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): February 8, 2010

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 February 8, 2010, PDL BioPharma, Inc. (the “Company”) will make a presentation at the 12^th Annual BIO CEO & Investor Conference in New York City. 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, the information in this report, including the exhibit, 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. This Current Report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.

Cautionary Statements

This filing and the presentation 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 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2009. 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 at the 12th Annual BIO CEO & Investor Conference on February 8, 2010

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 and Chief Financial Officer

Dated: February 8, 2010

EXHIBIT INDEX

Exhibit No.	Description
99.1	Presentation at the 12th Annual BIO CEO & Investor Conference on February 8, 2010

EX-99.1

12

th

Annual BIO CEO

& Investor Conference

February 8, 2010

Exhibit 99.1

www.pdl.com.

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, interferences 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

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

Royalty Revenue & Licensed Products

Optimizing Stockholder Return

4

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/Biogen IDEC,

Wyeth, and Chugai

Mission

Manage patent portfolio

Manage license agreements

Optimize return for shareholders

5

2009 Performance

PDL is a highly profitable company with revenue in 2009

in excess of $315 million and fewer than 10 employees

PDL is domiciled in Nevada where there is no state

income tax

PDL’s

mission is to improve shareholder return

We paid three dividends of $0.50/share in April, $0.50/share in

October and $1.67/share in December totaling $2.67 in 2009

Our goal is to pay dividends annually & have declared two $0.50

dividends in 2010

We signed one new license under the Queen et al. patents in

2009 and are seeking new licenses in 2010

We

do

not

invest

in

R&D

or

in

operating

companies

6

7

7

Legal Matters

Genentech

Settlement agreement resolved all disputes regarding infringement of the Genentech products

and the validity and enforceability of our patents

Multiple product licenses with tiered fee structure

Alexion

Settlement in December 2008 stipulated infringement, validity and enforceability of PDL patents

and no future contest of PDL patents

License

for

Soliris

in

exchange

for

$25

million

and

option

for

four

additional

licenses

at

4%

royalty

MedImmune

In December 2008, MEDI filed for declaratory judgment of patent invalidity and non-infringement;

subsequently

amended

its

complaint

asserting

MEDI

is

entitled

to

a

lower

royalty

rate

under

its

“most

favored

licensee”

(MFL)

rights

•

PDL

believes

that

it

has

no

obligation

to

offer

a

lower

royalty

rate

to

MEDI

under

the

MFL

clause

In December 2009, PDL declared MEDI in breach of the license agreement and canceled the

license agreement

Also in December 2009, PDL made certain filings with the court alleging that

•

MEDI

breached

the

license

agreement

by

(i)

failing

to

pay

all

royalties

due,

and

(ii)

by

blocking

PDL’s

exercise

of its contractual audit rights

•

As a result of MEDI’s

breach, it is infringing PDL patents and PDL is requesting damages for breach and

infringement

UCB/Celltech

US Patent Office has declared two interference proceedings 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

8

8

Converts and Securitization Note

$200 million 2.75% convertible subordinated notes due August 2023

Conversion rate is 164.7254  shares per $1,000 face amount ($6.07/share)

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

2018

•

August 2010 put can be for cash or stock, at noteholder’s

discretion

•

Subsequent puts are at PDL’s

discretion

Price as of February 3  

was ~115 vs. stock price of $6.77

$228 million 2.00% convertible senior notes due February 2012

Conversion rate is 119.294  shares per $1,000 face amount ($8.38/share)

