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): August 5, 2009

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.

On August 5, 2009, the Company made a presentation at a publicly webcast investor conference hosted by the BMO Capital Markets Healthcare Equity Research Team (the “BMO Conference”). A copy of the Company’s presentation materials has been posted on the Company’s website and is attached hereto as Exhibit 99.1.

The Company has posted a Company Overview presentation on its website. A copy of the Company’s presentation materials is attached hereto as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	BMO Conference presentation given on August 5, 2009.
99.2	Company Overview presentation posted to the Company’s website.

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 Larson
	Christine Larson
	Vice President, Chief Financial Officer

Dated: August 10, 2009

EXHIBIT INDEX

Exhibit No.	Description
99.1	BMO Conference presentation given on August 5, 2009.
99.2	Company Overview presentation posted to the Company’s website.

EX-99.1

BMO Capital Markets

Focus on Healthcare Conference

August 2009

Exhibit 99.1

2

Forward Looking Statements

This

presentation

contains

forward-looking

statements,

including

PDL's

expectations

with

respect

to

its

2009

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 products manufactured and sold outside the U.S. versus manufactured or

sold in the U.S.;

The

ability

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; 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.

3

Agenda

Overview of PDL BioPharma

2009 Guidance & Outlook

Optimizing Stockholder Return

4

PDL -

Company Background

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 Genentech, Elan, Wyeth, and Chugai

5

PDL -

Operating

Strategy

Maximize the value of PDL’s

antibody humanization patents

and licensing agreements

Reduce expenses with headcount of less than 10 and re-

domicile of operations to Nevada with no state tax

Distribute royalty revenues, net of operating expenses, debt

service, and income taxes via dividends to stockholders

To improve stockholder IRR -

pursue monetization

alternatives if beneficial:

Convertible note buybacks

Share repurchases

Monetization of royalty stream

PDL -

Select Licensed Products

6

Licensee

Product

Status

Indications

Roche

(Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast

Cancer

Gliobastoma

Metastatic Renal Cell Carcinoma

Ovarian cancer

Prostate

cancer

Adjuvant settings

Herceptin

Approved

Metastatic

Breast HER2+ Cancer

Lucentis

Approved

Phase 3

AMD

RVO

DME

Xolair

Approved

Phase 3

Moderate

-Severe

Asthma

Pediatric Asthma

MedImmune

Synagis

Approved

Respiratory Syncytial

Virus

Elan

Tysabri

Approved

Multiple

Sclerosis

Roche/Chugai

Actemra

Approved (EU& Japan)

Rheumatoid

Arthritis

Wyeth

Mylotarg

Approved

Acute Myeloid

Leukemia

Wyeth/J&J

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

PDL -

Select Licensed Products

7

Licensee

Product

Status

Indications

Roche

(Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast

Cancer

Gliobastoma

Metastatic Renal Cell Carcinoma

Ovarian cancer

Prostate

cancer

Adjuvant settings

Herceptin

Approved

Metastatic

Breast HER2+ Cancer

Lucentis

Approved

Phase 3

AMD

RVO

DME

Xolair

Approved

Phase 3

Moderate

-

Severe

Asthma

Pediatric Asthma

MedImmune

Synagis

Approved

Respiratory Syncytial

Virus

Elan

Tysabri

Approved

Multiple

Sclerosis

Roche/Chugai

Actemra

Approved (EU& Japan)

Rheumatoid

Arthritis

Wyeth

Mylotarg

Approved

Acute Myeloid

Leukemia

Wyeth/J&J

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

On

July

2,

Genentech

announced

that

a

Phase

3

trial

showed

Lucentis

significantly

improved

vision

in

patients

with

branch

retinal

vein

occlusion

at

6

months

On

July

30,

Genentech

announced

that

a

Phase

3

trial

from

a

second

study

showed

Lucentis

significantly

improved

vision

in

patients

with

central

retinal

vein

occlusion

at

6

months

PDL -

Select Licensed Products

8

Licensee

Product

Status

Indications

Roche

(Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast

Cancer

Gliobastoma

Metastatic Renal Cell Carcinoma

Ovarian cancer

Prostate

cancer

Adjuvant settings

Herceptin

Approved

Metastatic

Breast

HER2+

Cancer

Lucentis

Approved

Phase 3

AMD

RVO

DME

Xolair

Approved

Phase 3

Moderate-SevereAsthma

Pediatric Asthma

Med

Synagis

Approved

Respiratory Syncytial

Virus

Elan

Tysabri

Approved

MultipleSclerosis

Roche/Chugai

Approved (EU& Japan)

