PDL BioPharma Announces Third Quarter 2009 Financial Results

- Conference Call Today at 8:30 a.m. Eastern Time -

INCLINE VILLAGE, Nev., Oct. 28 /PRNewswire-FirstCall/ -- PDL BioPharma, Inc. (PDL) (Nasdaq: PDLI) today reported financial results for the third quarter ended September 30, 2009.

Total revenues from continuing operations for the third quarter of 2009 were $71.4 million, a 4 percent increase from $68.8 million for the same period in 2008. Royalty revenues are based on second quarter product sales by PDL's licensees and include $1.6 million for Synagis®, which is marketed by MedImmune. When compared with 2008, royalty revenue for foreign sourced sales was negatively impacted by changes in foreign exchange rates; approximately 50 percent of underlying product sales is in currencies other than U.S. dollars.

Total general and administrative expenses from continuing operations in the third quarter of 2009 were $5.3 million compared with $12.0 million in the third quarter of 2008. The decrease was primarily driven by the Company's reduced cost structure. Significant expense items for the third quarter of 2009 were legal fees of $3.0 million, compensation and benefits of $0.8 million, professional service fees and insurance of $0.7 million and non-cash stock compensation costs of $0.2 million.

Net income for the third quarter of 2009 was $46.4 million, or $0.29 per diluted share, compared with a net income of $55.7 million in the same period of 2008, or $0.38 per diluted share. The decrease in net income per share despite an increase in income from operations is due to increased income tax expense. In the current year, the Company is accruing tax at the federal statutory rate of 35% whereas in the prior year taxes were accrued at the federal and state alternative minimum tax rates.

Net cash provided by operating activities was $132.8 million for the first nine months of 2009 as compared with net cash provided by operating activities of $91.8 million for the same period of 2008. At September 30, 2009, PDL had cash, cash equivalents, short-term investments and restricted cash of $222.4 million, compared with $147.5 million at December 31, 2008. The dividend paid on October 1, 2009 of $59.7 million reduces the September 30, 2009 cash balance.

2009 Dividends

In 2009, PDL has paid two dividends of $0.50 per share to its stockholders. The first dividend, totaling $59.7 million, was paid on April 1, 2009 to all stockholders who owned shares of PDL on March 16, 2009. The second dividend, totaling $59.7 million, was paid on October 1, 2009 to all stockholders who owned shares of PDL on September 17, 2009.

2009 Financial Guidance

PDL is revising its 2009 revenue guidance to $310 to $320 million. The revised guidance includes MedImmune royalties. The Company's previous guidance of $310 to $325 million did not include MedImmune royalties due to ongoing legal disputes. The Company is changing its guidance due to less than anticipated product sales growth in Avastin, Herceptin and Tysabri. Also, anticipated royalties from sales of Avastin previously included ex-US manufacturing and sale of this product at a 3% royalty rate which did not occur. Market withdrawal of Raptiva earlier in 2009 also impacted results.

PDL reaffirms its previous general and administrative expense guidance for 2009 to a range from $20 to $22 million, of which approximately 50 percent is related to legal expense, patent defense and other professional service fees. Net income after taxes for 2009 is projected in the range of $187 to $195 million and cash generated in 2009 is expected to be in the range of $258 to $268 million.

Conference Call Details

The conference call has been rescheduled for 8:30 a.m. ET today, October 28. To access the live conference call via phone, please dial (866) 804-6928 from the United States and Canada or (857) 350-1674 internationally. The conference ID is 28992227. Please dial in approximately ten minutes prior to the start of the call. A telephone replay will be available beginning approximately one hour after the call through November 3, 2009 and may be accessed by dialing (888) 286-8010 from the United States and Canada or (617) 801-6888 internationally. The replay passcode is 78436903.

A brief explanatory presentation, which will be discussed during the call, can be downloaded beginning at 8:15 a.m. Eastern Time on Wednesday, October 28 at: http://66.215.142.25/Investor Presentation.pdf.

