SC 14D9

Use these links to rapidly review the document
TABLE OF CONTENTS

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

FACET BIOTECH CORPORATION
(Name of Subject Company)

FACET BIOTECH CORPORATION
(Names of Person(s) Filing Statement)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

30303Q103
(CUSIP Number of Class of Securities)

Francis Sarena
Vice President, General Counsel and Secretary
1500 Seaport Boulevard
Redwood City, CA 94063
(650) 454-1000
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)

Copies To:

Richard Capelouto
Kirsten Jensen
Robert Spatt
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
(650) 251-5000

o

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

TABLE OF CONTENTS

Item 1.	Subject Company Information	2
Item 2.	Identity and Background of Filing Person	2
Item 3.	Past Contacts, Transactions, Negotiations and Agreements	4
Item 4.	The Solicitation or Recommendation	10
Item 5.	Persons / Assets Retained, Employed, Compensated or Used	28
Item 6.	Interest in Securities of the Subject Company	29
Item 7.	Purposes of the Transaction and Plans or Proposals	29
Item 8.	Additional Information	30
Item 9.	Exhibits	34

1

Item 1.    Subject Company Information

Name and Address

        The name of the subject company is Facet Biotech Corporation, a Delaware corporation (the "Company"), and the address and telephone number of its principal executive offices is 1500 Seaport Boulevard, Redwood City, California 94063, (650) 454-1000.

Securities

        The title of the class of equity securities to which this Solicitation/Recommendation Statement on Schedule 14D-9 (together with the exhibits and annexes hereto, the "Statement") relates is the Company's Common Stock, par value $0.01 per share ("Common Stock"), including the associated rights to purchase shares of Series A Preferred Stock ("Rights", and together with the Common Stock, the "Shares"), issued pursuant to the Rights Agreement, dated as of September 7, 2009 (the "Rights Agreement"), by and between the Company and Mellon Investor Services LLC as Rights Agent (the "Rights Agent"). As of September 28, 2009, there were outstanding 25,046,212 shares of Common Stock.

Item 2.    Identity and Background of Filing Person

Name and Address

        The Company is the person filing this Statement. The Company's name, address and business telephone number are set forth in "Item 1. Subject Company Information", which information is incorporated by reference. The Company's website address is www.facetbiotech.com. The information on the Company's website should not be considered a part of this Statement.

Tender Offer

        This Statement relates to the tender offer by FBC Acquisition Corp. ("Purchaser"), a Delaware corporation and wholly owned subsidiary of Biogen Idec Inc. ("Biogen Idec"), to purchase all outstanding Shares at a purchase price of $14.50 per share, net to the seller in cash, without interest and subject to any required withholding of taxes. The tender offer is being made on the terms and subject to the conditions described in the Tender Offer Statement on Schedule TO (together with the exhibits thereto, the "Schedule TO"), filed by Purchaser with the Securities and Exchange Commission (the "SEC") on September 21, 2009. The value of the consideration offered, together with all of the terms and conditions applicable to the tender offer, is referred to in this Statement as the "Offer."

        The Schedule TO provides that the Offer is subject to 14 conditions. Certain of these conditions are summarized as follows:

•

the Company's stockholders having validly tendered and not properly withdrawn prior to the expiration of the Offer, a number of Shares representing, together with the Shares owned by Biogen Idec, at least a majority of the total voting power of all of the outstanding Shares entitled to vote generally in the election of directors or with respect to a merger, calculated on a fully diluted basis after consummation of the Offer;

•

Biogen Idec being satisfied that the restrictions on business combinations with interested stockholders set forth in Section 203 of the Delaware General Corporation Law (the "DGCL") are inapplicable to the Offer and the second-step merger proposed to be undertaken by Biogen Idec upon consummation of the Offer (the "Proposed Merger") or any other business combination involving Biogen Idec or any of its subsidiaries and the Company;

•

all waiting periods under applicable antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), having expired or been terminated;

2

•

the Company's board of directors (the "Board") redeeming the Rights, or Biogen Idec being satisfied that the Rights have been invalidated or are otherwise inapplicable to the Offer and the Proposed Merger (the "Rights Condition");

•

the Company not having entered into or effectuated any agreement or transaction with any person or entity having the effect of impairing Purchaser's or Biogen Idec's ability to acquire the Company or otherwise diminishing the expected value to Biogen Idec of the acquisition of the Company other than, except as to terms not disclosed in the Company's Current Report on Form 8-K filed with the SEC on August 31, 2009, the Collaboration and License Agreement and related Stock Purchase Agreement between the Company and Trubion Pharmaceuticals, Inc. ("Trubion") disclosed in such Current Report (the "Impairment Condition");

•

there shall not have been publicly announced, instituted or pending, and Biogen Idec or Purchaser shall not have been definitively notified of a person's intention to commence, any litigation, action, investigation or other similar proceeding by or before any governmental, administrative or regulatory authority or similar instrumentality or any other person (i) seeking to restrain, delay or prohibit the consummation of the Offer, the Proposed Merger or any other subsequent business transaction with the Company, (ii) seeking to make illegal, materially delay, restrain or prohibit, or seeking to impose procedural, price or other requirements in connection with making the Offer and payments related to the Offer, (iii) seeking to prohibit or limit the ownership of any portion of the Company or assets of the Company or (iv) that resulted in or could reasonably be expected to result in certain material adverse consequences to the Offer or Proposed Merger;

•

there shall not have occurred nor shall there be, other than in clause (iv) and (vii) of this paragraph, a material acceleration or worsening of any of the following: (i) any general suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the over-the-counter market for a period in excess of three hours, (ii) a commencement of a war, armed hostilities, terrorist attacks or other international or national calamity directly or indirectly involving the United States, (iii) any limitation by any United States governmental or regulatory authority on the extension of credit by banks or other financial institutions, (iv) any decline in the Dow Jones Industrial Average, the Standard & Poor's 500 Index or the Nasdaq Composite Index by an amount in excess of 15% measured from the close of business on the date of the Offer, (v) a declaration of a banking moratorium or any suspension of payments in respect of banks by federal or state authorities in the United States, (vi) any material change in the United States dollar or any other currency exchange rates or a suspension of, or limitation on, the markets therefor or (vii) any change or development in the general political, market, economic or financial conditions in the United States or other jurisdictions in which the Company does business that could, individually or in the aggregate, have a material adverse effect on the business, properties, assets, liabilities, capitalization, stockholders' equity, condition, operations, licenses, franchises, permits, permit applications (including without limitation, in the case of permits and permit applications, those filed with the Food and Drug Administration ("FDA")), results of operations or prospects of the Company or any of its subsidiaries, joint ventures or partnerships or the trading in, or value of, the Shares (the "Equity Market and Foreign Exchange Performance Condition");

•

no change (nor any condition involving a prospective change) shall have occurred or been threatened in the business, properties, assets, liabilities, capitalization, stockholders' equity, condition (financial or otherwise), operations, licenses, franchises, permits, permit applications (including without limitation, in the case of permits and permit applications, those filed with the FDA), results of operations or prospects of the Company or any of its subsidiaries which is or may be materially adverse, and neither Biogen Idec nor Purchaser shall have become aware of

3

any fact which may have material adverse significance with respect to the value of the Company, its subsidiaries, the Shares, Biogen Idec or Purchaser (the "MAE Condition");

•

subject to certain exceptions detailed in the Schedule TO, a tender or exchange offer for any Shares shall not have been made or publicly proposed by any person other than Biogen Idec, Purchaser, or any of their affiliates to acquire beneficial ownership of more than 5% of the outstanding Shares, nor shall any group have been formed which seeks to or beneficially owns more than 5% of the outstanding Shares, nor shall there have been granted any right, option or warrant to acquire beneficial ownership of more than 5% of the outstanding Shares;

•

subject to certain exceptions detailed in the Schedule TO, any covenant, term or condition in any of the Company's or any of its subsidiaries', joint ventures' or partnerships' instruments, licenses, or agreements is not and may not be materially adverse to the value of the Shares in the hands of Purchaser or any material contractual right, intellectual property or supply agreement of the Company or any of its subsidiaries shall be impaired or otherwise adversely affected, and no material contract right, intellectual property or supply agreement shall be adversely affected, and no material amount of indebtedness of the Company or any of its subsidiaries, joint ventures or partnerships shall become accelerated or otherwise become due before its stated due date as a result of the Offer or the Proposed Merger; and

•

certain other conditions contained in the Schedule TO.

        According to the Offer to Purchase filed by Purchaser as Exhibit (a)(1)(A) to the Schedule TO, the business address and telephone number of Purchaser is 14 Cambridge Center, Cambridge, Massachusetts 02142, (617) 679-2000.

Item 3.    Past Contacts, Transactions, Negotiations and Agreements

        Except as disclosed in this Statement or in the excerpts from the Company's 2009 Definitive Proxy Statement, dated April 16, 2009 (the "2009 Proxy Statement") filed as Exhibit (e)(1) to this Statement (and incorporated by reference into this Item 3), as of the date of this Statement, to the knowledge of the Company, there is no material agreement, arrangement or understanding, or actual or potential conflict of interest between the Company or any of its affiliates and (1) the Company's executive officers, directors or affiliates or (2) Purchaser, Biogen Idec or their respective executive officers, directors or affiliates. For further information with respect to these matters, see the 2009 Proxy Statement under the headings: "Security Ownership of Certain Beneficial Owners and Management"; "Executive Officer Compensation"; "Summary Compensation Table"; "Grant of Plan-Based Awards during 2008"; "Employment Arrangements", "Outstanding Equity Awards at December 31, 2008"; "Potential Payments Upon Termination or Change in Control" and "Compensation of Directors." Effective as of September 5, 2009, Hoyoung Huh, M.D, Ph.D. became a member of the Board and was appointed to the audit and compensation committees of the Board, and receives cash and equity compensation for such service commensurate with the Company's other non-employee directors as described in the 2009 Proxy Statement.

        Any information contained in the pages incorporated herein by reference shall be deemed modified or superseded for purposes of this Statement to the extent that any information contained herein modifies or supersedes such information.

Arrangements between the Company and Biogen Idec

Biogen Idec Collaboration Agreement

        Overview.    In September 2005, a predecessor entity to the Company, PDL BioPharma, Inc. ("PDL"), entered into a collaboration agreement with Biogen Idec providing for the joint development, manufacture and commercialization of daclizumab in multiple sclerosis (MS) and indications other than

4

transplant and respiratory diseases, and for shared development and commercialization of volociximab (M200) in all indications (the "Biogen Idec Collaboration Agreement"). A copy of the Biogen Idec Collaboration Agreement is filed as Exhibit (e)(2) to this Statement (and incorporated by reference into this Item 3). The Biogen Idec Collaboration Agreement was assigned by PDL to the Company in December 2008. The Biogen Idec Collaboration Agreement provides for the parties to share equally the costs of all development activities for each collaboration product and, if any of the collaboration products are commercialized, all operating profits within the U.S., Canada and Europe. Each party will have co-promotion rights in the U.S., Canada and Europe, based upon sales capabilities of each party at the time. Outside the U.S., Canada and Europe, Biogen Idec will fund all incremental development and commercialization costs and pay a royalty to the Company, which would be based on percentages of net sales of collaboration products ranging from the low-teens to approximately the high-teens.

        The Company is eligible to receive development, regulatory and sales-based milestones based on the further successful development of these antibodies. If the products under the Biogen Idec Collaboration Agreement are successfully developed in multiple indications and all milestones are achieved, the Biogen Idec Collaboration Agreement provides for development, regulatory and sales- based milestone payments totaling up to $660 million. Of this amount, the Biogen Idec Collaboration Agreement provides for $260 million in development and regulatory milestone payments related to IL-2R products (including daclizumab) and $300 million in development and regulatory milestone payments and $100 million in sales-based milestone payments related to a5b1 integrin products (including volociximab). The Company has previously received $10 million of these milestone payments under the Biogen Idec Collaboration Agreement.

        Recent Developments.    With respect to daclizumab, on July 31, 2009, the safety monitoring committee for the SELECT phase 2 study conducted a futility analysis and recommended the continuation of the SELECT phase 2 study with both daclizumab dose arms (150mg and 300mg). On August 3, 2009, the Company publicly announced the Company's and Biogen Idec's joint decision to continue planning for the phase 3 trial of daclizumab in multiple sclerosis and plan to request a Special Protocol Assessment with the FDA prior to the initiation of this phase 3 study. Pursuant to the terms of the Biogen Idec Collaboration Agreement, the Company will receive a $30 million milestone payment from Biogen Idec upon enrollment of the first patient in the phase 3 trial. See "Background of the Offer" below for a more detailed discussion of these matters.

        Provisions Relating to Termination or a Company Change of Control.    The Biogen Idec Collaboration Agreement does not contain a change of control provision, meaning that in the event the Company were to be acquired by a third party, the Biogen Idec Collaboration Agreement would continue and not be affected by the acquisition. At certain pre-determined points in the development plans, Biogen Idec and the Company each have the right to terminate on an indication-by-indication basis with respect to any products being jointly developed, except that the Company may not elect to terminate the development of daclizumab. Unless earlier terminated, the term of the Biogen Idec Collaboration Agreement will continue until the date on which neither party has any additional payment obligations to the other.

Beneficial Ownership of Shares

        According to the Schedule TO, as of September 21, 2009, Biogen Idec was the beneficial owner of 100 Shares, which were acquired by Biogen Idec on September 3, 2009 at a price per Share of $8.86 in an ordinary brokerage transaction. The 100 Shares owned beneficially by Biogen Idec represent less than 1% of the outstanding Shares.

5

Cash Consideration Payable Pursuant to the Offer and the Merger

        If the Company's directors and executive officers, each of whom is identified on Annex B hereto, were to tender any Shares they own for purchase pursuant to the Offer, they would receive the same cash consideration per Share on the same terms and conditions as the other stockholders of the Company. If the directors and executive officers were to tender all of the 13,644 Shares owned by them (which number of Shares excludes restricted Shares and options to purchase Shares, which are addressed in the succeeding paragraph below and under the section entitled "Potential Payments upon Termination or Change in Control") for purchase pursuant to the Offer and those Shares were purchased by the Purchaser for $14.50 per Share, the directors and executive officers would receive an aggregate of $197,838 in cash. As discussed below under "Item 4.—The Solicitation or Recommendation", to the knowledge of the Company, none of the Company's directors or executive officers currently intends to tender any of their Shares for purchase pursuant to the Offer.

        As of September 28, 2009, the directors and executive officers of the Company held options to purchase 899,180 Shares, 114,871 of which were vested and exercisable as of that date, with exercise prices ranging from $6.17 to $15.38 and an aggregate weighted average exercise price of $7.73 per Share. Immediately upon a change of control of the Company such as would occur if the Offer is consummated, 61,392 unvested options to purchase Shares and 53,333 unvested Shares underlying restricted stock awards held by directors would fully vest. See below under the section entitled "Potential Payments upon Termination or Change in Control" for information about awards held by executive officers. If a merger is consummated following the Offer, the directors and executive officers would receive cash consideration equal to the product of the number of vested options they own and the difference between $14.50 and the exercise price of the options and the same cash consideration for each Share underlying a restricted stock award as the other stockholders of the Company would receive per Share.

Potential Payments upon Termination or Change in Control

        The Company's executive officers participate in, or have entered into, as applicable, the various arrangements and agreements discussed below, which provide for the vesting of equity awards and the payment of compensation in connection with a "change in control" of the Company, such as would occur upon the consummation of the Offer (in certain instances, benefits are provided only in the event of termination without "cause" or for "good reason" following a change in control).

Payments upon a Change in Control

        All presently unvested options to purchase Shares and restricted Shares held by executive officers of the Company were issued pursuant to the Company's 2008 Equity Incentive Plan (the "2008 Plan"), which provides that the Compensation Committee of the Board (the "Compensation Committee"), as administrator, in its discretion may provide for the acceleration of vesting of such awards, including in the event of a change in control. Upon a change in control of the Company, such as would occur if the Offer is consummated, assuming that the Compensation Committee provides for such acceleration of vesting under the 2008 Plan (it being understood that the Compensation Committee is under no obligation to do so), unvested options to purchase Shares and restricted Shares held by such executive officers would fully vest.

        The following table describes for each executive officer (assuming that such executive officer continues employment in the same or similar capacity), the potential payments due upon a change in control of the Company as of September 28, 2009 assuming that the Compensation Committee determines, pursuant to its authority as administrator of the 2008 Plan, to accelerate the vesting of all

6

outstanding options to purchase Shares and all restricted Shares upon such a change in control (it being understood that the Compensation Committee is under no obligation to do so):

Name	Acceleration of Vesting Restricted Stock Awards ($)(1)		Acceleration of Vesting of Options ($)(2)		Total
Faheem Hasnain	$	1,851,172	$	2,868,783	$	4,719,955
Andrew Guggenhime	$	590,382	$	648,144	$	1,238,526
Maninder Hora	$	251,619	$	293,421	$	545,039
Ted Llana	$	655,777	$	652,043	$	1,307,820
Mark Rolfe	$	309,329	$	232,960	$	542,289
Francis Sarena	$	302,746	$	314,806	$	617,551

(1)

Assumes a purchase price of $14.50 per Share, and 100% acceleration of all unvested restricted stock awards.



(2)

Represents the net proceeds for 100% of unvested options, assuming options are exercised and Shares sold at $14.50 per Share.

Severance Plan

        The Company's Retention and Severance Plan (the "Severance Plan") provides for the acceleration of vesting of equity awards in connection with a "change of control". Each of the Company's executive officers has entered into an agreement with the Company to participate in the Severance Plan and all outstanding equity awards held by the executive officers are subject to the terms of the Severance Plan. If the Offer is consummated, a change of control under the terms of the Severance Plan will have occurred.

        Where the surviving or acquiring entity in a change of control does not assume or otherwise issue substitutes for any service-based equity awards, then, immediately prior to the change in control, the unvested portion of all time-vesting equity awards would become fully vested. All of the equity awards currently held by the Company's executive officers are time-vesting equity awards. In the event of a change of control transaction in which none of the outstanding restricted stock awards and options held by the Company's executive officers were assumed or otherwise continued or substituted for, then the Company's executive officers would be entitled to the same acceleration and potential payments as shown in the table above with respect to discretionary acceleration by the Compensation Committee.

Payments upon Certain Termination Events in Connection with a Change in Control

        The Severance Plan also provides for payment of severance and health and life insurance continuation benefits, as well as the acceleration of any unvested equity awards in connection with involuntary termination of employment following a change in control. As used in the Severance Plan, "involuntary termination" means termination of employment by the Company other than for cause (or the participant's death or permanent disability), including failure to renew an employment agreement, or the participant's resignation for good reason (each, a "triggering termination"). The severance benefits provided and equity award vesting acceleration that may occur in connection with a triggering termination are conditioned on the executive officer's execution of a general release of all claims against the Company.

        If an executive officer's employment is involuntarily terminated in connection with or within 18 months after a change in control, then such officer is entitled to certain payments based on such

7

officer's "monthly base salary rate" and "monthly incentive bonus rate" (in each case, as defined below), together with certain additional benefits, as follows:

•

a lump sum payment equal to the officer's monthly base salary rate plus monthly incentive bonus rate (calculated based on the greater of the targeted annual bonus and the prior year's actual bonus) for a specified number of months: (i) 24 months for the chief executive officer, (ii) 18 months for a senior vice president, (iii) 12 months for a vice president and (iv) 9 months for a key employee;

•

health and life insurance benefits following termination of employment for (i) 24 months for the chief executive officer, (ii) 18 months for a senior vice president, (iii) 12 months for a vice president and (iv) 9 months for a key employee;

•

full vesting and acceleration of all the officer's stock options and other equity awards, with the right to exercise stock options for a period of one year following their termination of employment; and

•

paid outplacement services for six months.

        For purposes of the Severance Plan, the term "monthly base salary rate" means an amount equal to the officer's monthly base salary immediately prior to the triggering termination (without giving effect to any reduction constituting "good reason" for resignation) or, if greater, the officer's monthly base salary immediately prior to the change in control. The term "monthly incentive bonus rate" means a quotient determined by dividing by 12 whichever of the following amounts is the greatest: (1) the aggregate amount of all annual incentive bonuses earned by the officer during the fiscal year immediately prior to the year of the change in control, (2) the aggregate amount of all annual incentive bonuses earned by the officer during the fiscal year immediately prior to the year of the triggering termination, or (3) the aggregate of all annual incentive bonuses that would be earned by the officer at the targeted annual rate assuming attainment of 100% of all applicable performance goals in the year in which the triggering termination occurs. For this purpose, annual incentive bonuses do not include signing bonuses, retention bonuses or other nonrecurring cash awards that are not part of an annual incentive bonus program.

        In addition, the participation agreement of Faheem Hasnain under the Severance Plan provides for a tax "gross-up" payment in the event that an excise tax payment becomes payable by Mr. Hasnain under Sections 280G and 4999 of the Internal Revenue Code (the "Code") in connection with a change in control transaction. The effect of the tax "gross-up" payment would be that the net amount retained by Mr. Hasnain from all payments and benefits after deduction of all applicable taxes (including excise taxes, penalties and interest), would equal the net amount he would have retained in the absence of such excise taxes. However, Mr. Hasnain is not entitled to a tax gross-up payment in the event that the payments that would otherwise be subject to the excise tax do not exceed the greatest amount of payments that could be paid without giving rise to the excise tax by an amount equal to the lesser of $100,000 or 5% of the payments. With respect to the other executive officers, the Severance Plan provides that payments and benefits will be cut back to the degree necessary to provide the officer with the greatest after-tax benefit in the event any portion of the payments becomes subject to excise taxes under Section 280G and 4999 of the Code. The officers may also elect to reduce the amount of vesting acceleration of their equity awards to avoid triggering these excise taxes.

        As used in the Severance Plan, "cause" means the occurrence of any of the following:

•

theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit or falsification of any of the Company's documents or records;

•

material failure to abide by the Company's code of conduct or other written policies;

8

•

material and intentional unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of the Company;

•

intentional act which has a material detrimental effect on the Company's reputation or business;

•

repeated failure or inability to perform any reasonable assigned duties after written notice of, and a reasonable opportunity to cure, such failure or inability;

•

material breach of any employment or other similar agreement with the Company not cured within 20 days after notice; or

•

conviction of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude.

        As used in the Severance Plan, "good reason" means the occurrence of any of the following conditions without informed written consent:

•

a material diminution in the officer's authority, duties or responsibilities;

•

a material diminution in the authority, duties or responsibilities of the officer's supervisor;

•

a material reduction in the officer's base salary rate or annual incentive bonus target rate, unless comparable reductions are concurrently made for all other officers and key employees of the Company;

•

a change in work location that increases the regular one-way commute distance by more than 30 miles; or

•

any action or inaction by the Company that constitutes a material breach of the Severance Plan or an employment agreement.

Retention Bonuses

        In addition to the severance benefits provided under the Severance Plan, the Company entered into a retention bonus letter agreement with Andrew Guggenhime in November 2008. If the Offer is consummated, a change of control under this retention bonus letter agreement will have occurred and Mr. Guggenhime will be entitled to a cash retention bonus in the amount of $88,000 should his employment be terminated without cause in connection with or following a change in control transaction. Receipt of the retention bonus is conditioned on execution of a release agreement within 60 days of the date of his employment termination.

        The following table summarizes the potential payments upon an involuntary termination of the Company's executive officers in connection with a change of control, assuming termination as of December 31, 2009:

Name	Cash Severance Payments ($)(1)		Continuation of Health and Life Insurance Benefits		Outplacement Services ($)		Equity Acceleration ($)		Tax Gross-Up Payments ($)		Acceleration of Retention Bonuses ($)		Total ($)
Faheem Hasnain	$	1,925,000	$	49,252	$	10,000	$	3,604,979	$	1,220,375	$	—	$	6,809,606
Andrew Guggenhime	$	746,728	$	37,032	$	10,000	$	1,192,193	$	—	$	88,000	$	2,073,953
Maninder Hora	$	382,395	$	24,750	$	10,000	$	523,829	$	—	$	—	$	940,974
Ted Llana	$	618,750	$	37,032	$	10,000	$	1,300,231	$	—	$	—	$	1,966,013
Mark Rolfe	$	660,000	$	37,032	$	10,000	$	542,289	$	—	$	—	$	1,249,321
Francis Sarena	$	348,431	$	24,750	$	10,000	$	594,976	$	—	$	—	$	978,158

(1)

Severance payments determined in accordance with each officer's monthly base salary rate and monthly incentive bonus rate.

9

        Some of the foregoing payments and/or benefits may be delayed or limited as necessary to comply with or be exempt from Code Sections 280G and 409A and the regulations thereunder.

Exculpation and Indemnification of Company Directors and Officers

        Section 102(b)(7) of the DGCL permits a Delaware corporation to include a provision in its certificate of incorporation that its directors will not be liable to the corporation or its stockholders for monetary damages for breaches of fiduciary duty. The Company's amended and restated certificate of incorporation (the "Certificate") includes such a provision. Such provision, however, does not preclude the personal liability of directors for monetary damages (i) for breaches of the duty of loyalty, (ii) for acts or omissions not in good faith, involving intentional misconduct, or involving knowing violation of the law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which a director derives an improper personal benefit.

        Additionally, as permitted by Section 145 of the DGCL, the Company's bylaws (the "Bylaws") provide that (i) the Company shall indemnify its directors and officers and may indemnify its employees and agents in each case to the fullest extent permitted by Delaware law, (ii) the Company shall advance expenses to such directors and officers, and may advance expenses to such employees and agents, in connection with defending a proceeding, (iii) the rights conferred in the Bylaws are not exclusive of any other rights under any agreement or otherwise and (iv) the Company may maintain director and officer liability insurance.

        The Company has entered into indemnification agreements with its directors and the Company's executive officers to, among other things, provide them with the maximum indemnification allowed under applicable law, including, to the extent permitted by applicable law, indemnification for judgments and expenses incurred as the result of any lawsuit in which such person is named as a defendant by reason of being a director, officer or employee of the Company. The Company has also purchased directors' and officers' liability insurance insuring the Company's directors and officers against certain claims that may be asserted against them in their capacity as directors and officers of the Company.

Item 4.    The Solicitation or Recommendation

Solicitation/Recommendation

        After consideration, including review of the terms and conditions of the Offer in consultation with the Company's financial and legal advisors, the full Board, by unanimous vote at a meeting on September 30, 2009, determined that the Offer is inadequate to the Company's stockholders and that the Offer is not in the best interests of the Company's stockholders.

Accordingly, for the reasons described in more detail below, the Board unanimously recommends that the Company's stockholders reject the Offer and NOT tender their Shares to Purchaser pursuant to the Offer.

        If you have tendered your Shares, you can withdraw them. For assistance in withdrawing your Shares, you can contact your broker or the Company's information agent, MacKenzie Partners, Inc., at the address and phone number below.

MacKenzie Partners, Inc.
105 Madison Ave.
New York, NY 10016
Tel: (800) 322-8225 (Toll-Free) or
(212) 929-5500 (Collect)
Email: facet@mackenziepartners.com

10

        In reaching the conclusions and in making the recommendation described above, the Board consulted with the Company's management, as well as the Company's financial and legal advisors, and took into account a number of reasons, described under "Reasons for the Board's Recommendation" below.

        Copies of the press release, letter to the Company's stockholders and letter to the Company's employees relating to the recommendation of the Board to reject the Offer are filed as Exhibit (a)(1), Exhibit (a)(2) and Exhibit (a)(3) hereto respectively and are incorporated herein by reference.

Background of the Offer; Reasons for Recommendation

Background of the Offer

        At the beginning of 2008, PDL was engaged in three businesses, one of which was its biotechnology operations. In April 2008, following the divestiture of its commercial operations through two asset sale transactions, PDL announced its intent to separate its antibody humanization royalty assets from its biotechnology operations by spinning off its biotechnology operations to its stockholders. In July 2008, in preparation for the spin-off, PDL organized the Company as a wholly owned subsidiary of PDL. In December 2008, PDL contributed its biotechnology operations (including the Biogen Idec Collaboration Agreement) and $405 million in cash to the Company and distributed all of the Company's outstanding shares to PDL's stockholders of record. On December 18, 2008, the Company became an independent, publicly traded company.