Actemra

Rheumatoid

Arthritis

Wyeth

Mylotarg

Approved

Acute Myeloid

Leukemia

Wyeth/J&J

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Immune

J&J

announced

that

it

would

buy

$1

billion

in

Elan

stock

for

50.1%

ownership

of

a

new JV to develop treatments for Alzheimer’s Disease, including bapineuzumab

J&J also pledged an initial $500 million to fund development of the drugs

9

PDL -

Royalty Revenue & 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 or

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

$0

$50

$100

$150

$200

$250

$300

$350

$400

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009E

PDL Royalties by Product

($ in millions)

Herceptin

Avastin

Lucentis

Synagis

Tysabri

Aggregate

Other

10

10

PDL -

Legal & Queen et al. Patents

Genentech

–

settlement

in

2003

upheld

validity

and

enforceability

of

patents

Multiple product license with tiered fee structure

Option for four additional antigens exercised in 2008

Alexion

–

settlement

in

December

2008

upheld

validity

and

enforceability

of

patents

License for Soliris

in

exchange for $25 million

Option for additional licenses at 4% royalty

MedImmune

–

in

December

2008,

filed

declaration

of

invalidity

and

non-infringement

MedImmune

has paid royalties since 1998; most recently for 2009-Q1 sales in May 2009

PDL

believes

that

its

exercise

of

its

rights

under

the

MedImmune

agreement

precludes

MedImmune

from

being

entitled

to

a

lower

royalty

rate

because

of

PDL’s

settlement

with

Alexion

UCB

Celltech

–

in

September

2008,

notified

PDL

that

it

does

not

intend

to

pay

royalties

on sales of Cimzia

In February 2009, US Patent Office declared an interference proceeding between certain claims

of Queen et al. patents and pending claims of Adair et al.

UCB Celltech

is the assignee of the Adair et al. patent

11

11

PDL -

Convertible Notes

$250 million 2.75% convertible subordinated notes due August 2023

Bought back $50 million in open market purchases

Current conversion rate is 123.715 shares per $1,000 face amount

($8.08 per

share); will adjust in connection with October dividend

Holders

have

a

put

right

in

August

2010,

August

2013,

and

August

2018

Price as of July 31 was 107 vs. stock price of $8.25

$250 million 2.00% convertible senior notes due February 2012

Bought back $5 million in open market purchases

Current conversion rate is 89.165 shares per $1,000 face amount or $11.22

per share; will adjust in connection with October dividend

Price as of July 31 was 93 vs. stock price of $8.25

12

Agenda

Overview of PDL BioPharma

2009 Guidance & Outlook

Optimizing Stockholder Return

PDL -

2009 Revised Guidance

13

Revenue growth driven by product sales of Herceptin, Avastin, Lucentis, and Tysabri

Revenue

guidance

excludes

MedImmune

royalties

due

to

ongoing

legal

disputes

Approximately

50%

of

the

expense

forecast

due

to

legal

and

other

professional

fees

Increase in expenses due to higher litigation costs, new patent interference and conclusion of

activities associated with discontinued commercial and development operations

Cash guidance based on anticipated use of $173 million NOL and $20 million tax credit

