8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  May 24, 2011

PDL BioPharma, Inc.

(Exact name of Company as specified in its charter)

000-19756

(Commission File Number)

Delaware	94-3023969
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

932 Southwood Boulevard

Incline Village, Nevada  89451

(Address of principal executive offices, with zip code)

(775) 832-8500

(Company’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

Beginning on May 24, 2011, PDL BioPharma, Inc. (the “Company”) will make presentations to certain stockholders, note holders, potential stockholders and potential note holders using defined presentation materials.  A copy of the Company’s presentation materials has been posted to the Company’s website and is attached hereto as Exhibit 99.1

Limitation of Incorporation by Reference

In accordance with General Instruction B.2. of Form 8-K, this information, including Exhibit 99.1, is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 of this Current Report on Form 8-K will not be deemed an admission as to the materiality of any information that is required to be disclosed solely by Regulation FD.

Item 8.01 Other Events.

On May 24, 2011, the Company issued a press release announcing that on June 30, 2011, it will redeem all of the Company’s outstanding 2.00% Convertible Senior Notes due February 15, 2012 (the “Notes”).  Holders of the Notes have been provided notice of the redemption by the trustee for the Notes.

In accordance with the terms of the Notes, the Notes will be redeemed at a redemption price of 100.29% of the outstanding principal amount of the Notes to be redeemed, together with accrued and unpaid interest to, but excluding, the redemption date of June 30, 2011.  Note holders may elect to convert their Notes at a conversion rate of 144.474 shares of common stock per $1,000 face amount of the Notes, subject to further adjustment upon certain events, or $6.92 per share on or before June 29, 2011.  The press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Cautionary Statements

This Current Report on Form 8-K, the presentation and the press release include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could impair the Company’s royalty assets or business are disclosed in the “Risk Factors” contained in the Company’s 2010 Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Presentation
99.2	Press Release, dated May 24, 2011

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PDL BIOPHARMA, INC.
(Company)
By:	/s/ Christine R. Larson
	Christine R. Larson
	Vice President and Chief Financial Officer

Dated:  May 24, 2011

EXHIBIT INDEX

Exhibit No.	Description
99.1	Presentation
99.2	Press Release, dated May 24, 2011

EX-99.1

Exhibit 99.1

1

Non-Deal Roadshow

May 24-25, 2011

Forward Looking Statements

This presentation contains forward-looking statements, including PDL’s expectations with respect to its future royalty
revenues, expenses, net income, and cash provided by operating activities.

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. Factors that may cause differences between current expectations
and actual results include, but are not limited to, the following:

▪The expected rate of growth in royalty-bearing product sales by PDL’s existing licensees;

•The relative mix of royalty-bearing Genentech products manufactured and sold outside the U.S. versus manufactured or
sold in the U.S.;

•The ability of PDL’s licensees to receive regulatory approvals to market and launch new royalty-bearing products and
whether such products, if launched, will be commercially successful;

•Changes in any of the other assumptions on which PDL’s projected royalty revenues are based;

•Changes in foreign currency rates;

•Positive or negative results in PDL’s attempt to acquire royalty-related assets;

•The outcome of pending litigationor disputes, including PDL’s current dispute with Genentech related to ex-U.S. sales of
Genentech licensed products; and

•The failure of licensees to comply with existing license agreements, including any failure to pay royalties due.

Other factors that may cause PDL’s actual results to differ materially from those expressed or implied in the forward-
looking statements in this presentation are discussed in PDL’s filings with the SEC, including the "Risk Factors" sections of
its annual and quarterly reports filed with the SEC. Copies of PDL’s filings with the SEC may be obtained at the "Investors"
section of PDL’s website at www.pdl.com. PDL expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to reflect any change in PDL’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 presentation are qualified in their entirety by this cautionary statement.