        In October 2008, the Company began a strategic review process to refine its strategic focus and significantly reduce its operating costs. In January 2009, following the completion of this strategic review process, the Company effected a restructuring and reduction in force and announced that, as a result, the Company expected to fund its business operations for approximately four years and advance and enhance its drug development pipeline to demonstrate meaningful value over this period.

        In March 2009, the Board evaluated with the Company's senior management the performance of the Company's common stock since the spin-off, the factors impacting the performance of the Company's common stock during this period and the governance structures the Company had in place and could consider adopting to protect against the risks posed by an unsolicited takeover attempt made on unfair terms or at inadequate prices. The Board discussed the potential vulnerability of the Company to an unsolicited takeover attempt in light of the price at which the Company's common stock had been trading and the Board's belief that the stock price did not reflect the value of the Company. The Board also discussed the possible adoption of a stockholder rights plan. The Board determined to further consider the adoption of a rights plan at a later date.

        As described above under "Arrangements between the Company and Biogen Idec—Biogen Idec Collaboration Agreement", the Company and Biogen Idec are parties to the Biogen Idec Collaboration Agreement which provides, among other things, for the joint development and commercialization of daclizumab in multiple sclerosis and indications other than transplant and respiratory diseases and volociximab in all indications. In March 2009, the Company and Biogen Idec announced their decision to amend the daclizumab SELECT trial in response to the agreement of the FDA and European regulatory agencies to consider an expanded SELECT study as a registration-enabling trial, thus requiring only one additional registration-enabling study to be conducted instead of two. Prior to this agreement, the companies had expected to conduct two registration-enabling studies in addition to SELECT. This change resulted in a significant decrease in the amount of the pre-registration costs anticipated by the Company and a potentially faster development path.

        On July 31, 2009, a futility analysis was performed with respect to the SELECT trial to ensure safety of the subjects and to evaluate whether the trial should continue. As described in an unblinding plan submitted to the FDA, an independent statistician analyzed clinical data from approximately 150 trial subjects that had completed at least six months of treatment. An independent safety monitoring committee reviewed the interim data and recommended to Biogen Idec and the Company the

11

continuation of the SELECT study with both daclizumab dose arms (150mg and 300mg). In addition, to determine whether the collaboration should trigger the DECIDE phase 3 trial and to inform the design of this phase 3 trial, certain prearranged employees of each of the Company and Biogen Idec (which employees are no longer directly involved in the management of the SELECT study) reviewed summary data tables prepared by the independent statistician from the interim analysis. Based on this review and data from prior studies, these prearranged personnel recommended on behalf of the Company and Biogen Idec that the collaboration should initiate the DECIDE phase 3 study, which is the second and final required registration-enabling study. On August 3, 2009, the Company announced Biogen Idec's and the Company's joint decision to initiate this phase 3 study and plan to request a Special Protocol Assessment with the FDA prior to the initiation of the study. SELECT remains an ongoing blinded study.

        On August 4, 2009, at a meeting of the Audit Committee of the Board at which four of the five Board members and certain members of senior management of the Company were present, the members of the Board discussed the price at which the Company's common stock had been trading, the Board's belief that the stock price continued to undervalue the Company and whether the increased prospects for the Company's daclizumab program would be fully appreciated by the financial community. The Board discussed the possibility that the financial community was likely to better appreciate the value of the daclizumab program following initiation of the phase 3 trial and that by the time such trial commenced other events were expected to occur that could reasonably be expected to increase stockholders' valuation of the Company. The Board also discussed the potential vulnerability of the Company to an unsolicited takeover attempt on unfair terms or at an inadequate price in light of these factors. The Board continued to discuss the possible adoption of a stockholder rights plan. The Board also considered whether Biogen Idec, with its understanding of the value of the daclizumab program and certain of the Company's other assets, might seek to acquire the Company, either on a negotiated or unsolicited non-negotiated basis, prior to the initiation of the phase 3 trial.

        On August 17, 2009, two weeks after the announcement by the Company of Biogen Idec's and the Company's joint decision to initiate the daclizumab phase 3 study, James Mullen, the President and Chief Executive Officer of Biogen Idec, called and spoke with Faheem Hasnain, the President and Chief Executive Officer of the Company. Mr. Mullen expressed concerns regarding the possibility that the Company could enter into a strategic transaction or be acquired by another third party and the potential impact of such an event on Biogen Idec, particularly in light of some challenges Biogen Idec previously had with another collaboration partner. During the conversation, Mr. Mullen stated that Biogen Idec wanted to purchase the Company's rights to daclizumab. Mr. Hasnain responded that a sale of those rights likely would not make strategic sense for the Company at that point in time, given the significant value the Company attributed to the daclizumab program. Mr. Hasnain reviewed with Mr. Mullen various positive developments that had occurred with respect to the Company and various matters that the Company expected to have a favorable effect on the Company's prospects. Mr. Mullen then indicated that if the Company were not interested in selling its daclizumab rights, Biogen Idec would be interested in an acquisition of all of the Company. Mr. Mullen stated that he would speak to Biogen Idec's board of directors and contact Mr. Hasnain in a few days with a more specific indication of interest.

        On August 20, 2009, Mr. Mullen called Mr. Hasnain, and informed him that the Biogen Idec board of directors had approved an offer to acquire all of the outstanding shares of the Company at a price of $15.00 per share in cash. Mr. Mullen stated the offer would be confirmed in writing to the Company the following day and that the Company should consider the offering price of $15.00 per share as a starting point for negotiations. Mr. Mullen also said that Biogen Idec had engaged Leerink Swann LLC ("Leerink") as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel with respect to this proposed transaction.

        On August 21, 2009, the Company contacted Centerview Partners LLC ("Centerview") and requested that Centerview assist the Company in evaluating and responding to Biogen Idec's proposal.

12

        On August 21, 2009, Biogen Idec sent a letter containing an offer (the "Initial Proposal") to the Company. The text of the letter is as follows:

August 21, 2009

Facet Biotech Corporation
Board of Directors
c/o Faheem Hasnain, President and Chief Executive Officer
1500 Seaport Boulevard
Redwood City, CA 94063

Dear Faheem:

This confirms that Biogen Idec Inc. is proposing to acquire all of the outstanding shares of Facet Biotech Corporation for $15.00 per share in cash. Our all-cash offer represents a premium of approximately 53% over the closing price of Facet Biotech's common stock on August 17, the day we initially discussed our interest in a transaction; a premium of approximately 61% over the one-month average closing price; and a premium of 78% over the average closing price since January 1, 2009.

As communicated in yesterday's phone call, Biogen Idec believes this transaction makes compelling business sense for both of our companies and is in the best interests of our respective shareholders. The price Biogen Idec is offering represents an extremely attractive opportunity for Facet Biotech's shareholders to realize today the future value of your company. In addition, we believe this transaction will enable the important multiple sclerosis and solid tumor clinical programs which we have been working on in collaboration for nearly four years to have the best chance of reaching the market and improving patients' lives.

Biogen Idec has engaged Leerink Swann LLC as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel to assist us in completing this transaction. Our offer would not be subject to approval by the shareholders of Biogen Idec and is not subject to any financing contingency. We do not foresee any regulatory or other impediment to closing. Any definitive transaction documentation will be subject to the approval of our Board of Directors and would contain conditions completely customary for a transaction of this nature. We and our advisors are prepared to meet with you and your advisors to answer any questions you may have about our offer and to commit all necessary resources to complete a transaction expeditiously.

Our offer assumes, and it is very important to Biogen Idec, that Facet Biotech does not undertake any material commercial or strategic transactions between now and the consummation of this transaction.

We would appreciate hearing from you as soon as possible and in any event by 05:00 pm EDT on August 28, 2009. Our strong desire is to conclude a negotiated transaction with you and the Facet Biotech Board of Directors.

As is customary, this letter does not constitute a binding commitment. I look forward to hearing from you as soon as possible. If you do not reach me, feel free to call Michael Lytton.

Sincerely,

/s/ James C. Mullen
Carol Caouette p.p. James C. Mullen
President and Chief Executive Officer

cc: Brad Goodwin
cc: Gary Lyons
cc: David Parkinson, M.D.
cc: Kurt von Emster

13

        On August 21, 2009, following receipt of Biogen Idec's letter, Mr. Hasnain called each of the Board members who were reachable at that time to update them on the Company's receipt of Biogen Idec's written offer.

        On August 21, August 22 and August 23, 2009, members of the Company's management engaged in discussions with Centerview concerning the Initial Proposal. The Company's management also consulted with representatives of the legal advisors DLA Piper LLP (US) ("DLA Piper") and Simpson Thacher & Bartlett LLP ("Simpson Thacher") with respect to the Initial Proposal.

        On August 24, 2009, the Board met to discuss, among other things, the Initial Proposal, the possible adoption of a stockholder rights plan and a proposed collaboration agreement with Trubion. Certain members of the Company's management and representatives of Centerview and DLA Piper attended the meeting. At that meeting, representatives of DLA Piper reviewed the fiduciary duties of the Board when reviewing and responding to the Initial Proposal. Following an overview given by Mr. Hasnain to the Board of the recent discussions between Mr. Hasnain and Mr. Mullen and the details of Mr. Mullen's letter, the Board, together with the Company's management and financial advisors, considered the Company's business, financial condition and future prospects (including the daclizumab program), the terms of the Initial Proposal, the nature and timing of the Initial Proposal, the Company's strategic plan and other business opportunities. After discussion, the Board unanimously determined that Biogen Idec's Initial Proposal to acquire the Company for $15.00 per Share was inadequate and not in the best interests of the Company's stockholders. The Board reviewed a draft of a letter to Biogen Idec that was delivered on August 25, 2009, and the Board's reasons for rejecting the Initial Proposal included those reflected in the letter. The Board, together with the Company's management, discussed the terms of the proposed Trubion collaboration agreement. The Board noted that discussions with Trubion had commenced in February 2009. The Board and the Company's management all agreed that the proposed collaboration with Trubion was in the best interest of the Company and its stockholders, was consistent with the Company's publicly stated strategy to expand its oncology product pipeline and that the collaboration agreement should be a positive synergistic opportunity for Biogen Idec which was unlikely to adversely affect Biogen Idec's interest in the Company. At this meeting, the Board also discussed with its legal advisors the possibility of adopting a stockholder rights plan in light of the Initial Proposal. Representatives of DLA Piper presented a form of such a rights plan to the Board and reviewed the potential terms. The Board unanimously agreed that the Company's management and legal and financial advisors should prepare a rights plan on the terms discussed that would be ready for further consideration at the request of the Board. The Board also discussed and approved retaining Simpson Thacher as a legal advisor to the Company in addition to DLA Piper in connection with the evaluation of Biogen Idec's proposal.

        Mr. Hasnain attempted to contact Mr. Mullen by phone on August 25, 2009 to discuss Biogen Idec's offer and the Board's response, and to tell him that the Company expected to enter into the Trubion collaboration. Mr. Mullen's office indicated that he would not be available to speak with Mr. Hasnain until August 28, 2009. Following Mr. Hasnain's attempt to reach Mr. Mullen, on

14

August 25, 2009 the Company delivered a letter to Biogen Idec responding to the Initial Proposal. The text of the Company's letter follows:

August 25, 2009

Mr. James C. Mullen
Biogen Idec, Inc.
14 Cambridge Center
Cambridge, MA 02142

Dear Jim:

We are in receipt of your letter dated August 21, 2009. The Facet Biotech board of directors, with the assistance of its financial and legal advisors, has carefully considered your expression of interest to acquire our Company and has determined that is not in our stockholders' best interest to pursue such a transaction on the terms you have offered. Our board and management remain firmly committed to increasing the value of the Company to our stockholders. We believe our development programs, our collaborations and our technology capabilities continue to represent substantial potential value for our stockholders.

As you well know, net of cash, your offer places negligible value on, among other things: daclizumab, on which our companies have been partnered for four years, and which we recently decided jointly with you to advance into phase 3; our pipeline, which includes multiple products in clinical trials; our protein engineering technologies; and our scientific capabilities.

Like any responsible board, we are receptive to opportunities to further enhance stockholder value.

Sincerely,

/s/ Faheem Hasnain
Teri Case
p.p. Faheem Hasnain
President and Chief Executive Officer

cc: Michael Lytton
cc: Richard Brudnick

        On August 28, 2009, the Company publicly announced its collaboration with Trubion. Later on the same day, Mr. Hasnain spoke with Mr. Mullen. Mr. Mullen asked whether the Company's intention was to reject a deal with Biogen Idec at any price, or instead to reject a deal at the specific price proposed. Mr. Hasnain responded that the rejection was of the price proposed. Mr. Mullen asked Mr. Hasnain to propose a price at which the Board would be prepared to sell the Company to Biogen Idec. Mr. Hasnain responded that he was not in a position to do so and that Mr. Mullen needed to make a bona fide proposal that reflected the fair value of the Company. Mr. Hasnain reviewed for Mr. Mullen at a high level the key assets of the Company and the Company's expectations regarding its ability to mitigate its property lease obligations. Mr. Hasnain noted the Company's announcement of the collaboration with Trubion, the value of the TRU-016 program to the Company and the potential synergies with Biogen Idec's B-cell related assets, including Rituxan®. Mr. Mullen did not express any reservations to Mr. Hasnain at that time regarding the Trubion collaboration. Mr. Mullen expressed Biogen Idec's desire to commence due diligence. Mr. Hasnain responded that Biogen Idec first needed to make a proposal that better reflected the value of the Company and that the $15 per Share offer was substantially less than what the Company would view as a reasonable and serious initial offer. Mr. Mullen stated that he would get back to Mr. Hasnain.

        On September 1, 2009, a meeting was held of the Board which members of senior management of the Company and representatives of Centerview and Simpson Thacher attended. The Board discussed

15

the Initial Proposal and the conversations that had taken place on August 28, 2009 between Messrs. Hasnain and Mullen. Representatives of Centerview presented a preliminary financial analysis and the Board, management and Centerview discussed the business, operations, financial results and prospects of the Company. Also, at this meeting, the Board formally retained Centerview as its financial advisor in connection with Biogen Idec's proposal and the Company entered into an engagement letter with Centerview. Representatives from Simpson Thacher and Centerview also engaged in a discussion with the Board regarding the possible adoption of a stockholder rights plan.

        On September 3, 2009, Alex Denner, a member of Biogen Idec's board of directors, contacted Mr. Hasnain. In their conversation, Mr. Denner repeatedly asked at what price Mr. Hasnain would accept Biogen Idec's offer to acquire the Company. Mr. Hasnain stated that he was not in a position to name such a price and that any revised offer by Biogen Idec would be considered by the Board.

        On September 4, 2009, Biogen Idec delivered a letter to the Board (the "Second Proposal"), which it also made publicly available through a press release. The Second Proposal lowered the offered price at which Biogen Idec would acquire the Company to $14.50 per Share, despite the fact that the Board had previously rejected the Initial Proposal of $15.00 per Share. The full text of the September 4, 2009 letter to the Board follows:

September 4, 2009

Facet Biotech Corporation
Board of Directors
c/o Faheem Hasnain, President and Chief Executive Officer
1500 Seaport Boulevard
Redwood City, CA 94063

Dear Faheem:

We are deeply disappointed Facet chose to announce a collaboration with Trubion on the day you and I were scheduled to discuss Biogen Idec's all-cash proposal to acquire Facet, which you rejected on August 25.

Moreover, the timing of the Trubion collaboration follows a sequence of events that suggest you have no interest in having a bona fide discussion with us about a combination of our two companies. As we have stated, we believe such a combination makes compelling business sense for both of our companies and is in the best interests of our respective shareholders.

•

On August 17, you and I spoke and I proposed various alternatives to working together including combining our two companies. On that call, we agreed to speak again later that week.

•

On August 20, you and I spoke and I conveyed Biogen Idec's interest in acquiring Facet for $15 per share in cash.

•

On August 21, I sent a letter to you and Facet's Board of Directors stating Biogen Idec's proposal to purchase Facet for $15 per share in cash. Our letter included the statement that "our offer assumes, and it is very important to Biogen Idec, that Facet does not undertake any material commercial or strategic transactions between now and the consummation of this transaction," which reiterated what I communicated to you on our August 17 phone call. The Trubion collaboration is an example of such a transaction.

•

On August 25, you sent us a response rejecting our proposal and suggested we speak on August 28. Notwithstanding that agreement to speak, Facet announced the collaboration with Trubion prior to our call.

Accordingly, we have decided to disclose publicly our interest in pursuing a business combination with Facet. We believe your collaboration with Trubion reduces Facet's value, as apparently do Facet's investors,

16

as evidenced by the 22% reduction in Facet's stock price since announcing the Trubion collaboration. As a result, we are lowering the price we are offering to acquire Facet.

We are proposing to acquire Facet for $14.50 per share in cash, which represents a premium of approximately 64% over the closing price of Facet's common stock on September 3, 2009.

The price Biogen Idec is proposing represents an extremely attractive opportunity for Facet's shareholders to realize today the future value of your company. In addition, we believe this transaction will enable the important multiple sclerosis and solid tumor clinical programs that we have been working on in collaboration for nearly four years to have the best chance of reaching the market and improving patients' lives.

Biogen Idec has engaged Leerink Swann LLC as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel to assist us in completing this transaction. Our offer would not be subject to approval by the shareholders of Biogen Idec and is not subject to any financing contingency. We do not foresee any regulatory or other impediment to closing. Any definitive transaction documentation will be subject to the approval of our Board of Directors and would contain conditions completely customary for a transaction of this nature.

We and our advisors are prepared to meet with you and your advisors to answer any questions you may have about our offer. We would like to complete a transaction expeditiously and we are prepared to commit all necessary resources to achieve this goal.

If you are interested in negotiating a transaction, please call me as soon as possible.

Sincerely,

/s/ James C. Mullen
President and Chief Executive Officer

        On September 4, 2009, the Board met with the Company's management and financial and legal advisors to discuss the Second Proposal. As part of this discussion, representatives from Simpson Thacher and Centerview had a further discussion with the Board regarding the possible adoption of a stockholder rights plan. The Board noted that the Second Proposal was at a price less than the Initial Proposal, which the Board had previously rejected as inadequate and not in the best interest of the Company's stockholders. After discussions, the Board requested that the Company's management and advisors continue their review of the Second Proposal and preparation of a written response to the Second Proposal. The closing stock price for the Shares on September 4, 2009 was $15.38.

        On September 7, 2009, a meeting was held of the Board, which members of the Company's management and representatives of Centerview, Simpson Thacher and DLA Piper attended. At that meeting, a representative of Simpson Thacher reviewed the fiduciary duties of the Board in connection with their consideration of the Second Proposal and possible adoption of a stockholder rights plan. Also at this meeting, Centerview reviewed the financial presentation it had made to the Board on September 1, 2009. In addition, Centerview responded to questions from the Board regarding its views of the Second Proposal. The Board then reviewed the Company's business, financial condition and prospects (including the daclizumab program), the terms of the Second Proposal, the nature and timing of the Second Proposal, the Company's strategic plan and other business opportunities. After discussion, the Board unanimously determined that the $14.50 per Share offer undervalued the Company's long-term prospects and was inadequate and not in the best interest of the Company's stockholders. The Board also reviewed a draft of a letter to Biogen Idec that was delivered to Biogen Idec on September 8, 2009, and the Board's reasons for rejecting the Second Proposal included those reflected in the letter. Next, the Board discussed further with its legal advisors the possibility of adopting a stockholder rights plan. Representatives of DLA Piper presented a stockholder rights plan

17

to the Board and discussed the terms and conditions with the Board. Representatives of Centerview reviewed with the Board an exercise price analysis in connection with the stockholder rights plan. The Board, together with its advisors, discussed that the rights plan was designed to ensure that the Board has adequate time to consider the best approach to protect the interests of the Company's stockholders and maximize stockholder value. The Board further discussed, together with its advisors, that the rights plan was not intended to, and would not, prevent a takeover of the Company on terms that the Board determined were favorable and fair to all stockholders. Following the discussion, the Board unanimously adopted a limited duration stockholder rights plan.

        On September 8, 2009, the Company responded to Biogen Idec's Second Proposal by letter (which was also included in a Company press release issued the same day). The text of that letter follows:

September 8, 2009

Mr. James C. Mullen
Biogen Idec Inc.
14 Cambridge Center
Cambridge, MA 02142

Dear Jim:

We are in receipt of your letter dated September 4, 2009.

Facet Biotech's board of directors, with assistance from its financial and legal advisors, has reviewed your revised proposal to acquire our company for $14.50 per share. After careful consideration, we have determined that it is not in our stockholders' best interests to pursue a transaction under the terms you have proposed, and we therefore reject your proposal.

As we stated in our response to your proposal of $15 per share on August 21, we believe your proposal does not reflect Facet Biotech's existing value or our long-term ability to create value for our stockholders. We reject your revised proposal because, among other reasons, we believe that:

•

The proposal values Facet Biotech at approximately the value of its cash, marketable securities and restricted cash ($371.1 million as of June 30, 2009, or approximately $15.11 per share based on shares outstanding as of July 31, 2009) and thus places no value on the operating and other assets of the company.

•

Daclizumab represents substantial value for the company and our stockholders. This is based on the daclizumab data seen to date over multiple clinical trials, the insights that both Facet Biotech and Biogen Idec have on the development program, as well as the significant market opportunity in multiple sclerosis. This belief is reinforced by the recent decision by Facet Biotech and Biogen Idec to advance the program into a phase 3 trial. Biogen Idec's enthusiasm for the daclizumab program is evident from the sizeable investment being made to fund its part of the collaboration to move into phase 3, including a $30 million milestone payment due to Facet Biotech from Biogen Idec upon the enrollment of the first patient in the trial, which is expected in the first half of 2010.

•

The proposal does not reflect the value of Facet Biotech's pipeline of four additional programs in clinical development and one in preclinical development, the company's protein engineering technologies or our scientific capabilities. In addition to the $30 million milestone payment related to daclizumab, Facet Biotech has the potential to earn from Bristol-Myers Squibb Company an additional $30 million in milestone payments by the first half of 2010 related to two of these other programs.

•

The proposal does not reflect the value of the strategic fit with Biogen Idec or the substantial synergies that Biogen Idec, or any number of potential acquirers, could attain from an acquisition of Facet Biotech.

18

Additionally, despite your suggestions otherwise, we do not believe our collaboration with Trubion is in any way adverse to the valuation of, or your interest in, our company. I believe you are aware that I attempted to contact you on Tuesday, August 25 prior to the signing of the Trubion collaboration but was told by your office that you were not available because of your travel schedule until Friday the 28th. As I discussed with you on the 28th, we had been working on the Trubion transaction for some time, and our announcement did not reflect any attempt to impede a transaction with Biogen Idec. We entered into the Trubion collaboration only after concluding that it was a positive for our stockholders and was likely to be a positive synergistic opportunity for Biogen Idec as well.

Our board of directors and management team continue to take our fiduciary responsibilities to our stockholders extremely seriously. We remain committed to building value for all our stockholders and remain open to opportunities at any time that will help us achieve that.

Sincerely,

/s/ Faheem Hasnain
President and Chief Executive Officer
Facet Biotech Corporation

        On September 8, 2009, after the Company responded to the Second Proposal, a representative of Leerink contacted a representative of Centerview, and expressed Biogen Idec's interest in entering into a negotiated transaction with the Company based on the Second Proposal. Later that same day, Biogen Idec issued a press release reiterating the Second Proposal.

        Also on September 8, 2009 Mr. Mullen called Mr. Hasnain. Mr. Hasnain indicated that he disagreed with Biogen Idec's assertion that the Company had no interest in discussing any combination of the two companies, and stated that the Board had rejected the specific offer prices in the Initial Proposal and Second Proposal. Mr. Mullen indicated Biogen Idec's desire to commence due diligence. Mr. Hasnain responded that it would be inappropriate to allow Biogen Idec access to confidential due diligence information of the Company given the inadequacy of Biogen Idec's proposal and that Biogen Idec needed to make a reasonable and serious proposal that better reflected the value of the Company before the Company would grant Biogen Idec access to any confidential due diligence information.

        There was no additional contact between the Company and Biogen Idec with respect to Biogen Idec's proposed acquisition of the Company prior to September 21, 2009, when Biogen Idec commenced the Offer, through Purchaser. The Tender Offer was communicated in the following letter to the Board:

September 21, 2009

Facet Biotech Corporation
Board of Directors
c/o Faheem Hasnain, President and Chief Executive Officer
1500 Seaport Boulevard
Redwood City, CA 94063

Dear Faheem:

Biogen Idec is today commencing a tender offer to acquire all of the outstanding shares of Facet Biotech Corporation for $14.50 per share in cash. As you know, we have repeatedly expressed our interest in discussing with Facet Biotech's Board of Directors and management team the potential acquisition of Facet Biotech by Biogen Idec in a negotiated transaction, but have been told that Facet Biotech has no interest in discussing a potential transaction on the terms we proposed. In light of the rejection of the proposal by Facet Biotech's Board of Directors on September 8, 2009, we are presenting our $14.50 per share, all-cash offer directly to Facet Biotech's stockholders.

19

In commencing this tender offer, we would like to address for the record certain of the assertions you made through the September 8, 2009 letter and press release rejecting our offer, as well as in subsequent communications to the investment community.

First, Facet Biotech has stated inaccurately that Biogen Idec's $14.50 per share proposal "represents only the cash on [Facet Biotech's] balance sheet and fails to attribute any value to daclizumab, or to the rest of [Facet Biotech's] R&D pipeline and platform." Specifically, Facet Biotech asserts that its cash balance as of June 30, 2009 represents a per share cash value of approximately $15.11. In fact, Facet Biotech's available cash is considerably below our offer price of $14.50 per share when the following factors are accounted for:

•

In public statements, Facet Biotech has estimated that it will use approximately $80 million in cash in 2009 and indicated that about $32 million had already been spent through June 30, 2009. This implies that the monthly cash usage is about $8 million for the rest of 2009. Each month that passes is another month in which Facet Biotech's cash balance decreases.

•

Facet Biotech also recently spent $30 million in cash as part of its Trubion collaboration, in addition to committing to funding future development costs and milestone payments, which it has since confirmed are not included in its estimated $80 million per year cash expenditure rate. This new collaboration obligation represents a significant cash burden to Facet Biotech.

•

Facet Biotech also has significant lease and other obligations. As you recently disclosed, Facet Biotech has total lease obligations on an undiscounted basis of approximately $208 million. Facet Biotech's most recent Quarterly Report discloses additional obligations totaling over $12 million related to manufacturing, post-retirement benefits, and other obligations.

•

Facet Biotech has referred to its cash per share using shares outstanding as of July 31, 2009, but this overstates the amount because it does not reflect the shares underlying outstanding options.

When these factors are included in the per share cash analysis, the available cash is significantly below the reported June 30, 2009 balance.

Second, Facet Biotech claims that Biogen Idec's proposal does not reflect the value of daclizumab, additional programs in its pipeline, its technology platform, related milestone payments, and synergies. However, the fact that Facet Biotech's net cash per share is considerably below our offer price means that Biogen Idec's proposal does ascribe meaningful value for these operating assets. Further, Biogen Idec's $14.50 offer represents a 64% premium over the $8.82 per share closing price of Facet Biotech on September 3, 2009.

Third, Facet Biotech suggests that "the significance of the [interim futility analysis regarding daclizumab] has not been fully appreciated by the investment community." In fact, Facet Biotech's stock price increased approximately 13% on the day following the announcement regarding the interim futility analysis and 27% from that day to the day prior to the announcement of the Trubion collaboration, evidencing a significant appreciation for the futility analysis findings in the market.

Fourth, Facet Biotech suggests that it only entered into the Trubion collaboration "after concluding that it was a positive for [Facet's] stockholders and was likely to be a positive synergistic opportunity for Biogen Idec as well." We believe that our view that the Trubion collaboration is value destructive has been corroborated by the fact that Facet Biotech's stock price dropped 22% in the five trading days following the announcement of the Trubion collaboration and prior to Biogen Idec's proposal.

