. Interest revenue for the fourth quarter of 2018 was $83,000, compared with $776,000 for the fourth quarter of 2017, with the decrease due to CareView not making interest payments on their note receivable in the fourth quarter.

Turning to operating expenses for the fourth quarter of 2018, total operating expenses were $11.6 million, compared with $38.2 million for the prior year period. As a result of the imminent launch of generic aliskiren and our decision to launch an authorized generic of Tekturna, we were required to evaluate the Noden asset for impairment. Our analysis resulted in no additional impairment being recorded in Q4. However, given the extreme likelihood of a third-party generic launch in 2019, we eliminated our contingent liabilities related to future milestone payments to Novartis for Tekturna and recorded a credit of expenses of $19.2 million.

Additional variances, which resulted in lower expenses included lower cost of product revenue of $6.5 million and lower sales and marketing expenses of $2.8 million for the fourth quarter of 2018, compared with $6.5 million for the prior year period with the decrease largely related to the change in commercialization strategy of the Noden products from a direct sales force model to a more cost-efficient non-personnel promotion program. Offsetting these reductions was an $8.2 million impairment loss related to the reassessed value of our note receivable from CareView Communications. Additionally, I will point out our higher tax expense for the quarter, which is a result of an $11.4 million non-cash valuation allowance taken against the Noden deferred tax asset, as we determine that the NOLs that are carried on Noden's books may not be realizable in the near future.

Turning to full year 2018 results on the same slide, total revenues were $20.8 million -- were $198.1 million, which compares with $320.1 million for 2017, as we continued to shift away from relying on our royalty assets or revenue. Product revenues were $105.4 million, a 25% increase from $84.1 million for 2017. Product revenues in 2018 consisted of $80.7 million from the sale of Noden products and $24.7 million from the product revenues of the LENSAR Laser System.

The change in fair value of the royalty rights assets was $85.3 million for 2018, which compares with $162.3 million for 2017 with the reduction as a result of one-time royalty payments on Glumetza in 2017, and a substantial increase in the fair value in 2017 related to additional future cash flows coming from the Glumetza authorized generic. In 2018, PDL received $78 million in net cash royalties, which was on the high-end of our guidance. Our Queen et al. patent royalties decreased by $31.9 million to $4.5 million as a result of our royalties for Tysabri coming to an end and interest revenue decreased by $15.4 million, as a result of no interest revenue in 2018 from the kaleo asset, which was sold in late 2017.

Operating expenses for 2018 were $248.7 million, compared with $126.3 million for 2017, a $122.4 million increase. The increase primarily resulted from the impairment of the Noden Products intangible asset of $152.3 million we announced in Q2 of 2018, and additional cost of product revenues of Noden Products of $16.6 million and LENSAR of $1.4 million, and the $8.2 million impairment loss on our note receivable from CareView, partially offset by the reduction and elimination in the Novartis contingent liability of $41.6 million. Our GAAP net loss for 2018 was $68.9 million, or a loss of $0.47 per share. The full year net loss was primarily a result of a non-cash accounting charge related to the impairment of intangible asset from Noden, due to the expected launch of a generic version of aliskiren in the US, offset by the decrease in the contingent liability.

Turning to our non-GAAP financial results on Slide 11, we adjusted our Q4 2018 GAAP net income of $16.3 million for the mark-to-market changes in fair value, amortization of intangible assets, contingent considerations, and other non-cash items such as stock-based compensation expense and debt offering costs. This resulted in a non-GAAP net income of $15.1 million for the fourth quarter of 2018, which compares with $24.8 million for the prior year period. We adjusted our 2018 GAAP net loss of $68.9 million with the same items as of fourth quarter, plus the impairment of the intangible assets. This resulted in a non-GAAP net income for 2018 of $56.7 million, which compares with non-GAAP net income for 2017 of $100.7 million.