Price as of February 3  

was ~96 vs. stock price of $6.77

$300 million 10.25% note with expected maturity of December 2012

Securitized by 60% of 5-year NPV of Genentech royalties

Anticipated final maturity is December 2012; legal maturity is March 2015

After final maturity securitized Genentech royalties return to PDL

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

rd

rd

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

9

10

Agenda

Overview of PDL BioPharma

Royalty Revenue & Licensed Products

Optimizing Stockholder Return

11

Royalty Revenue & Licensed Products

Royalties: When Licensed Product is Made or Sold

PDL’s

revenues consist of royalties generated on sales of licensed products

Sold before the expiration of the Queen et al. patents in 2013/14 or

Made

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

thereafter

Example

of

Antibody

Bulk

Manufacturing

Schedule

Cell Culture

Purification to concentrated bulk/frozen

Quality release testing

Bulk frozen storage

Example

of

Antibody

Formulation,

Fill

and

Finish

Schedule

Thaw, formulation &

vial filling

Quality release

Packaging & quality

Inventory

12

Genentech/Roche Royalties

13

Roche/Genentech manufacturing integration

Roche expects to complete global restructuring by 2011

Closed one of the two CHO manufacturing facilities in Vacaville,

CA

Some CHO and E. coli manufacturing to transfer to Singapore

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%

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

14

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

15

On

November

16,

2009,

Roche

filed

two

sBLAs

with

FDA

for

treatment

of

women who have not received chemotherapy for metastatic HER2-negative

breast cancer (first-line treatment)

One sBLA

is for use of Avastin

in combination with docetaxel

chemotherapy; and

Other sBLA

is for Avastin

in combination with a taxanes.

On November 24, 2009, Roche made similar filings in Europe.

Avastin

is

currently

approved

in

combination

with

paclitaxel

chemotherapy

for

first-line treatment of advanced HER2-negative breast cancer.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

16

On December 11, 2009, Roche announced results from a Phase 3 study (RIBBON

2) in women who had previously been treated with initial (first-line) chemotherapy for

advanced HER2-negative breast cancer and needed additional (second-line)

treatment.

The

study

showed

that

women

who

received

Avastin

in

combination

with

a

commonly used chemotherapy had a 28% improvement in the likelihood of living

without the disease getting worse, compared with those who received chemotherapy

alone (hazard ratio=0.78; p=0.0072).

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

17

On January 28, 2010, Roche announced EU approval for the use of Herceptin

first

line

treatment

of

HER-2

positive

stomach

or

gastro-esophagel

junction

cancers.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

18

Additional data from on-going Phase 3 trial in over 3,000 early stage breast

cancer

patients

showed

one

year

treatment

with

Herceptin

plus

one

of

several

commonly used chemotherapeutics reduced the risk of recurrence by 36%

and risk of death by 37% compared to chemotherapy alone.  At least 80% of

the

women

who

received

one

year

treatment

with

Herceptin

were

cancer

free

at five years.

Additional data from on-going open label Phase 3 trial in 3,400 early stage

breast cancer patients showed disease free survival rates at five years of 80%

and

84%

(depending

on

whether

Herceptin

treatment

was

sequential

or

concurrent with chemotherapy, respectively) compared to 72% for

chemotherapy alone.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

19

Roche announced results from a Phase 2 study of T-DM1 showing that it shrank the tumors in

33% of women with HER2+ breast cancer that had worsened following previous treatment. In

this single-arm study of over 100 patients; 45% of women experienced a clinical benefit. This is

significant because the women had essentially exhausted all other medical options.

Roche

has

said

that

it

expects

to

discuss

this

data

with

the

FDA

to

ascertain

whether

it

can

file

a BLA for third line treatment in 2010.

For

second

line

treatment,

patient

enrollment

is

on

track

in

the

Phase

3

trial.

For first line treatment, patient enrollment has been completed in a Phase 2 with interim data

expected this year, and a first line Phase 3 trial is targeted to begin mid-2010.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

20

On

December

22,

2009,

Genentech

announced

that

it

had

submitted

a

sBLA

to

the

FDA

for

treatment of patients with macular edema following retinal vein occlusion (RVO).

Assuming a 10-month standard review, PDUFA date would fall on October 22, 2010.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

21

On November 18, the FDA Advisory Committee on Pulmonary-Allergy Drugs Advisory

Committee

did

not

support

approval

of

the

sBLA

to

expand

the

label

from

adults

to

include

children 6 to <12 years old with moderate to severe persistent asthma.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

22

In November 2009, Biogen

Idec

reported four more cases of PML bringing the total to 28.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

23

On January 8, 2010, Genentech announced US approval for the treatment of adult patients

with moderately to severely active rheumatoid arthritis (RA) who

have had an inadequate

response to one or more tumor necrosis factor antagonists.

Actemra

was already approved for this indication in the EU.

Select Licensed Products

Licensee

Product

Status

Indications

Roche (Genentech)

Avastin

Approved

Phase 3

Colorectal Cancer

NSCLC

Metastatic Breast Cancer

Gliobastoma

Metastatic Renal Cell

Ovarian Cancer

Prostate Cancer

Adjuvant settings

Herceptin

Approved

Breast HER2+ Cancer

HER2+ stomach and gastro-esophagel

Cancers

trastuzumab-DM1

Phase 2 and 3

Breast HER2+ Cancer

Lucentis

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

Wyeth

Mylotarg

Approved

Acute Myeloid Leukemia

Elan/J&J/Pfizer

Bapineuzumab

Phase 3

Alzheimer’s Disease

Lilly

Solanezumab

Phase 3

Alzheimer’s Disease

Lilly

Teplizumab

Phase 3

Newly Diagnosed Type 1 Diabetes

24

On December  21, 2009, PDL and Lilly entered into a non-exclusive license with respect to

teplizumab, a humanized anti-CD3 monoclonal antibody, as well as other potential next

generation anti-CD3 molecules.

Teplizumab

is

currently

being

studied

by

Lilly

and

its

partner

MacroGenics

for

the

treatment of individuals with newly-diagnosed type 1 diabetes mellitus.

In June 2009, the pivotal Phase 2/3 reached its targeted enrollment.

Also in June 2009, a Phase 3 global study was initiated and is designed to capture patient-

reported outcome measures in addition to safety and efficacy data.

Genentech/Roche-Future Products

In December 2008, Genentech exercised options for four

additional antigens and extended other options paying fees

totaling $1.8 million

Genentech can seek to convert the exercised options into

license agreements by identifying the target antigen and so

long as certain other conditions are met

Genentech/Roche has a number of humanized antibodies for

in Phase 3

Pertuzumab

HER2+

breast

cancer-

Phase

3

started

in

1Q08

GA101

CLL,

NHL

–

Phase

3

started

in

Q409

Orcrelizumab

RA

–

Positive

Phase

3

in

4Q09,

methotrexate

naive and TNF inadequate responders in 2010

25

:

:

:

Genentech/Roche-Select 2010 Events

Phase 3 Data

Avastin

•

Ovarian cancer, first line

•

Advanced gastric cancer, first line

•

Hormone refractory prostrate cancer, first line

•

Adjuvant colon cancer

Filings

Avastin

•

Metastatic breast cancer, second line

•

Ovarian cancer, first line

•

Advanced gastric cancer, first line

Herceptin

•

HER2+ gastric cancer (US)

Herceptin-DM1 conjugate

•

HER2+ breast cancer, third line –

under

discussion with

FDA

26

27

Agenda

Overview of PDL BioPharma

Royalty Revenue & Licensed Products

Optimizing Stockholder Return

28

Optimizing Stockholder Return

Intend to distribute royalty revenues, net of operating

expenses, debt service and income taxes

Will pay special dividend of $0.50 per share on April 1, 2010 to

holders of record on March 15, 2010

Will pay second special dividend of $0.50 per share on October 1,

2010 to holders of record on September 15, 2010

Continuously evaluating alternatives

Convertible note buyback or share repurchase

Company sale

Purchase of commercial stage royalty generating assets

Do not

expect to securitize any additional assets in 2010

29

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 three special cash dividends totaling $2.67/share in 2009

Will pay two special cash dividends totaling $1.00/share in 2010