Finally, Facet Biotech has disclosed that it expects its cash balance to be completely depleted by the end of 2012, despite the fact that the company will have significant remaining obligations and the need to continue funding its clinical programs, including importantly, the clinical programs in which it is partnered with Biogen Idec.

20

Biogen Idec's proposal represents an extremely attractive opportunity for Facet Biotech's shareholders to receive today the future value of the company. We continue to urge you to engage in discussions with us so that we may reach a definitive merger agreement.

Sincerely,

/s/ James C. Mullen
President and Chief Executive Officer

        On September 21, 2009, Biogen Idec filed a Schedule TO with the SEC, commencing the Offer. On September 21, 2009, the Board met and determined to recommend that stockholders take no action at that time with respect to the Offer until the Board had reviewed and issued its recommendation regarding the Offer on this Schedule 14D-9. The closing stock price for the Shares on September 21, 2009 was $16.74.

        On September 30, 2009, a meeting was held of the Board, which members of the Company's management and representatives of Centerview, Simpson Thacher and DLA Piper attended, to discuss what recommendation, if any, the Board should make to the Company's stockholders with respect to the Offer. At that meeting, a representative of Simpson Thacher reviewed the fiduciary duties of the Board in connection with their consideration of the Offer. Representatives of Centerview presented a financial analysis and the Board, management and Centerview discussed the business, operations, financial results and prospects of the Company. Centerview then rendered its oral opinion to the Board, which oral opinion was subsequently confirmed in writing, that, as of September 30, 2009 and based upon and subject to the factors and assumptions set forth in the written opinion, the consideration proposed to be paid to the Company's stockholders (other than the Purchaser and its affiliates) pursuant to the Offer was inadequate, from a financial point of view, to such holders. After consideration, including taking into account the factors set forth below under "Reasons for the Recommendation of the Board," the Board unanimously determined that the Offer was inadequate and not in the best interests of the Company and its stockholders. Accordingly, the Board unanimously determined to recommend that the Company's stockholders reject the Offer and not tender their Shares in the Offer, and approved the filing of this Statement.

Reasons for the Recommendation of the Board

        The Offer is on the same economic terms as the Second Proposal submitted by Biogen Idec to the Company on September 4, 2009, and less favorable economic terms than the First Proposal that was made on August 21, 2009. Both the First Proposal and the Second Proposal were determined by the Board of Directors to be inadequate and not in the best interests of the Company's stockholders.

        The Board has reviewed and considered the Offer after consultation with members of management and the Company's financial and legal advisors. After considering its fiduciary duties under applicable law, the Board has unanimously determined that the Offer is inadequate and is not in the best interests of the Company or its stockholders. Accordingly, the Board recommends that the Company's stockholders reject the Offer and not tender their Shares to Purchaser pursuant to the Offer.

        The Board considered each of the following factors, among others, when reaching its recommendation that stockholders reject the Offer and not tender their Shares to Purchaser:

•

The Offer is primarily funded by the Company's cash, marketable and investment securities and restricted cash, and attributes insufficient value to the operating and other assets of the Company.

•

Significant value of cash, marketable and investment securities and restricted cash.  As of August 31, 2009, the Company held cash, marketable and investment securities (including its equity investment in Trubion) and restricted cash having an aggregate value of

21

approximately $364.3 million. This represents approximately $14.55 per outstanding Share and $13.99 per Share calculated on a fully-diluted basis using the treasury stock method at the Offer price of $14.50 per Share. Subsequent to August 31, 2009, the Company made a $20 million upfront licensing payment to Trubion.

•

Up to $60 million in collaboration milestone payments achievable by end of first half of 2010.  If all $60 million of these payments were received, this amount would represent approximately $2.40 per outstanding Share and $2.30 per Share calculated on a fully-diluted basis using the treasury stock method at the Offer price of $14.50 per Share. These potential milestone payments are detailed below under "The value of the Company's rights under its collaboration agreements is substantial."

•

Daclizumab has significant value and strong probability of success, particularly following the decision to advance to phase 3.

•

Significant market opportunity for daclizumab in MS.  The global multiple sclerosis ("MS") market for 2010 is estimated at $10.9 billion, of which approximately $9.7 billion, or 88%, represents sales of interferons. The Company believes that next-generation molecules in development, which are expected to be significantly more efficacious than interferons and Copaxone®, will capture a significant and increasing portion of the MS market. Among these potentially more efficacious next-generation molecules, the Company believes that safety likely will be a significant differentiating factor. Based on daclizumab efficacy and safety data to date over a number of clinical trials, the Company believes that daclizumab, if approved, would achieve a strong position in the global MS market. Biogen Idec, a leader in the global MS market, has stated that daclizumab has the potential to play a significant role in the treatment of multiple sclerosis.

•

Strong probability of success for daclizumab.

•

The SELECT study is the first of two required registration-enabling studies for daclizumab. On July 31, 2009, a futility analysis was performed with respect to the SELECT trial to ensure safety of the subjects and to evaluate whether the trial should continue. As described in an unblinding plan submitted to the FDA, an independent statistician analyzed clinical data from approximately 150 trial subjects that had completed at least six months of treatment. An independent safety monitoring committee reviewed the interim data and recommended to Biogen Idec and the Company the continuation of the SELECT study.

•

In addition, to determine whether the collaboration should trigger the DECIDE phase 3 trial and to inform the design of this phase 3 trial, certain prearranged employees of the Company and Biogen Idec, who no longer have a role in the management of the SELECT study, reviewed on behalf of the Company and Biogen Idec summary data tables prepared by the independent statistician from the interim analysis. Based on this review and data from prior studies, these certain prearranged employees recommended on behalf of the Company and Biogen Idec that the collaboration should initiate the DECIDE phase 3 study, which is the second and final required registration-enabling study. On August 3, 2009, the Company announced Biogen Idec's and the Company's decision to initiate this phase 3 study. SELECT remains an ongoing blinded study and the primary endpoint data readout is expected to occur in 2011.

•

Based on these factors, including the decision by the Company and Biogen Idec to advance to a phase 3 trial, the Company believes the probability of success of the daclizumab program has increased significantly and, when combined with the data to date from a number of prior daclizumab clinical trials, the Company believes daclizumab has a strong probability of success.

22

•

The Company's other development products, four of which are in clinical-stage development and one additional in pre-clinical stage development, have considerable value.

In addition to the daclizumab program, the Company has four other programs in clinical-stage development and one in pre-clinical stage development. These development programs are:

•

Elotuzumab.  Elotuzumab, a CS1 directed antibody, is in phase 1 development for the treatment of multiple myeloma in collaboration with Bristol-Myers Squibb ("BMS"). The Company has submitted several abstracts to the American Society of Hematology conference detailing both efficacy and safety interim data from the phase 1 trials.            While the data remain under embargo, we believe they are very positive and should support a decision to initiate phase 2 studies in the first half of 2010.

•

Volociximab.  Volociximab (M200), an antibody targeting the a5b1 integrin, is in phase 1/2 development for solid tumors with Biogen Idec under the Biogen Idec Collaboration Agreement, which covers volociximab in all indications. The Company and Biogen Idec also have together licensed volociximab to Ophthotech for ophthalmic indications and have the right to various development, regulatory and sales-based milestones and eventual royalties on potential product sales.

•

TRU-016.  TRU-016, a Small Modular ImmunoPharmaceutical (SMIP^TM) protein therapeutic that targets CD37, is in phase 1 development for the treatment of chronic lymphocytic leukemia in collaboration with Trubion. TRU-016 appears to be a highly effective B-cell depleting drug that acts through both antibody-dependent cellular cytoxicity (ADCC) and direct cell killing (apoptosis) and may be effective in treating patients who do not respond well or at all to CD20-directed therapies, such as Biogen Idec's Rituxan® antibody. B-cell depletion has broad therapeutic applications, including chronic lymphocytic leukemia, non-Hodgkin's lymphoma, MS, rheumatoid arthritis and lupus.

•

PDL192.  PDL192 is in phase 1 development for solid tumors. PDL192 is a monoclonal antibody which targets the tumor necrosis factor-like weak inducer of apoptosis (TWEAK) receptor, also known as Fn14, with respect to which the Company owns worldwide rights. Although several companies, including Biogen Idec, are targeting Fn14 in ongoing oncology and immulogy programs, to its knowledge, only the Company has advanced a program to the clinic.

•

PDL241.  PDL241 is in pre-clinical development for immunologic diseases. Like elotuzumab, PDL241 is directed against the CS1 antigen. BMS has an option to include PDL241 in the existing collaboration with the Company, which is further discussed below under "The Company's rights under its collaboration agreements have substantial value."

The Board believes that these programs represent substantial value for the Company's stockholders, including the value represented by potential milestone payments and the Company's rights under its collaboration agreements for the programs that are being developed in collaboration with the Company's partners as discussed below under "The Company's rights under its collaboration agreements have substantial value."

•

The Company's rights under its collaboration agreements have substantial value.

•

No change in control termination or consent rights in collaboration agreements.  In the event of an acquisition of the Company by a third party (other than Biogen Idec), the Company's collaboration with Biogen Idec would continue unchanged, as further described above in Item 3 under the heading "Biogen Idec Collaboration Agreement". In addition, the Company's collaboration agreements with BMS and Trubion would also continue. Those collaboration agreements do not require any consent by BMS or Trubion or permit BMS or

23

Trubion to terminate because of a Company change of control, except that Trubion has the right to opt out of collaboration on the TRU-016 product specifically.

•

Biogen Idec Collaboration Agreement.  Under the Biogen Idec Collaboration Agreement, Biogen Idec will pay the Company a $30 million milestone payment upon the initiation of the DECIDE phase 3 study of daclizumab, which both Biogen Idec and the Company have publicly announced they expect will occur in the first half of 2010. As described under Item 2 above under "Biogen Idec Collaboration Agreement", the Company also potentially has the right to additional development, regulatory and sales-based milestone payments totaling up to $620 million for IL-2R products (including daclizumab) and a5b1 products (including volociximab). Development costs under the collaboration are shared equally and the Company would be entitled to 50% of the operating profits and to co-promotion rights in the U.S., Canada and the European Union for any collaboration product that is commercialized and the right to receive royalties in other territories.

•

Bristol-Myers Squibb Collaboration Agreement.  For elotuzumab, the Company has the right to receive a $15 million milestone payment under its BMS collaboration agreement if the Company and BMS determine to advance elotuzumab into phase 2, and the Company expects that it will achieve this milestone and receive this payment by the end of the first half of 2010. The Company also potentially has the right to receive up to $460 million in additional development and regulatory milestone payments and up to $200 million in sales-based milestone payments for elotuzumab in multiple myeloma and other indications. For PDL241, if BMS elects to expand the collaboration to include the PDL241 antibody after the completion of certain pre-agreed pre-clinical studies, which the Company expects to complete by the end of 2009, the Company could receive a $15 million milestone payment by early 2010. If BMS exercises its option to expand the collaboration to include PDL241, the Company would have the right to receive up to $230 million in development and regulatory milestone payments and up to $200 million in sales-based milestone payments with respect to PDL241. Under the agreement, BMS funds 80% of the development costs and the Company funds the remaining 20%. The Company would receive 30% of the profits on any U.S. sales of collaboration products and royalties on sales of collaboration products outside the U.S. ranging from the low- to mid-teens.

•

Trubion Collaboration and License Agreement.  This agreement provides for the Company and Trubion to collaborate with respect to the development and commercialization of CD37-directed protein therapeutic products, including TRU-016, and share equally in development costs and collaboration product profits. Trubion has a right of first negotiation with respect to any assignment by the Company of its interest in the agreement to a third party other than in connection with a Company change of control. The Company may terminate the collaboration agreement at any time prior to February 27, 2011 upon payment of a $10 million termination fee and thereafter without a termination fee.

•

The Company's proprietary protein engineering platform technologies have favorable prospects.

•

Scalable, Rapid and Comprehensive Protein Engineering.  The Company's proprietary platform of next-generation protein engineering technologies rapidly and comprehensively identifies potential opportunities to improve the affinity, immunogenicity and half-life of protein therapeutics, vaccines and enzymes.

•

COM Patents.  Applying this technology, the Company has identified mutations and combinations of mutations on two commercial antibodies, including Avastin®, and has filed composition of matter (COM) patent applications covering these antibody mutations. The Company expects to complete its protein engineering work on three additional commercial

24

antibodies and file COM related patent applications in 2009 and to continue its protein engineering work thereafter.

•

Potential for Collaborations and Licensing.  The Company believes its proprietary platform and capabilities are valuable to companies pursuing biobetters or seeking to improve first-generation proteins. Discussions are underway with multiple parties regarding licensing the Company's protein engineering technologies, collaborating on the development of biobetters and performing protein engineering services for a fee.

•

The Company's strong balance sheet provides the resources to continue development through important development milestones in 2010 and 2011.

A number of the Company's development programs have important milestones in 2010 and 2011, each of which could create significant value for stockholders of the Company. The Company's strategic plan provides the Company with sufficient cash to fund its operations through these potential value inflection points into 2012, including the SELECT registration trial data readout which is expected to occur in the second half of 2011.

•

The Company has the potential to generate significant royalties and milestone payments from the Company's out-licensed programs and other agreements.

        The agreements under which the Company may receive royalty and milestone payments from third parties include:

•

EKR Therapeutics.  Royalties on sales of the pre-mixed bag formulation of Cardene®, which has been commercialized and is currently sold in the market.

•

Abbott.  Licensee of ABT-874, a fully human anti-IL-12 antibody which is currently in phase 3 development, and of rights related to several humanized antibodies.

•

Seattle Genetics.  Licensee of SGN-33 (lintuzumab), an anti-CD33 antibody which is currently in phase 2b development, and rights to another preclinical target.

•

Progenics Pharmaceuticals.  Licensee of PRO-140, a humanized antibody which is currently in phase 2 development.

•

Ophthotech.  Licensee of volociximab for ophthalmic uses, which is currently in phase 1 development.

•

Actinium Pharmaceuticals.  Licensee of forms of derivatives of HuM195, an anti-CD33 antibody, conjugated with alpha emitting radioisotopes, which is currently in phase 1 development.

•

Genentech.  Licensee of rights to antibody-drug conjugates (ADC) directed against the TMEFF2 antigen, which is currently in pre-clinical development.

•

The Offer is opportunistically timed to acquire value not reflected in the Company's stock price and prior to a pending $30 million milestone payment from Biogen Idec.

•

Biogen Idec's Initial Proposal was made shortly after the interim futility analysis and the joint decision to advance daclizumab to phase 3.  Biogen Idec has a deep understanding of the potential of daclizumab as a result of knowledge obtained as the Company's development partner over the last four years and through its existing MS franchise. The Board believes that Biogen Idec recognizes the attractiveness of the Company's near-term and future growth prospects, including the significant market opportunity for daclizumab, and has opportunistically timed the Offer to acquire the Company before these factors are fully reflected in the Company's stock price.

25

•

Biogen Idec is expected to make a significant milestone payment to the Company in the first half of 2010.  Biogen Idec will make a $30 million milestone payment to the Company upon the initiation of the DECIDE daclizumab phase 3 study, which the Company and Biogen Idec have announced is expected to occur in the first half of 2010.

•

There is significant potential synergy value in a business combination with the Company.

•

Strategic Synergies.  The Board believes that any industry buyer would gain value through the strategic fit and competitive value inherent in the Company's MS and oncology programs and its antibody and protein engineering technology platforms. Biogen Idec would gain exclusive rights to daclizumab in MS if it were to acquire the Company, and any other acquirer would gain a 50% interest in daclizumab in MS and all of the Company's other rights under the Biogen Idec Collaboration Agreement. Biogen Idec has publicly stated that a transaction is compelling because of the strong strategic fit with its MS franchise.

•

Cost Synergies.  The Board believes that given Biogen Idec's significant resources and infrastructure it would achieve significant cost synergies.

•

Elimination of Future Milestone Payments.  In the event of an acquisition by Biogen Idec, the pending $30 million milestone payment and any other future milestone payment obligations of Biogen Idec under the daclizumab and volociximab development programs would be eliminated. If the products under the Biogen Idec Collaboration Agreement are successfully developed in multiple indications and all milestones are achieved, the Biogen Idec Collaboration Agreement provides for development, regulatory and sales-based milestone payments totaling up to $660 million.

•

Net Operating Losses ("NOLs").  The Company had incurred net operating losses of approximately $63.6 million as of June 30, 2009. These NOLs would have value in the hands of any potential acquiror (including Biogen Idec) to offset taxable profits. The Company estimates that the full value of these NOLs could be realized in less than four years. The Company's existing development activities are expected in result in an increase to the NOLs.

•

Opportunities exist to reduce the Company's long-term lease liabilities.

•

Over the 12-year period from 2010 through the end of the lease term in 2021, the Company's estimated aggregate lease obligations total $208 million. This amount would be lower in current dollars on a discounted basis. Approximately 80% of these lease payments are due after 2012.

•

The Company is currently in discussions regarding potential subleases of the Company's excess real estate capacity. While there is no assurance of success, the Company is optimistic that over time a significant reduction of these obligations can be achieved through one or more subleases.

•

Opinion of Centerview Partners.

Centerview Partners delivered an oral opinion, subsequently confirmed in writing, that, as of September 30, 2009, and based upon and subject to the factors and assumptions set forth in such written opinion, the Offer was inadequate to the holders of the Shares from a financial point of view. The full text of the written opinion of Centerview Partners, dated September 30, 2009, and which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with such opinion, is attached to this Statement as Annex A. Centerview Partners provided its opinion for the information and assistance of the Board in connection with its consideration of the Offer. The opinion of Centerview Partners is not a

26

recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Offer or any other matter.

•

The Offer values the Shares below the market price at the time that the Offer was made.

The market price has remained above the Offer price of $14.50 per Share since the initial unsolicited public announcement of Biogen Idec's intent to acquire the Company on September 4, 2009. The Offer price represents a 16.1% discount to the $17.29 closing price per Share on September 30, 2009, the last trading day prior to the date of this Statement.

•

The Offer is highly conditional, creating substantial uncertainty as to whether Biogen Idec would be required to consummate the Offer.

•

MAE Condition.  As described under Item 2 of this Statement, the Offer is conditioned upon the MAE Condition, the requirements of which include, among other items, that there not have occurred any change to the business, operations or prospects of the Company that may be materially adverse, and that Biogen Idec not have become aware of any fact which may have material adverse significance with respect to the value of the Company. The MAE Condition is sufficiently broad that Biogen Idec or the Purchaser could argue that almost any change to the Company's business, including changes arising in the ordinary course of the operations of the Company, may cause this condition not to be satisfied.

•

The Impairment Condition.  As described under Item 2 of this Statement, the Offer is conditioned on the Impairment Condition, the requirements of which include, among others, that the Company not having entered into any agreement or transaction that diminishes the expected value of the acquisition of the Company to Biogen Idec. This condition is sufficiently broad and vague that it enables Biogen Idec to argue that virtually any agreement or transaction entered into by the Company, including in the ordinary course of operations, diminishes the expected value of the Company to Biogen Idec.

•

Equity Market and Foreign Exchange Performance Condition.  The Offer is conditioned upon the performance of the Dow Jones Industrial Average, S&P 500 index and the NASDAQ Composite Index (together, the "Indices"). To the extent that any of these Indices decline by an amount in excess of 15% measured from the close of business at the time of commencement of the Offer, Biogen Idec is not required to complete the Offer. In the past two years, the equity markets have dropped over 15% in a 20 trading-day period at least 18 times. The Offer is also conditioned upon there not having occurred any material change in the US dollar or any other currency exchange rates or a suspension or limitation of the currency markets.

•

Litigation Condition.  The Offer is conditioned on the absence of various types of litigation and the condition is sufficiently broad that Biogen Idec and Purchaser may argue that the litigation currently pending against the Company as described in Item 8, under the heading "Litigation" may have already triggered the failure of this condition.

•

Highly Conditional Offer.  The effect of these, and other numerous conditions, is that the Company's stockholders cannot be assured that Biogen Idec will be required to consummate its Offer. A number of the conditions are broad, are of questionable relevance, and are solely for the benefit of the Purchaser and Biogen Idec. Compliance with some of these conditions could restrict the Company's ability to manage its business in the ordinary course and may not be capable of being satisfied in the event that the Company continues to operate its business consistent with past practice.

27

Considerations of the Board

        The foregoing discussion of the information and factors considered by the Board is not meant to be exhaustive, but includes the material information, factors and analyses considered by the Board in reaching its conclusions and recommendation in relation to the Offer and the transaction proposed thereby. The members of the Board evaluated the various factors listed above in light of their knowledge of the business, financial condition and prospects of the Company, taking into account the advice of the Company's financial and legal advisors. In light of the variety of factors and amount of information that the Board considered, the members of the Board did not find it practicable to provide specific assessment of, quantify or otherwise assign any relative weights to, the factors considered in determining its recommendation. However, the recommendation of the Board was made after considering the totality of the information and factors involved. Individual members of the Board may have given different weight to different factors. In addition, in arriving at its recommendation, the directors of the Company were aware of the interests of certain officers and directors of the Company as described under "Past Contracts, Transactions, Negotiations and Agreements."

Recommendation of the Board

        In light of the factors described above, the Board has unanimously determined that the Offer is inadequate and not in the best interests of the Company or its stockholders. Therefore, the Board unanimously recommends that the stockholders reject the Offer and not tender their Shares to Purchaser pursuant to the Offer.

Intent to Tender

        To the knowledge of the Company, after making reasonable inquiry, none of the Company's executive officers, directors, affiliates or subsidiaries currently intends to tender Shares held of record or beneficially by such person for purchase pursuant to the Offer.

Item 5.    Person/Assets Retained, Employed, Compensated or Used

        The Company has retained Centerview as its financial advisor in connection with the Offer. Centerview will receive a customary fee for its services, portions of which will become payable during the course of its engagement and a significant portion of which is contingent upon the consummation of a sale or business combination involving the Company. In addition, the Company has agreed to reimburse Centerview for its reasonable out-of-pocket expenses and indemnify Centerview and certain related persons against certain liabilities arising out of the engagement.

        The Company also has engaged MacKenzie Partners, Inc. ("MacKenzie") to assist it in connection with the Company's communications with its stockholders with respect to the Offer. The Company has agreed to pay customary compensation to MacKenzie for such services. In addition, the Company has agreed to reimburse MacKenzie for its reasonable out-of-pocket expenses, and MacKenzie and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement.

        The Company has retained Brunswick Group LLC ("Brunswick") as its public relations advisor in connection with the Offer. The Company has agreed to pay customary compensation for such services and to reimburse Brunswick for its out-of-pocket expenses, and Brunswick and certain related persons will be indemnified against certain liabilities relating to or arising out of the engagement.

        Except as set forth above, neither the Company nor any person acting on its behalf has or currently intends to employ, retain or compensate any person to make solicitations or recommendations to the stockholders of the Company on its behalf with respect to the Offer.

28

Item 6.    Interest in Securities of the Subject Company

        During the past 60 days, no transactions with respect to the Common Stock have been effected by the Company or, to the Company's knowledge after reasonable inquiry and a review of Form 4 filings, by any of its current executive officers, directors, affiliates or subsidiaries, except for the following:

Name	Date of Transaction		Nature of Transaction	Number of Shares		Price
Faheem Hasnain		9/22/2009	Automatic purchase of shares under a Code Section 423 employee stock purchase plan		1,200	$	5.525
Maninder Hora		9/22/2009	Automatic purchase of shares under a Code Section 423 employee stock purchase plan		1,200	$	5.525
Francis Sarena		9/14/2009	Shares withheld by the Company to satisfy tax withholding obligations incident to the vesting of restricted shares		1,182	$	16.34
Francis Sarena		9/22/2009	Automatic purchase of shares under a Code Section 423 employee stock purchase plan		1,200	$	5.525

        No information has been included in this Item 6 with respect to any transactions that have been effected within the past 60 days by persons or entities that hold 5% or more of the outstanding Shares but are otherwise unaffiliated with the Company.

Item 7.    Purposes of the Transaction and Plans or Proposals

Subject Company Negotiations

        For the reasons discussed in Item 4 "—Reasons for the Recommendation of the Board," the Board unanimously determined that the Offer is inadequate and not in the best interests of the Company's stockholders, other than Biogen Idec and its affiliates. Accordingly, the Board recommends, on behalf of the Company, that the Company's stockholders reject the Offer and not tender their Shares pursuant to the Offer. The Company has received inquiries from third parties that could lead to offers being made for all or a portion of the Shares or the Company's assets. The Company may determine to pursue discussions with various parties, and in the course of such discussions, the Company may enter into confidentiality agreements and may supply confidential information to one or more parties. Except as described in this Schedule 14D-9 (including in the Exhibits to this Schedule 14D-9) or as incorporated in this Schedule 14D-9 by reference, the Company is not now undertaking or engaged in any negotiations in response to the Offer that relates to or would result in (i) a tender offer for, or other acquisition of, Shares by Biogen Idec, any of its subsidiaries, or any other person, (ii) any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries, (iii) any purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries or (iv) any material change in the present dividend rate or policy, indebtedness or capitalization of the Company. Except as described or referred to in this Schedule 14D-9 or the annexes and exhibits to this Schedule 14D-9 or the Offer, there are no transactions, board resolutions, agreements in principle or contracts entered into in response to the Offer which relate to or would result in one or more of the matters referred to in the preceding sentence.

        Notwithstanding the foregoing, the Company may in the future engage in negotiations in response to the Offer that could have one of the effects specified in the preceding paragraph, and it has determined that disclosure with respect to the parties to, and the possible terms of, any transactions or proposals of the type referred to in the preceding paragraph might jeopardize the discussions or negotiations that the Company may conduct. Accordingly, the Board has adopted a resolution instructing management not to disclose the possible terms of any such transactions or proposals, or the

29

parties thereto, unless and until such time as counsel advises the Company such disclosure is required by law.

Item 8.    Additional Information

        The information contained in all of the Exhibits referred to in Item 9 below is incorporated herein by reference in its entirety.

Board Action Regarding Rights Agreement

        At its meeting on September 7, 2009, the Board adopted the Rights Agreement to protect stockholders against, among other things, unsolicited attempts to acquire control of the Company at an inadequate price or that are otherwise not in the best interests of the Company and its stockholders.

        Under the Rights Agreement, the rights will become exercisable if a person becomes an "acquiring person" by acquiring beneficial ownership of 15% or more of the Common Stock or if a person commences a tender offer that could result in that person owning 15% or more of the Common Stock.

        At its meeting on September 30, 2009, the Board took action, as permitted by the Rights Agreement, to postpone the Distribution Date (as defined in the Rights Agreement), which otherwise would occur on the tenth business day after the commencement of the Offer or the first public announcement of the Purchaser's intention to commence the Offer, until such date (prior to such time as any person becomes an Acquiring Person (as defined in the Rights Agreement)) as may be subsequently determined by the Board by resolution. Until the Distribution Date, the Rights will continue to be evidenced by the certificates for the Common Stock, and the Rights will be transferable only in connection with the transfer of the associated Common Stock.

        A copy of the Rights Agreement has been filed with the SEC as an exhibit to a Registration Statement on Form 8-A, dated September 9, 2009, and is incorporated herein by reference.

Delaware General Corporation Law

        The Company is incorporated under the laws of the State of Delaware. The following provisions of the DGCL are therefore applicable to the Offer.

        Business Combination Statute.    Section 203 of the DGCL prevents an "interested stockholder" (generally defined as a person who, together with its affiliates and associates, beneficially owns 15% or more of a corporation's voting stock) from engaging in a "business combination" (which includes a merger, consolidation, a sale of a significant amount of assets, and a sale of stock) with a Delaware corporation for three years following the time such person became an interested stockholder unless:

(i)

before such person became an interested stockholder, the board of directors of the corporation approved either the transaction in which the interested stockholder became an interested stockholder or the business combination;



(ii)

upon consummation of the transaction in which the interested stockholder became an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding, for purposes of determining the number of shares outstanding, stock held by directors who are also officers and by employee stock plans that do not allow plan participants to determine confidentially whether to tender shares); or



(iii)

following the transaction in which such person became an interested stockholder, the business combination is (x) approved by the board of directors of the corporation and (y) authorized at a meeting of stockholders by the affirmative vote of the holders of at least 66²/3% of the outstanding voting stock of the corporation which is not owned by the interested stockholder.