To access the live and subsequently archived webcast of the conference call, go to the company's website at http://www.pdl.com and click "Investors." Please connect to the web site at least 15 minutes prior to the call to allow for any software download that may be necessary.

About PDL BioPharma, Inc.

PDL BioPharma 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 today and also may receive royalty payments on additional humanized antibody products launched before patent expiry 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, including regarding 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 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; 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" 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 press release are qualified in their entirety by this cautionary statement.

-Financial statements below-

                                        PDL BIOPHARMA, INC.
                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (in thousands, except per share amounts)
                                           (unaudited)


                                        Three Months Ended  Nine Months Ended
                                          September 30,      September 30,
                                          -------------      -------------
                                          2009     2008      2009      2008
                                          ----     ----      ----      ----
    Revenues                            $71,446  $68,817  $259,932  $225,537
    General and administrative expenses   5,255   11,999    15,538    35,633
                                          -----   ------    ------    ------
        Operating income                 66,191   56,818   244,394   189,904
    Gain from repurchase of convertible
     notes                                  323        -     1,518         -
    Interest and other income, net          214    3,209       860    12,540
    Interest expense                     (3,105)  (3,555)  (10,036)  (10,665)
                                         ------   ------   -------   -------

        Income from continuing
         operations before income taxes  63,623   56,472   236,736   191,779
    Income tax expense                   17,217    6,161    75,636     8,869
                                         ------    -----    ------     -----
        Income from continuing
         operations                      46,406   50,311   161,100   182,910
    Income (loss) from discontinued
     operations, net of  income
     taxes (1)                                -    5,380         -  (155,162)
                                        -------  -------  --------   -------
        Net income                      $46,406  $55,691  $161,100   $27,748
                                        =======  =======  ========   =======

    Income (loss) per basic share
        Continuing operations             $0.39    $0.42     $1.35     $1.54
        Discontinued operations               -     0.05         -     (1.31)
                                            ---     ----       ---     -----
          Net income per basic share      $0.39    $0.47     $1.35     $0.23
                                          =====    =====     =====     =====

    Income (loss) per diluted share
        Continuing operations             $0.29    $0.34     $0.97     $1.25
        Discontinued operations               -     0.04         -     (1.02)
                                            ---     ----       ---     -----
          Net income per diluted share    $0.29    $0.38     $0.97     $0.23
                                          =====    =====     =====     =====

    Cash dividends declared per
     common share                            $-       $-     $1.00        $-
                                            ===      ===     =====       ===

    Shares used to compute income
     (loss) per basic share             119,411  119,267   119,366   118,540
                                        =======  =======   =======   =======
    Shares used to compute income
     (loss) per diluted share           168,576  152,812   172,248   152,302
                                        =======  =======   =======   =======


    (1) The financial results associated with both PDL's former commercial
    operations which were sold in March 2008 and PDL's former biotechnology
    operations which were spun off in December 2008 have been presented as
    discontinued operations for the three and nine months ended September 30,
    2008.  There were no discontinued operations for the three and nine months
    ended September 30, 2009.



                                PDL BIOPHARMA, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEET DATA
                                  (in thousands)
                                    (unaudited)

                                                   September 30,  December 31,
                                                        2009          2008
                                                        ----          ----
    Cash, cash equivalents, short-term
     investments and restricted cash                   $222,418      $147,527
    Total assets                                       $264,451      $191,142
    Total stockholders' deficit                       $(242,392)    $(352,569)



                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW DATA
                                  (in thousands)
                                    (unaudited)

                                                          Nine Months Ended
                                                            September 30,
                                                          ---------------
                                                         2009          2008
                                                         ----          ----
    Net income                                         $161,100       $27,748
    Adjustments to reconcile net income
     to net cash provided by operating activities        (4,474)       49,014
    Changes in assets and liabilities                   (23,822)       15,084
                                                        -------        ------
    Net cash provided by operating activities          $132,804       $91,846
                                                       ========       =======

SOURCE PDL BioPharma, Inc.