Turning to our balance sheet on Slide 12, we had cash, cash equivalents, and short-term investments of $394.6 million as of December 31, 2018. This includes the positive cash flow from operations and royalties, offset by $49.1 million related to our stock repurchase programs last year. With regard to future guidance, given the recent launch of the authorized generic of Tekturna, and likely competition from a third-party generic, we're not in a position to give guidance on product sales for 2019. However, similarly to 2018, when we gave guidance of $70 million to $80 million in cash royalties, based upon our current asset values and royalty forecasts, we expect between $55 million to $65 million in cash royalties for 2019.

With that financial overview, we're ready to open up the call for questions. Operator?

Questions and Answers:

Operator

(Operator Instructions)

Dominique Monnet -- President and Chief Executive Officer

While we are waiting for our first question, I'd like to mention that Pete Garcia will be attending the Roth Conference being held in Dana Point, California next week. Pete will participate on the panel entitled Searching for Deep Value in Pharma on March 19, and he will be holding one-on-one meetings with investors during the conference. The panel will be webcast and we will post an updated corporate presentation on our website next week. Okay, operator, we are ready for the first question.

Operator

Our first question is from Phil Nadeau with Cowen and Company.

Philip Nadeau -- Cowen and Company -- Analyst

Good afternoon, and thanks for taking my questions. First one, on your prepared remarks, you said you'd be interested in looking at products from the late development stage right through commercialization. Can you characterize late development stage a bit more? Would that be Phase II, Phase III and how early in clinical development would you be willing to go?

Dominique Monnet -- President and Chief Executive Officer

And that's a very good question. At this point, we probably will be looking at product which would be getting close to end of Phase II, preferably even maybe getting into the Phase III program. What we like is to get engaged before the Phase III gets fully shaped. I mean, as you know, this is a critical time to shape the label of a product and ultimately what we will be launching for. So from my experience being able to engage at this end of Phase II portal is very critical. This being said, we have been approached for products which are already well into Phase III. And when we think that the team has done a good job in shaping those Phase III programs, we would be willing to enter either later -- even later stage than that. So essentially at the preparation of the regulatory filing and even preparation of the launch.

Philip Nadeau -- Cowen and Company -- Analyst

Great.

Dominique Monnet -- President and Chief Executive Officer

So, it's actually, we would not -- at this point, we are going to hesitate to get engaged before end of Phase II. This may change in the future, but for the next couple of years, that's where we are.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. Okay. That's logical and just as a follow-up to that. Can you remind us what the status of your clinical organization is? How many people do you have currently in clinical development in terms of personnel?

Dominique Monnet -- President and Chief Executive Officer

That's a very easy answer to your question. To answer, we have zero experts on the clinical side and for one good reason. I mean it's, we are exploring a number of opportunities. They are all in very different fields. And we have built a network and then we continue to expand it and then call on to it of experts we could call on to whenever we evaluate a strategy. I would -- this is something that we may build more on the advisory side. I think again, being an expert on board, who may -- I mean, on the scientific side unless you really get an extraordinary person and there are quite a few out there. It's a place where you're better off calling for the right experts for the right assets. These, of course, if we were to engage in more development stage assets, we may very well revisit that, but then by that time we would know in which field we tend to operate more specifically.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. Okay. And one last question for me. In your press release announcing the authorized generic of aliskiren, I think, you suggested in there that there wasn't any visibility on the time of an actual generic launch. In your prepared remarks this afternoon you suggested one was coming very soon. Has something changed to give you visibility over the last couple of weeks on when that generic could launch, or by very soon do just mean at some point in the near future without -- with still no visibility on exactly when that could be?