30

        Appraisal Rights.    Holders of Shares will not have appraisal rights in connection with the Offer. However, if Purchaser or Biogen Idec purchases Shares in the Offer and a subsequent merger (including a short-form merger) involving the Company is consummated, holders of Shares immediately prior to the effective time of such merger may have the right pursuant to the provisions of Section 262 of the DGCL to demand appraisal of their Shares. If appraisal rights are applicable, dissenting stockholders who comply with the applicable statutory procedures will be entitled, under Section 262 of the DGCL, to receive a judicial determination of the fair value of their Shares (excluding any element of value arising from the accomplishment or expectation of such merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any. Any such judicial determination of the fair value of the Shares could be based upon factors other than, or in addition to, the price per Share ultimately paid in the Offer or any subsequent merger or the market value of the Shares. The value so determined could be more or less than the price per Share ultimately paid in the Offer or any subsequent merger.

        Appraisal rights cannot be exercised at this time. If appraisal rights become available at a future time, the Company will provide additional information to the holders of Shares concerning their appraisal rights and the procedures to be followed in order to perfect their appraisal rights before any action has to be taken in connection with such rights.

        The foregoing summary of the rights of stockholders to seek appraisal rights under Delaware law does not purport to be a complete statement of the procedures to be followed by stockholders desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The perfection of appraisal rights requires strict adherence to the applicable provisions of the DGCL.

Antitrust Laws

        Under the HSR Act, and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. The purchase of Shares by Purchaser pursuant to the Offer is subject to such requirements. The Company received notice that Biogen Idec has filed a Premerger Notification and Report Form in connection with the purchase of Shares pursuant to the Offer with the Antitrust Division and the FTC on September 21, 2009. The Company is required to file its Premerger Notification and Report Form with respect to the Offer no later than October 1, 2009.

        The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as Purchaser's or Biogen Idec's acquisition of Shares pursuant to the Offer. Private parties who may be adversely affected by the proposed transaction and individual states may also bring legal actions under the antitrust laws.

Litigation

        On September 24, 2009, stockholder John Dugdale filed a complaint on behalf of himself and all others similarly situated and derivatively on behalf of the Company, in the Superior Court of the State of California, County of San Diego (the "Complaint"). The Complaint purports to be a stockholder class and derivative action and alleges claims for breach of fiduciary duties, abuse of control, gross mismanagement and corporate waste against the Company's directors Faheem Hasnain, Brad Goodwin, Gary Lyons, David R. Parkinson, Kurt Von Emster, Hoyoung Huh and Does 1-25 (the "Defendants"), in connection with certain offers made by Biogen Idec to acquire the Company, including the Offer. The Complaint seeks declaratory and injunctive relief, including an order compelling Defendants to comply with their fiduciary duties, prohibiting Defendants "from entering into any contractual

31

provisions which harm Facet or its shareholders" or that "prohibit [D]efendants from maximizing shareholder value," and either invalidating or directing the rescission or redemption of the Rights Agreement and any other "defensive measure that has or is intended to have the effect of making the consummation of an offer to purchase the Company more difficult or costly for a potential acquirer." The Complaint further seeks fees and costs, including attorneys' and experts' fees. The case is Dugdale v. Hasnain et al., No. 37-2009-00099044-CU-BT-CTL.

Forward-Looking Statements

        Statements made in this Statement include forward-looking statements of the Company that are not historical facts. These forward-looking statements may be identified by words such as "anticipate," "expect," "suggest," "plan," "believe," "intend," "estimate," "target," "project," "could," "should," "may," "will," "would," "continue," "forecast," and other similar expressions. Each of these forward-looking statements involves risks and uncertainties. Actual results or developments may differ materially from those, express or implied, in these forward-looking statements. Various factors may cause differences between current expectations and actual results or developments, including risks and uncertainties associated with Biogen Idec's unsolicited proposal to acquire the Company. These risks and uncertainties associated with Biogen Idec's tender offer include, among others, the risk that key employees may pursue other employment opportunities due to concerns as to their employment security with the Company; the risk that the acquisition proposal will make it more difficult for the Company to execute its strategic plan and pursue other strategic opportunities; the risk that the future trading price of the Company's common stock is likely to be volatile and could be subject to wide price fluctuations; and the risk that stockholder litigation in connection with Biogen Idec's unsolicited proposal, or otherwise, may result in significant costs of defense, indemnification and liability. Other factors that may cause the Company's actual results or developments to differ materially from those expressed or implied in the forward-looking statements in this Statement include the following: if the Company's research and development efforts are not successful, it may not be able to effectively develop new products; the Company's business strategy is dependent on the ability to in-license or otherwise acquire the rights to develop and commercialize products; unless the Company's clinical studies demonstrate the safety and efficacy of the Company's product candidates, the Company will not be able to commercialize its product candidates; the clinical development of drug products is inherently uncertain and expensive and subject to extensive government regulation; the Company may be unable to enroll a sufficient number of patients in a timely manner in order to complete the Company's clinical trials; if the Company's collaborations are not successful or are terminated by its collaborators, the Company may not effectively develop and market some of its product candidates; the Company must protect its patent and other intellectual property rights to succeed; the Company may need to obtain patent licenses from others in order to manufacture or sell its potential products and the Company may not be able to obtain these licenses on terms acceptable to it or at all; the failure to gain market acceptance of the Company's product candidates among the medical community would adversely affect any product revenue the Company may receive in the future; the Company faces significant competition; changes in the U.S. and international health care industry, including regarding reimbursement rates, could adversely affect the commercial value of the Company's development product candidates; the Company may be unable to obtain or maintain regulatory approval for the Company's products, the Company relies on sole source, third parties to manufacture the Company's products; manufacturing changes may result in delays in obtaining regulatory approval or marketing for the Company's products; the Company must comply with extensive government regulations and laws; the Company may incur significant costs in order to comply with environmental regulations or to defend claims arising from accidents involving the use of hazardous materials; the Company may be subject to product liability claims, and the Company's insurance coverage may not be adequate to cover these claims; the Company may be required to satisfy certain indemnification obligations to PDL or may not be able to collect on indemnification rights from PDL; the Company must attract and retain

32

highly skilled employees in order to succeed; the Company anticipates that it will incur losses for the foreseeable future; the Company may never achieve or sustain profitability; if additional capital is not available, the Company may have to curtail or cease operations; the Company may obtain future financing through the issuance of debt or equity, which may have an adverse effect on the Company's stockholders or may otherwise adversely affect the Company's business; the Company may not receive the contingent consideration related to the sale of the product rights to new formulations of Cardene and the ularitide development-stage product under the Asset Purchase Agreement with EKR; the Company has no history operating as an independent company upon which stockholders can evaluate it; the Company's historical financial information is not necessarily indicative of the Company's future financial position, future results of operations or future cash flows and may not reflect what the Company's financial position, results of operations or cash flows would have been as a stand-alone company during the periods presented; the Company's operating expenses and results and any future revenue likely will fluctuate in future periods; the market price for the Shares may fluctuate widely; stockholders' percentage ownership in Facet Biotech may be diluted in the future; provisions in the Company's certificate of incorporation and bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of the Shares; and the other factors discussed in the Company's filings with the SEC, including the "Risk Factors" sections of the Company's periodic reports on Form 10-K and Form 10-Q filed with the SEC. Copies of the Company's filings with the SEC may be obtained at the "Investors" section of the Company's website at www.facetbiotech.com. All forward-looking statements in this Statement and the attachments hereto are qualified in their entirety by this cautionary statement.

33

Item 9.    Materials to Be Filed as Exhibits

Exhibit No.		Document
	(a)(1)	Press Release issued by Facet Biotech, on October 1, 2009
	(a)(2)	Letter, dated October 1, 2009 to Facet Biotech's stockholders.
	(a)(3)	Text of email, dated October 1, 2009 to Facet Biotech's employees.
	(a)(4)	Opinion of Centerview, dated as of September 30, 2009 (attached as Annex A to the Schedule).
	(a)(5)	Presentation dated October 1, 2009
	(e)(1)	Excerpts from the Company's Definitive Proxy Statement on Schedule 14A relating to the 2009 Annual Meeting of Stockholders as filed with the SEC on April 15, 2009.
	(e)(2)	Collaboration Agreement dated as of September 12, 2005 by and between PDL BioPharma, Inc. and Biogen Idec MA Inc., as amended by the First Amendment to the Collaboration Agreement, effective as of November 1, 2007 (incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on Form 10-12B/A filed December 4, 2008)*.
	(e)(3)	2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to Registration Statement on Form 10-12B/A filed October 27, 2008)
	(e)(4)	Form of Notice of Grant of Stock Option under the 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to Registration Statement on Form 10-12B/A filed October 6, 2008
	(e)(5)	Form of Stock Option Agreement under the 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to Registration Statement on Form 10-12B/A filed October 6, 2008)
	(e)(6)	Forms of Notice of Grant of Restricted Stock Award under the 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 to Registration Statement on Form 10-12B/A filed October 6, 2008)
	(e)(7)	Form of Restricted Stock Agreement under the 2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to Registration Statement on Form 10-12B/A filed October 6, 2008)
	(e)(8)	Retention and Severance Plan (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement, as amended, on Form 10-12B/A filed October 27, 2008).
	(e)(9)	Agreement to Participate in the Retention and Severance Plan, dated December 1, 2008, by and between Facet Biotech Corporation and Faheem Hasnain (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	(e)(10)	Agreement to Participate in the Retention and Severance Plan, dated December 1, 2008, by and between Facet Biotech Corporation and Andrew Guggenhime (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	(e)(11)	Agreement to Participate in the Retention and Severance Plan, dated December 1, 2008, by and between Facet Biotech Corporation and Maninder Hora Guggenhime (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008)
	(e)(12)	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.9 to the Company's Registration Statement, as amended, on Form 10-12B/A filed November 12, 2008).
	(e)(13)	Offer Letter, dated December 1, 2008, by and between Facet Biotech Corporation and Faheem Hasnain (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).

34

Exhibit No.		Document
	(e)(14)	Offer Letter, dated November 13, 2008, by and between Facet Biotech Corporation and Andrew Guggenhime (incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	(e)(15)	Offer Letter, dated November 13, 2008, by and between Facet Biotech Corporation and Maninder Hora (incorporated by reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	(e)(16)	Retention Bonuses Letter Agreement, dated November 13, 2008, by and between Facet Biotech Corporation and Andrew Guggenhime (incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	(e)(17)	Retention Bonuses Letter Agreement, dated November 13, 2008, by and between Facet Biotech Corporation and Maninder Hora (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	(e)(18)	2009 Performance Bonus Program (incorporated by reference to Item 5.02 in the Current Report on Form 8-K filed March 25, 2009)
	(e)(19)	Amended and Restated Certificate of Incorporation of Facet Biotech Corporation, effective August 28, 2008 (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement, as amended, on Form 10-12B/A filed October 6, 2008).
	(e)(20)	Bylaws of Facet Biotech Corporation (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement, as amended, on Form 10-12B/A filed October 6, 2008).

*

Certain information in this exhibit has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4) and 24b-2.

35

SIGNATURE

        After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

FACET BIOTECH CORPORATION
By:	/s/ FRANCIS SARENA
Name:	Francis Sarena
Title:	Vice President, General Counsel and Secretary
Dated:	October 1, 2009

36

Annex A

[Centerview Partners LLC Letterhead]

September 30, 2009

Board of Directors
Facet Biotech Corporation
1500 Seaport Blvd.
Redwood City, CA 94063

Members of the Board:

        You have asked us to advise you with respect to the adequacy, from a financial point of view, to the holders of shares of common stock, par value $0.01 per share (the "Shares") of Facet Biotech Corporation (the "Company") of the consideration of $14.50 per Share, net to the seller in cash, without interest (and less any applicable withholding taxes) (the "Consideration") proposed to be paid to such holders in the Offer (as defined below). The offer to purchase (the "Offer to Purchase") and related letter of transmittal (which, together with the Offer to Purchase, constitutes the "Offer") contained in the Tender Offer Statement on Schedule TO (the "Schedule TO") filed by FBC Acquistion Corp. (the "Offeror"), a wholly owned subsidiary of Biogen Idec Inc. ("Biogen Idec"), and Biogen Idec with the Securities and Exchange Commission on September 21, 2009, provide for an offer for all of the Shares pursuant to which, subject to the satisfaction of certain conditions set forth in the Offer, the Offeror will pay the Consideration for each Share accepted. We note that the Offer to Purchase provides that following consummation of the Offer, the Offeror intends to consummate a merger with the Company (the "Merger" and, together with the Offer, the "Transactions") in which all remaining public stockholders of the Company would receive the per Share Consideration that was paid pursuant to the Offer. The terms and conditions of the Transactions are set forth in more detail in the Offer to Purchase relating to the Offer.

        In connection with rendering our opinion, we have reviewed, among other things, the Schedule TO, including the Offer to Purchase and the related letter of transmittal contained therein; the Solicitation/Recommendation Statement of the Company to be filed on Schedule 14D-9 (the "Schedule 14D-9"), in the form approved by you on the date of this opinion. We have also reviewed and analyzed certain publicly available business and financial information relating to the Company, including the Company's audited financial statements as of and for the year ending December 31, 2008 and interim statements to date, as well as certain internal financial and operating information, including financial forecasts, analyses and projections prepared by or on behalf of the Company and provided to us for purposes of our analysis, and we have met with management of the Company to review and discuss such information and, among other matters, the Company's business, operations, assets, financial condition and future prospects.

        We have also reviewed and considered certain financial and stock market data relating to the Company, and we have compared that data with similar data for certain other companies, the securities of which are publicly traded, that we believe may be relevant or comparable in certain respects to the Company or one or more of its businesses or assets, and we have reviewed and considered the financial terms of certain business combinations in the biotechnology and specialty pharmaceuticals industries. We have also performed such other financial studies, analyses, and investigations and reviewed such other information as we considered appropriate for purposes of this opinion.

        In our review and analysis and in formulating our opinion, we have assumed and relied upon the accuracy and completeness of all of the historical financial and other information provided to or discussed with us or publicly available, and we have not assumed any responsibility for independent

A-1

verification of any of such information. We have also assumed and relied upon the reasonableness and accuracy of the financial projections, forecasts and analyses provided to us, and we have assumed that such projections, forecasts and analyses were reasonably prepared in good faith and on bases reflecting the best currently available judgments and estimates of the Company's management. We express no opinion with respect to such projections, forecasts and analyses or the assumptions upon which they are based. In addition, we have not reviewed any of the books and records of the Company, or assumed any responsibility for conducting a physical inspection of the properties or facilities of the Company, or for making or obtaining an independent valuation or appraisal of the assets or liabilities of the Company, and no such independent valuation or appraisal was provided to us. We also have assumed that the transactions described in the Offer to Purchase would be consummated without waiver or modification of any of the material terms or conditions contained therein by any party. Our opinion does not address any legal, regulatory, tax or accounting matters.

        In rendering this opinion, Centerview Partners, LLC ("Centerview") has not been engaged to act as an agent or a fiduciary of the Company, any of its affiliates, or its stockholders. In the ordinary course of our business, Centerview or its affiliates may, from time to time make a market in, have a long or short position in, buy and sell or otherwise effect transactions for customer accounts and for our own accounts in securities or loans of, or perform investment banking, commercial lending or other services for, the Company and other entities which are or may be involved in the Transactions. We are acting as financial advisor to the Board of Directors of the Company (the "Board of Directors") in connection with its consideration of the Offer and other matters pursuant to our engagement by the Board of Directors. We have received certain fees for our services in connection with our engagement, and the Company has agreed to pay us additional fees for our services in connection with our engagement, the amount of which depends upon whether a sale of the Company or a business combination involving the Company is consummated, including as a result of the Transactions. In addition, the Company has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement. We also may provide investment banking and other financial services to the Company, the Offeror, Biogen Idec or their respective affiliates in the future, for which we may receive compensation.

        Our opinion does not address the relative merits of the Transactions as compared to any strategic alternatives that may be available to the Company. This opinion addresses only the adequacy from a financial point of view, as of the date hereof, of the Consideration proposed to be paid to the holders of Shares (other than the Offeror and any of its affiliates) pursuant to the Offer. In addition, we do not express any view on, and our opinion does not address, the adequacy or fairness of the Consideration or any other term or aspect of the Offer or the Merger to, or any consideration received in connection therewith by, the Offeror, Biogen Idec or any of their respective affiliates, creditors, or other constituencies of the Company or of the Offeror. We are not expressing any opinion as to the prices at which the Shares will trade at any time. Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof and we assume no responsibility for updating, revising or reaffirming this opinion based on circumstances, developments or events occurring after the date hereof. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors in connection with its consideration of the Offer and such opinion does not constitute a recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Offer or any other matter.

        It is understood that this letter is for the benefit and use of the Board of Directors of the Company in its consideration of the Offer and except for inclusion in its entirety in the Schedule 14D-9, may not be quoted, referred to or reproduced at any time or in any manner without our prior written consent.

A-2

        Based upon and subject to the foregoing, including the various assumptions and limitations set forth herein, it is our opinion that as of the date hereof, the Consideration proposed to be paid to the holders of Shares (other than the Offeror and any of its affiliates) is inadequate to such holders from a financial point of view.

Very truly yours,

/s/ Centerview Partners LLC

CENTERVIEW PARTNERS LLC

A-3

Annex B

DIRECTORS AND EXECUTIVE OFFICERS OF FACET BIOTECH CORPORATION

Name	Position
Kurt von Emster	Director
Brad Goodwin	Director, Chairperson of the Board
Andrew Guggenhime	Senior Vice President and Chief Financial Officer
Faheem Hasnain	Director, Chief Executive Officer and President
Maninder Hora	Vice President, Product and Quality Operations
Hoyoung Huh	Director
Ted Llana	Senior Vice President, Commercial and Corporate Development
Gary Lyons	Director
David Parkinson	Director
Mark Rolfe	Senior Vice President and Chief Scientific Officer
Francis Sarena	Vice President, General Counsel and Secretary

B-1

EX-99.(A)(1)

Exhibit 99.(a)(1)

FOR IMMEDIATE RELEASE

Contacts:
Investors:	Media:
Jean Suzuki	Brunswick Group
Investor Relations	Steve Lipin/Cindy Leggett-Flynn
(650) 454-2648	(212) 333-3810
jean.suzuki@facetbiotech.com
MacKenzie Partners
Dan Burch/Larry Dennedy
(800) 322-2885

FACET BIOTECH’S BOARD OF DIRECTORS UNANIMOUSLY REJECTS
BIOGEN IDEC’S UNSOLICITED TENDER OFFER AS INADEQUATE

— Recommends Stockholders Not Tender Shares at $14.50 per Share —

Redwood City, Calif., October 1, 2009 — Facet Biotech Corporation (NASDAQ: FACT) today announced that its board of directors has unanimously recommended that its stockholders reject the unsolicited conditional tender offer from Biogen Idec Inc. (NASDAQ: BIIB) to acquire all of the outstanding shares of Facet Biotech common stock for $14.50 per share in cash. The board, with the assistance of its financial and legal advisors, determined that the offer is inadequate and not in the best interests of Facet Biotech’s stockholders. Centerview Partners is serving as financial advisor and Simpson Thacher & Bartlett LLP is serving as legal advisor to Facet Biotech.

The board unanimously recommends that Facet Biotech stockholders reject the offer and not tender their shares into Biogen Idec’s offer.

“We analyzed the unsolicited tender offer put forward by Biogen Idec to our stockholders and determined that $14.50 per share does not reflect the value of our company and its prospects,” said Facet Biotech president and chief executive officer Faheem Hasnain. “The offer is substantially lower than our company’s current market value, is primarily funded by our own cash and marketable and investment securities, and attributes insufficient value to the attractive pipeline and assets of the company, including daclizumab.”

Mr. Hasnain continued: “We are committed to creating value for all of our stockholders and remain open to appropriate opportunities that will achieve this result.  Meanwhile, Facet Biotech continues to execute on its strategic plan, and I am confident in our company’s ability to provide meaningful growth and value to our stockholders as we look forward to several potential value inflection points in the near term.”

Stockholders with questions about the board’s recommendation or how to withdraw any tender of their shares may call MacKenzie Partners, Inc. at (800) 322-8225 (toll-free), (212) 929-5500 (call collect), or by email to facet@mackenziepartners.com.

The basis for the board’s recommendation is set forth in a Solicitation/Recommendation Statement on Schedule 14D-9, which was filed by Facet Biotech today with the Securities and Exchange Commission (SEC), accompanied by a letter to stockholders. The full text of the letter appears below.

October 1, 2009

Dear Fellow Stockholders:

As you are aware, on September 21, 2009, Biogen Idec Inc. (Biogen Idec) launched an unsolicited conditional tender offer (the Offer) to acquire your shares of Facet Biotech (the Company) common stock for $14.50 per share in cash, a price that is less than the closing price of $17.29 per share on September 30, 2009.

After consideration, including review of the Offer with assistance from its financial and legal advisors, your board of directors has unanimously determined that the Offer is inadequate and not in the best interests of Facet Biotech stockholders.

Your board of directors unanimously recommends that you reject the Offer and NOT tender your shares to Biogen Idec.

The board’s determination is based on numerous factors as detailed in the enclosed Schedule 14D-9, including:

·The Offer is primarily funded by Facet Biotech’s cash, marketable and investment securities and restricted cash, and attributes insufficient value to the operating and other assets of the Company. As of August 31, 2009, the Company had approximately $364.3 million of cash, marketable and investment securities (including its investment in Trubion Pharmaceuticals) and restricted cash.  This represents approximately $14.55 per outstanding share and $13.99 per share calculated on a fully-diluted basis using the treasury stock method at the Offer price of $14.50 per share. Subsequent to August 31, 2009, the Company made a $20 million upfront license payment to Trubion.  Facet Biotech has the potential to receive up to $60 million in collaboration milestone payments by the end of the first half of 2010, or approximately $2.40 per outstanding share and $2.30 per share calculated on a fully-diluted basis using the treasury stock method at the Offer price of $14.50 per share.

·Daclizumab has significant value and a strong probability of success, particularly following the decision to advance to phase 3. The global multiple sclerosis (MS) market for 2010 is estimated at $10.9 billion.  We believe daclizumab, if approved, has the potential to achieve an important position in the global MS market. We also believe that there is a strong probability of success for daclizumab following the recent joint decision of Facet

2

Biotech and Biogen Idec to advance the program into a phase 3 study.  This decision was reached after an independent safety monitoring committee reviewed interim data from a futility analysis and recommended to Biogen Idec and the Company the continuation of the SELECT study and after the review by certain prearranged employees of the Company and Biogen Idec (who no longer have a role in the management of the SELECT study) of summary data tables prepared by the independent statistician from the interim analysis.  SELECT remains an ongoing blinded study.  Moreover, Biogen Idec, a leader in the global MS market, has stated that daclizumab has the potential to play a significant role in the treatment of MS.

·Facet Biotech’s other development products, four of which are in clinical-stage development and one additional in pre-clinical stage development, have considerable value. The board believes the Company’s rights for these programs — elotuzumab, volociximab, TRU-016, PDL192 and PDL241 — represent substantial value for our stockholders, including the value represented by potential milestone payments under the Company’s collaboration agreements.

·Facet Biotech’s rights under its collaboration agreements have substantial value.  The Company has substantial and valuable rights under its collaboration agreements with Biogen Idec, Bristol-Myers Squibb and Trubion.  Also, these collaboration agreements do not allow the Company’s collaborators to terminate such agreements if the Company experiences a change in control, although Trubion would have the right to opt out of the collaboration on the TRU-016 product specifically.

·Facet Biotech’s proprietary protein engineering platform technologies have favorable prospects. Discussions are underway with multiple parties regarding licensing the Company’s protein engineering technologies, collaborating on the development of biobetters and performing protein engineering services for a fee. In addition, using this technology, the Company has identified mutations and combinations of mutations on two commercial antibodies, including Avastin®, and has filed composition of matter patent applications covering these mutations.

·Facet Biotech’s strong balance sheet provides the resources to continue development activities through important development milestones in 2010 and 2011. The Company’s strategic plan provides sufficient cash to fund its operations through these potential value inflection points and through 2012, which could create significant value for stockholders.

·Facet Biotech has the potential to generate significant royalties and milestone payments from the Company’s out-licensed programs and other agreements.  The agreements under which the Company may receive royalty and/or milestone payments include agreements with EKR Therapeutics, Abbott, Seattle Genetics, Progenics Pharmaceuticals, Ophthotech, Actinium Pharmaceuticals and Genentech.

·The Offer is opportunistically timed to acquire value not reflected in Facet Biotech’s stock price and prior to a pending $30 million milestone payment from Biogen Idec. Biogen Idec’s initial proposal was made shortly after the interim futility analysis and the joint decision to advance daclizumab to phase 3.  Biogen Idec has a deep understanding of the potential of daclizumab as a result of knowledge obtained as the Company’s development

3

partner over the last four years and through its existing MS franchise. The board believes that Biogen Idec recognizes the attractiveness of Facet Biotech’s growth prospects and has opportunistically timed the Offer to acquire the Company before these factors are fully reflected in the Company’s stock price.

·There is significant potential synergy value in a business combination with the Company. The board believes that any industry buyer would gain value through the strategic fit and competitive value inherent in the Company’s MS and oncology programs and its antibody and protein engineering technology platforms. Biogen Idec has publicly stated that a transaction is compelling because of the strong strategic fit with its MS franchise. In addition, the board believes that should a transaction occur, Biogen Idec would achieve significant cost synergies, as well as eliminate the pending $30 million milestone payment to the Company and any other future milestone payment obligations under the daclizumab and volociximab development programs.

·Opportunities exist to reduce the Company’s long-term lease liabilities.The Company is currently in discussions regarding potential subleases of its excess real estate capacity and is optimistic that a significant reduction of these obligations can be achieved through one or more subleases over time.

·Opinion of Centerview Partners.Centerview Partners delivered an oral opinion, subsequently confirmed in writing, that, as of September 30, 2009, and subject to certain factors and assumptions, the Offer of $14.50 per share was inadequate to Facet Biotech stockholders from a financial point of view. Please see the full text of Centerview Partners’ written opinion, which is included as Annex A in the enclosed Schedule 14D-9.

Your board of directors and management team take their fiduciary responsibilities to you, our stockholders, extremely seriously. We are committed to creating value for all of our stockholders and remain open to appropriate opportunities that will achieve this result. The enclosed Schedule 14D-9 contains a detailed description of the reasons for your board of directors’ recommendation and the factors considered by the board. We urge you to read the Schedule 14D-9 so you will be fully informed before you make your decision. If you have questions or need assistance, please call our information agent, MacKenzie Partners, Inc. at (800) 322-8225 (toll-free), (212) 929-5500 (call collect), or by email facet@mackenziepartners.com.

Sincerely,
/s/ Brad Goodwin	/s/ Faheem Hasnain
Brad Goodwin	Faheem Hasnain
Chairperson of the Board	President and Chief Executive Officer
Facet Biotech	Facet Biotech

About Facet Biotech

Facet Biotech is a biotechnology company dedicated to advancing its pipeline of five clinical-stage products, leveraging its research and development capabilities to identify and develop new oncology drugs and applying its proprietary next-generation protein engineering technologies to potentially improve the clinical performance of protein therapeutics. Facet Biotech Corporation launched in December 2008 as a spin-off from PDL BioPharma, Inc.

4

NOTE: Facet Biotech and the Facet Biotech logo are considered trademarks of Facet Biotech Corporation.