2

Company:	PDL BioPharma, Inc.
Ticker:	PDLI (NASDAQ)
Location:	Incline Village, Nevada
Employees:	Less than 10
2010 Revenues:	$345 million
2011- Q1 Revenue:	$83 million
2011 Regular Dividends:	$0.15 /share paid on March 15, June 15, September 15 & December 15
Q1-2011 Cash Position1:	$193 million
Shares O/S2:	~ 140 million
Average Daily Volume:	~ 3 million shares

Key Information

3

1. As of March 31, 2011; 2. Not fully diluted

Overview of PDL BioPharma

4

Company Overview

•PDL pioneered the humanization of monoclonal antibodies
which enabled the discovery of a new generation of targeted
treatments for cancer and immunologic diseases

•PDL’s primary assets are its antibody humanization patents
and royalty assets which consist of its Queen et al. patents
and license agreements

•Licensees consist of large biotechnology and pharmaceutical
companies including Roche/Genentech/ Novartis,
Elan/BiogenIdec, Pfizer/Wyeth/J&J and Chugai

5

Antibody Humanization Technology

•Antibodies are naturally produced by humans to fight
foreign substances, such as bacteria and viruses

•In the 1980’s, scientists began creating antibodies in
non-human immune systems, such as those of mice,
that could target specific sites on cells to fight various
human diseases

•However, mouse derived antibodies are recognized by
the human body as foreign substances and may be
rejected by the human immune system

6

•PDL’s technology allows for the “humanization” of mouse derived antibodies by moving the
important binding regions from the mouse antibody onto a human framework

•PDL’s humanization technology is important because the humanized antibodies retain the binding
and activity levels from the original mouse antibody

•PDL’s technology has been incorporated into antibodies to treat cancer, eye diseases, arthritis,
multiple sclerosis and other health conditions with aggregate annual sales of over $17 billion

Mission Statement

•Queen et al. Patents

▪Manage patent portfolio

▪Manage license agreements

•Purchase new royalty generating assets

▪Assets that improve shareholder return

▪Commercial stage assets

▪Prefer biologics with strong patent protection

•Optimize return for shareholders

7

Corporate Governance

Management

•John McLaughlin
President & CEO

•Christine Larson
VP & CFO

•Christopher Stone
VP, General Counsel &
Secretary

•Caroline Krumel
VP of Finance

•Danny Hart
Associate General Counsel

Board of Directors

•Fred Frank
Lead Director

•Jody Lindell

•John McLaughlin

•Paul Sandman

•Harold Selick

8

Licensed Products and Royalty Revenue

9

Licensed Products and Royalty Revenue

10

1. As reported to PDL by its licensee 2. As reported by Roche; assume 1.155 CHF/USD

How Long will PDL Receive Royalties from
Queen et al. Patents?

•PDL’s revenues consist of royalties generated on sales of licensed products

▪Sold before the expiration of the Queen et al. patents in mid-2013 through end of 2014

or

▪Made prior to the expiration of the Queen et al. patents and sold anytime thereafter

11

Example of Antibody Formulation, Fill and Finish Schedule

½ month

1 month

½ month

2-3 months

Thaw, Formulation &
Vial Filling

Quality
Release

Packaging
& Quality

Inventory

Example of Antibody Bulk Manufacturing Schedule

Cell

Culture

Quality Release
Testing

Bulk Frozen Storage

1 mo

3 mos

5 mos

10 mos

15 mos

20 mos

27 mos

3 mos

2-18 months

1mo

1mo

Purification to Concentrated Bulk/Frozen

Genentech Product Made or Sold in U.S.
Net Sales up to $1.5 Billion	3.0%
Net Sales Between $1.5 Billion and $2.5 Billion	2.5%
Net Sales Between $2.5 Billion and $4.0 Billion	2.0%
Net Sales Over $4.0 Billion	1.0%
Genentech Product Made and Sold Ex-U.S.
All Sales	3.0%

Queen et al Patents - Royalty Rates

12

•Tysabri and Actemra

•Flat, low single-digit royalty

•Genentech Products (Avastin, Herceptin, Lucentis1 and Xolair)

•Tiered royalties on product made or sold in US

•Flat, 3% royalty on product made and sold outside US

•Blended global royalty rate on Genentech Products in 2010 was 1.9%

•Blended royalty rate on Genentech Products in 2010 made or sold in US was 1.5%

1. As part of a settlement with Novartis, which commercializes Lucentis outside US, PDL agreed to pay to Novartis certain amounts
based on net sales of Lucentis made by Novartis during calendar year 2011 and beyond. The amounts to be paid are less than we
receive in royalties on such sales and we do not currently expect such amount to materially impact our total annual revenues.

