EX-99.1 2 dex991.htm OPPENHEIMER CONFERENCE PRESENTATION Oppenheimer Conference presentation
Oppenheimer
20
th
Annual Healthcare Conference
November 4, 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 Roche/Genentech, Elan/BiogenIDEC,
Wyeth, and Chugai

PDL Mission
Manage patent portfolio
Manage license agreements
Optimize return for shareholders
5

Optimizing Return
Reduce expenses
Reduced staff to less than 10 persons
Relocated to Nevada to eliminate state taxes
Increase revenue
Audit existing licensees
Seek additional licenses
Reviewed monetization alternatives
Sale of some or all of royalties to royalty buyer
Royalty buy out/buy down by one or more of licensees
Securitization or high yield debt -
$300 million securitization transaction
closed Monday, November 2
Tax structure
No structure could be identified to improve tax efficiencies for
federal
tax purposes
6

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/BIIB
Tysabri
Approved
Multiple
Sclerosis
Roche/Chugai
Actemra
Approved (EU& Japan)
Rheumatoid
Arthritis
Wyeth
Mylotarg
Approved
Acute Myeloid
Leukemia
Pfizer/J&J
Bapineuzumab
Phase 3
Alzheimer’s Disease
Lilly
Solanezumab
Phase 3
Alzheimer’s Disease

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
-Severe
Asthma
Pediatric Asthma
MedImmune
Synagis
Approved
Respiratory Syncytial
Virus
Elan/BIIB
Tysabri
Approved
Multiple
Sclerosis
Roche/Chugai
Actemra
Approved (EU& Japan)
Rheumatoid
Arthritis
Wyeth
Mylotarg
Approved
Acute Myeloid
Leukemia
Pfizer/J&J
Bapineuzumab
Phase 3
Alzheimer’s Disease
Lilly
Solanezumab
Phase 3
Alzheimer’s Disease
Roche filed a supplemental application for approval for the treatment of gastric
cancer in EU

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
9
A supplemental application for approval for the treatment of pediatric asthma has
been scheduled before FDA Advisory Committee on Pulmonary-Allergy Drugs
Advisory Committee on November 18
The FDA began a safety review of Xolair
after preliminary data from a long term
safety
study
being
conducted
by
Genentech
showed
an
increased
risk
of
heart
attack,
abnormal
heart
rhythm,
heart
failure
and
stroke
in
treated
patients
-
final
results from the study are due in 2012

PDL -
Select Licensed Products
10
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/BIIB
Tysabri
Approved
Multiple
Sclerosis
Roche/Chugai
Actemra
Approved (EU& Japan)
Rheumatoid
Arthritis
Wyeth
Mylotarg
Approved
Acute Myeloid
Leukemia
Pfizer/J&J
Bapineuzumab
Phase 3
Alzheimer’s Disease
Lilly
Solanezumab
Phase 3
Alzheimer’s Disease
Roche
forecasts
that
it
will
file
a
supplemental
application
for
approval
for
the
treatment of retinal vein occlusion in 2010 based on positive results from two Phase
trials in this patient population

PDL -
Select Licensed Products
11
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
Roche announced two-year results from a Phase III study, which showed that
people with rheumatoid arthritis who received either a 4 mg/kg or 8 mg/kg dose of
Actemra
in combination with methotrexate, had no progression of joint damage,
(75% and 83%, respectively, as assessed by radiograph) compared with people
who received methotrexate
alone (66%)
Roche filed a supplemental application for approval to expand RoActemra’s (EU
trade
name)
label
to
include
slowing
progression
of
joint
damage
and
improvement of physical function
Roche expects a response from FDA by January 2010 on its US application for
approval for the treatment of rheumatoid arthritis

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/BIIB
Tysabri
Approved
Multiple
Sclerosis
Roche/Chugai
Actemra
Approved (EU& Japan)
Rheumatoid
Arthritis
Wyeth
Mylotarg
Approved
Acute Myeloid
Leukemia
Pfizer/J&J
Bapineuzumab
Phase 3
Alzheimer’s Disease
Lilly
Solanezumab
Phase 3
Alzheimer’s Disease
EU
is
reviewing
the
risks
and
benefits
of
Tysabri
after
reports
of
24
cases
of
PML
Biogen
Idec has amended US label to state occurrence of PML in patients treated
24-36 months is similar to 1:1,000 seen in clinical trials.
As of September 2009, BIIB estimates that over 46,000 patients are currently on
therapy

13
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

14
14
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
in
August
2009
PDL
believes
that
its
exercise
of
its
rights
under
the
MedImmune
agreement precludes
MedImmune
from being entitled to a lower royalty rate
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

15
15
PDL -
Convertible Notes
$250 million 2.75% convertible subordinated notes due August 2023
Bought back $50 million in open market purchases through 3Q09
Conversion rate is 131.0339 shares per $1,000 face amount ($7.63/share)
•
Will adjust in connection with December 2009 dividend
Holders
have
a
put
right
in
August
2010,
August
2013,
and
August
2018
Price as of October 30
th
was 113 vs. stock price of $8.40
$250 million 2.00% convertible senior notes due February 2012
Bought back $22 million in open market purchases through 3Q09
Conversion rate is 94.447 shares per $1,000 face amount ($10.59/share)
•
Will adjust in connection with December 2009 dividend
Price as of October 30 was 97 vs. stock price of $8.40

Corporate Governance
Management
John McLaughlin,
President & CEO
Christine Larson,
VP & CFO
Christopher Stone,
VP, General Counsel &
Secretary
Karen Wilson,
VP of Finance
Board of Directors
Fred Frank, Lead Director
Joseph Klein
Jody Lindell
John McLaughlin
Paul Sandman
Harold Selick
16

17
Agenda
Overview of PDL BioPharma
2009 Guidance & Outlook
Optimizing Stockholder Return

PDL -
2009 Revised Guidance
18
Revenue
guidance
is
revised
down
due
to
slower
growth
in
Avastin,
Herceptin
and
Tysabri,
as
well
as
less
ex-US
manufacturing
which
affects
PDL’s
effective
royalty
rate
Revised
revenue
guidance
includes
royalties
received
from
MedImmune
which
were
$42
million
($38
million
received
YTD)
not
included
in
previous
guidance
Approximately
50%
of
the
expense
forecast
due
to
legal
and
other
professional
fees
Cash
guidance
based
on
anticipated
use
of
$173
million
NOL
and
$20
million
tax
credit

PDL -
Roche/Genentech Royalties
19
Roche/Genentech manufacturing integration
Close one of the two CHO manufacturing facilities in Vacaville, CA
Avastin
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%

20
Agenda
Overview of PDL BioPharma
2009 Guidance & Outlook
Optimizing Stockholder Return

21
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 paid on October 1, 2009
Continuously 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
Priced $300 million securitization on October 27, 2009
Closed transaction on November 2, 2009

