PDL to Acquire ESP Pharma, Inc.

Combination Will Transform PDL Into a Fully Integrated Biopharmaceutical

Company



Webcast to Discuss Agreement Scheduled for 8:30 a.m. Eastern Time



25 Jan, 2005, 00:00 ET from Protein Design Labs, Inc.

    FREMONT, Calif. and EDISON, N.J., Jan. 25 /PRNewswire-FirstCall/ --
 Protein Design Labs, Inc. (PDL) (Nasdaq:   PDLI), a leading developer of
 humanized monoclonal antibodies, and ESP Pharma, Inc. (ESP Pharma), a leading
 privately held, hospital-focused pharmaceutical company, today announced that
 they have entered into a definitive agreement under which PDL will acquire ESP
 Pharma for $300 million in cash and approximately $175 million in PDL common
 stock, or an aggregate value of approximately $475 million, plus the
 assumption of net debt of approximately $14 million.  ESP Pharma was founded
 in April 2002 around the acquisition of several therapeutics from Wyeth,
 including ESP Pharma's leading product, Cardene(R) IV.  ESP Pharma generated
 total net product sales in excess of $90 million in 2004, a significant
 increase over 2003.
     Mark McDade, Chief Executive Officer, PDL, said, "With this transaction,
 we have filled the void in the one major functional expertise PDL lacked,
 namely commercialization capabilities.  Upon closing, we will have created an
 exciting new, fully integrated, hospital-focused biopharma company with
 best-in-class marketed products, a growing and diverse revenue base, and a
 broad, wholly-owned proprietary pipeline.  In addition to significant
 commercial expertise, ESP Pharma will contribute several additional
 clinical-stage compounds.  This combination will also dramatically accelerate
 our path to operational profitability, as we expect to become cash flow
 positive in 2006 with the completion of the transaction.
     "Significant to our commercialization strategy," Mr. McDade said, "we add
 ESP Pharma's 75-person, experienced hospital-focused sales and sales
 management team and New Jersey-based marketing, medical affairs, sales
 operations and supply chain infrastructure for the U.S. market and Canada.  We
 believe this strategic move will permit us to maximize the potential value of
 Zenapax(R) and Nuvion(R), as we are building significant competence ahead of
 our hoped for product introductions in 2007 and beyond.  Importantly, the
 transaction expands our therapeutic focus into the cardiovascular arena, with
 Cardene IV, an intravenous anti-hypertensive used extensively in cardiac- and
 neuro-surgery.  In the hospital setting, ESP's IV Busulfex(R) is marketed as a
 preconditioning chemotherapeutic agent in bone-marrow transplant, and is a
 natural fit in view of our right to potentially reacquire the rights to
 Zenapax in the transplant indication by 2007."
     John T. Spitznagel, Chairman and Chief Executive Officer, ESP Pharma,
 said, "ESP Pharma has established a record of success in identifying,
 acquiring, marketing and developing innovative therapeutics.  Our flagship
 product, Cardene IV, is indicated for the short-term treatment of hypertension
 when oral therapy is not feasible or desirable.  IV Busulfex is used in
 combination with cyclophosphamide as a conditioning regimen prior to
 allogeneic hematopoietic progenitor cell transplantation for chronic
 myelogenous leukemia.  We believe this strategic combination with PDL will
 enable us to successfully market PDL's proprietary product candidates, and
 acquire or in-license additional products or product candidates."
     PDL expects to provide additional information regarding the financial
 effect of the transaction as part of its news release and conference call to
 discuss full-year 2004 results and forward-looking guidance for 2005.  This
 conference call is not yet scheduled, but is expected to occur not later than
 March 15, 2005.  PDL does not require financing to complete the transaction,
 but may consider additional financing transactions now or in the future.
     The Boards of Directors of PDL and ESP Pharma, and the shareholders of ESP
 Pharma have approved the acquisition.  The closing of the transaction is
 subject to various conditions, including the receipt of antitrust and other
 regulatory approvals.  The initial number of PDL shares to be issued is
 approximately 8,870,000 and the actual number of PDL shares to be issued in
 the transaction is subject to upward adjustment of up to approximately 985,000
 shares and to downward adjustment of up to approximately
 806,000 shares based on the price of PDL stock in the period prior to the
 closing of the transaction.  ESP Pharma and PDL have also reached an agreement
 as to a U.S.-marketed product acquisition under negotiation between ESP Pharma
 and a third party.  That transaction has not been finalized and the potential
 financial and other terms remain confidential.
     Lazard acted as financial advisor to PDL in the transaction, and SG Cowen
 & Co., LLC acted as financial advisor to ESP Pharma.  The firms of DLA Piper
 Rudnick Gray Cary, and Milbank, Tweed Hadley & McCloy LLP served as counsel to
 PDL and ESP Pharma, respectively.
 