Shift of Manufacturing Sites = Higher Royalties

•Roche is moving some manufacturing ex-US which may result in higher royalties to PDL
due to the flat 3% royalty for Genentech Products made and sold ex-US

▪Current production at Penzburg (Herceptin) and Basel (Avastin) plants

▪Two new plants in Singapore (CHO = antibody and e. coli = antibody fragment)

-E. coli (Lucentis) and CHO (Avastin) plants are approved for commercial supply to the US

-E. coli and CHO plants are expected to be approved for commercial supply to the EU in 2011

-Currently, all Lucentis is made in the US

13

Percent of Total Worldwide Sales1

1. As reported to PDL by its licensee

Royalty Revenue & Licensed Products

14

Royalties by Product

($ in millions)

Royalty Products - Approved

15

Royalty Products - Avastin

16

Licensee	Product	Status	Indications
Roche (Genentech)	Avastin	Approved sBLA Phase 3	Colorectal Cancer NSCLC Metastatic Renal Cell Glioblastoma Metastatic Breast HER2- 1st Line Metastatic Breast HER2- 2nd Line Ovarian Cancer Gastric
Elan

•On December 16, 2010, FDA notified Roche/Genentech of its intention to withdraw Avastin’s
approval as first line treatment for HER2- breast cancer in combination with paclitaxel.

•In response to request from Genentech, FDA scheduled a hearing on June 28-29, 2011 to
allow Genentech to present why Avastin should remain FDA-approved for HER2- breast cancer.

•On December 16, 2010, EMEA narrowed, but did not withdraw Avastin’s approval for first line
treatment of HER2- breast cancer in combination with paclitaxel.

•Roche lowered its estimate of peak annual sales from of Avastin from CHF8 - CHF9 billion to
CHF7 billion.

•On April 15, 2011, Roche announced that CHMP issued a positive opinion for the use of
Avastin in combination with Xeloda for 1st-line HER 2- breast cancer.

•Based on our internal model, we project Avastin for treatment of metastatic HER2- breast
cancer represents slightly more than 2% of total PDL royalty revenue.

Royalty Products - Avastin

17

Licensee	Product	Status	Indications
Roche (Genentech)	Avastin	Approved sBLA Phase 3	Colorectal Cancer NSCLC Metastatic Renal Cell Glioblastoma Metastatic Breast HER2- 1st Line Metastatic Breast HER2- 2nd Line Ovarian Cancer Gastric
Elan

•On February 7, 2011, Genentech reported that Phase 3 trial in women with previously treated
(recurrent), platinum-sensitive ovarian cancer showed an improvement in progression free
survival in those patients treated with Avastin in combination with chemotherapy (carboplatin
and gemcitabine) followed by continued use of Avastin alone compared to those treated with
chemotherapy alone.

•Two previous Phase 3 studies in women with newly diagnosed ovarian cancer demonstrated
that front-line Avastin in combination with standard chemotherapy (carboplatin and paclitaxel),
followed by the continued use of Avastin alone, significantly increased progression free survival
compared to treatment with chemotherapy alone.

•Roche has submitted an application for approvalfor first line treatment in EU and expectsa
decision later in 2011.

•Genentech expects to file an application for approval in US in 2011.

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		Phase 2 ISP	Retinopathy ofPrematurity
	Herceptin	Approved	Breast HER2+ Cancer HER2+ Stomach and Gastro-Esophageal cancers
	Lucentis	Approved Approved Phase 3	AMD RVO DME
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

•On February 16, Research to Prevent Blindness Foundation and the U.S. National Eye Institute
announced results from a trial showing that just 4% of the infants who developed retinopathy of
prematurity and were treated with Avastin suffered a recurrence of thedisease compared to
22% of those babies with the disease who received laser treatment.

•Retinopathy of prematurity is a disease that harms the retina and is the most common cause of
blindness in infants.

•Because the trial was not sponsored by Genentech/Roche, it is not clear whether they will seek
approval for this indication.

•The publication of this data in the February 17 issue of the New England Journal of Medicine
should result in significant off-label use in this disease.

Royalty Products - Lucentis

	Lucentis	Approved Approved Phase 3 (US)	AMD RVO DME
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

•On January 7, Novartis announced that Lucentis has been approved in the EU for the treatment
of visual impairment due to diabetic macular edema (DME).

•DME is a leading cause of blindness in the working-age population in most developed
countries.

•On February 11, 2011, Genentech announced that one of two Phase 3 studies evaluating in
patients with DME showed that a significantly higher percentage of patients receiving monthly
dosing of Lucentis achieved an improvement in vision of at least 15 letters on the eye chart at
24 months compared to those in a control group, who received a placebo injection.