Dominique Monnet -- President and Chief Executive Officer

Now you're putting your finger on a good point. We do not have 2020 visibility. Clearly, we're getting intelligence, in particular from our partner Prasco, which is a field where people really get some pretty good information from customers and others including suppliers. So there are two things which really are making us believe that the launch is imminent, is first. We have passed this March 1 date by which Anchen's could not launch. So now they could launch anytime. And although they do not have a launch, as far as we know they are ANDA-approved. There is usually two or three days between the approval of an ANDA and the time of launch. So for all practical purposes, they may actually be ready to launch as we speak. So the short answer to your question would be, we do not have very precise information that we have a number of pieces of intelligence which make us believe that that launch is going to be soon.

Philip Nadeau -- Cowen and Company -- Analyst

I get it. So your checks in the channel suggests that there's something...

Dominique Monnet -- President and Chief Executive Officer

Yeah. And again this is -- we will see how credible or how accurate these signals are. We felt that they were converging sufficiently that we are planning now. This is why we launched our authorized generic because we believe that their launch is going to be imminent and we wanted to make sure we would be first to market.

Philip Nadeau -- Cowen and Company -- Analyst

Perfect. That's very helpful. Thanks for taking my questions.

Dominique Monnet -- President and Chief Executive Officer

Thank you.

Operator

(Operator Instructions) Our next question is from Max Jacobs with Edison Group.

Maxim Jacobs -- Edison Group -- Analyst

Hi, guys. Thanks for taking my question. I was just wondering if you could provide any additional color on just where you are in the acquisition process for additional assets. Just are you kind of at the term sheet stage and just how many -- give us a sense of how many products might be at play and whether they are -- are they all kind of end of Phase II assets, or is it a mix between things that are commercial or near commercial and development stage?

Dominique Monnet -- President and Chief Executive Officer

Good question, Max. I think, first, I can't speak specifically as you can imagine. Also, by experience, we have gone over just in the last 12 months more than once in very advanced stage of negotiation only to move away, because we could not get comfortable with some diligence questions and this could always happen. We always have more than a couple of assets we look very carefully at and are engaged very actively with other parties about. And the profile of these assets tend to be at this stage more products which are either pending registrations and preparing for launch or products which really are basically in the launch phase. But pretty much if we think, it's in that kind of a stage where the product has been pretty well shaped, the data are coming or available. And we still would have an opportunity to assist with their regulatory approval, but most importantly, we would be focusing very quickly on enabling the launch or just engineering the launch.

Maxim Jacobs -- Edison Group -- Analyst

Okay, great. That's very helpful. And then just on the -- are there any additional metrics that you could share on the Archer Healthcare commercializing Tekturna beyond the prescription?

Dominique Monnet -- President and Chief Executive Officer

I could give you a number of metrics, like on the number of physicians that we are calling about. We used to call on around 11,000. We are reducing this now with the launch of the authorized generic. We may reduce this even further. So we are reconsidering that effort. We have been very pleased with that collaboration and frankly we have learned quite a bit from it, including myself, and never really used exclusively non-personnel promotion. I always used it in the past as support to personnel promotion. And what was quite satisfying is to see that following the very nice work that the Noden reps made in getting the physicians to understand the right place for Tekturna, then we could follow that and sustain that with non-personnel promotion for a period of time. So it has been a successful experience. And the other metrics we have are just essentially, frankly a lot of things to just kind of get a sense of execution and Archer is executing very nicely.

Maxim Jacobs -- Edison Group -- Analyst

Okay, great. And am I right to kind of read into your remarks that you might kind of reduce the Archer Healthcare, like kind of their involvement?

Dominique Monnet -- President and Chief Executive Officer

This is under consideration. We, basically at this point, as we mentioned, we are going to be -- the Noden team is going to be managing Tekturna for profitability or profit maximization at this point. There could be a rationale for continuing to support the brand because ultimately physicians still prescribe. And even if it goes to the authorized generic, the economics would still be very favorable for us. But we have not made final decisions yet on any of that. We are just looking at line by line again to maximize profit at this point and it's an exercise in process.

Maxim Jacobs -- Edison Group -- Analyst

Okay, wonderful. That was very helpful. And then just want to know, is there any update on the launch for Rasilez in China?