     Webcast scheduled for 8:30 a.m. Eastern time on January 25
     PDL will host a webcast beginning at 8:30 a.m. Eastern time today,
 January 25, 2005, to discuss the acquisition.
     The live webcast will be available through the PDL website: www.pdl.com.
 Please connect to this website at least 15 minutes prior to the live webcast
 to allow time for any software download that may be needed to hear the
 webcast.  A replay will be available at www.pdl.com starting approximately one
 hour after completion of the webcast.
     An audio replay will also be available by telephone from approximately
 10:30 a.m. Eastern time on January 25, 2005 through 10:30 a.m. Eastern time on
 January 29, 2005.  To access the replay, dial 800-633-8284 from inside the
 United States and 402-977-9140 from outside the United States; enter
 conference ID number 21230399.
 
     About ESP Pharma, Inc.
     ESP Pharma was founded in April 2002 and began operations in May 2002 with
 the acquisition of four in-market therapeutics from Wyeth, including the
 flagship product, Cardene IV.  ESP Pharma's "Buy and Build, Search and
 Develop" business plan for creating asset value focuses on selectively
 acquiring approved and late-stage development products addressing the needs of
 the acute-care hospital market. ESP Pharma has concentrated its acquisition
 programs on products and compounds representing strong returns on investment,
 driven by high growth potential.
     In support of its business plan to revitalize the promotion of acquired
 products and to fuel near- and intermediate-term growth, ESP Pharma
 established its own hospital sales force of experienced pharmaceutical
 representatives in September 2002. Through the efforts of its sales team, ESP
 Pharma has planned to drive revenue growth while adding to its revenue base
 and realizing synergistic benefits from additional acquisitions of acute-care
 specialty products.  ESP Pharma's key marketed products are:
 
     -- Cardene IV (nicardipine hydrochloride injection).  Indicated for the
 short-term treatment of hypertension when oral therapy is not feasible or
 desirable.  Cardene is a patent-protected intravenous preparation of
 nicardipine, a dihydropyridine calcium channel blocker.
     -- IV Busulfex (busulfan) Injection.  Indicated for use in combination
 with cyclophosphamide as a conditioning regimen prior to allogeneic
 hematopoietic progenitor cell transplantation for chronic myelogenous
 leukemia.  A patent-protected, potent cytotoxic drug and intraveneous
 formulation of the alkylating agent busulfan.
     In addition to ESP Pharma's key marketed products, ESP Pharma has several
 products in clinical development targeted to the acute-care hospital market.
 
     About PDL
     Protein Design Labs is a leader in the development of humanized antibodies
 to prevent or treat various disease conditions.  PDL currently has antibodies
 under development for autoimmune and inflammatory conditions, asthma and
 cancer.  PDL holds fundamental patents for its antibody humanization
 technology.  Further information on PDL is available at www.pdl.com.
 
     The foregoing contains forward-looking statements involving risks and
 uncertainties and PDL's actual results may differ materially from those,
 express or implied, in the forward-looking statements.  The forward-looking
 statements contained herein include statements about the consummation of the
 pending acquisition and the benefits of the pending acquisition, including its
 potential effect upon PDL's future financial performance.  These statements
 are subject to inherent risks and uncertainties that could cause actual
 results to differ materially from those expressed or implied.  Such risks and
 uncertainties include, among others, the possibility that regulatory or other
 closing conditions will not be satisfied, whether the combined company will be
 able to realize the anticipated benefits or synergies of the transaction in a
 timely manner or at all, and the future revenues from ESP Pharma products.
 Other factors that may cause our actual results to differ materially from
 those, express or implied, in the forward-looking statements in this press
 release are discussed in our Annual Report on Form 10-K for the year ended
 December 31, 2003, in our quarterly report on Form 10-Q for the period ended
 September 30, 2004, and in other filings with the Securities and Exchange
 Commission.
 
     NOTE:  Protein Design Labs, the PDL logo and Nuvion are registered U.S.
 trademarks of Protein Design Labs, Inc.  Zenapax is a registered trademark of
 Hoffmann-La Roche.  Cardene IV and IV Busulfex are registered trademarks of
 ESP Pharma, Inc.
 