Forward Looking Statements

This press release contains forward-looking statements of Facet Biotech that are not historical facts. These forward-looking statements may be identified by words such as “anticipate,” “expect,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “could,” “should,” “may,” “will,” “would,” “continue,” “forecast,” and other similar expressions. 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. Various factors may cause differences between current expectations and actual results, including risks and uncertainties associated with Biogen Idec’s tender offer. Other factors that may cause Facet Biotech’s actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in Facet Biotech’s filings with the SEC, including the “Risk Factors” sections of the Company’s periodic reports on Form 10-K and Form 10-Q filed with the SEC. Copies of Facet Biotech’s filings with the SEC may be obtained at the “Investors” section of Facet Biotech’s website at www.facetbiotech.com. Facet Biotech’s 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 Facet Biotech’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based for any reason, except as required by law, even as new information becomes available or other events occur in the future. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.

5

EX-99.(A)(2)

QuickLinks -- Click here to rapidly navigate through this document

Exhibit (a)(2)

October 1, 2009

Dear Fellow Stockholders:

        As you are aware, on September 21, 2009, Biogen Idec Inc. (Biogen Idec) launched an unsolicited conditional tender offer (the Offer) to acquire your shares of Facet Biotech (the Company) common stock for $14.50 per share in cash, a price that is less than the closing price of $17.29 per share on September 30, 2009.

        After consideration, including review of the Offer with assistance from its financial and legal advisors, your board of directors has unanimously determined that the Offer is inadequate and not in the best interests of Facet Biotech stockholders.

Your board of directors unanimously recommends that you reject the Offer and NOT tender your shares to Biogen Idec.

        The board's determination is based on numerous factors as detailed in the enclosed Schedule 14D-9, including:

•

The Offer is primarily funded by Facet Biotech's cash, marketable and investment securities and restricted cash, and attributes insufficient value to the operating and other assets of the Company. As of August 31, 2009, the Company had approximately $364.3 million of cash, marketable and investment securities (including its investment in Trubion Pharmaceuticals) and restricted cash. This represents approximately $14.55 per outstanding share and $13.99 per share calculated on a fully-diluted basis using the treasury stock method at the Offer price of $14.50 per share. Subsequent to August 31, 2009, the Company made a $20 million upfront license payment to Trubion. Facet Biotech has the potential to receive up to $60 million in collaboration milestone payments by the end of the first half of 2010, or approximately $2.40 per outstanding share and $2.30 per share calculated on a fully-diluted basis using the treasury stock method at the Offer price of $14.50 per share.

•

Daclizumab has significant value and a strong probability of success, particularly following the decision to advance to phase 3. The global multiple sclerosis (MS) market for 2010 is estimated at $10.9 billion. We believe daclizumab, if approved, has the potential to achieve an important position in the global MS market. We also believe that there is a strong probability of success for daclizumab following the recent joint decision of Facet Biotech and Biogen Idec to advance the program into a phase 3 study. This decision was reached after an independent safety monitoring committee reviewed interim data from a futility analysis and recommended to Biogen Idec and the Company the continuation of the SELECT study and after the review by certain prearranged employees of the Company and Biogen Idec (who no longer have a role in the management of the SELECT study) of summary data tables prepared by the independent statistician from the interim analysis. SELECT remains an ongoing blinded study. Moreover, Biogen Idec, a leader in the global MS market, has stated that daclizumab has the potential to play a significant role in the treatment of MS.

•

Facet Biotech's other development products, four of which are in clinical-stage development and one additional in pre-clinical stage development, have considerable value. The board believes the Company's rights for these programs—elotuzumab, volociximab, TRU-016, PDL192 and

PDL241—represent substantial value for our stockholders, including the value represented by potential milestone payments under the Company's collaboration agreements.

•

Facet Biotech's rights under its collaboration agreements have substantial value. The Company has substantial and valuable rights under its collaboration agreements with Biogen Idec, Bristol-Myers Squibb and Trubion. Also, these collaboration agreements do not allow the Company's collaborators to terminate such agreements if the Company experiences a change in control, although Trubion would have the right to opt out of the collaboration on the TRU-016 product specifically.

•

Facet Biotech's proprietary protein engineering platform technologies have favorable prospects. Discussions are underway with multiple parties regarding licensing the Company's protein engineering technologies, collaborating on the development of biobetters and performing protein engineering services for a fee. In addition, using this technology, the Company has identified mutations and combinations of mutations on two commercial antibodies, including Avastin®, and has filed composition of matter patent applications covering these mutations.

•

Facet Biotech's strong balance sheet provides the resources to continue development activities through important development milestones in 2010 and 2011. The Company's strategic plan provides sufficient cash to fund its operations through these potential value inflection points and through 2012, which could create significant value for stockholders.

•

Facet Biotech has the potential to generate significant royalties and milestone payments from the Company's out-licensed programs and other agreements. The agreements under which the Company may receive royalty and/or milestone payments include agreements with EKR Therapeutics, Abbott, Seattle Genetics, Progenics Pharmaceuticals, Ophthotech, Actinium Pharmaceuticals and Genentech.

•

The Offer is opportunistically timed to acquire value not reflected in Facet Biotech's stock price and prior to a pending $30 million milestone payment from Biogen Idec. Biogen Idec's initial proposal was made shortly after the interim futility analysis and the joint decision to advance daclizumab to phase 3. Biogen Idec has a deep understanding of the potential of daclizumab as a result of knowledge obtained as the Company's development partner over the last four years and through its existing MS franchise. The board believes that Biogen Idec recognizes the attractiveness of Facet Biotech's growth prospects and has opportunistically timed the Offer to acquire the Company before these factors are fully reflected in the Company's stock price.

•

There is significant potential synergy value in a business combination with the Company. The board believes that any industry buyer would gain value through the strategic fit and competitive value inherent in the Company's MS and oncology programs and its antibody and protein engineering technology platforms. Biogen Idec has publicly stated that a transaction is compelling because of the strong strategic fit with its MS franchise. In addition, the board believes that should a transaction occur, Biogen Idec would achieve significant cost synergies, as well as eliminate the pending $30 million milestone payment to the Company and any other future milestone payment obligations under the daclizumab and volociximab development programs.

•

Opportunities exist to reduce the Company's long-term lease liabilities. The Company is currently in discussions regarding potential subleases of its excess real estate capacity and is optimistic that a significant reduction of these obligations can be achieved through one or more subleases over time.

•

Opinion of Centerview Partners. Centerview Partners delivered an oral opinion, subsequently confirmed in writing, that, as of September 30, 2009, and subject to certain factors and assumptions, the Offer of $14.50 per share was inadequate to Facet Biotech stockholders from a

2

financial point of view. Please see the full text of Centerview Partners' written opinion, which is included as Annex A in the enclosed Schedule 14D-9.

        Your board of directors and management team take their fiduciary responsibilities to you, our stockholders, extremely seriously. We are committed to creating value for all of our stockholders and remain open to appropriate opportunities that will achieve this result. The enclosed Schedule 14D-9 contains a detailed description of the reasons for your board of directors' recommendation and the factors considered by the board. We urge you to read the Schedule 14D-9 so you will be fully informed before you make your decision. If you have questions or need assistance, please call our information agent, MacKenzie Partners, Inc. at (800) 322-8225 (toll-free), (212) 929-5500 (call collect), or by email facet@mackenziepartners.com.

Sincerely,
Brad Goodwin	Faheem Hasnain
Chairperson of the Board	President and Chief Executive Officer
Facet Biotech	Facet Biotech

3

QuickLinks

Exhibit (a)(2)

EX-99.(A)(3)

QuickLinks -- Click here to rapidly navigate through this document

Exhibit (a)(3)

October 1, 2009

Dear Colleagues,

        Today we responded to Biogen Idec's unsolicited tender offer to acquire Facet Biotech at $14.50 per share in cash. Attached is our press release, including a letter to stockholders, which was issued this morning.

        After reviewing Biogen Idec's offer, our board of directors determined that the proposal is inadequate and not in the best interests of our stockholders. The board therefore has recommended that you and other stockholders reject the offer and not tender shares to Biogen Idec.

        In our response, we outlined numerous reasons why our board determined that Biogen Idec's offer is inadequate. Among other reasons, it attributes insufficient value to the development programs, proprietary technologies and pipeline we all have worked so hard to develop.

        Biogen Idec has given our stockholders until 12:00 midnight ET on October 19, 2009 to tender, or sell, their shares. At that time, the tender offer will most likely be extended or terminate. It is possible that Biogen Idec may respond to our filing in the meantime, and we will continue to keep you updated with any additional news or developments.

        Our board and management team are committed to the best interests of the company and building stockholder value. Because of your efforts, we have made incredible progress meeting our goals this past year, and I want to thank you for your hard work to maintain our momentum as we work through this situation.

        I'm sure you have many questions and I look forward to addressing them. We will hold an all-hands meeting tomorrow, Friday, October 2^nd to discuss this announcement further. You will receive an email shortly with the calendar invite. As always, please feel free to speak with a member of the Executive Committee if you have any concerns or questions.

Sincerely,

Faheem

SOME QUESTIONS YOU MIGHT HAVE

1.

What exactly was announced today?

Our board unanimously determined that Biogen Idec's unsolicited tender offer to acquire the company for $14.50 per share in cash is inadequate and not in the best interests of our stockholders. The board recommended to our stockholders that they not tender, or sell, their shares into the offer.

2.

This is the same price the board rejected before. Why did the company need to respond in this way?

Under the SEC rules governing tender offers, we were required to file a formal response following a review of the tender offer with our financial and legal advisors. Our board determined that the offer is inadequate and not in the best interests of our stockholders.

3.

Why did Biogen Idec launch the offer at the same price that was offered before, and at a price lower than our current share price?

It's not our place to speculate on the rationale for Biogen Idec launching the tender offer at the price it did. Our board determined that the offer is inadequate and not in the best interests of our stockholders.

4.

Is our strategy now to sell the company?

An acquisition by Biogen Idec or any other entity is by no means a certainty. Our board has recommended that you and other stockholders not tender shares into the offer. Consistent with its duties to our stockholders, the board is committed to creating value for all of our stockholders and remains open to appropriate opportunities to achieve that result. We also are confident in the company's ability to provide meaningful growth and value to our stockholders under our existing business plan.

5.

What happens next?

While we cannot predict what Biogen Idec may do next, it's important that we all continue to focus on achieving our objectives to maintain our momentum. We will continue to keep you updated on this situation.

6.

Where can I find more information about the current situation?

We will be hosting an all-hands meeting where you will have the opportunity to ask the management team your questions. As always, if you have questions or concerns, please speak to any member of the Executive Committee. All of our press releases and SEC filings are available on our website.

QuickLinks

Exhibit (a)(3)

SOME QUESTIONS YOU MIGHT HAVE

EX-99.(A)(5)

Exhibit 99.(a)(5)

 Company Presentation October 1, 2009

Facet Biotech Corporation Forward-looking Statements This presentation contains forward-looking statements involving risks and uncertainties and Facet’s actual results could differ materially from those, express or implied, in this presentation. The forward-looking statements include, without limitation, that we expect: (i) our 2009 cash utilization to be approximately $80 million, (ii) our 2009 total costs and expenses to be $155 to $165 million, (iii) to initiate the DECIDE phase 3 trial for daclizumab in 1H 2010, (iv) we could receive milestone payments related to the development of elotuzumab and daclizumab, (v) to fund our current operations until approximately the end of 2012, (vi) MS market dynamics to shift towards higher efficacy therapeutics, (vii) daclizumab would compete with these higher efficacy therapeutics, (viii) daclizumab could have significant penetration and be a strong competitor in the MS market, (ix) there is a strong probability that the SELECT and DECIDE trials will reach their study goals, (x) to reduce our real estate lease expenses and (xi) that there would be significant potential synergies to an acquirer in an acquisition of Facet. Various factors may cause differences between our expectations and actual results including: the development and commercial potential of daclizumab and elotuzumab could be adversely impacted by changes in our plans or timelines, including because of unexpected safety or efficacy data observed during clinical trials, enrollment rates in clinical trials, changes in expected competition and changes in regulatory support for our development path; changes in clinical development program expectations, including regarding the advancement, slowing or termination of clinical development programs, unexpected litigation or other disputes and other unexpected events could adversely impact our cash utilization and costs and expenses. Other risk factors we face are discussed in the “Risk Factors” sections of our SEC filings, which may be obtained at the “Investors” section of our website at www.facetbiotech.com. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statements to reflect any change in expectations, even as new information becomes available or other events occur in the future. All forward-looking statements in this presentation are qualified in their entirety by this cautionary statement. Copyright Notice All of the content in this presentation is copyrighted and may not be reproduced, distributed or revised in any manner without the prior written consent of Facet Biotech. Any use without consent may violate copyright law and other laws or regulations. © Copyright 2009, Facet Biotech Corporation. All Rights Reserved.

Key Points Daclizumab: A Compelling Opportunity among Next-Generation MS Therapies Robust Pipeline and Protein Engineering Platform Strong Balance Sheet: Capable of Funding Company to Key Value Inflection Points through 2012 Acquisition Value: Beyond the Company’s Cash, Pipeline and Platform

Key Points Daclizumab: A Compelling Opportunity among Next-Generation MS Therapies Robust Pipeline and Protein Engineering Platform Strong Balance Sheet: Capable of Funding Company to Key Value Inflection Points through 2012 Acquisition Value: Beyond the Company’s Cash, Pipeline and Platform

We expect MS market dynamics to shift ANNUALIZED RELAPSE RATE (ARR) Relative Reduction AVONEX® REBIF® BG-12 BETASERON® COPAXONE® DACLIZUMAB HYP RITUXAN® FTY-720 CLADRIBINE TYSABRI® ~30% Worldwide ABCR market valued at ~$10B ABCRs currently capture most new patients Cycling dynamics should change once more efficacious therapies gain approval Failure of the ABCR therapies creates a large patient population seeking better control of MS 1. Assumed ARR reduction based on reported clinical results with the exception of TYSABRI 50 – 67% The next generation of novel agents will raise the efficacy bar1 Within this group, safety is key While oral compounds have demonstrated strong efficacy and offer convenience, their safety profiles may limit use Based on the available data and analyses, we believe daclizumab will be a strong contender in this “next-generation” market

We believe daclizumab would be a strong contender among next-generation MS drugs Phase 1/2 open label studies suggest activity in excess of 80% reduction in Gd-enhancing lesions and 50% reduction in ARR1-4 CHOICE results demonstrate that daclizumab is highly active in patients when combined with IFNs Daclizumab monotherapy likely superior to reported results of daclizumab combined with IFN Successful completion of interim futility analysis and data assessment Facet developing only drug-biomarker combination in MS Rose et. al. Neurology 2007 69:785-789 Rose et. al. Ann Neurol 2004 56:864-869 Bielekova et.al. PNAS USA 2004 101:8705-8708 Bielekova et. al. Arch Neur Vol. 66 (No. 4) Apr. 2009 Phase 1/2 Studies in MS CHOICE SELECT Interim Futility Analysis and Data Assessment CD56bright Biomarker

Phase 1/2 open label studies were promising Overall, very well tolerated Infections – mild urinary and URI Transient LFTs (2) New CEL red. = 78.42% Total CEL red. = 70.39% Exacerbation rate (ARR) reduction of 80.72% Ph 2 open label baseline to treatment N=11 1mg/kg 2x monthly Bielekova et.al. PNAS USA 2004 101:8705-87081 Rash Lymphopenia Lymphadenopathy 72% reduction in new CELs Significant improvements in clinical measures of disability Ph 2 open label baseline to treatment N=15 IFN (0-5.5 months) then DAC 1mg/kg (6.5-15.5 months) Bielekova et. al. Arch Neurol. 2009;66(4):483-489 19 of 21 patients completed URI (1) Rash Mild leukopenia (1) >50% of patients with average EDSS reduction of 2.5 Approximately 80% reduction in active scans Ph 2 open label baseline to treatment N=19 IV, 1mg/kg every 28 days (w/ loading) Rose et. al. Ann Neurol 2004 56:864-869 The side effect profile was favorable throughout the study Rash 4x reduction in new CEL On average, ARRs declined from 0.45 at baseline to ~0.05 at 24 months Ph 2 open label baseline to treatment N=9 IFN 5.5 months then switch to DAC 1mg/kg for 27.5 months Rose et. al. Neurology 2007 69:785-789 Safety Efficacy Design Study

CHOICE demonstrated that daclizumab improves outcomes in patients failing IFN therapy Phase 2 CHOICE multiple sclerosis trial Daclizumab 2 mg/kg added to IFN beta every 2 weeks reduced the number of new or enlarged lesions by 72% ARR reduction of 32% low dose and 43% high dose compared to IFN+placebo (unadjusted) Acceptable safety profile Overall infection similar to IFN alone 1. P-values, percent reductions, and 95% confidence intervals were estimated from a negative binomial regression adjusting for the number of baseline lesions and type of MS (RRMS vs. SPMS). Data presented by M. Kaufman; AAN 2008. Adjusted Means of New/Enlarged Gd+ Lesions 0 1 2 3 4 5 IFN/Placebo IFN/DAC 1 mg/kg IFN/DAC 2 mg/kg 4.8 3.6 1.3 72% reduction 95% CI: -88% -34% P=0.004 25% reduction 95% CI: -68% +76% P=0.514 CHOICE Primary Endpoint – Adjusted New or Enlarged Gd+ Lesions1 CHOICE data and historical controls suggest that daclizumab monotherapy could reduce lesions by 80% and ARR by 50% vs. placebo

Subset analyses suggest daclizumab monotherapy likely superior to daclizumab + IFN Daclizumab monotherapy may have improved efficacy over daclizumab combined with IFN IFN NAb+ patients taking daclizumab showed a 94% reduction in Gd-enhancing lesions versus 72% reduction for IFN+daclizumab patients4 In patients where IFN is blocked, daclizumab appears to be more efficacious L. Neyer, et al., World Congress for Treatment and Research in MS, Montreal, Sept. 2008, poster 479 1 Adjusted means are obtained using a negative binomial model; SE = standard error. 2 p values obtained from the differences of the least square means between compared treatment groups. 3 ITT includes all subjects who are randomized and received any study drug. For the ITT (intent-to-treat) population, the primary endpoint (total number of new or enlarged Gd-CELs from Weeks 8 to 24) was significant (p=0.004) for the 2 mg/kg group, But not for the 1 mg/kg group (p=0.514) when compared with placebo. For IFN-beta NA/b positive subjects, significantly lower number of new or enlarged Gd-CELs were obtained for both the 2mg/kg group (p=0.0043) and 1 mg/kg group (p=0.0002) when compared with placebo. Primary Efficacy Analysis for ITT and IFN-beta Nab Positive Subjects 0.0043 1.21 (0.99) 7 DAC 2 mg/kg 0.0002 0.32 (0.32) 7 DAC 1 mg/kg 20.76 (11.40) 9 Placebo IFN-beta NAb Positive 0.004 1.32 (0.55) 75 DAC 2 mg/kg 0.514 3.58 (1.57) 78 DAC 1 mg/kg 4.75 (1.99) 76 Placebo Intent-to-Treat3 p value vs. Placebo2 Adj-Means1 (SE) N Treatment Analysis Population Total Number of Gd-CELs (New or Enlarged)

We believe we are developing the only drug-biomarker combination available in MS Daclizumab has been shown to cause rapid expansion of CD56bright NK cells in MS patients (see appendix 1) Observed effect was dose-dependent and reversible Magnitude of expansion correlated with reduced new or enlarged Gd+ lesions (MRI) CD56bright NK cells of MS patients play a role in reduction of the T-cell proliferative responses to myelin basic protein An effective biomarker can have multiple applications Increase likelihood of response Limit drug exposure of non-responders; reduce drug safety concerns Create pricing flexibility and improve cost-effectiveness Improve persistency 0 Means of New/Enlarged Gd+ Lesions 1 2 3 4 IFN+Placebo (n=17) IFN+DAC (n=11) IFN+DAC (n=12) 3.8 2.0 0.5 75% reduction (P=0.037) 87% reduction (P=0.024) Lowest Quartile CD56bright NK Highest Quartile CD56bright NK Source: Sheridan J. et al. ECTRIMS 2009 poster 0 28 56 84 112 140 168 196 224 252 280 308 0 10 20 30 40 50 60 70 80 90 100 IFN + placebo (n=16) IFN + DAC Low (n= 24) IFN + DAC High (n=20) Time (Day) Ab CD56bright NK (cells/mm3)

Biomarker data again suggest that daclizumab monotherapy more effective than daclizumab + IFN CD56bright NK cell expansion is correlated with greater daclizumab efficacy Daclizumab drives CD56bright NK cell expansion in a dose-dependent manner Daclizumab alone (vs IFN+DAC) leads to a two-fold greater expansion in CD56bright cells These data suggest that daclizumab alone may be more efficacious than IFN+DAC Bielekova et. al. Arch Neur Vol. 66 (No. 4) Apr. 2009 IFN+DAC CD56bright cell expansion in full- and partial responders1 CD56bright NK cell (% of lymphocytes) DAC CD56bright NK cell (% of lymphocytes) P = .09 P = .03 0 100 200 300 400 500 600 700 800 FR PR 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 FR PR 1.

Daclizumab MOA may offer a different approach to treatment of MS Unlike most next-generation MS therapies, daclizumab does not significantly deplete T cells or B cells Activity appears to result from CD56bright NK cell expansion T and B cell depletion likely would raise safety challenges for many current MS drugs in development – cladribine, fingolimod, natilizumab, rituximab, Campath® Source: Tang M. et al. “Exposure-Response Relationship of Daclizumab Added to IFN-beta for Treatment of Multiple Sclerosis During a Phase II Study”. ECTRIMS 2008 poster. CD8+ T 0 28 56 84 112 140 168 196 224 252 280 308 0 25 50 75 100 125 150 175 200 225 IFN + placebo (n=17) IFN + DAC Low dose (n=25) IFN + DAC High dose (n=21) * *** Time (Day) Ab CD8 + T cells Rel. to Baseline CD4+ T 0 28 56 84 112 140 168 196 224 252 280 308 0 25 50 75 100 125 150 INF + placebo (n=17) INF + DAC Low dose (n=25) IFN + DAC High dose (n=21) * *** *** *** *** Time (Day) Ab CD4 T cells Rel. to Baseline +

We believe that safety could differentiate daclizumab from other next-generation MS drugs Daclizumab appears to have an acceptable safety profile based on existing data CHOICE: No deaths or opportunistic infections reported CHOICE: Similar incidence of overall infection (vs. placebo+IFN) The most frequently reported AE is a rash The relatively low incidence of AEs is expected given daclizumab’s MOA Passed futility analysis with 150 patients on therapy for at least 6 months SELECT No opportunistic infection Grade 3 infections (6.7%) Grade 3/4 Rash (0.6%) CHOICE Well-tolerated overall Rash Infections Phase 1/2 Long-term (4 years) exposure in uveitis Long-term history of exposure in transplant Other

Step 1 Strong probability that SELECT and DECIDE will reach their study goals SMC Futility Analysis Futility + Futility – Interim Data Assessment Discontinue SELECT Initiate DECIDE Do Not Initiate DECIDE The collaboration followed a two-step process to maintain SELECT as a fully blinded registrational study: Step 2 Interim review designed to: 1) Assess whether we should initiate DECIDE, the second and final registrational study 2) Inform the design of the DECIDE trial Futility analysis conducted by an independent safety monitoring committee designed to assess whether we should continue the SELECT study 150 patients on therapy at least 6 months

We would expect robust adoption of daclizumab across multiple segments1 Penetration into the “efficacy seeker” segment could reach 40% at peak Next-generation drugs could rapidly expand this segment (while depleting the ABCR segment) Initially, penetration would be limited to patients with rapidly progressing disease Segment would shift to next-generation drugs over time – daclizumab penetration could exceed 25% Most newly diagnosed patients would likely initiate ABCR therapy Penetration into 5% of patients possible (those with aggressive disease) 1. Based on qualitative (n=21) interviews with MS KOLs and community physicians conducted by independent third party firm 50,000 200,000 250,000 Global Addressable Multiple Sclerosis Patients (>500,000) Newly Diagnosed ABCR Controlled Uncontrolled / Discontinued

Overall, the daclizumab market opportunity is significant We expect next-generation molecules to capture a significant portion of the ~$11B worldwide market Opportunity to break IFN cycling Although improvements in efficacy will shift demand, safety will likely differentiate the more efficacious options Efficacy advantage of orals and TYSABRI may be offset by safety concerns We believe daclizumab, if approved, would achieve a strong position in this market 100% = $10.9B1 1. Wall Street research 2010E Global MS Market Avonex $2.6B Copaxone $3.0B Betaseron $1.8B Rebif $2.3B Tysabri $1.3B 27% 16% 21% 12% 24%

17 In aggregate, the data support a strong probability of clinical success and robust market performance Small open-label Phase 2 investigator-sponsored trials Phase 1 healthy volunteer trials CHOICE: Phase 2, randomized, placebo-controlled trial SELECT: Phase 2 first registration-enabling trial DECIDE: Phase 3 second registration-enabling trial 2010~ 2008~ 2005 - 2008 2000 - 2008 2005 - 2006 DECIDE expected to commence in 1H 2010 FACT and BIIB will continue planning activities for the trial SPA request submitted August 2009 Will provide additional study details at the time of trial initiation $30M milestone from Biogen Idec for Phase 3 first patient enrolled (expected 1H 2010) Additional potential milestones of $220M for MS and other indications

Key Points 1. Daclizumab: A Compelling Opportunity among Next-Generation MS Therapies 2. Robust Pipeline and Protein Engineering Platform 3. Strong Balance Sheet: Capable of Funding Company to Key Value Inflection Points through 2012 4. Acquisition Value: Beyond the Company’s Cash, Pipeline and Platform

Elotuzumab: tracking to Phase 2 Source: Lonial et al. “Phase 1b Study of Elotuzumab (HuLuc63) in Combination with Lenalidomide/dexamethasone in Relapsed Multiple Myeloma: Interim Results:. Interim results, 12th International Myeloma Workshop, Feb 2009, poster presentation Three Phase 1 trials underway: 1 monotherapy and 2 in combination We have assessed Phase 1 data from 74 patients Abstracts have been submitted for ASH 2009 We are tracking to Phase 2 with response data at least as good as data presented at the Myeloma Workshop $15M milestone for Phase 2 initiation Additional potential milestones of $665M for MM and other potential oncology indications PR Yes No 2 2404 4 4 8 4 1 No. of prior therapies No No Yes Yes Yes Refractory to previous therapy VGPR Yes 2304 SD Yes 2502 PR Yes 2306 PR Yes 2402 SD No 2303 Best response on current therapy Prior Thalidomide Patient ID Elotuzumab + REVLIMID® Efficacy Data Source:  Lonial et al. “Phase 1b Study of Elotuzumab (HuLuc63) in Combination with Lenalidomide/dexamethasone in Relapsed Multiple Myeloma: Interim Results:.  Interim results, 12th International Myeloma Workshop, Feb 2009, poster presentation

Volociximab appears to have relevance in NSCLC Currently exploring volociximab safety and efficacy in Phase 1 NSCLC Currently tracking to 6.6 months median PFS Data to date suggests similar efficacy to Avastin® in NSCLC Up to $300M in regulatory and development-based and $100M in sales-based milestone payments We would share 50% of profits in the U.S., Canada and E.U., have right to co-promote in these territories and the right to receive royalties in other territories 1. B. Besse, et al., Volociximab in Combination with Carboplatin and Paclitaxel in Patients with Advanced Non-Small Cell Lung Cancer (NSCLC), ESMO, Sept. 2009, poster 1211 1

TRU-016: strengthening the pipeline Signed worldwide collaboration with Trubion in August 2009 50/50 development and commercialization of TRU-016 and additional protein therapeutics that target CD37 TRU-016 is a Small Modular ImmunoPharmaceutical (SMIPTM) protein therapeutic that targets CD37 Facet paid Trubion $20M upfront and could pay up to $176.5M in potential milestones for TRU-016 Risk-mitigated development program: majority of milestones are later-stage development, regulatory and sales-based Consistent with stated strategy Preliminary clinical data in CLL and compelling preclinical data for NHL presented at ASCO 2009 $10M equity investment in Trubion at $4.46 per share Maintain guidance of having sufficient capital to fund current operations to the end of 2012