Previous

Current

Revenue

$310 -

$325

million

Unchanged

Operating

Expenses

$12 -

$15 million

$20 -

$22 million

Net Income

after taxes

$185 -

$200 million

$200 -

$215 million

Cash Generated

in 2009

$260 -

$280 million

$285 -

$300 million

PDL -

Roche/Genentech Royalties

14

Roche/Genentech manufacturing integration

Close one of the two CHO manufacturing facilities in Vacaville, CA

Avastin

& Herceptin

E. coli manufacturing to transfer to Singapore in 2011/12

Lucentis

PDL

could

see

improvement

in

mix

of

royalty

rates

in

future

years

Product made

in US

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%

Product made and sold ex-US

All sales

3.0%

15

Agenda

Overview of PDL BioPharma

2009 Guidance & Outlook

Optimizing

Stockholder Return

16

PDL -

Optimizing

Stockholder Return

Intend to distribute royalty revenues, net of operating expenses,

debt service and income taxes

Declared dividend of $0.50 per share paid on April 1, 2009

Declared dividend of $0.50 per share payable on October 1, 2009

to shareholders of record as of September 17, 2009

In the process of evaluating alternatives

Convertible note buyback –

gain is taxable but deferrable for 5

years under the American Recovery and Reinvestment Act of

2009

Share repurchases

Sale of all or a portion of royalty assets

Securitization –

formation of SPV and bond issuance

17

PDL -

Investment Rationale

Strong revenue growth from approved products

Potential for additional indications from existing products

and new product approvals

Significantly reduced expenses with no R&D burn

Return to stockholders

Declared two dividends totaling $1.00 in 2009

Actively exploring other means to enhance stockholder return

18

PDL -

PDL BioPharma

EX-99.2

Company Overview

August

200

Exhibit 99.2

9

2

Forward Looking

Statements

This

presentation

contains

forward-looking

statements,

including

PDL's

expectations

with

respect

to

its

2009

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 products manufactured and sold outside the U.S. versus manufactured or

sold in the U.S.;

The

ability

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; 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.

3

Overview of PDL BioPharma

PDL Licensed Royalty Products

Outlook & 2009 Guidance

Optimizing Stockholder Return

PDL BioPharma

4

PDL -

Company Background

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 Genentech, Elan, Wyeth, and Chugai

5

PDL

-

Operating

Strategy

PDL is focused on maximizing the value of its antibody

humanization patents and related assets

PDL re-domiciled its operations to Incline Village, Nevada

in December 2008 to reduce its corporate tax rate

The company intends to distribute its royalty revenues, net

of operating expenses, debt service, and income taxes

PDL declared a 2009 semi-annual dividend of $0.50 per share

payable on April 1 and October 1

PDL is actively exploring ways of improving after-tax IRR for

its stockholders

6

PDL -

Management & Board of Directors

PDL management:

John McLaughlin, President & CEO, hired in November 2008

Cris

Larson, VP & CFO, hired in December 2008

Chris Stone, VP & General Counsel, hired in February 2009

Karen Wilson, VP Finance, hired in April 2009

PDL independent board members:

Joseph Klein III, Managing Director, Gauss Capital Advisors -

joined

July 2007

Paul

Sandman,

retired

General

Counsel,

Boston

Scientific

-

joined

October 2008

Jody Lindell, President and CEO, SG Mana, former Partner,  KPMG -

joined March 2009

Fred Frank, Vice Chairman, Peter J. Solomon Company, former VC,

Barclays Capital & Lehman Brothers -

joined March 2009

Barry Selick, CEO Threshold Pharmaceuticals –

joined August 2009

7

PDL -

Historical Revenue with Facet Carve-Out

PDL stand-alone revenue after divestiture of Facet Biotech

comprises royalties, license, and other revenue

Facet revenue primarily includes collaboration revenue from its

arrangements with Biogen

Idec and Bristol-Myers Squib, and its

former arrangement with Roche

$ in 000's

2008

Q1

Q2

Q3

Q4

Total

Combined PDL/Facet revenue

57,329

$   

111,893

$ 

77,346

$   

75,398

$   

321,966

$ 

Facet revenue

7,140

5,361

8,529

6,740

27,770

PDL stand-alone revenue

50,189

$   

106,532

$ 

68,817

$   

68,658

$   

294,196

$ 

2007

Q1

Q2

Q3

Q4

Total

Combined PDL/Facet revenue

58,856

$   

89,057

$   

61,256

$   

49,756

$   

258,925

$ 

Facet revenue

9,879

7,975

5,641

10,345

33,840

PDL stand-alone revenue

48,977

$   

81,082

$   

55,615

$   

39,411

$   

225,085

$ 

2008 Quarter

2007 Quarter

8

8

PDL -

Legal & Queen et al. Patents

Genentech

–

settlement

in

2003

upheld

validity

and

enforceability

of

patents

Multiple product license with tiered fee structure

Option for four additional antigens exercised in 2008

Alexion

–

settlement in December 2008 upheld validity and enforceability of patents

License for Soliris

in exchange for $25 million

Option for additional licenses at 4% royalty

MedImmune

–

in December 2008, filed declaration of invalidity and non-infringement

MedImmune

has paid royalties since 1998; most recently for 2009-Q1 sales in May 2009

PDL

believes

that

its

exercise

of

its

rights

under

the

MedImmune

agreement

precludes

MedImmune

from

being

entitled

to

a

lower

royalty

rate

because

of

PDL’s

settlement

with

Alexion

UCB Celltech

–

in September 2008, notified PDL that it does not intend to pay royalties

on sales of Cimzia

In February 2009, US Patent Office declared an interference proceeding between certain claims

of Queen et al. patents and pending claims of Adair et al.

UCB Celltech

is the assignee of the Adair et al. patent

9

9

PDL -

Convertible Notes

$250 million 2.75% convertible subordinated notes due August 2023

Bought back $50 million in open market purchases

Current conversion rate is 123.715 shares per $1,000 face amount

($8.08 per

share); will adjust in connection with October dividend

Holders have a put right in August 2010, August 2013, and August

2018

Price as of July 31 was 107 vs. stock price of $8.25

$250 million 2.00% convertible senior notes due February 2012

Bought back $5 million in open market purchases

Current conversion rate is 89.165 shares per $1,000 face amount or $11.22

per share; will adjust in connection with October dividend

Price as of July 31 was 93 vs. stock price of $8.25

10

PDL BioPharma

Overview of PDL BioPharma

PDL Licensed Royalty Products

Outlook & 2009 Guidance

Optimizing Stockholder Return

11

PDL -

Royalty Revenue & 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 or

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

$0

$50

$100

$150

$200

$250

$300

$350

$400

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009E

PDL Royalties by Product

($ in millions)

Herceptin

Avastin

Lucentis

Synagis

Tysabri

Aggregate

Other

PDL -

Select Licensed Products

12

Licensee

Product

Status

Indications

Roche

(Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast

Cancer

Gliobastoma

Metastatic Renal Cell Carcinoma

Ovarian cancer

Prostate

cancer

Adjuvant settings

Herceptin

Approved

Metastatic

Breast HER2+ Cancer

Lucentis

Approved

Phase 3

AMD

RVO

DME

Xolair

Approved

Phase 3

Moderate

-Severe

Asthma

Pediatric Asthma

MedImmune

Synagis

Approved

Respiratory Syncytial

Virus

Elan

Tysabri

Approved

Multiple

Sclerosis

Roche/Chugai

Actemra

Approved (EU& Japan)

Rheumatoid

Arthritis

Wyeth

Mylotarg

Approved

Acute Myeloid

Leukemia

Wyeth/J&J

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Licensee

Product

Status

Indications

Roche

(Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

Metastatic Breast

NSCLC

Cancer

Gliobastoma

Metastatic Renal Cell Carcinoma

Ovarian cancer

Prostate

cancer

Adjuvant settings

Herceptin

Approved

Metastatic

Breast HER2+ Cancer

Lucentis

Approved

Phase 3

AMD

RVO

DME

Xolair

Approved

Phase 3

Moderate

-Severe

Asthma

Pediatric Asthma

MedImmune

Synagis

Approved

Respiratory Syncytial

Virus

Elan

Tysabri

Approved

Multiple

Sclerosis

Roche/Chugai

Actemra

Approved (EU& Japan)

Rheumatoid

Arthritis

Wyeth

Mylotarg

Approved

Acute Myeloid

Leukemia

Wyeth/J&J

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

PDL -

Select Licensed Products

13

On

July

2,

Genentech

announced

that

a

Phase

3

trial

showed

Lucentis

significantly

improved

vision

in

patients

with

branch

retinal

vein

occlusion

at

6

months

On July 30, Genentech announced that a Phase 3 trial from a second study

showed

Lucentis

significantly

improved

vision

in

patients

with

central

retinal

vein

occlusion

at

6

months

PDL -

Select Licensed Products

14

Licensee

Product

Status

Indications

Roche(Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic BreastCancer

Gliobastoma

Metastatic Renal Cell Carcinoma

Ovarian cancer

Prostatecancer

Adjuvant settings

Herceptin

Approved

MetastaticBreast HER2+ Cancer

Lucentis

Approved

Phase 3

AMD

RVO

DME

Xolair

Approved

Phase 3

Moderate-SevereAsthma

Pediatric Asthma

MedImmune

Synagis

Approved

Respiratory Syncytial Virus

Elan

Tysabri

Approved

MultipleSclerosis

Roche/Chugai

Actemra

Approved (EU& Japan)

RheumatoidArthritis

Wyeth

Mylotarg

Approved

Acute MyeloidLeukemia

Wyeth/J&J

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

J&J announced that it would buy $1 billion in Elan stock for 50.1% ownership of a

new JV to develop treatments for Alzheimer’s Disease, including bapineuzumab

J&J also pledged an initial $500 million to fund development of the drugs

15

Agenda

Overview of PDL BioPharma

PDL Licensed Royalty Products

Outlook & 2009 Guidance

Optimizing Stockholder Return

PDL -

2009 GAAP Guidance

16

Original

revenue

guidance

of

$310

-

$325

excluding

Medlmmune

is

unchanged, the

above

revenue

guidance

includes

actual

Q1

&

Q2

Medlmmune

royalties

of

$36

million

Revenue growth driven by product sales of Herceptin, Avastin, Lucentis, and Tysabri

Anticipate

Q3

&

Q4

revenue

will

benefit

form

weakening

US$

-

EUR

plan

rate

was

$1.34

vs.

current

of

$1.42

and

GBP

plan

rate

was

$1.48

vs.

Current

rate

of

$1.64

Approximately

50%

of

the

expense

forecast

due

to

legal

and

other

professional

fees

$ in millions

Guidance

Revenue

$345 -

$360

Operating Expense

20 -

22

Cash Used by Operating Activities

18 -

20

Net Interest Expense

10 -

12

Net Income before Tax

310 -

330

Income Tax Expense

110 -

115

Net Income after Tax

$200 -

$215

PDL -

Roche/Genentech Royalties

17

Roche/Genentech manufacturing integration

Close one of the two CHO manufacturing facilities in Vacaville, CA

Avastin & Herceptin

E. coli manufacturing to transfer to Singapore in 2011/12

Lucentis

PDL could see improvement in mix of royalty rates in future years

Product made

in US

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%

Product made and sold ex-US

All sales

3.0%

18

PDL -

2009 Cash Guidance

Available NOL at the end of 2008 was $219 million of which $173 will be used in 2009

Of the total NOL, $46.8 million is due to the EOS Biotech acquisition in 2003

The section 382 limitation on the use of the EOS NOL is $24.2 million in 2009 and $1.8

million per year thereafter

Available tax credits at the end of 2008 were $36 million:

When using tax credits, the minimum effective tax rate on net income after NOL is 20%

Remaining tax credits of $12+ million will be used in the upcoming year

$ in millions

Net Income before Tax

$310

$330

Available NOL

173

173

Net Income after NOL

137

157

Tax @ 35%

(48)

(55)

Tax Credits

21

24

Net Income after Tax

285

$      

300

$      

Cash Guidance

19

Overview of PDL BioPharma

PDL Licensed Royalty Products

Outlook & 2009 Guidance

Optimizing Stockholder Return

PDL BioPharma

20

PDL -

Optimizing

Stockholder Return

Intend to distribute royalty revenues, net of operating expenses,

debt service and income taxes

Declared dividend of $0.50 per share paid on April 1, 2009

Declared dividend of $0.50 per share payable on October 1, 2009

to shareholders of record as of September 17, 2009

In the process of evaluating

alternatives

Convertible note buyback –

gain is taxable but deferrable for 5

years under the American Recovery and Reinvestment Act of

2009

Share repurchases

Sale of all or a portion of royalty assets

Securitization –

formation of SPV and bond issuance

21

PDL -

Investment Rationale

Strong revenue growth from approved products

Potential for additional indications from existing products

and new product approvals

Significantly reduced expenses with no R&D burn

Return to stockholders

Declared two dividends totaling $1.00 in 2009

Actively exploring other means to enhance stockholder return

22

PDL BioPharma