19

	Lucentis	Approved Approved Phase 3	AMD RVO DME
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

•On November 22, 2010, Regeneron and its partner, Bayer, reported top line data from two
Phase 3 trials investigating its VEGF Trap in age-related macular degeneration (AMD) patients
which suggest that it may be injected into the eye every other month with safety and efficacy
comparable to that of monthly dosing of Lucentis.

•On December 20, 2010, Regeneron has also reported positive Phase 3 data in the treatment of
retinal vein occlusion (RVO) for which Lucentis is approved.

•Unlike the AMD trial, monthly administration was used in the RVO trial, which does not
afford a dosing advantage with respect to Lucentis.

•On February 22, 2011, Regeneron and its partner, Bayer, filed an application for approval of its
VEGF Trap for treatment of AMD with a PDUFA date of August 20, 2011 based on priority
review.

•Regeneron filed suit in February 2011 seeking a summary judgment that it does not infringe
Genentech’s patents.

•Genentech filed a countersuit in April 2011 asserting that Regeneron is willfully infringing
Genentech’s patents, seeking treble damages and asking for injunctive relief.

20

Royalty Products - Lucentis

Licensee	Product	Status	Indications
			HER2+ Stomach and Gastro-Esophageal cancers
	Lucentis	Approved Approved Phase 3	AMD RVO DME
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

•On April 4, 2011, Genentech and Johns Hopkins University reported results of a review of files
of 77,886 patients with AMD who received either Avastin off-label or Lucentis.

•Patients receiving Avastin off-label had an 11% increased risk of overall mortality, 57%
increased risk of hemorrhagic cerebrovascular accident, 80% more likely to have ocular
inflammation and 11% more likely to have cataract surgery following treatmentthan Lucentis
treated patients.

•Authors of the study note that it is limited due to incomplete information on confounding factors
such as smoking, lipid and blood pressure levels, etc.

21

Royalty Products - Lucentis

	Lucentis	Approved Approved Phase 3	AMD RVO DME
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

•On April 28, 2011, New England Journal of Medicine reported the results from the NEI’s CATT
study comparing Lucentis and Avastin on fixed and variable schedules in the treatment of AMD.

•Efficacy results from the first year of the two year study showed that, with respect to the primary
endpoint of mean change in visual acuity (number of lines of letters on an eye chart) at 12
months, less expensive Avastin was not inferior to Lucentis.

•It is estimated that off label use of Avastin in the U.S. was 60% prior to the results of the
CATT trial.

•At 12 months, serious adverse events (primarily hospitalizations) occurred at a 24 percent rate
for patients receiving Avastin and a 19 percent rate for patients receiving Lucentis. However,
preliminary 24 month safety data showedno difference between Lucentis and Avastin treated
patients in terms of death, stroke and all arteriothrombotic events.

22

Royalty Products - Tysabri

23

Licensee	Product	Status	Indications
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

•Biogen Idec and Elan made regulatory filings with FDA and EMA to update the label of Tysabri
to reflect that anti-JC virus antibody status could be used to stratify the risk of progressive
multifocal leukoencephalopathy (PML).

•On April 18, 2011, CHMP recommended inclusion of JC virus (JCV) status as a risk factor
the product label for Tysabri in the EU.

•The CHMP also recommended a five-year renewal of the Tysabri’s Marketing Authorization
in the EU.

•On April 22, 2011, FDA disclosed the estimated risk of PML infection in Tysabri treated patients
is 0.3 per 1,000 patients during the first two years of treatment, 1.5 per 1,000 patients during
months 25 to 36, and 0.9 per 1,000 after three years. Limited data is available beyond four
years.

Licensee	Product	Status	Indications
Roche (Genentech)	Avastin	Approved	Colorectal Cancer NSCLC
		Phase 3	DME
	Xolair	Approved sBLA	Moderate-Severe Asthma Pediatric Asthma
Elan	Tysabri	Approved	Multiple Sclerosis
Roche (Chugai)	Actemra	Approved	Rheumatoid Arthritis

Royalty Products - Actemra

24

•On January 5, 2011, Roche announced that FDA expanded the Actemra label to include
inhibition and slowing of structural joint damage, improvement of physical function, and
achievement of major clinical response in adult patients with moderately to severely active
rheumatoid arthritis.

•On April 18, 2011, FDA approved Actemra to treat patients age 2 and older with active
systemic juvenile idiopathic arthritis (SJIA).

•It is the first and only approved treatment for SJIA, a rare and severe form of arthritis
affecting children.