Even at low doses, TRU-016 demonstrates significant biologic activity CD37 is a clinically validated target for treatment of B-cell malignancies Significant decrease in lymphocyte counts in heavily pretreated CLL patients Known to be highly over-expressed in patients with CLL and broadly expressed on all B-cell malignancies except multiple myeloma Emerging data support need for therapies for patients who do not respond well or at all to CD20-directed therapies Clinical activity has been observed at low doses in every cohort beyond cohort 2 Reductions in lymphadenopathy; up to 39% by CT Reduction in splenomegaly Reduction in peripheral lymphocytosis Improvement in pre-treatment cytopenias 2 patients with leukemia cutis had complete or partial clearance of skin lesions B-cell depletion has broad applications, including multiple sclerosis, rheumatoid arthritis and lupus Lymphocyte count (1,000) Subject Mean reduction in ALC, all patients: 61% Median reduction in ALC, all patients: 67% Mean reduction in ALC, cohort 3 or later: 76% Median reduction in ALC, cohort 3 or later : 71% Mean reduction in ALC, Lymphs > 10,000: 78% Median reduction in ALC, Lymphs > 10,000 : 84% Source: Andritsos L et al. “A Phase I Trial of TRU-016, an anti-CD37 Small Modular Immunopharmaceutical (SMIPTM) in Relapsed and Refractory CLL”. ASCO 2009 poster 3017 0 50 100 150 200 250 300 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Day 1 (Pre Dose) Day 29

Our protein engineering platform is already creating value Proprietary platform of next-generation protein engineering technologies that improve antibodies using half-life extension, de-immunization, and comprehensive mutagenesis mapping (PxP) Rapid (months vs. years) and exhaustive mapping of CDR mutants (affinity and immunogenicity) creates opportunity for biobetters and improved first-generation antibodies We have filed composition of matter (COM) patent applications on Avastin® antibody mutations and are investigating performance pre-clinically Chen et. al. – 4 point mutations identified; best combination variant 20x higher affinity We found 18 novel higher affinity mutations; best combination variant is 24x higher affinity; no previously identified mutants used On-rate 10x higher than Avastin antibody COM patent applications filed on 1 additional mAb; expect 3 more by 2009 year-end with more to follow Discussions underway with multiple partners trying to enter “biobetter” space or improve existing antibodies Avastin Variants Chen et. al Avastin Variants Facet Biotech

Key Points Daclizumab: A Compelling Opportunity among Next-Generation MS Therapies Robust Pipeline and Protein Engineering Platform Strong Balance Sheet: Capable of Funding Company to Key Value Inflection Points through 2012 Acquisition Value: Beyond the Company’s Cash, Pipeline and Platform

We can fund our development investments to reach significant value inflections over the next 2-3 years 1. In collaboration with Biogen Idec (BIIB); for DAC HYP, ongoing SELECT Phase 2 trial considered first of two required registration-enabling trials; 2. In collaboration with Bristol-Myers Squibb (BMS); 3. In collaboration with Trubion Pharmaceuticals; 4. BMS has option to include in collaboration oncology immunology DAC HYP lung1 volociximab multiple myeloma (monotherapy)2 multiple myeloma (combination)2 elotuzumab Preclinical Phase 1 Phase 2 Phase 3 multiple sclerosis1 solid tumors PDL192 immunologic diseases4 PDL241 chronic lymphocytic leukemia3 TRU-016 non-Hodgkin’s lymphoma / AIID3

 $14.55 per share based on shares outstanding and $13.99 per share on fully-diluted basis2 Subsequent to August 31, Facet made $20M upfront licensing payment to Trubion $364.3M in cash, marketable and investment securities and restricted cash1 Up to $60M in milestone payments achievable by end of first half of 2010 Our balance sheet is strong As of August 31, 2009 and includes equity investment in Trubion; 2. Based on shares and options outstanding as of September 28, 2009; fully-diluted calculation using treasury stock method at $14.50 Biogen Idec offer price $2.40 per share based on shares outstanding and $2.30 per share on fully-diluted basis2 $30M from Biogen Idec for initiation of daclizumab Phase 3 trial $15M from BMS for initiation of elotuzumab Phase 2 trial $15M if BMS opts in to PDL241

Our out-licensed programs and other agreements provide additional opportunities for value Royalties on sales of the pre-mixed bag formulation of Cardene®, currently on the market EKR Therapeutics Licensee of ABT-874 (fully human anti-IL-12), currently in Phase 3, and of rights to several humanized antibodies Abbott Licensee of PRO-140 (humanized antibody), currently in Phase 2 Progenics Licensee of SGN-33 (lintuzumab, anti-CD-33) currently in Phase 2b Seattle Genetics Licensee of volociximab for ophthalmic uses, currently in Phase 1 Ophthotech Licensee of HuM195 derivatives, currently in Phase 1 Actinium Licensee of rights to ADCs directed against TMEFF2 antigen, currently in pre-clinical development Genentech

Opportunities exist to reduce our long-term lease liabilities $208M in aggregate estimated lease obligations over 12-year period from 2010-2021 Lower in current dollars on a discounted basis ~80% of payments due post-2012 Ongoing discussions regarding subleasing opportunities Focus is on excess capacity Optimistic about ability over time to significantly reduce these obligations through one or more subleases No assurances of success Lease Overview Actions to Minimize

We are financially disciplined Cash utilization of ~$80M Includes ~$10M in one-time, workforce reduction-related costs Excludes receipt of potential in-bound milestone payments Includes full costs of existing facility leases Total costs and expenses updated to $155M to $165M Does not reflect costs related to Trubion collaboration Reduced expected 2009 cash utilization from $110M at January 2009 to $80M at August 2009 Updated 2009 Guidance

Key Points Daclizumab: A Compelling Opportunity among Next-Generation MS Therapies Robust Pipeline and Protein Engineering Platform Strong Balance Sheet: Capable of Funding Company to Key Value Inflection Points through 2012 Acquisition Value: Beyond the Company’s Cash, Pipeline and Platform

The acquisition value of Facet goes beyond its cash and pipeline Biogen Idec collaboration would continue unchanged in the event of an acquisition by a 3rd party BMS and Trubion collaborations also would continue in the event of an acquisition by a 3rd party Trubion has opt-out right No change in control termination or consent rights in collaboration agreements The value of our rights under our collaboration agreements is substantial Significant potential synergies in a transaction Strategic synergies Strategic fit and competitive value to any industry buyer MS and oncology programs and antibody and protein engineering technologies Biogen Idec would gain exclusive rights to daclizumab and another buyer our existing rights Cost synergies NOLs ~$63.6M at June 30, 2009

Favorable terms to collaborations 50/50 cost sharing Significant milestone opportunities Commercialization and co-promotion rights 50/50 profit split in US, Canada and EU; royalty ROW Biogen Idec 20/80 Facet/BMS cost sharing Significant milestone opportunities 30/70 Facet/BMS U.S. profit split; royalty ex-US Bristol-Myers Squibb 50/50 cost sharing Risk-mitigated outbound milestone payments given late-stage nature Commercialization rights worldwide 50/50 profit split worldwide Flexibility to assign or terminate Trubion Terms

Key Points Daclizumab: A Compelling Opportunity among Next-Generation MS Therapies Robust Pipeline and Protein Engineering Platform Strong Balance Sheet: Capable of Funding Company to Key Value Inflection Points through 2012 Acquisition Value: Beyond the Company’s Cash, Pipeline and Platform

APPENDIX 1: Multiple Mechanisms Contribute to DAC’s Inhibiting Effects on Pathological T Cells of MS The mechanisms of action which may contribute to daclizumab’s inhibiting effects on T cells in MS patients include: Antigen activation of naïve T cells Cytokine secretion by activated T cells Killing of activated T cells by CD56bright NK Lopez-Diego R and Weiner H. “Novel therapeutic strategies for multiple sclerosis - a multifaceted adversary”. Nat. Rev. Drug Discovery. 2008 Nov;7:909-925.

EX-99.(E)(1)

QuickLinks -- Click here to rapidly navigate through this document

Exhibit (e)(1)

Excerpts from Facet Biotech Corporation Definitive Proxy Statement on Schedule 14A relating to the 2009 Annual Meeting of Stockholders as filed with the Securities and Exchange Commission on April 15, 2009.

Compensation of Directors

        The cash and equity compensation payable to non-employee directors ("Outside Directors") is described below. Members of our Board who are also employees of the Company are not entitled to any compensation with respect to their service as Board members.

Cash Compensation

        Each Outside Director, other than the Chairperson of the Board, receives a retainer of $35,000 per year. If the Chairperson is an Outside Director, the Chairperson receives a retainer of $50,000 per year in lieu of the $35,000 retainer payable to other Outside Directors.

        Each member of the Audit Committee, other than the Chairperson of the Audit Committee, receives a retainer of $7,500 per year and the Chairperson of the Audit Committee receives a retainer of $15,000 per year for his or her service as an Audit Committee member. As to all other committees of the Board, each Outside Director member, other than the Chairperson of these committees, will receive a retainer of $6,000 per year and each Outside Director Chairperson of the foregoing committees will receive a retainer of $12,000 per year, for his or her respective service as a member of these committees.

        Each Outside Director also receives cash compensation for attendance at meetings of our Board and committees of our Board of $2,000 for each Board meeting and $1,000 for each committee meeting. All cash compensation paid to Outside Directors for their service on our Board and its committees and attendance on meetings is paid on a quarterly basis in arrears.

        We also reimburse our directors for their travel expenses for Board and committee meetings.

Equity Compensation

        Each Outside Director receives (1) an initial grant of 8,333 shares of our restricted stock and an option to purchase 16,667 shares of our common stock effective upon election or appointment to our Board and (2) an annual grant of 5,000 shares of our restricted stock and an option to purchase 10,000 shares of common stock, except that the first annual grant to a new director is prorated if the new director was elected or appointed in between annual stockholder meetings. If the Chairperson of the Board is an Outside Director, the Chairperson of the Board receives (1) an initial grant of 10,000 shares of our restricted stock and an initial option to purchase 20,000 shares of our common stock effective upon election or appointment to our Board and (2) an annual grant of 6,667 shares of our restricted stock and an option to purchase 13,333 shares of our common stock, except that any annual grant is prorated if the chairperson was elected or appointed in between annual stockholder meetings. Such restricted stock grants and options will be made under our 2008 Equity Incentive Plan.

        Mr. Goodwin, Mr. Lyons and Dr. Parkinson, our initial Outside Directors, were appointed to the Board of Directors prior to the date we became a publicly traded company. At the time they were appointed to the Board of Directors we did not grant to them the initial equity grants that we customarily make upon appointment. As previously disclosed, we determined to make these initial grants to Mr. Goodwin, Mr. Lyons and Dr. Parkinson approximately 20 trading days after the Spin-off. We made these initial grants on January 23, 2009.

        Stock options granted to our Board members customarily vest monthly over 12 months and restricted stock granted to our Board members customarily vests one year after grant, in each case subject to the Board member's continued service to the Company.

2008 Compensation of Directors

        In 2008, our Outside Directors who served during 2008 earned the compensation set forth in the below table with respect to their service on our Board of Directors. Neither Mr. Hasnain nor Mr. Guggenhime received any compensation with respect to their service on our Board of Directors during 2008. Each of our Outside Directors was elected to our Board of Directors in November 2008 and the below compensation is not indicative of what would have been earned or paid had these Outside Directors served for a full year.

Name	Fees Earned or Paid in Cash ($)		Option Awards(1) ($)		Total ($)
Brad Goodwin	$	13,334		—	$	13,334
Gary Lyons	$	12,459		—	$	12,459
David R. Parkinson, M.D.	$	10,959		—	$	10,959

(1)

Our Outside Directors did not hold any Company option or other equity awards during 2008.

2

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Program Objectives

        The goal of our executive compensation program is to effectively motivate our executive leadership to achieve the stated goals of the Company and to perform in a manner that maximizes stockholder value. To that end, we seek to maintain an executive compensation program that ensures that we can successfully recruit high quality candidates for senior leadership positions and retain these executives through appropriate base compensation, equity and cash awards and incentives tied to their individual performance and their contribution to our overall performance as measured against the achievement of company-wide goals and objectives.

        Our Compensation Committee will annually review and evaluate the components and effectiveness of our executive compensation program to ensure that our programs are consistent with our goals and that our executive compensation program is aligned with the marketplace in which we compete for executive talent. In conducting its annual review and evaluation, we expect that our Compensation Committee will use the services of independent compensation consultants to provide advice regarding executive compensation, including with respect to the composition of our peer group, gathering peer group and other relevant executive compensation information and analysis of this information and preparing "tally sheets" of each officer's compensation for our Compensation Committee's review.

        Our Compensation Committee also solicits and receives input from our Human Resources, Finance and Legal departments and Chief Executive Officer and takes into account this input in determining the structure and amount of compensation for our individual officers. Our Compensation Committee also solicits input from other Outside Directors in evaluating the performance of our Chief Executive Officer. Members of management of our Human Resources, Finance and Legal departments and our Chief Executive Officer attend portions of our Compensation Committee's meetings; however, our Chief Executive Officer is not present during voting or deliberations regarding his compensation. Members of management of our Human Resources, Finance and Legal departments are not present during voting regarding our Chief Executive Officer's compensation, but may be asked to participate in certain of the deliberations regarding our Chief Executive Officer's compensation.

Developments Prior to the Spin-off

        Prior to the Spin-off, the Biotechnology Operations were operated by PDL. PDL and the Biotechnology Operations experienced a significant amount of change from 2007 until the Spin-off and the PDL Compensation Committee was particularly active throughout this period addressing a variety of compensation-related matters that emerged as a result of these changes.

        In August and October 2007, PDL announced a strategic change and plans to actively seek offers for a sale of PDL or its key assets, including PDL's commercial and cardiovascular product related assets. Because of the uncertainty regarding the timing and effect of these planned strategic transactions and the impact of this uncertainty on PDL's employees, PDL's management and PDL's Compensation Committee worked together to develop and implement several programs, incentives and benefits designed to retain employees through these processes. In March 2008, PDL closed the sales of its commercial and cardiovascular product-related assets and its antibody manufacturing facilities-related assets. PDL also announced in March 2008 that it would no longer actively pursue the sale of the Company or of the Biotechnology Operations and would implement a restructuring and reduce its workforce across all functions by approximately 260 positions over approximately 12 months. Because of the cumulative impact on employees of the events in 2007 and early 2008, including the reductions in force and strategic changes and transactions, and the need to retain employees, PDL offered broad-based cash retention bonuses to employees that it sought to retain after its restructuring as well as to employees that PDL sought to retain through a defined transition period before eliminating their employment positions. Some of these retention benefits as originally offered by PDL were payable after

3

the Spin-off. In connection with the Spin-off, we offered these same retention benefits to ensure that employees joining the Company from PDL had comparable compensation packages and to retain them after the Spin-off.

        Some of the above-referenced retention programs and incentives were targeted at or designed for executive officers of PDL who became executive officers of the Company and are described in further detail below.

        Because the vast majority of PDL's employees solely supported the Biotechnology Operations during 2008 and because each of the named executive officers identified in this proxy statement were officers of PDL until mid-December 2008, we have included in the Summary Compensation Table the compensation earned by these officers as officers of PDL and refer in various parts of this Compensation Discussion and Analysis to compensation policies of and decisions made by PDL or its Compensation Committee.

Compensation Program Elements

        Compensation payable to our executive officers is primarily comprised of five elements, designed together to motivate our officers to perform in a manner that enables us to meet our strategic goals and annual business objectives and increase stockholder value. The five elements which comprise our total compensation program are (1) base salary, (2) employee benefits, (3) annual cash incentives, (4) equity incentives and (5) change in control and severance benefits. Each of these elements is discussed in more detail below.

        Our officers and other employees have experienced substantial organizational and operational changes as a result of changes in PDL's business and operations, including reductions-in-force and changes in management. Because of these factors, we implemented certain retention programs designed to mitigate the number of voluntary terminations. The retention compensation that may be earned under these programs is in addition to what we would otherwise pay our officers and employees with respect to their service to the company. We do not expect to extend these retention programs beyond the current life of these programs. The retention compensation payable to our named executive officers is discussed in more detail below.

Peer Group Selection and Benchmarking

        The Compensation Committee periodically reviews and revises the list of peer group companies (the "Peer Group List") that the Compensation Committee uses to compare the Company's officer compensation programs and obtain comparative data on officer and director compensation. The Compensation Committee customarily receives input in this review process from its compensation consultant and the Company's management. Peer group companies are selected based on whether the company is similarly-sized based on the number of employees, the amount of annual research and development expenses and market capitalization. In determining whether we should include a company on the Peer Group List, we also evaluate the therapeutic area or areas on which the company focuses, the stages of development of its products and whether we would compete for executive officer talent with the company. Our Peer Group List is currently composed of the companies listed below:

Alexza Pharmaceuticals, Inc.
Dendreon Corporation
Geron Corporation
Incyte Corporation
Maxygen, Inc.
Neurocrine Biosciences, Inc.
Rigel Pharmaceuticals, Inc.
Seattle Genetics, Inc.
XOMA Limited

4

        Our Human Resources group periodically purchases third-party compensation benchmark surveys, including the Global Life Sciences Survey produced by Radford and prepares and provides additional analyses to assist our Compensation Committee's evaluation and comparison of each element of executive compensation. We expect that our Compensation Committee would supplement this information with information it would obtain from independent compensation consultants.

        Our Compensation Committee reviews the survey and peer group compensation information it receives to ensure that our total compensation program for executive officers is competitive and that we retain and properly motivate our executive officers.

Base Salary

        Base salary is the fundamental, fixed element of our executive officers' compensation and the foundation for each officer's total compensation.

        The initial amount of base salary our Compensation Committee determines to pay each of our officers is primarily driven by two factors: (1) the amount the market would pay for similar positions with like responsibilities and (2) the officer's experience, knowledge, skills and education. In assessing what the market would pay for a given position, our Compensation Committee relies on peer group executive compensation information prepared by outside compensation consultants and compensation benchmark surveys we purchase. Our Compensation Committee currently targets the 50^th percentile of the market for an officer's total cash compensation, including base salary. However, the officer's overall experience and education would then determine where within the market salary range the officer's base salary would initially be set.

        Our Compensation Committee annually reviews each officer's base salary and customarily adjusts it based on three elements: (1) performance of the officer's respective functional responsibilities against defined objectives, (2) individual performance, using the performance areas identified below, and (3) changes in the competitive marketplace using benchmarks of comparable positions in the biotech industry. To evaluate functional performance, our Compensation Committee receives a performance assessment from our Chief Executive Officer, rating each officer's individual performance. Each officer's individual and functional area performance is measured through our annual focal review process, which assesses a variety of performance areas and evaluates whether and to what extent the officer's performance meets, exceeds or falls below expectations and how consistently or often performance exceeds expectations. The areas for individual performance review include contributions towards the meeting of corporate objectives and:

•

Strategic leadership skills;

•

Ability to drive performance;

•

Communication skills;

•

Ability to collaborate cross-functionally and teamwork;

•

Ability to create an environment that encourages continuous improvement;

•

Ability to build and maintain a high-performing team; and

•

Ability to manage change.

        To ensure that each of our officers is compensated commensurate within market parameters, our Compensation Committee reviews peer group and benchmark survey information, using outside compensation surveys, to assess the reasonableness and competitiveness of annual base salaries and any proposed salary increase for our officers. This benchmarked data helps to ensure that our overall annual adjustments to salary are designed to appropriately reward, incentivize and retain our officers.

5

        Shortly prior to the events described under the heading "Developments Prior to the Spin-off" above, PDL had an employee base of nearly 1,200 employees, which is approximately six times greater than our employee base, a market capitalization several times larger than our current market capitalization and aggregate annual revenue and expense amounts that were several times our expected annual revenue and expense amounts. As a result, PDL's peer group was significantly different than our current peer group and consisted of entities that are significantly larger than companies we currently consider to be our peers based on several measures. In addition, during this time, PDL had a compensation philosophy that targeted the 60^th percentile of cash compensation for its peer group, whereas our current compensation philosophy is to target the 50^th percentile for cash compensation. The base salary of some of our officers were originally established prior to the events described under the heading "Developments Prior to the Spin-off" above

        In February 2009, our Compensation Committee evaluated the 2008 performance of each of our officers, including our named executive officers, and the information relating to competitive salary levels, to determine what adjustments, if any, should be made to each officer's annual base salary. This evaluation considered the individual performance of our officers as officers of PDL during 2008. Although each of our named executive officers met or exceeded expectations, our Compensation Committee determined to not increase any of their annual base salaries for 2009. With respect to Mr. Hasnain's base salary, the determination to keep his base salary unchanged for 2009 was based on his having started as President and Chief Executive Officer of PDL on October 1, 2008 and that our policy is to not provide any increase in annual base salary to employees who initially start with us after September 30 of the preceding year. Mr. Guggenhime's and Dr. Hora's annual base salaries were left unchanged for 2009 because each of their annual base salaries is significantly above the 50^th percentile of annual base salary for comparable positions in our current peer group. The Compensation Committee did not believe that a reduction in annual base salary was warranted given the performance of each of these officers historically and the experience, knowledge and skills they bring to their positions in the Company. The Compensation Committee did not believe that a merit increase for Dr. McCamish was justified in light of his pending departure and the fact that his annual base salary is above the 50^th percentile of annual base salary for comparable positions in our current peer group. Mr. Shah's employment had been terminated prior to our Compensation Committee's evaluation and he was therefore not eligible for any increase to his annual base salary.

Employee Benefits

        We provide our employees, including our officers, with customary benefits, including medical, dental, vision and life insurance coverage, short-term and long-term disability coverage and the ability to participate in our 401(k) plan, which provides that we will match contributions up to certain limits based on tenure of employment with credit given for tenure at PDL, and our tax-qualified employee stock purchase plan. The costs of our insurance coverage benefits are largely borne by us; however, employees do pay portions of the premiums for some of these benefits. We believe these benefits are of the type customarily offered to employees by our peer group and in our industry.

        This element of compensation is intended to provide assurance of financial support in the event of illness or injury, encourage retirement savings through a 401(k) plan and encourage equity ownership by our employees through our employee stock purchase plan.

Cash Incentive Bonuses

        Another component of our officers' total compensation is the annual cash bonus. The annual cash bonus is intended to encourage high levels of individual and Company performance by rewarding our officers for their individual contributions and our overall performance during the year.

6

        Each employee's baseline target bonus, including each officer's target bonus, is determined based on the salary grade or level of the employee and equals a percentage of the employee's annual base salary. Our Compensation Committee sets the target bonus levels by salary grade level for all officers and employees, based on review of peer and benchmarking data and taking into consideration the targeted levels of other elements of compensation. The targeted bonus levels are intended to put a higher amount of total compensation and cash compensation at risk based on our performance and individual performance for officers and employees with relatively higher responsibilities. Our Compensation Committee will review target bonuses for officers each year with this goal in mind.

        The actual amount of bonus to be received by each officer is adjusted from the target bonus level based on our performance during the year, as determined by our Board, and individual performance of the officer during the year. As noted above, our Chief Executive Officer conducts the annual assessment of the performance of officers other than our Chief Executive Officer, and our Compensation Committee reviews our Chief Executive Officer's assessment of the other officers. Our Compensation Committee is solely responsible for evaluating our Chief Executive Officer's performance and assesses his performance annually. The individual performance of each officer is reviewed by our Compensation Committee, which determines the amount of target bonus adjustment.

2008 Performance Bonus Program

        In June 2008, PDL's Board of Directors approved a performance-based bonus program for calendar year 2008 (the "2008 Performance Program") pursuant to which eligible employees, including officers, would receive cash bonuses for the successful achievement of certain corporate goals during 2008. Because those employees of the Company that were eligible to receive an annual incentive bonus with respect to 2008 were employees of PDL for nearly all of 2008, we did not adopt or implement a separate performance bonus program.

        In June and October 2008, PDL's Compensation Committee reviewed management's estimate of performance against the goals under the 2008 Performance Program and provided input as to the reasonableness of management's estimates used for financial statement accrual purposes. In December 2008, PDL's Board of Directors evaluated performance against the goals under the 2008 Performance Program and determined to fund the bonus pool under the 2008 Performance Program at 108.5% of target.

        Pursuant to the Separation and Distribution Agreement that we entered into with PDL, in February 2009, after the Spin-off, Facet recommended to PDL the amount of bonus under the 2008 Performance Program earned by certain former PDL employees, including all of the PDL employees that joined Facet in connection with the Spin-off, with respect to these former PDL employees' 2008 service to PDL prior to the Spin-off. PDL paid these bonuses in accordance with our recommendation in February 2009. The bonus amounts earned by our named executive officers under the 2008 Performance Program are disclosed in the "Summary Compensation Table" below.

7

        A description of the goals under the 2008 Performance Program, their respective possible weighting and the actual weighting based on PDL's Board of Directors' assessment of performance against the goals under the 2008 Performance Program are set forth in the table below.

				Weighting
Goal Category			Goal Met	Possible			Actual
1.	Complete Transition of Organization				30	%		31.5	%
	a.	Operate within 2008 budget to enable reduced post-restructuring annualized run rate	Yes
	b.	Effect transformation activities in R&D, including simplifying team and governance structures, establishing supply chain functions in Redwood City and effectively outsourcing clinical operations activities	Yes
	c.	Effect transformation activities in G&A, including streamlining infrastructure and support services and making facility sublease and consolidation decisions to reduce expenses	Partially
	d.	Close commercial and manufacturing operations asset sales transactions with Otsuka, EKR Therapeutics and Genmab and timely perform transition services obligations to each	Yes
	e.	Submit Cardene pre-mix bag formulation to FDA and obtain approval	Yes (early)
	f.	Complete spin-off of biotechnology assets and operations	Yes (late)
2.	Advance Clinical Pipeline				30	%		30	%
	a.	Advance daclizumab in phase 2, including with respect to interactions with FDA	Yes
	b.	Advance elotuzumab in phase 1, including by initiating a phase 1 combo study and enrolling patients	Yes
	c.	Advance volociximab in oncology studies	Yes (early)
	d.	Advance PDL192 into the clinic, including by initiating a phase 1 study	Yes
3.	Advance Pre-clinical Development				20	%		20	%
	a.	Advance PDL241 pre-clinical development to support IND efforts	Yes
	b.	Identify next IND candidate(s) for potential 2010 IND	Yes
	c.	Advance antibody engineering technologies	Yes
4.	Utilize Collaborations Effectively				20	%		22	%
	a.	Enter into a development collaboration agreement	Yes (early)
	b.	Evaluate novel, early-stage antibody candidates for in-licensing	Yes
		Total:			100	%		103.5	%
		Other Considerations:						5.0	%
		Total Funding Level:						108.5	%

8

        A description of certain significant factors considered by PDL's Board of Directors in making its bonus determination with respect to the first and fourth goal category is included below.

        1.     Complete Transition of Organization—PDL's Board of Directors determined to fund this goal category at 105% of target allocation even though one objective in this category was completed late and two objectives in this category were not completed. The other objectives in this category were performed on-time or early.

        We completed the Spin-off later than originally planned. This was due in part because PDL had consciously determined to evaluate opportunities to monetize its antibody humanization royalty assets through a potential sale or securitization transaction in parallel to planning for the Spin-off; PDL halted its monetization efforts in October 2008, shortly before the Spin-off, primarily due to market conditions at the time. Also, we received multiple rounds of SEC comments. As a result, we did not complete the Spin-off until December 18, 2008.

        The two objectives that were not completed in this goal category regard the effort to sublease excess capacity in our Redwood City facility and our plan to consolidate our operations within our facility. During 2008 PDL marketed our excess capacity to potential sublessees. Although overall economic conditions worsened during 2008 and sublease activity declined, adversely impacting PDL's efforts to sublease our excess capacity, PDL had entered into preliminary discussions with several potential sublessees, which discussions did not mature into consummated sublease transactions. Because of the nature and scope of the interest of some of these potential sublessees and other considerations, we determined not to consolidate our operations within the Redwood City facility during 2008.