Dominique Monnet -- President and Chief Executive Officer

Yes, I was there just a couple of weeks ago with Alan Markey, the CEO of Noden, and we had great discussions. I think this is imminent. Based on what we saw last time, and I think on time of the launch, you always have some last minute delays, but essentially that we're looking at either launch by the end of March. Now, this is the latest information that we have from there. We had announced -- we have planned for it in the first half. So right now, they seem to be very well on track and maybe even a little earlier than we anticipated, so on the earlier end of the spectrum.

Maxim Jacobs -- Edison Group -- Analyst

Great. And then just last question is just on CareView. So the principal and interest payments have been delayed a couple of times. So what are the prospects for additional delays?

Dominique Monnet -- President and Chief Executive Officer

Pete, your view.

Peter Garcia -- Vice President and Chief Financial Officer

Yeah. Hi, Max. This is Pete. So we are still working through with them, that issue. I would say, I wouldn't anticipate them making any interest payments in the near future for the next few quarters. But we will have to revisit that. At this point in time, it's considered impaired asset. So every quarter we will also look at it for potentially additional impairment writedown at this point.

Maxim Jacobs -- Edison Group -- Analyst

Okay. Okay, great. Thanks a lot for taking my questions.

Peter Garcia -- Vice President and Chief Financial Officer

Thank you.

Dominique Monnet -- President and Chief Executive Officer

Thank you.

Operator

(Operator Instructions) And your next question is from James Lieberman with Revere Securities.

James Lieberman -- Revere Securities -- Analyst

Yes, hello.

Dominique Monnet -- President and Chief Executive Officer

Hi, James.

Peter Garcia -- Vice President and Chief Financial Officer

Hello, James.

Dominique Monnet -- President and Chief Executive Officer

It looks like he might have dropped off, operator.

Operator

And James your line is open now.

James Lieberman -- Revere Securities -- Analyst

Oh, thank you. Okay, I guess, I'm open now. Can you comment on the filtration module? I don't know if you had commented much about that. It looks like it could in fact be a major groundbreaking technology?

Dominique Monnet -- President and Chief Executive Officer

I'm sorry James, could you repeat your question again, we didn't hear it well?

James Lieberman -- Revere Securities -- Analyst

I'm sorry, thank you. And perhaps you've already covered this. But I wonder, if you could comment on the filtration module. I think there was something that was mentioned in January. It looked like it could be a major breakthrough technology. I wonder what the past two market would be for that?

Dominique Monnet -- President and Chief Executive Officer

No, I think, James, maybe we wanted to follow up on the separate call, because I'll be very candid, I'm not sure what you're referring to. So -- but maybe I am just not answering your question -- not understanding your question. So please feel free to follow-up with us, and I think we can go into details.

James Lieberman -- Revere Securities -- Analyst

I saw a news release on January 10, but perhaps that was inaccurate. So, I will follow up. Thank you very much.

Dominique Monnet -- President and Chief Executive Officer

Thank you, James.

Operator

There are no further questions at this time. Mr. Dominique Monnet, please proceed with your presentation or any closing remarks.

Dominique Monnet -- President and Chief Executive Officer

Well, thank you very much to all who participated today. Once again, we look forward to updating you on our progress when PDL reports first quarter 2019 results in early May. In the meantime, thanks again, and we wish you a wonderful end of your day.

Operator

Ladies and gentlemen, that concludes your conference call for today. We thank you for your participation, and ask that you disconnect your lines.

Duration: 39 minutes

Call participants:

Jody Cain -- Senior Vice President of Investor Relations

Dominique Monnet -- President and Chief Executive Officer

Peter Garcia -- Vice President and Chief Financial Officer

Philip Nadeau -- Cowen and Company -- Analyst

Maxim Jacobs -- Edison Group -- Analyst

James Lieberman -- Revere Securities -- Analyst

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