PotentialRoyalty Products
- Development Stage

25

Licensee	Product	Status	Indications
Roche (Genentech)	T-DM1	Phase 2 & 3	Breast HER2+ Cancer
	Ocrelizumab	Phase 2b	Relapsing Remitting Multiple Sclerosis
	Pertuzumab	Phase 3	Metastatic HER2+ Breast Cancer
Roche	Afutuzumab	Phase 3	Chronic Lymphocytic Leukemia
Elan/J&J/Pfizer	Bapineuzumab	Phase 3	Alzheimer’s Disease
Lilly
Eisai

Potential Royalty Products - T-DM1

•On October 13, 2010, Roche/Genentech announced preliminary, six month results from a
Phase 3 trial in second line HER2+ breast cancer patients which showed that 48% of women
treated with T-DM1 had their tumors shrink compared with 41% of those taking the combination
of Herceptin and Taxotere.

•Among the women taking the standard therapy, 75% had side effects of grade 3 or higher
on a 5-point scale, compared with 37% of those getting T-DM1.

Potential Royalty Products - Pertuzumab

Licensee	Product	Status	Indications
Roche (Genentech)	T-DM1	Phase 2 & 3	Breast HER2+ Cancer
	Ocrelizumab	Phase 2b	Relapsing Remitting Multiple Sclerosis
	Pertuzumab	Phase 3	Metastatic HER2+ Breast Cancer
Roche	Afutuzumab	Phase 3	Chronic Lymphocytic Leukemia
Elan/J&J/Pfizer	Bapineuzumab	Phase 3	Alzheimer’s Disease
Lilly	Solanezumab	Phase 3	Alzheimer’s Disease

•On December 10, 2010, Roche/Genentech reported the results from a Phase 2 trial
investigating the neoadjuvant (prior to surgery) use of pertuzumab and Herceptin plus
chemotherapy for the treatment of early-stage, HER2+ breast cancer.

•Treatment significantly improved the rate of complete tumor disappearance in the breast by
more than half compared to Herceptin plus docetaxel, p=0.014.

•Roche expects a global regulatory filing of pertuzumab at the end of 2011.

Genentech / Roche - Product Pipeline

2011

2012

2013

Post 2013

Avastin

Ovarian Cancer 1st Line US

Lucentis

Diabetic Macular Edema (US)

Pertuzumab1

mBC HER2+1st Line

Avastin + Herceptin

mBC HER+ 2nd Line

Avastin

Relapsed Ovarian Cancer

T-DM1

HER 2+ Advanced mBC

Actemra

RA DMARD H2H (EU)

Actemra

Ankylosing Spondylitis

Herceptin

SubcutaneousFormulation

Avastin & Herceptin

HER2+ mBC 1st Line

Avastin

mCRC TML

Actemra

SC Formulation (EU)

Afutuzumab (GA101)

Chronic Lymphocytic Leukemia

Actemra

Early Rheumatoid Arthritis

Avastin

BC Adjuvant HER2+

Avastin

BC Adj Triple Negative

Herceptin

BC HER 2+ Adj 2 Year

Xolair

Chronic Idiopathic Urticaria

Avastin

Glioblastoma 1st Line

Actemra

SC Formulation (US)

Lucentis

AMD High Dose (US)

Avastin

HER 2- BC adj

Avastin

NSCLC adj

Afutuzumab (GA101)

Non-Hodgkin’s Lymphoma

T-DM1

HER 2+ mBC 1st Line

Pertuzumab1

HER 2+EBC

Ocrelizumab1

PPMS & RRMS

Lebrikizumab1

Asthma

Rontalizumab1

Systemic Lupus Erythematosus

1.Not a licensed product; source Roche investor update, April 14, 2011

US & EU Filings Calendar

Financial Update

29

Financial Overview

30

1.Includes $92.5 million one time legal settlement to MedImmune. Net interest expense includes
$17.6 million loss on convertible note retirement.

2.Includes $10.0 million one time legal settlement from UCB.

New 2015 Convertible Notes

•Terms

▪$135 million convertible, non-callable senior notes due May 2015

-Bankers exercised option to purchase an additional ~$20 million increasing total to ~$155
million

▪Coupon rate is 3.75%

▪Conversion price is $7.92/share

▪Bond hedge effectively increases conversion price to $9.31½ /share

•Timing

▪Transaction was priced on May 10thand closed on May 16th

•Use of Proceeds

▪Redeem PDL’s convertible notes due in February 2012 with a current
principal balance of $133 million

▪Pay cost of convertible note hedge transactions

▪General corporate purposes

31

$497 Million Debt

•$250 million 2.00% convertible senior notes due February 2012; current principal
balance of $133 million

▪Conversion rate is 144.474 shares / $1,000 face amount ($6.92/share)

▪Issued a notice of redemption for cash on May 23 effective as of June 30 for all outstanding Notes at
redemption price of 100.29% (approximately $1,010.3444 per $1,000 principal amount of Notes)

▪Using cash from new 2015 Notes

•$180 million 2.875% convertible senior notes due February 2015 placed November 1,
2010

▪Conversion rate is 144.474 shares / $1,000 face amount ($6.92/share) 

•$300 million 10.25% secured non-recourse notes; current principal balance of $184million

▪Distributed $200 million of proceeds as special dividend of $1.67/share in December 2009

▪Approximately 40% of Genentech royalties dedicated to quarterly principal and interest payments; principal
repayment fluctuates in relation to royalties received

▪Anticipated final maturity is September 2012; legal maturity is March 2015

▪After final maturity, securitized Genentech royalties will be retained by PDL

•In order to pay a dividend, PDL must first satisfy a net assets test at the time of dividend
declaration by Board of Directors

32

Legal Matters

33

Recent Resolution of Legal Disputes

•PDL has resolved all challenges to the Queen et al. Patents in the
U.S. Patent and Trademark Office (USPTO) and the European Patent
Office (EPO) as well as its dispute with MedImmune

▪UCB Pharma

-PDL received $10 million from UCB and PDL agreed not to sue UCB for any royalties related
to Cimzia

-UCB terminated patent interference proceedings before the USPTO and withdrew its
opposition appeal in the EPO

▪MedImmune

-PDL paid MedImmune $65 million on February 15, 2011 and will pay them an additional $27.5
million by February 2012

-MedImmune ceased support of any party in the EPO opposition appeal

▪Novartis

-PDL dismissed its claims against Novartis in its Nevada lawsuit

-Novartis withdrew its opposition appeal to PDL’s European patent in EPO

-PDL will pay Novartis an amount based on Novartis’ net ex-U.S. sales of Lucentis during
calendar year 2011 and beyond

▪BioTransplant

-PDL acquired BioTransplant, a bankrupt company and instructed BioTransplant to withdraw
its opposition appeal in the EPO

34

Pending Dispute with Genentech and Roche

•In August 2010, Genentech sent a fax on behalf of Roche and Novartis
asserting its products do not infringe PDL’s supplementary protection
certificates (SPCs)

▪Products include Avastin, Herceptin, Lucentis and Xolair

▪SPCs are extensions of patent term in Europe that are issued on a country-by-country and
product-by-product basis

•PDL Response

▪Genentech’s assertions are without merit

▪PDL disagrees with Genentech’s assertions of non-infringement

▪Genentech had waived its rights to challenge our patents, including SPCs in its 2003
Settlement Agreement with PDL

•2003 Settlement Agreement

▪Resolved intellectual property disputes between the two companies at that time

▪Limits Genentech’s ability to challenge infringement of PDL’spatent rights, including SPCs,
and waives Genentech’s right to challenge or assist other in challenging the validity of our
patent rights

35

Nevada Lawsuit Against Genentech/Roche

•PDL filed a lawsuit against Genentech and Roche in Nevada
state court

▪Lawsuit states that fax constitutes a breach of 2003 Settlement Agreement
because Genentech assisted Roche in challenging PDL’s patents and SPCs

▪Complaint seeks compensatory damages, including liquidated damages and
other monetary remedies set forth in the 2003 Settlement Agreement, punitive
damages and attorney’s fees

•In November 2010, Genentech and Roche filed two motions to
dismiss

▪They contend that 2003 Settlement Agreement applies only to PDL’s U.S.
patent rights

▪They asserted that the Nevada court lacks personal jurisdiction over Roche

▪On April 21, 2011, Nevada court heard arguments on two Genentech and
Roche motions