        4.     Utilize Collaborations Effectively—One of our objectives in this goal category was to enter into a collaboration agreement for at least one development program by the end of 2008. On August 18, 2008, PDL and Bristol-Myers Squibb Company ("BMS") entered into a collaboration agreement regarding the global development and commercialization of our elotuzumab development product. PDL also granted BMS an option to expand the collaboration to include PDL241, another of our development products. Because this objective was completed early and because of the strategic importance of this objective and the terms and scope of the collaboration agreement with BMS, PDL's Board of Directors determined to fund this goal category at 110% of target allocation.

        In evaluating the Company's performance under the 2008 Performance Program, PDL's Board of Directors also considered PDL's performance of goals under the 2008 Performance Program in light of other factors, including:

•

The lack of a Chief Executive Officer during significant portions of the year;

•

The efforts undertaken to evaluate opportunities to monetize PDL's antibody humanization royalty assets, which was not among the goals in the 2008 Performance Program;

•

The significant time and attention dedicated to planning for the Spin-off, which was a late addition to the 2008 Performance Program;

•

The implementation of the restructuring announced in March 2008;

•

The uncertainty associated with the above events and efforts; and

•

Strategic review efforts conducted during the year.

        Because most of the objectives in the 2008 Performance Program were successfully completed, including several which were completed early or in a manner that exceeded expectations, notwithstanding the above factors, PDL's Board of Directors determined to increase the overall funding of the 2008 bonus pool by 5% in recognition of the added difficulty of achieving objectives during 2008.

        In February 2009, our Compensation Committee evaluated the individual performance of each of our officers to determine the amount of bonus they would earn with respect to 2008 service. The target

9

bonus for each of our named executive officers for the bonuses earned in 2008, as adjusted for the Company's performance under the 2008 Performance Program and individual officer performance, are included in the table below. The actual cash bonuses earned by each named executive officer with respect to 2008 service are listed in the Summary Compensation Table in the "Non-Equity Incentive Plan Compensation" column.

Named Executive Officer	Target Bonus (unadjusted)			Bonus (adjusted for Company performance(1))			Final Bonus (adjusted for Company and individual performance)
Faheem Hasnain		75.0	%		18.75	%(2)		18.75	%
Andrew Guggenhime		37.5	%		40.69	%		49.72	%
Maninder Hora		30.0	%		32.55	%		37.40	%
Mark McCamish		37.5	%		40.69	%		40.69	%
Jaisim Shah(3)		37.5	%		—			—

(1)

The target bonus of each named executive officer, other than our Chief Executive Officer, was multiplied by 108.5%, the performance multiplier under our 2008 Performance Program, before further adjustment to reflect individual performance.

(2)

In accordance with Mr. Hasnain's offer letter, his target bonus was prorated based on his October 1, 2008 start date with PDL and equaled 18.75% after the proration factor was applied.

(3)

Mr. Shah was not eligible to receive a bonus under the 2008 Performance Program because he was not an employee at the time bonuses were paid.

        Our offer letter with Mr. Hasnain, which was negotiated at the time he joined PDL in October 2008, provided that his bonus with respect to 2008 service would be prorated and based on his contribution to PDL's and Facet's achievement of 2008 goals and objectives during 2008 and his individual performance during this period. Prior to the Compensation Committee's determinations regarding individual officer bonuses, Mr. Hasnain recommended to the Compensation Committee that his target bonus not be adjusted by 108.5%, the amount by which other employees' bonuses were adjusted to reflect the Company's performance of goals under the 2008 Performance Program, because he had joined PDL late in the year and had not impacted the bulk of PDL's performance during 2008. The Compensation Committee considered Mr. Hasnain's request and his demonstrated leadership during the transition of the Company through the Spin-off, including the efforts undertaken to evaluate and refine the Company's strategic focus and direction in a disciplined and expeditious manner, and set Mr. Hasnain's bonus at 100% of target, which prorated for his three months of service in 2008 resulted in an 18.75% bonus.

        In determining Mr. Guggenhime's bonus, the Compensation Committee took into account his heightened leadership role during 2008 from late-May 2008 until October 2008, when the Company did not have a Chief Executive Officer, his leadership role in the sales of PDL's commercial and cardiovascular product-related assets and PDL's antibody manufacturing facilities-related assets, each of which closed in March 2008, and his leadership in PDL's efforts to plan for and implement the Spin-off and evaluate opportunities to monetize PDL's antibody humanization royalty assets. In determining Dr. Hora's bonus, the Compensation Committee considered Dr. Hora's success in assuming responsibilities for process development, product supply and quality functions after the divestiture of PDL's manufacturing facility in March 2008, his contribution to the establishment of CMC supply chain functions in Redwood City, a Company objective under the 2008 Performance Program, which was achieved early, and his increased leadership role at the Company. In determining Dr. McCamish's bonus, the Compensation Committee considered Dr. McCamish's heightened leadership role during 2008 when the Company did not have a Chief Executive Officer as well as his leadership of the Clinical organization and contribution to the corporate goals relating to advancing our clinical pipeline.

10

2009 Performance Bonus Program

        In March 2009, the Board approved a performance-based bonus program for calendar year 2009 (the "2009 Performance Program") pursuant to which eligible employees, including officers of the Company, may receive cash bonuses for the successful achievement of certain goals of the Company during 2009. The primary goal categories under the 2009 Performance Program and their respective weighting are:

Category	Weighting
Operating expense and cash utilization related goals		25	%
Development goals related to our daclizumab, volociximab, elotuzumab, PDL192 and PDL241 development products		25	%
Business development related goals		25	%
Leadership and organization related goals		15	%
Culture, employee-development and reputation related goals		10	%
Total:		100	%

        The target bonus that each eligible employee may receive under the 2009 Performance Program would equal a percentage of the employee's annual base salary at the end of 2009, which percentage is dependent on the salary grade of the employee, adjusted upward or downward based on Company performance of the goals under the 2009 Performance Program and the individual performance of the eligible employee (as adjusted, the "Target Bonus").

        The successful achievement of the goals in the 2009 Performance Program would, subject to the other terms of the 2009 Performance Program, including the exercise of the discretion of the Board to increase, decrease or eliminate bonuses payable under the 2009 Performance Program, entitle each eligible employee to a set percentage of the employee's Target Bonus. The successful achievement of all of the goals in the 2009 Performance Program would, subject to the other terms of the 2009 Performance Program, entitle each eligible employee to 100% of the Target Bonus for that employee.

        All employees, other than interns and employees hired after September 30, 2009, are eligible to participate in the 2009 Performance Program, provided that they work 20 hours or more per week. Eligible employees who are assigned to regularly work a schedule of less than 40 hours per week but more than 20 hours per week would be entitled to a pro rated portion, based on their work schedule but excluding overtime hours, of the amount of the Target Bonus to which they would otherwise be entitled. Eligible employees that start after January 31, 2009 and before October 1, 2009 would be entitled to a pro rated portion of the amount of the Target Bonus to which they would otherwise be entitled. In order to receive any bonus that may be paid out under the 2009 Bonus Program, eligible employees also must continue to be employed by the Company at the time bonuses, if any, are paid, which the Company expects would occur in early 2010.

        The actual bonuses that the Company may pay under the 2009 Performance Program will depend on the extent to which the Company achieves the goals set forth in the 2009 Performance Program as determined by the Board. The Board reserves the right, exercisable at its discretion, to increase, decrease or eliminate the bonuses that could be paid under the 2009 Performance Program and to amend or terminate the 2009 Performance Program at any time.

2009 Cash Retention Bonus Program

        In March and June 2008, PDL's Compensation Committee approved time-based cash retention bonuses payable to each of our named executive officers, other than our Chief Executive Officer, who was not an employee of PDL at those times.

11

        Leading up to March 2008, PDL had undertaken a strategic review, asset divestiture process and restructuring, which significantly changed the strategic direction and operational scope of PDL. The uncertainty caused by the strategic review, asset sale processes, restructuring and related reductions-in-force that PDL undertook created anxiety among PDL employees. PDL believed that this caused voluntary attrition to increase and could cause attrition to continue because of employees' uncertainty regarding the continuation of employment. As a result, in an effort to mitigate the number of voluntary terminations, PDL approved a broad-based retention bonus program in which continuing employees, including officers, and certain transition employees participated.

        In May 2008, PDL's Board of Directors eliminated the position of Interim Chief Executive Officer, which was then held by L. Patrick Gage, and Dr. Gage and Karen Dawes, who was PDL's Chairperson of the Board at the time, resigned from PDL's Board. The remaining three PDL Board members jointly constituted an Office of the Chair of the Board and the members of PDL's Executive Team reported directly to the Office of the Chair while PDL continued its search for a new Chief Executive Officer. At that time, PDL was in the midst of preparing for the Spin-off and evaluating opportunities to sell or securitize all or part of its antibody humanization royalties and PDL had not yet completed its restructuring. Because of the strategic importance of these efforts and the greater uncertainty for executive officers after the elimination of the Interim Chief Executive Officer position and the significant change in the size of PDL's Board of Directors, in June 2008, PDL's Compensation Committee approved additional retention bonuses for PDL's executive officers and granted restricted stock awards to Dr. McCamish and Mr. Guggenhime, which fully vested upon the Spin-off.

        Each of the cash retention bonuses approved were time-based and were or will be earned provided that the individual remained or remains employed in good standing through a specified date. The dates on which many of these retention bonuses were earnable extended to the end of 2009. We continued these retention bonus programs and entered into retention bonus letter agreements with the named executive officers listed in the table below. The circumstances in which these retention bonus programs were adopted were unique and we do not expect to implement similar retention programs in the foreseeable future.

	Retention Bonus Payment Date
	January 31, 2009		May 31, 2009		June 30, 2009		September 4, 2009		December 31, 2009
Andrew Guggenhime	$	25,000		—	$	66,000		—	$	88,000
Maninder Hora		—	$	45,000		—	$	67,500		—
Mark McCamish(1)	$	25,000		—	$	69,000		—	$	92,000
Jaisim Shah(2)	$	25,000		—	$	60,000		—	$	80,000

(1)

Dr. McCamish's resignation, as disclosed in our Form 8-K filed on January 7, 2009, became effective as of April 3, 2009. In accordance with the terms of our retention bonus letter agreement with him, he received his payment for the period ending on January 31, 2009, but is not entitled to receive the payments which otherwise would have been payable for the periods ending on June 30, 2009 and December 31, 2009.

(2)

We terminated Mr. Shah's employment on January 9, 2009. In accordance with the terms of our retention bonus letter agreement with him, he received a prorated portion of each of the retention bonuses listed in this row.

        In accordance with the retention bonus letter agreements we entered into with each of the above-listed officers, in the event a named executive officer's employment with us is terminated without "cause" (as defined in our retention plan) prior to one of the retention bonus payment dates set forth above, such officer would be eligible to receive a prorated amount of the retention bonuses that such officer would otherwise have earned. The foregoing proration would be based on the number of

12

months between December 1, 2008 and such termination date, rounded up to the nearest whole month. Any portion of the retention bonus that would be payable would be earned provided that the officer signs, and does not revoke, the Company's form of release agreement within 60 days after the officer's termination date. Should the officer's employment be terminated without cause in connection with or following a "change in control" (as defined in our retention plan) and provided the officer signs, and does not revoke, a release agreement within 60 days of the date of employment termination, we would pay the officer the full amount of the retention bonuses that have not been earned. If the Company terminates an officer for cause or such officer voluntarily terminates employment, the individual would not be eligible to receive any portion of the retention bonuses that had not been earned.

Equity Incentives

        We believe that equity awards encourage the perspective necessary to meet longer-term financial and strategic goals and more closely align the interests of our employees with those of our stockholders. These awards cause our employees to think like owners because the value of equity awards, especially stock options, increases only if the value of our common stock increases. The long-term incentive of equity awards provides balance to the shorter-term and medium-term focus that base salary and annual bonuses may foster in isolation, thereby promoting thoughtful, balanced decision-making by our employees. We also believe that equity incentives are a key part of our ability to attract and retain employees, especially officers, in a highly competitive labor market.

New Hire Grants

        We grant to all our new employees stock option awards in connection with the start of their employment. The number of option shares granted to a new employee is based on the salary grade of the new employee and is subject to grant size guidelines established by our Compensation Committee. Because compensation packages for officers tend to be more highly negotiated than are compensation packages for other employees, equity awards to officers may vary from the guidelines customarily followed to a greater degree than awards to other employees and often will include a mix of stock options and restricted stock. For retention purposes, we target the size of our equity grants to be competitive with our peers and roughly at the 60^th percentile based on compensation survey data we obtain. However, the actual grant date fair value of a given equity grant to an officer may differ from the 60^th percentile target grant size for that officer's position depending on the officer's experience, knowledge, skills and education. Also, new hire equity grants to officers may be highly negotiated, which may cause a particular grant to differ from the 60^th percentile target grant size for a particular position.

        Stock option grants to new employees, other than officers, are approved and granted by the Equity Grant Committee of our Board on the first business day of the week following the new employee's start date and have an exercise price equal to the closing price of our common stock on the date of grant. We believe that the process of granting new hire option grants on a weekly basis provides an even-handed, fair approach for our employees generally, because the new hire stock option grant to each new employee is granted closer in time to the employee's decision to accept an employment offer than if grants were made on a monthly, quarterly or less-frequent basis. Stock option grants to promoted employees, other than officers, are also customarily approved and granted by the Equity Grant Committee on the first business day of the first week after the date of the promotion. Most promotions occur in March in connection with the annual performance review process; however, promotions also occur from time to time throughout the year. Our new hire and promotion stock option grants vest over four years with 25% of the shares subject to the option vesting on the first anniversary of the grant date and ¹/48 of the shares subject to the option vesting monthly after the first anniversary.

13

        The Equity Grant Committee is not authorized to grant equity awards to those officers that would be deemed "officers" ("Section 16 Officers") under Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Grants to Section 16 Officers are made only by our Compensation Committee. Grants to other officers are also customarily made by our Compensation Committee and not by our Equity Grant Committee, even though our Equity Grant Committee also has the authority to grant equity awards to these other officers. Our Compensation Committee customarily approves the general terms of employment offers to prospective new officers, subject to limitations to allow our management to negotiate final terms with the candidate. The equity award grant negotiated with the prospective new officer is then sent to our Compensation Committee for approval after the officer candidate accepts our employment offer but before the start of employment. Because stock option grants to newly hired officers are customarily approved prior to the start of employment, these grants are usually effective on the officer's employment start date and have an exercise price equal to the closing price of our common stock on the officer's employment start date, which is the grant date. Our Compensation Committee also approves equity awards to officers in connection with promotions. These grants are customarily effective on the date of the promotions.

Annual Incentive Grants

        In addition to new hire option grants, we may grant employees, including our officers, annual equity awards, which most likely will be granted mid-year. Our annual stock option and restricted stock grants are on average approximately half the size of the grants that would otherwise be made to a new hire of the same salary grade, although an employee's individual performance affects the actual size of the grant, with higher performers receiving larger awards and lower performers receiving smaller or no awards. The goal of our annual equity incentive grant is to provide officers and employees with continued incentives to improve corporate performance and continuing retention benefits.

        We allocate between stock options and restricted stock awards to our employees and officers on a case-by-case basis, with awards weighted to either stock options or restricted stock for individual officers or employees based on our Compensation Committee's assessment in individual cases of the relative motivational impact of the respective types of equity and consistent with our Compensation Committee's goal to minimize dilution of stockholders. Our Compensation Committee determines the number of option shares or shares of restricted stock to be granted to each individual employee or officer based on a review of:

•

The employee's or officer's position at the Company;

•

His or her individual performance;

•

The number of unvested stock options and restricted shares held by the officer or employee;

•

The amount that the employee's or officer's stock options are "in the money," that is the extent to which the current market price exceeds the exercise price of such stock options; and

•

Other factors, including independent equity compensation survey data.

        Our annual stock option grants have an exercise price equal to the closing price of our common stock on the date of grant and vest with respect to 1/48 of the shares subject to the option on a monthly basis after the grant date. Annual restricted stock grants vest annually with respect to 25% of the shares subject to the grant.

Re-engagement and Value-Transfer Grants

        In connection with the Spin-off, we hired nearly all of PDL's employees because all of these employees support the Biotechnology Operations. Upon the Spin-off, the unvested PDL stock options held by these employees terminated, the vested portion of their PDL stock options remained exercisable for three months following the Spin-off and any unvested PDL restricted stock held by

14

these employees was cancelled. We did not assume any of the PDL stock options held by our employees in connection with the Spin-off and our employees did not have any equity interest in the Company at the time of the Spin-off other than shares of the Company they may have received in the distribution to all PDL stockholders with respect to PDL stock they held prior to the ex-dividend date for the Spin-off.

        In order to provide initial equity incentives to our employees and better align the interest of our employees with those of our stockholders, we made certain broad-based equity grants to our employees in early 2009. On January 23, 2009, consistent with disclosures we made in the Information Statement attached as an exhibit to the Registration Statement on Form 10 we filed on August 13, 2008, we granted to our employees, including our officers, unvested stock options and restricted stock ("re-engagement grants"). The re-engagement grants for non-officer employees were market competitive with the 60^th percentile based on salary grade level for new hire grants. Because our Chief Executive Officer had negotiated the terms of his employment with us, including his Facet equity grants, at the time he joined PDL in October 2008, he did not receive a re-engagement grant, but instead received the equity grants that were provided for in his offer letter with us (the "CEO Offer Letter Grants"). Although our Chief Executive Officer did not receive a re-engagement grant, we granted the CEO Offer Letter Grants at the same time we granted all of the re-engagement grants and the ratio of stock options to restricted stock in the CEO Offer Letter Grants impacted the mix of stock options and restricted stock in the re-engagement grants awarded to our other officers. With respect to our officer employees, other than our Chief Executive Officer, we determined re-engagement grant levels by evaluating both the 60^th percentile grant size for new hire grants as well as average share ownership data of officers in our peer group. As noted, we also evaluated the ratio between option shares and shares of restricted stock granted to our Chief Executive Officer, which was a ratio of 3-to-1, and determined to use the same ratio for the re-engagement grants awarded to our other officers to demonstrate alignment among our officers. The CEO Offer Letter Grants and the re-engagement grants to our other named executive officers that we awarded on January 23, 2009 are listed in the table below.

CEO Offer Letter Grants and Officer Re-Engagement Grants

Named Executive Officer	Stock Options		Restricted Shares		Approximate Share Ownership(1)
Faheem Hasnain		300,000		100,000		1.63	%
Andrew Guggenhime		64,000		21,330		0.35	%
Maninder Hora		32,000		10,650		0.17	%
Mark McCamish(2)		—		—		—
Jaisim Shah(3)		—		—		—

(1)

The approximate share ownership represents the aggregate number of stock option and restricted shares in this table divided by 24,576,879, which was the number of outstanding shares on January 23, 2009, the grant date for these awards.



(2)

At the time of grant, the Compensation Committee did not believe that a re-engagement grant to Dr. McCamish was justified in light of his pending departure. Dr. McCamish's resignation, as disclosed in our Form 8-K filed on January 7, 2009, became effective on April 3, 2009.



(3)

Mr. Shah was not an employee at the time we made re-engagement grants.

        Also, in an attempt to reflect the prior contributions of our continuing employees to the Biotechnology Operations while at PDL, we granted these employees, other than our Chief Executive Officer, Facet restricted stock awards ("value-transfer restricted shares") and Facet stock option awards ("value-transfer options") with an approximate value, based on certain assumptions, of the unvested

15

PDL restricted stock and vested PDL stock options held by these employees that expired in connection with the Spin-off. The value-transfer restricted shares were granted on January 23, 2009 at the same time we granted the re-engagement grants described above. The number of value-transfer restricted shares received by a given employee was determined by the value of unvested shares of PDL restricted stock that were cancelled upon the Spin-off. Each value-transfer restricted share award has a vesting schedule that matches the vesting schedule of the corresponding unvested PDL restricted stock award which terminated upon the Spin-off. The value-transfer options were granted on April 2, 2009 to our current employees who (i) held unexercised vested stock options to purchase shares of common stock of PDL on March 17, 2009, which vested PDL options expired on March 17, 2009 (the "Vested PDL Options"); (ii) held stock options to purchase shares of common stock of PDL immediately prior to the Spin-off, which options were granted after December 18, 2007 (each, a "2008 PDL Grant"); or (iii) were promoted to a higher grade level by PDL in 2008 but did not receive a stock option to purchase shares of PDL in connection with such promotion (each, a "2008 Missed Grant", and together with the Vested PDL Options and the 2008 PDL Grants, the "Eligible PDL Options"). The number of shares issuable under each value transfer stock option grant was determined using a Black-Scholes valuation methodology, with each value transfer stock option granted to our employee having a value approximately equal to the value as of December 18, 2008 of the Eligible PDL Option that (i) with respect to each Vested PDL Option, was vested and unexercised at the end of business on March 17, 2009, (ii) with respect to each 2008 PDL Grant, would have been vested and unexercised at the end of business on December 17, 2008 had such stock option vested on a monthly basis from the date of grant, or (iii) with respect to each 2008 Missed Grant, would have been vested and unexercised at the end of business on December 17, 2008 had such stock option been granted on the effective date of the relevant promotion and vested on a monthly basis from the date of grant. We determined the value of each Eligible PDL Option using a Black-Scholes valuation methodology (i) assuming reductions to the exercise price of certain Eligible PDL Options to account for the special cash dividend distributed by PDL in May 2008, to the extent such Eligible PDL Options had not previously been adjusted for such special cash dividend, and assuming increases to the exercise price of each Eligible PDL Option by the amount of the decrease in exercise price effected in connection with the Spin-off; and (ii) assuming with respect to each 2008 PDL Grant that such stock option would have vested monthly from the date of grant and with respect to each 2008 Missed Grant that such stock option would have been granted on the effective date of the relevant promotion and that such stock option would have vested monthly from the date of grant.

Value-Transfer Equity Grants

Named Executive Officer	Value-Transfer Restricted Shares		Value-Transfer Options
Faheem Hasnain(1)		—		—
Andrew Guggenhime		8,270		20,980
Maninder Hora		2,756		16,856
Mark McCamish		12,405		19,045
Jaisim Shah(2)		—		—

(1)

Mr. Hasnain joined PDL in October 2008 shortly before the Spin-off and did not receive value-transfer equity awards.



(2)

Mr. Shah was not an employee at the time we made any of the value-transfer equity grants.

Policy on Timing of Equity Grants

        We do not have any plan or practice to time equity grants in coordination with our public release or disclosure of material nonpublic information. We also do not time our release of material nonpublic

16

information for purposes of affecting the value of compensation to employees, including our officers. Under our equity compensation plans:

•

Equity grants approved by our Board or Compensation Committee are granted effective as of the date of the meeting (the "Grant Date"), unless another later date is specified by the Board or Compensation Committee, at its discretion, including because the public announcement of material information is anticipated.

•

Equity grants approved by our Board or Compensation Committee pursuant to a unanimous written consent are effective as of the first business day of the week following the receipt by the Company of the last signature required for such consent, unless another effective date is specified by the terms of such consent, which date shall not be earlier than the date the written consent becomes effective.

•

Equity grants to our new employees are granted effective on the first business day of the week following the start date for such employees.

•

Equity grants to existing employees for promotion or to reward performance are granted effective on the first business day of the week following the final approval of the promotion.

Change in Control and Severance Benefits

        Our change in control benefits are intended to retain our officers during the pendency of a proposed change of control transaction and to align the interests of our officers with our stockholders in the event of a change in control. We believe that proposed or actual change in control transactions can adversely impact the morale of officers and create uncertainty regarding their continued employment. Our Compensation Committee has determined that offering change in control benefits would better ensure the retention of our officers during the pendency of a potential change in control transaction. Without these benefits, officers may be tempted to leave us prior to the closing of the change in control, especially if they do not wish to remain with the entity after the transaction closes, and any such departures could jeopardize the consummation of the transaction or our interests if the transaction does not close and we remain independent. Our Compensation Committee believes that these benefits therefore serve to enhance stockholder value in any such transaction, and align our officers' interests with those of our stockholders in change in control transactions.

        The potential payments that each of our named executive officers would have received if a change in control or termination of employment had occurred on December 31, 2008 are set forth under the section titled "Potential Payments Upon Termination or Change in Control" in this proxy statement.

        If the Wong Nominees are elected to our Board at the annual meeting, a change of control under various of our agreements with our officers will have occurred.

Retention and Severance Plan

        We adopted our Retention and Severance Plan, or the "retention plan," which provides for the acceleration of vesting of equity awards and severance benefits in connection with a participant's involuntary termination of employment, whether following a "change in control" or otherwise. Each of our officers, including our named executive officers, is eligible to receive benefits under the retention plan. The extent of vesting acceleration and amount of severance payable to an officer is based on whether an officer is a "vice president," "senior vice president" or the "chief executive officer."

        A change in control under our retention plan is deemed to occur if:

•

any person or entity becomes the "beneficial owner," directly or indirectly, of our securities representing 50% of the total fair market value or total combined voting power of our then

17

outstanding securities entitled to vote generally in the election of directors, subject to certain exceptions;

•

we are a party to a merger or consolidation or similar corporate transaction, or series of related transactions, which results in the holders of our voting securities outstanding immediately prior to such transaction(s) failing to retain immediately after such transaction(s) direct or indirect beneficial ownership of more than 50% of the total combined voting power of the securities entitled to vote generally in the election of our directors or the surviving entity outstanding immediately after such transaction(s), subject to certain exceptions;

•

the sale, exchange or transfer of all or substantially all of our assets or consummation of any transaction, or series of related transactions, having similar effect (other than a sale or disposition to one or more of our subsidiaries); or

•

a change in the composition of our Board within any consecutive 12-month period as a result of which fewer than a majority of the directors are "incumbent directors" (as defined in the retention plan).

        If the Wong Nominees are elected to our Board at the annual meeting, a change of control under our Retention and Severance Plan will have occurred.

        If the surviving or acquiring entity in a change in control does not assume or otherwise issue substitutes for equity awards whose vesting is based on continued service alone ("service-based equity awards"), then, immediately prior to the change in control, 100% of the unvested portion of awards held by each participant would become vested in full. In addition, all equity awards whose vesting is based on achievement of performance goals ("performance-based equity awards") would vest in full immediately prior to the change in control in an amount that would vest had the target level of performance been achieved. In either case, continued employment to the time of the change in control is a condition to acceleration of vesting of a participant's equity awards, except as otherwise provided by the retention plan in the event of involuntary termination.

        Without the above-described acceleration of equity awards, officers may be tempted to leave us prior to the closing of the change in control, especially if they do not wish to remain with the acquiring or surviving entity, and any such departures could jeopardize the consummation of the transaction or our interests if the transaction does not close and we remain independent.

        The retention plan also provides for severance and health and life insurance continuation benefits, outplacement benefits and certain acceleration of vesting of equity awards in the event the participating officer's employment is involuntarily terminated. For the purposes of the retention plan, involuntary termination means termination of employment by the company other than for "cause" or the participant's death or permanent disability, or the participant's resignation for "good reason" (each, a "triggering termination"). The specific benefits provided vary depending on whether involuntary termination occurs within 18 months after the change in control or at other times not in connection with a change in control. In any case, the severance benefits provided and equity award vesting acceleration that occurs in connection with a triggering termination are conditioned on the officer's execution of a general release of all claims against us in a form prescribed by the retention plan.

        If a participant's employment is involuntarily terminated within 18 months after a change in control, then the participant is entitled to certain payments based on the participant's monthly base salary and annual incentive bonus rates, together with certain additional benefits, as follows:

•

The participant would receive a lump sum payment equal to the sum of the participant's monthly base salary rate and monthly annual incentive bonus rate for a specified number of months based on the participant's position: (i) 24 months if the participant is the chief executive

18

officer, (ii) 18 months if the participant is a senior vice president, (iii) 12 months if the participant is a vice president, and (iv) nine months if the participant is a key employee.