$300 Million Securitization Terms
Issuer…………………….....
QHP Royalty Sub LLC, Delaware limited liability company, 100% owned by & consolidated with PDL
Security……………………..
60%
of
the
Genentech
royalties
in
Avastin,
Herceptin,
Xolair,
Lucentis
and
future
licensed
products
Principal Amount…………
$300 million
Coupon ……………………..
10.25% per annum
Loan Type…………………..
Amortizing in relation to 60% of the Five  Year NPV of the Genentech royalties
Loan-to-Value………………
41.2%
Closing Date………………..
Monday, November 2
Payment Dates……………..
March 15, June 15, September 15, and December 15 beginning on March 15, 2010
Expected Average Life……
1.9 years based on sales, manufacturing and FX waterfall assumptions
Expected Final Maturity…..
December
15,
2012
(3.1
years)
based
on
sales,
manufacturing
and
FX
waterfall
assumptions
–
Upon
final
maturity,
PDL will own the pledged assets without restriction
Legal Maturity………………
March 15, 2015 (coincides with expected duration of royalty payments)
Non-Recourse……………...
The obligation to pay debt service is an obligation solely of QHP and is without recourse to any other entity, except to
the extent of the pledge of the equity in QHP by PDL
Redemption…………………
The
Notes
have
an
optional
redemption
feature
which
allows
QHP
to
redeem
the
Notes
at
any
time
with
payment
of
a
premium.
The
premium
is
calculated
by
the
following
formula:
the
greater
of
(x)
the
outstanding
principal
balance
of the Notes being redeemed and (y) the present value, discounted at the applicable Treasury Rate plus 2% of such
principal payment amounts and interest (assuming the principal balances are amortized at the times and in the
amounts
set
forth
in
Schedule
B
to
the
Indenture)
plus,
in
each
case,
the
accrued
and
unpaid
interest
to
the
redemption date on the Notes that are being redeemed.
22

60% of 5 Year NPV of Genentech Royalties
Avastin
Treatment
of
metastatic
colorectal
cancer,
advanced
non-small
cell
lung
cancer,
HER2-
breast
cancer, gliobastoma
and renal cell carcinoma
2008 worldwide revenues of $4.9Bn and royalties of $75.9MM
Herceptin
Approved for the treatment of HER2+ patients in breast cancer, adjuvant node positive and node
negative breast cancer
2008 worldwide revenues of $4.8Bn and royalties of $98.6MM
Lucentis
Treatment of (wet) advanced macular degeneration of the eye
2008 worldwide revenues of $1.8Bn and royalties of $27.8MM
Xolair
Treatment of moderate-to-severe persistent asthma
2008 worldwide revenues of $700MM and royalties of $13.9MM
Future Products
Other
humanized
antibodies
commercialized
by
Genentech
and
under
license
from PDL while the
securitization bond is outstanding
23

Schedule of Next Steps
Monday, November 2
Closed $300 million securitization
Wednesday, November 11
Board of Directors meeting to determine total amount of special dividend, record date
and dividend payment date
Thursday, November 12
Announcement of total amount of special dividend, record date and dividend
payment date
Record Date (likely early December)
Announcement of actual dividend to be paid on per share basis
Payment Date (in December 2009)
24

Why Securitization?
25
Multiple operating strategies were evaluated based on relative IRR & NPV of dividends to stockholders
Securitization increases shareholder return
Allows PDL to leverage time value of money for the benefit of shareholders by returning sizable sum to
shareholders now and using 60% of 5 year NPV of Genentech royalties to pay off the principal and interest on the
securitization bond in the future
Recourse is limited to 60% of Genentech royalties so maintains upside optionality on total portfolio to PDL & limits
some of downside risk
Transaction size allows PDL to continue to pay dividends in the future
Other monetization options proved to be less favorable at this time
PDL had discussions with potential buyers about buying down/out their royalties
Securitization offers more advantageous terms and structure than those offered by potential buyers: once debt is
paid, royalties revert to PDL for dividends
We expect that conversations with potential royalty buyers will continue
Securitization does not limit future options
Option to pay off the securitization bond early if necessary for royalty sale or sale of company

Why $300 Million Securitization?
Four Considerations
1.
NPV of dividends returned to shareholders through 2015
2.
IRR to shareholders over life of the company
3.
Effect on 2023 and 2012 Convertible Notes
•
Preferred not to trigger early repayment of either set of Notes
•
Didn’t want to swap 2.00% -
2.75% money for 10.25% money
4.
Control of Patent and License Assets
Optimal Figure
$300 million offered good balance among above considerations
Offered comparable or better NPV & IRR than other securitization
/
monetization / status quo alternatives
26

27
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 special cash dividends totaling $1.00 in 2009
Expect to declare a third special cash dividend from a
significant amount of net proceeds of $300 million
securitization payable in December 2009

28
PDL -
PDL BioPharma