 

SOURCE Protein Design Labs, Inc.
    FREMONT, Calif. and EDISON, N.J., Jan. 25 /PRNewswire-FirstCall/ --
 Protein Design Labs, Inc. (PDL) (Nasdaq:   PDLI), a leading developer of
 humanized monoclonal antibodies, and ESP Pharma, Inc. (ESP Pharma), a leading
 privately held, hospital-focused pharmaceutical company, today announced that
 they have entered into a definitive agreement under which PDL will acquire ESP
 Pharma for $300 million in cash and approximately $175 million in PDL common
 stock, or an aggregate value of approximately $475 million, plus the
 assumption of net debt of approximately $14 million.  ESP Pharma was founded
 in April 2002 around the acquisition of several therapeutics from Wyeth,
 including ESP Pharma's leading product, Cardene(R) IV.  ESP Pharma generated
 total net product sales in excess of $90 million in 2004, a significant
 increase over 2003.
     Mark McDade, Chief Executive Officer, PDL, said, "With this transaction,
 we have filled the void in the one major functional expertise PDL lacked,
 namely commercialization capabilities.  Upon closing, we will have created an
 exciting new, fully integrated, hospital-focused biopharma company with
 best-in-class marketed products, a growing and diverse revenue base, and a
 broad, wholly-owned proprietary pipeline.  In addition to significant
 commercial expertise, ESP Pharma will contribute several additional
 clinical-stage compounds.  This combination will also dramatically accelerate
 our path to operational profitability, as we expect to become cash flow
 positive in 2006 with the completion of the transaction.
     "Significant to our commercialization strategy," Mr. McDade said, "we add
 ESP Pharma's 75-person, experienced hospital-focused sales and sales
 management team and New Jersey-based marketing, medical affairs, sales
 operations and supply chain infrastructure for the U.S. market and Canada.  We
 believe this strategic move will permit us to maximize the potential value of
 Zenapax(R) and Nuvion(R), as we are building significant competence ahead of
 our hoped for product introductions in 2007 and beyond.  Importantly, the
 transaction expands our therapeutic focus into the cardiovascular arena, with
 Cardene IV, an intravenous anti-hypertensive used extensively in cardiac- and
 neuro-surgery.  In the hospital setting, ESP's IV Busulfex(R) is marketed as a
 preconditioning chemotherapeutic agent in bone-marrow transplant, and is a
 natural fit in view of our right to potentially reacquire the rights to
 Zenapax in the transplant indication by 2007."
     John T. Spitznagel, Chairman and Chief Executive Officer, ESP Pharma,
 said, "ESP Pharma has established a record of success in identifying,
 acquiring, marketing and developing innovative therapeutics.  Our flagship
 product, Cardene IV, is indicated for the short-term treatment of hypertension
 when oral therapy is not feasible or desirable.  IV Busulfex is used in
 combination with cyclophosphamide as a conditioning regimen prior to
 allogeneic hematopoietic progenitor cell transplantation for chronic
 myelogenous leukemia.  We believe this strategic combination with PDL will
 enable us to successfully market PDL's proprietary product candidates, and
 acquire or in-license additional products or product candidates."
     PDL expects to provide additional information regarding the financial
 effect of the transaction as part of its news release and conference call to
 discuss full-year 2004 results and forward-looking guidance for 2005.  This
 conference call is not yet scheduled, but is expected to occur not later than
 March 15, 2005.  PDL does not require financing to complete the transaction,
 but may consider additional financing transactions now or in the future.
     The Boards of Directors of PDL and ESP Pharma, and the shareholders of ESP
 Pharma have approved the acquisition.  The closing of the transaction is
 subject to various conditions, including the receipt of antitrust and other
 regulatory approvals.  The initial number of PDL shares to be issued is
 approximately 8,870,000 and the actual number of PDL shares to be issued in
 the transaction is subject to upward adjustment of up to approximately 985,000
 shares and to downward adjustment of up to approximately
 806,000 shares based on the price of PDL stock in the period prior to the
 closing of the transaction.  ESP Pharma and PDL have also reached an agreement
 as to a U.S.-marketed product acquisition under negotiation between ESP Pharma
 and a third party.  That transaction has not been finalized and the potential
 financial and other terms remain confidential.
     Lazard acted as financial advisor to PDL in the transaction, and SG Cowen
 & Co., LLC acted as financial advisor to ESP Pharma.  The firms of DLA Piper
 Rudnick Gray Cary, and Milbank, Tweed Hadley & McCloy LLP served as counsel to
 PDL and ESP Pharma, respectively.
 
     Webcast scheduled for 8:30 a.m. Eastern time on January 25
     PDL will host a webcast beginning at 8:30 a.m. Eastern time today,
 January 25, 2005, to discuss the acquisition.
     The live webcast will be available through the PDL website: www.pdl.com.
 Please connect to this website at least 15 minutes prior to the live webcast
 to allow time for any software download that may be needed to hear the
 webcast.  A replay will be available at www.pdl.com starting approximately one
 hour after completion of the webcast.
     An audio replay will also be available by telephone from approximately
 10:30 a.m. Eastern time on January 25, 2005 through 10:30 a.m. Eastern time on
 January 29, 2005.  To access the replay, dial 800-633-8284 from inside the
 United States and 402-977-9140 from outside the United States; enter
 conference ID number 21230399.
 
     About ESP Pharma, Inc.
     ESP Pharma was founded in April 2002 and began operations in May 2002 with
 the acquisition of four in-market therapeutics from Wyeth, including the
 flagship product, Cardene IV.  ESP Pharma's "Buy and Build, Search and
 Develop" business plan for creating asset value focuses on selectively
 acquiring approved and late-stage development products addressing the needs of
 the acute-care hospital market. ESP Pharma has concentrated its acquisition
 programs on products and compounds representing strong returns on investment,
 driven by high growth potential.
     In support of its business plan to revitalize the promotion of acquired
 products and to fuel near- and intermediate-term growth, ESP Pharma
 established its own hospital sales force of experienced pharmaceutical
 representatives in September 2002. Through the efforts of its sales team, ESP
 Pharma has planned to drive revenue growth while adding to its revenue base
 and realizing synergistic benefits from additional acquisitions of acute-care
 specialty products.  ESP Pharma's key marketed products are:
 
     -- Cardene IV (nicardipine hydrochloride injection).  Indicated for the
 short-term treatment of hypertension when oral therapy is not feasible or
 desirable.  Cardene is a patent-protected intravenous preparation of
 nicardipine, a dihydropyridine calcium channel blocker.
     -- IV Busulfex (busulfan) Injection.  Indicated for use in combination
 with cyclophosphamide as a conditioning regimen prior to allogeneic
 hematopoietic progenitor cell transplantation for chronic myelogenous
 leukemia.  A patent-protected, potent cytotoxic drug and intraveneous
 formulation of the alkylating agent busulfan.
     In addition to ESP Pharma's key marketed products, ESP Pharma has several
 products in clinical development targeted to the acute-care hospital market.
 
     About PDL
     Protein Design Labs is a leader in the development of humanized antibodies
 to prevent or treat various disease conditions.  PDL currently has antibodies
 under development for autoimmune and inflammatory conditions, asthma and
 cancer.  PDL holds fundamental patents for its antibody humanization
 technology.  Further information on PDL is available at www.pdl.com.
 
     The foregoing contains forward-looking statements involving risks and
 uncertainties and PDL's actual results may differ materially from those,
 express or implied, in the forward-looking statements.  The forward-looking
 statements contained herein include statements about the consummation of the
 pending acquisition and the benefits of the pending acquisition, including its
 potential effect upon PDL's future financial performance.  These statements
 are subject to inherent risks and uncertainties that could cause actual
 results to differ materially from those expressed or implied.  Such risks and
 uncertainties include, among others, the possibility that regulatory or other
 closing conditions will not be satisfied, whether the combined company will be
 able to realize the anticipated benefits or synergies of the transaction in a
 timely manner or at all, and the future revenues from ESP Pharma products.
 Other factors that may cause our actual results to differ materially from
 those, express or implied, in the forward-looking statements in this press
 release are discussed in our Annual Report on Form 10-K for the year ended
 December 31, 2003, in our quarterly report on Form 10-Q for the period ended
 September 30, 2004, and in other filings with the Securities and Exchange
 Commission.
 
     NOTE:  Protein Design Labs, the PDL logo and Nuvion are registered U.S.
 trademarks of Protein Design Labs, Inc.  Zenapax is a registered trademark of
 Hoffmann-La Roche.  Cardene IV and IV Busulfex are registered trademarks of
 ESP Pharma, Inc.
 
 SOURCE  Protein Design Labs, Inc.

RELATED LINKS

http://www.pdl.com