▪If case proceeds, trial is not yet scheduled and not expected until 2012

36

Optimizing Stockholder Return

37

Business Strategy

•Purchase new royalty assets and
ladder like a bond portfolio

▪Continue to reinvest in new royalty assets
and pay dividends

▪Debt repaid by end of 2015

▪Company continues as long as it can
generate satisfactory return

•If unable to acquire royalty assets on
attractive terms, build cash reserves to

▪Repay debt

▪Use all excess cash to pay dividends to
enhance shareholder return

▪Wind-up company in 2016 timeframe

38

•Queen et al. patents expire end of 2014; we
anticipate royalties will likely continue to ~
2016

•There are two possible pathways forward
for PDL

Optimizing Stockholder Return

•Continuously evaluating
alternatives

▪Dividends

▪Capital restructure

▪Share repurchase

▪Company sale

▪Purchase of commercial stage, royalty
generating assets

39

Investment Highlights

•Strong historic revenue growth from approved products

•Potential for additional indications from existing
products, new product approvals and purchase of new
royalty assets

•Potential to grow and diversify revenues with the
addition of new royalty assets

•Significantly reduced expenses with no R&D burn

•Liquidity - volume averages 3 million shares/day

•Return to stockholders

▪In 2011, $0.60/share to be paid in quarterly regular dividends of
$0.15/share in March 15, June 15, September 15 and December
15

40

Appendix

41

Avastin

•Licensor

▪Genentech (US) and Roche (ex-US)

•Mechanism

▪As a tumor grows, it exceeds the ability of the local blood supply
to nourish it

▪Tumor causes up regulation of vascular endothelial growth factor
(VEGF) stimulating angiogenesis or the growth of leaky blood
vessels to nourish the tumor

▪Avastin targets and inhibits VEGF reduction in blood vessels
“starving” the tumor

•Approvals

▪Metastatic colorectal cancer, advanced non-small cell lung
cancer, renal cancer, metastatic HER2- breast cancer and
glioblastoma

•Sales

▪2010 worldwide net sales of $6.4 billion1

-US is reviewing approval for metastatic HER2- breast cancer and EU has
narrowed this label, resulting in drop in sales for this indication

42

Treatment with Avastin
reduces vascularization
or blood supply of tumor

1. As reported to PDL by its licensee

Herceptin

•Licensor

▪Genentech (US) and Roche (ex-US)

•Mechanism

▪Some breast cancer cells make too many (over-express)
copies of a particular gene known as HER2 that causes
rapid growth ofthe breast cancer cell

▪Herceptin works by attaching itself to the HER2 receptors
on the surface of breast cancer cells, blocking them from
receiving growth signals and slowing or stopping the
growth of the breast cancer cell

▪Herceptin also fights breast cancer by alerting the immune
system to destroy cancer cells onto which it is attached

•Approvals

▪Metastatic HER2+ breast cancer, metastatic HER2+
stomach cancer

•Sales

▪2010 worldwide net sales of $5.4 billion1

43

Without Herceptin treatment,
cell surface receptors signal
into the HER2+ breast cancer
cell to proliferate

Herceptin binds to cell surface
receptors inhibiting intracellular
signals thus preventing cancer
cell proliferation and signaling
the immune system to “kill” the
cancer cell

1. As reported to PDL by its licensee

Lucentis

44

•Licensor

▪Genentech (US) and Novartis (ex-US)

•Mechanism

▪A form of VEGF known as VEGF-A causes the
formation of leaky blood vessels result in the
swelling in the macula and vision loss

▪Lucentis binds to and inhibits VEGF-A before it can
cause the formation of the leaky blood vessels
preserving and sometimes improving vision

•Approvals

▪Wet age-related macular degeneration (AMD),
macular edema or swelling following retinal vein
occlusion, diabetic macular edema

•Sales

▪2010 worldwide net sales of $3.0 billion1

-Recent NIH study comparing safety and effectiveness of
Lucentis finds less expensive Avastin equally efficacious -
will adversely affect future Lucentis sales for AMD

-It’s estimated that in the U.S. 60% of AMD patients are
already treated with off-label Avastin

Cross
section of
normal
macula at
back of eye

Cross
section of
macula with
AMD causing
loss of vision

Amsler Grid as
seen through
normal eyes

Amsler Grid as
seen through
eyes with AMD

1. As reported to PDL by its licensee

Xolair

45

•Licensor

▪Genentech (US) and Novartis (ex-US)

•Mechanism

▪IgE plays a role in allergic disease by
causing the release of inflammatory
mediators from mast cells that result in
sneezing, wheezing and asthma

▪Xolair binds to and neutralizes circulating
IgE by preventing IgE from binding to its
mast-cell receptor

•Approvals

▪Moderate-to-severe persistent asthma

•Sales

▪2010 worldwide net sales of $1.0 billion1

Xolair antibody (yellow) binds to IgE
(blue) preventing IgE from binding to
mast cell.Otherwise, IgE binding to
mast cell would result in wheezing,
sneezing and asthma.

1. As reported to PDL by its licensee

Tysabri

46

In MS, the body’s
autoimmune system is
inappropriately activated,
resulting in it attacking the
body. Here, defense cells,
known as T cells, are
activated.

Activated T cells are able
to cross the blood brain
barrier affording them
access to nerve cells.

Activated T cells attack,
and recruit other defense
cells known as
macrophages, to attack
and consume the myelin
sheath or insulation
surrounding nerve fibers.
The resulting holes in the
myelin slow the
transmission of impulses
along the nerve and cause
the symptoms of MS.

1. As reported to PDL by its licensee

Actemra

47

•Licensor

▪Roche and Chugai

•Mechanism

▪Rheumatoid arthritis (RA) is an autoimmune disease in
which the body's immune system attacks itself

▪One of the defense mechanisms inappropriately activated
in RA is IL-6, which can result in destruction of the cartilage
between joints causing the symptoms of RA

▪Actemra binds to and neutralizes IL-6 preventing it from
destroying cartilage thereby blocking one of the causes of
RA

•Approvals

▪Treatment of signs and symptoms in moderate-to-severe
adult RA patients, slowing of structural damage to joints
caused by RA and preservation physical function of joints
afflicted by RA

•Sales

▪2010 worldwide net sales of $459 million1

It is the degradation and
eventual destruction of this
cartilage that causes the
symptoms of RA.

1. As reported by Roche; assume 1.155 CHF/USD

EX-99.2

Exhibit 99.2

Contacts:

Cris Larson	Jennifer Williams
PDL BioPharma, Inc.	Cook Williams Communications, Inc.
775-832-8505	360-668-3701
Cris.Larson@pdl.com	jennifer@cwcomm.org

PDL BioPharma Issues Redemption Notice for Its

2.00% Convertible Senior Notes Due February 15, 2012

INCLINE VILLAGE, NV, May 24, 2011 – PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) today announced that on June 30, 2011, it will redeem all of the Company’s outstanding 2.00% Convertible Senior Notes due February 15, 2012 (the Notes).  Holders of the Notes have been provided notice of the redemption by The Bank of New York Mellon, the trustee for the Notes. In accordance with the terms of the Notes, the Notes will be redeemed at a redemption price of 100.29% of the outstanding principal amount of the Notes, together with accrued and unpaid interest up to, but excluding the redemption date of June 30, 2011. Note holders may elect to convert their Notes at a conversion rate of 144.474 shares of common stock per $1,000 face amount of the Notes, subject to further adjustment upon certain events, or $6.92 per share on or before June 29, 2011.

About PDL BioPharma

PDL pioneered the humanization of monoclonal antibodies and, by doing so, enabled the discovery of a new generation of targeted treatments for cancer and immunologic diseases. PDL is focused on maximizing the value of its antibody humanization patents and related assets. The Company receives royalties on sales of a number of humanized antibody products marketed by leading pharmaceutical and biotechnology companies today based on patents which expire in late 2014. For more information, please visit www.pdl.com.

NOTE: PDL BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma, Inc.

Forward-Looking Statements

This press release contains forward-looking statements. 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. Factors that may cause differences between current expectations and actual results include, but are not limited to, the following:

· The expected rate of growth in royalty-bearing product sales by PDL’s existing licensees;

· The relative mix of royalty-bearing Genentech products manufactured and sold outside the U.S. versus manufactured or sold in the U.S.;

· The ability of our licensees to receive regulatory approvals to market and launch new royalty-bearing products and whether such products, if launched, will be commercially successful;

· Changes in any of the other assumptions on which PDL’s projected royalty revenues are based;

· The outcome of pending litigation or disputes;

· The change in foreign currency exchange rates; and

· The failure of licensees to comply with existing license agreements, including any failure to pay royalties due.

Other factors that may cause PDL’s actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in PDL’s filings with the SEC, including the “Risk Factors” section of its annual and quarterly reports filed with the SEC. Copies of PDL’s filings with the SEC may be obtained at the “Investors” section of PDL’s website at www.pdl.com. PDL expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in PDL’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.