•

The participant would continue to receive health and life insurance benefits for (i) 24 months, if the participant is the chief executive officer, (ii) 18 months if the participant is a senior vice president, (iii) 12 months if the participant is a vice president, and (iv) nine months if a participant is a key employee.

•

100 percent of the unvested portion of the equity awards held by the participant, including awards granted by the surviving or acquiring entity after the change in control, would become vested.

•

Stock options held by the participant would remain exercisable for one year after termination of employment.

•

The participant would receive outplacement services for a period of six months.

        If a participant's employment is involuntarily terminated at any time other than within 18 months after a change in control, then the participant is entitled to certain payments based on the participant's monthly base salary rate alone, together with certain additional benefits, as follows:

•

The participant would receive a lump sum payment equal to the participant's monthly base salary rate and monthly annual incentive bonus rate for a number of months based on the participant's position: (i) 18 months if the participant is the chief executive officer, (ii) 12 months if the participant is a senior vice president, (iii) nine months if the participant is a vice president, and (iv) six months if the participant is a key employee.

•

The participant would continue to receive health and life insurance benefits for (i) 18 months if the participant is the chief executive officer, (ii) 12 months if the participant is a senior vice president, (iii) nine months if the participant is a vice president, and (iv) six months if the participant is a key employee.

•

Any unvested service-based equity awards held by the participant, which would otherwise vest during the one year following termination, would become vested. Except for awards intended to quality for exemption under Section 162(m) of the Code, the vesting of performance-based equity awards would accelerate to the extent that the award would vest had the target level of performance been achieved, subject to proration if the performance period would have continued for more than 12 months beyond the date of the participant's termination of employment, in the case of performance-based equity awards intended to qualify for exemption under Section 162(m) of the Code, the extent of accelerated vesting would be determined by the actual achievement of the applicable performance goals at the end of the performance period, subject to proration if the performance period extends more than 12 months beyond the participant's termination of employment.

•

Stock options held by the participant would remain exercisable for one year after termination of employment.

•

The participant would receive outplacement services for a period of six months.

        For purposes of the retention plan, the term "monthly base salary rate" means an amount equal to the officer's monthly base salary immediately prior to the triggering termination (without giving effect to any reduction constituting "good reason" for resignation) or, if greater, the officer's monthly base salary immediately prior to the change in control. The term "monthly annual incentive bonus rate" means a quotient determined by dividing 12 by whichever of the following amounts is the greatest: (1) the aggregate amount of all annual incentive bonuses earned by the officer during the fiscal year immediately prior to the year of the change in control, (2) the aggregate amount of all annual incentive

19

bonuses earned by the officer during the fiscal year immediately prior to the year of the triggering termination, or (3) the aggregate of all annual incentive bonuses that would be earned by the officer at the targeted annual rate assuming attainment of 100% of all applicable performance goals in the year which the triggering termination occurs. For this purpose, annual incentive bonuses do not include signing bonuses, retention bonuses or other nonrecurring cash awards that are not part of an annual incentive bonus program.

        For purposes of the retention plan, the term "cause" means the occurrence of any of the following:

•

Such participant's theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any of our documents or record;

•

Such participant's material failure to abide by our code of conduct or other written policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct);

•

Such participant's material and intentional unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of ours (including, without limitation, such participant's improper use or disclosure of our confidential or proprietary information);

•

Such participant's intentional act which has a material detrimental effect on our reputation or business;

•

Such participant's repeated failure or inability to perform any reasonable assigned duties after written notice of, and a reasonable opportunity to cure, such failure or inability;

•

Such participant's material breach of any employment, service, non-disclosure, non-competition, non-solicitation or other similar agreement of ours, which breach is not cured pursuant to the terms of such agreement or within 20 days of receiving written notice of such breach; or

•

Such participant's conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs such participant's ability to perform his or her duties to us.

        For purposes of the retention plan, the term "good reason" means the occurrence of any of the following conditions without such participant's informed written consent:

•

A material diminution in such participant's authority, duties or responsibilities, causing such participant's position to be of materially lesser rank or responsibility;

•

A material diminution in the authority, duties or responsibilities of the supervisor to whom such participant is required to report, causing such supervisor's position to be of materially lesser rank or responsibility; or, if such participant reports to the Board, a requirement that such participant report to a corporate officer or employee other than directly to our Board or the board of any parent company of ours;

•

a material reduction in such participant's base salary rate or annual incentive bonus target rate, unless reductions comparable in amount and duration are concurrently made for all other officers and key employees of ours;

•

a change in such participant's work location that increases the regular one-way commute distance between such participant's residence and work location by more than 30 miles; or

•

any action or inaction by us or our successor that constitutes a material breach with respect to such participant of the retention plan or an employment agreement under which such participant provides services to us.

20

        The offer letter we entered into with Faheem Hasnain, our Chief Executive Officer, provided that his participation agreement under the Retention and Severance Plan would provide for a tax "gross-up" payment to Mr. Hasnain in the event that an excise tax payment becomes payable by Mr. Hasnain under Sections 280G and 4999 of the Internal Revenue Code, which excise tax may be due in certain change of control events. The effect of the tax "gross-up" payment is that the net amount retained by him from all payments after deduction of applicable taxes, including excise tax, penalties and interest with respect to these payments, would equal the net amount that he would have retained in the absence of the excise tax imposed by Section 280G and Section 4999 of the Internal Revenue Code.

Tax Considerations

        Our Compensation Committee has considered the provisions of Section 162(m) of the Internal Revenue Code and related Treasury Department regulations which restrict deductibility for federal income tax purposes of executive compensation paid to our Chief Executive Officer and each of the four other most highly compensated executive officers holding office at the end of any year to the extent such compensation exceeds $1,000,000 for any of such officers in any year and does not qualify for an exception under the statute or regulations. The members of our Compensation Committee qualify as outside directors for purposes of exempting executive compensation from the limits on deductibility under Section 162(m). Our Compensation Committee is solely responsible for granting stock options to officers. In the future, our Compensation Committee will continue to evaluate the advisability of exempting executive compensation from the deductibility limits of Section 162(m). Our Compensation Committee's policy is to qualify our executives' compensation for deductibility under applicable tax laws to the maximum extent possible, consistent with our compensation objectives.

Stock Ownership Guidelines

        The Board believes that ownership of our common stock by our officers and directors promotes a focus on long-term growth and aligns the interests of our officers and directors with those of our stockholders. During 2009, we expect that our Board will evaluate the adoption of stock ownership guidelines that would apply to our executive officers and directors to achieve this goal.

Prohibition against Certain Equity Transactions

        Our Trading Compliance Policy prohibits our officers and directors from engaging in "short" sales and hedging or monetization transactions which could reasonably cause our officers and directors to have interests adverse to our stockholders. "Short" sales, which are sales of shares of common stock by a person that does not own the shares at the time of the sale, evidence an expectation that the value of the shares will decline in value. We prohibit our officers and directors from entering into "short" sales because such transactions signal to the market that the officer or director has no confidence in us or our short-term prospects and may reduce the officer's or director's incentive to improve our performance. In addition, Section 16(c) of the Exchange Act expressly prohibits officers and directors from engaging in short sales. Our officers and directors are also prohibited under our Trading Compliance Policy from entering into hedging or monetization transactions, such as zero-cost collars and forward sale contracts, which allow a party to lock in much of the value of their stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions would allow someone to continue to own the covered securities, but without the full risks and rewards of ownership. If an officer or director were to enter into such a transaction, the officer or director would no longer have the same objectives as our other stockholders.

21

REPORT OF THE COMPENSATION COMMITTEE

        The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis found on pages 18 to 36 of this proxy statement. Based on this review and these discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008.

Respectfully submitted,

Gary Lyons, Chairperson
Brad Goodwin

22

EXECUTIVE OFFICER COMPENSATION

Summary Compensation Table

        The following table sets forth information concerning the compensation earned by our chief executive officer, our chief financial officer and our three other most highly compensated executive officers (each, a "named executive officer") during 2008 with PDL and the Company.

Name and Principal Position	Year		Salary ($)			Bonus ($)			Stock Awards(1) ($)		Option Awards(2) ($)		Non-Equity Incentive Plan Compensation ($)			All Other Compensation ($)			Total ($)
Faheem Hasnain		2008		112,115	(3)(4)		—			—		—		103,125	(5)		25,787	(6)		241,027
President and		2007		—			—			—		—		—			—			—
Chief Executive Officer		2006		—			—			—		—		—			—			—
Andrew Guggenhime		2008		345,804	(3)		116,000	(7)		129,590		319,478		180,000	(5)		4,619	(8)		1,095,491
Senior Vice President and		2007		348,081			17,755	(9)		59,340		301,569		97,245	(9)		3,668	(8)		827,658
Chief Financial Officer		2006		228,750	(10)		74,900	(11),(12)		44,307		168,410		—			3,365	(8)		519,732
Maninder Hora		2008		280,951	(3)		97,500	(7)		6,517		142,882		110,000	(5)		192,664	(13)		830,514
Vice President, Product		2007		280,125			4,622	(9)		10,569		121,016		62,608	(9)		4,371	(8)		483,311
and Quality Operations		2006		118,731	(14)		49,700	(11)(15)		4,496		39,044		—			569	(8)		212,540
Mark McCamish(18)		2008		373,277	(3)		119,000	(7)		117,390		179,928		155,874	(5)		5,263	(8)		950,732
Senior Vice President and		2007		308,308	(16)		187,471	(9)(17)		29,898		143,896		92,529	(9)		5,032	(8)		767,134
Chief Medical Officer		2006		—			—			—		—		—			—			—
Jaisim Shah(19)		2008		310,417	(3)		110,000	(7)		30,893		104,135		—			8,297	(8)		563,742
Senior Vice President and		2007		297,045			17,013	(9)		52,695		161,002		82,987	(9)		7,648	(8)		618,390
Chief Business Officer		2006		287,000			66,010	(11)		23,475		218,942		—			6,810	(8)		602,237

(1)

Amounts listed in this column reflect the compensation cost PDL recognized for financial statement purposes during 2008 for the shares of PDL restricted stock held by our named executive officer calculated in accordance with Statement of Financial Accounting Standards (SFAS) No. 123, "Share-Based Payment (Revised 2004)" ("SFAS 123(R)"). See note 3 of PDL's "Notes to consolidated financial statements" in PDL's annual report on Form 10-K filed with the SEC on March 2, 2009 for a discussion of assumptions PDL made in determining the compensation costs included in this column.

(2)

Amounts listed in this column reflect the compensation cost PDL recognized for financial statement purposes during 2008 for the stock awards held by the named executive officer calculated in accordance with SFAS 123(R) and using a Black-Scholes valuation model. See note 3 of PDL's "Notes to consolidated financial statements" in PDL's annual report on Form 10-K filed with the SEC on March 2, 2009 for a discussion of assumptions PDL made in determining the compensation costs included in this column.

(3)

This amount consists of 2008 salary earned as a PDL employee through November 30, 2008 and salary earned as a Facet employee from December 1, 2008 through December 31, 2008.

(4)

Mr. Hasnain's annual base salary in 2008 was $550,000. The amount of salary earned is lower than his base salary, however, because Mr. Hasnain joined PDL in October 2008.

(5)

This amount reflects the amount of cash bonus earned under the 2008 Performance Program.

(6)

Pursuant to the offer letter Mr. Hasnain entered into with both PDL and Facet, he is entitled to a $6,000 monthly housing allowance and reimbursement of up to $7,500 of his attorneys' fees incurred in connection with his negotiation of his offer letter with PDL. This amount consists of three months of the housing allowance benefit and reimbursement of Mr. Hasnain's attorneys' fees.

23

(7)

Our named executive officers, other than Mr. Hasnain, earned retention bonuses on the dates and in the amounts set forth in the table below. See the section titled "2009 Cash Retention Bonus Program" above in the "Compensation Discussion and Analysis" section for more information regarding these bonuses.

	Retention Bonus Payment Dates
	July 31, 2008		September 30, 2008		October 31, 2008		December 1, 2008
Andrew Guggenhime	$	25,000	$	66,000	$	25,000		—
Maninder Hora		—	$	30,000		—	$	67,500
Mark McCamish	$	25,000	$	69,000	$	25,000		—
Jaisim Shah	$	25,000	$	60,000	$	25,000		—

(8)

Consists of (A) matching contributions PDL made to the officer's 401(k) plan and (B) insurance premiums paid with respect to life insurance for the benefit of the officer.

(9)

Based on PDL's performance against stated goals in PDL's 2007 Performance Program, PDL's Compensation Committee funded PDL's bonus pool at 74.5%. PDL's Compensation Committee, in the exercise of its discretion, increased the funding of the bonus pool by an additional 5.5% to recognize PDL's achievement of strategic goals and objectives that were adopted in the second half of 2007, which were not included as goals or objectives under the 2007 Performance Program when it was originally developed and adopted. As a result, a portion of this officer's bonus is classified under the "Non-equity Incentive Plan Compensation" column and the remainder is classified under the "Bonus" column.

(10)

Mr. Guggenhime's annual base salary in 2006 was $305,000. The amount of salary earned is lower than his base salary, however, because Mr. Guggenhime joined PDL in April 2006.

(11)

Although the target bonuses (not including hiring bonuses that were earned by some of PDL's named executive officers) of each of PDL's executive officers earned in 2006 were adjusted based on PDL's performance during 2006, PDL had not established or communicated to PDL's executive officers a formal connection between the amount of the target bonus the executive officer would receive and the extent to which PDL achieved PDL's company-wide objectives until November 2006. Because of this, the bonuses that PDL's named executive officers received with respect to 2006 bonuses that were impacted by PDL's performance are classified in the "Bonus" column and not classified and disclosed as awards under a non-equity incentive plan.

(12)

Includes a hiring bonus of $20,000 PDL paid to Mr. Guggenhime at the start of his employment with PDL in April 2006.

(13)

Consists of (A) matching contributions PDL made to Dr. Hora's 401(k) plan, (B) insurance premiums paid with respect to life insurance for the benefit of Dr. Hora and (C) a relocation payment of $185,048 that PDL paid to Dr. Hora in connection with his purchase of a residence pursuant to a letter agreement between Dr. Hora and PDL.

(14)

Dr. Hora's annual base salary in 2006 was $270,000. The amount of salary earned is lower than his base salary, however, because Dr. Hora joined PDL in July 2006.

(15)

Includes a hiring bonus of $20,000 paid to Dr. Hora at the start of his employment with PDL in July 2006.

(16)

Dr. McCamish's annual base salary in 2007 was $360,000. The amount of salary earned is lower than his base salary, however, because Dr. McCamish joined PDL in February 2007.

(17)

Includes a hiring bonus of $100,000 and a relocation bonus of $55,000 PDL paid to Dr. McCamish at the start of his employment with PDL in February 2007.

(18)

Dr. McCamish's services as an officer and employee of the Company terminated in April 2009.

(19)

We terminated the services of Mr. Shah as an officer and employee of the Company in January 2009.

24

Grants of Plan-Based Awards During 2008

        We did not grant any equity awards to our named executive officers or any employees during 2008. Please see the sections titled "Re-engagement and Value-Transfer Grants" above and the descriptions of our employment arrangements with Mr. Hasnain below regarding equity awards we made to our executive officers in early 2009.

        The following table lists each equity award granted by PDL during 2008 to our named executive officers.

Name	Grant Date		Date of Board of Directors Action		All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Share)		Grant Date Fair Value of Stock and Option Awards
Faheem Hasnain		10-01-2008		09-16-2008		125,000					$	1,167,500
		10-01-2008		09-16-2008				650,000	$	9.34	$	2,250,690
Andrew Guggenhime		06-19-2008		06-19-2008		10,000					$	111,400
Maninder Hora		—		—		—		—		—		—
Mark McCamish		06-19-2008		06-19-2008		10,000					$	111,400
Jaisim Shah		—		—		—		—		—		—

Employment Arrangements

        We entered into employment offer letters with each of our named executive officers in connection with the Spin-off and their start of employment with us on December 1, 2008. None of these employment offer letters indicates a specific term of employment, each officer is an "at-will" employee and each officer's employment may be terminated by us or the named executive officer at any time. Each offer letter specifies the officer's initial annual base salary and annual target bonus, which are set forth in the table below. Certain additional terms of our employment arrangements with Mr. Hasnain are summarized below.

Named Executive Officer	Initial Annual Base Salary		Initial Annual Target Bonus
Faheem Hasnain	$	550,000		75.0%
Andrew Guggenhime	$	362,050		37.5%
Maninder Hora	$	294,150		30.0%
Jaisim Shah	$	325,000		37.5%
Mark McCamish	$	383,100		37.5%

        Our employment offer letter with Faheem Hasnain also specifies that he will receive a monthly housing allowance of $6,000 until the earlier of his termination of employment or October 1, 2010. The offer letter also provided that Mr. Hasnain would be granted (1) an option to acquire 300,000 shares of our common stock and (2) a restricted stock award for 100,000 shares of our common stock; we granted these awards to Mr. Hasnain on January 23, 2009. The offer letter also provides that Mr. Hasnain's participation agreement under our retention plan will provide for a gross up payment to Mr. Hasnain in the event that an excise tax payment becomes payable by Mr. Hasnain under Sections 280G and 4999 of the Internal Revenue Code, which excise tax may be due in certain change of control events, in connection with payments and benefits Mr. Hasnain may receive under our retention plan.

Option Exercises and Stock Vested in 2008

        The following table lists the number of shares of PDL common stock acquired upon exercise of options by each named executive officer during 2008 and the number of shares of restricted PDL

25

common stock held by each named executive officer that vested during 2008. Our named executive officers held no Facet stock-based awards during 2008.

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise(1) ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting(2) ($)
Faheem Hasnain		—		—		—		—
Andrew Guggenhime		—		—		11,875	$	114,224
Maninder Hora		—		—		625	$	6,669
Mark McCamish		—		—		11,875	$	123,131
Jaisim Shah		1,251	$	6,044		3,125	$	34,313

(1)

Value realized on exercise equals the aggregate differences between the market price and the exercise price at the time of each option exercise.

(2)

Value realized on vesting equals the market value of the shares that vested on the vesting date.

Outstanding Equity Awards at December 31, 2008

        None of our named executive officers held any Facet equity awards as of December 31, 2008. The following table sets forth information regarding each unexercised option to purchase shares of PDL common stock held by our named executive officers as of December 31, 2008. As a result of the Spin-off, the unvested portion of each PDL stock option held by our named executive officers terminated and the then-vested portion of each PDL stock option remained exercisable until March 17, 2009, at which time any unexercised portion of these PDL stock options terminated. Also as a result of the Spin-off, the unvested portion of any PDL restricted shares held by our named executive officers terminated.

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date(1)
Faheem Hasnain(2)		—		—		—		—
Andrew Guggenhime		43,333		—	$	25.344		3/17/2009
		11,666		—	$	14.234		3/17/2009
		9,166		—	$	16.104		3/17/2009
		10,000		—	$	19.204		3/17/2009
Mark McCamish		37,187		—	$	16.244		3/17/2009
		6,666		—	$	19.204		3/17/2009
Maninder Hora		29,166		—	$	10.604		3/17/2009
		10,000		—	$	19.204		3/17/2009
Jaisim Shah		160,000		—	$	32.917		3/17/2009
		30,000		—	$	16.004		3/17/2009
		313		—	$	11.064		3/17/2009
		5,063		—	$	12.354		3/17/2009
		10,000		—	$	19.204		3/17/2009
		31,604		—	$	18.834		3/17/2009
		8,540		—	$	14.234		3/17/2009

(1)

The right to exercise the vested portion of each PDL stock option held by our named executive officers lapsed on March 17, 2009, three months after the Spin-off, pursuant to the terms of the option agreement governing each option.

(2)

Mr. Hasnain did not hold any vested PDL stock options immediately prior to the Spin-off and, as a result, all of his PDL stock options terminated upon the Spin-off.

26

Potential Payments upon Termination or Change in Control

        The tables below identify the potential payments that each of our named executive officers would have received in the event of a change in control or termination of employment assuming that the transaction or termination occurred on December 31, 2008. Except as noted below, all of the potential payments listed in the table below are payments that would have been made pursuant to the terms of our retention plan discussed above under the heading "Change in Control and Severance Benefits."

        If the Wong Nominees are elected to our Board at the annual meeting, a change of control under various of our agreements with our officers will have occurred.

		Acceleration of Vesting(1)
								Continuation of Benefits and Outplacement Services(3)
		Stock Options		Restricted Stock		Severance Payment(2)				Tax Gross-Up Payments		Acceleration of Retention Bonuses(4)		Total
Faheem Hasnain
•	Change in control transaction (options not assumed)(5)		—		—		—		—		—		—		—
•	Change in control employment termination(6)		—		—	$	1,925,000	$	58,896	$	807,589		—	$	2,791,485
•	Employment termination absent a change in control(7)		—		—	$	1,443,750	$	46,821		—		—	$	1,490,571
Andrew Guggenhime
•	Change in control transaction (options not assumed)(5)		—		—		—		—		—		—		—
•	Change in control employment termination(6)		—		—	$	746,728	$	46,820		—	$	179,000	$	972,548
•	Employment termination absent a change in control(7)		—		—	$	497,819	$	34,646		—	$	28,965	$	561,430
Maninder Hora
•	Change in control transaction (options not assumed)(5)		—		—		—		—		—		—		—
•	Change in control employment termination(6)		—		—	$	382,395	$	34,646		—	$	112,500	$	529,541
•	Employment termination absent a change in control(7)		—		—	$	286,796	$	28,522		—	$	14,958	$	330,276
Mark McCamish
•	Change in control transaction (options not assumed)(5)		—		—		—		—		—		—		—
•	Change in control employment termination(6)		—		—	$	790,144	$	46,820		—	$	186,000	$	1,022,964
•	Employment termination absent a change in control(7)		—		—	$	526,763	$	34,646		—	$	29,704	$	591,113
Jaisim Shah
•	Change in control transaction (options not assumed)(5)		—		—		—		—		—		—		—
•	Change in control employment termination(6)		—		—	$	670,313	$	46,820		—	$	165,000	$	882,133
•	Employment termination absent a change in control(7)		—		—	$	446,875	$	34,646		—	$	27,487	$	509,008

(1)

None of our named executive officers held any Facet equity awards as of December 31, 2008.

(2)

The amounts listed in this column do not include the payment of accrued salary and vacation that would be due upon termination of employment.

(3)

Represents the present value of the continuation of our current employee benefits, including medical, dental, disability and life insurance as well as the value of six months of outplacement services under our retention plan. Under our retention plan, benefits continue for 24 months after a triggering termination for our Chief Executive Officer, 18 months after a triggering termination for our senior vice presidents and 12 months after a triggering termination for our vice presidents.

27

(4)

The amounts in this column consist of retention bonus payments that would be accelerated pursuant to the terms of retention bonus letter agreements we entered into with each of our named executive officers other than our Chief Executive Officer. See the section titled "2009 Cash Retention Bonus Program" above in the "Compensation Discussion and Analysis" section for more information regarding these bonuses.

(5)

If a "change in control" under our retention plan occurs and the surviving or acquiring entity in the change in control transaction neither assumes the officer's equity awards nor issues substitute awards, then 100% of the unvested portion of awards held by each participant would become vested in full and all equity awards whose vesting is based on achievement of performance goals would vest in full immediately prior to the change in control in an amount that would vest had the target level of performance been achieved. None of our officers held any Facet equity awards at December 31, 2008.

(6)

The amounts in this row were determined on the assumption that a "change in control" under our retention plan occurred and a triggering termination occurred with respect to the officer's employment. This severance payment is based on the officer's annual base salary and annual incentive bonus rate as of December 31, 2008.

(7)

The amounts in this row were determined on the assumption that a triggering termination occurred with respect to the officer's employment absent a change in control. This severance payment is based on the officer's annual base salary and annual incentive bonus rate as of December 31, 2008.

28

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information regarding beneficial ownership of our common stock as of April 9, 2009, with respect to our current officers and directors, and as of the date noted below for those persons or groups that beneficially hold more than 5% of our outstanding shares of common stock. The table contains ownership information for:

•

each person who is known by us, based on the records of our transfer agent and relevant documents filed with the SEC, to own beneficially more than 5% of the outstanding shares of our common stock;

•

each member of or nominee to our Board;

•

each of our named executive officers; and

•

all members of our Board and our executive officers as a group.

        Unless otherwise specified, the address of each named individual in the table below is the address of the Company.

Name of Beneficial Owner or Identity of Group(1)	Amount and Nature of Beneficial Ownership of Common Stock		Percent of Class
The Baupost Group, L.L.C.(2) 10 St. James Avenue, Suite 1700 Boston, Massachusetts 02116		4,374,407	17.8%
Iridian Asset Management LLC(3) 276 Post Road West Westport, Connecticut 06880		2,960,204	12.1%
Goldman Sachs Asset Management(4) 32 Old Slip New York, New York 10005		1,275,451	5.2%
Brad Goodwin(5)		16,666	*
Gary Lyons(6)		13,888	*
David R. Parkinson, M.D.(7)		13,888	*
Kurt von Emster(8)		12,499	*
Faheem Hasnain		100,000	*
Andrew Guggenhime(9)		57,051	*
Maninder Hora(10)		33,609	*
Mark McCamish(11)		32,245	*
Jaisim Shah		2,127	*
All directors and executive officers as a group (10 persons)(12)		319,677	1.3%

*

Less than 1%

(1)

Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.

(2)

All information included in this footnote regarding the beneficial ownership of The Baupost Group, L.L.C. ("Baupost"), SAK Corporation ("SAK"), and Seth A. Klarman ("Mr. Klarman") is based on our review of a Schedule 13D filed with the SEC by Baupost, Baupost Value Partners, L.P.-IV ("Baupost Partners"), SAK and Mr. Klarman on April 8, 2009 regarding their

29

beneficial ownership of our common stock (the "Baupost 13D"). According to the Baupost 13D, Baupost, Baupost Partners, SAK and Mr. Klarman each beneficially owns 4,374,407 shares of our common stock and each shares voting and dispositive power with respect to these shares.

(3)

All information included in this footnote regarding the beneficial ownership of Iridian Asset Management LLC ("Iridian"), The Governor and Company of the Bank of Ireland ("Bank of Ireland"), BIAM Holdings ("Holdings"), BancIreland (US) Holdings, Inc. ("BancIreland"), BIAM (US) Inc. ("BIAM") is based on our review of a Schedule 13G filed with the SEC by Iridian, Bank of Ireland, Holdings, BancIreland and BIAM on February 4, 2009 regarding their beneficial ownership of our common stock (the "Iridian 13G"). According to the Iridian 13G, Iridian, Bank of Ireland, Holdings, BancIreland and BIAM each beneficially owns in the aggregate 2,960,204 shares of our common stock and each shares voting and dispositive power with respect to these shares.

(4)

All information included in this footnote regarding the beneficial ownership of Goldman Sachs Asset Management, L.P. ("GSA") and Goldman Sachs Investment Strategies, LLC ("GSI") is based on our review of a Schedule 13G filed with the SEC by GSA and GSI on February 12, 2009 regarding their beneficial ownership of our common stock (the "Goldman 13G"). According to the Goldman 13G, GSA and GSI each beneficially owns in the aggregate 1,275,451 shares of our common stock and each shares voting and dispositive power with respect to these shares.

(5)

Includes 6,666 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

(6)

Includes 5,555 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

(7)

Includes 5,555 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

(8)

Includes 4,166 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

(9)

Includes 26,313 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

(10)

Includes 19,522 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

(11)

Includes 19,045 shares issuable upon exercise of options which are currently exercisable.

(12)

Consists of all shares beneficially owned by our directors and executive officers who served in that capacity as of April 9, 2009. Includes 84,897 shares issuable upon the exercise of options which are currently exercisable or will become exercisable by June 8, 2009, the date 60 days after April 9, 2009.

30

QuickLinks

COMPENSATION DISCUSSION AND ANALYSIS
CEO Offer Letter Grants and Officer Re-Engagement Grants
Value-Transfer Equity Grants
REPORT OF THE COMPENSATION COMMITTEE
EXECUTIVE OFFICER COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT