Following an extended strategic review and solicitation of interest in the company and its assets, PDL BioPharma, Inc. said its board of directors has decided that it will no longer actively pursue the sale of the company or of its biotechnology discovery and development assets.

The company will remain independent and focus on the discovery and development of innovative new antibodies for cancer and immunologic diseases. In pursuing this path, PDL will substantially reduce its expenses and implement a significant workforce reduction, distribute to stockholders at least $500 million of the initial proceeds from its previously announced commercial, cardiovascular and manufacturing asset sales transactions, pending the close of these transactions, in a form and at a time to be determined, continue to actively evaluate several structures to distribute to its stockholders 50 percent or more of the value of its future antibody humanization royalties from currently marketed licensed products, net of any applicable corporate-level taxes; and re-start a process led by the board to search for a new chief executive officer, the company said.

Dr. L. Patrick Gage will continue to serve as interim chief executive officer during the search process.

"During our thorough strategic review process, we entered into agreements for the sale of our manufacturing, commercial and cardiovascular assets for a total of over $525 million in cash, up to $85 million in potential future milestone payments, as well as potential future royalties," said Karen A. Dawes, chair of board of directors, PDL. "Although we garnered interest regarding certain of our pipeline programs, we did not receive a firm offer for the company as a whole or for our biotech R&D assets. We believe that the completion of and planned distribution of proceeds from our strategic transactions, our expense reduction efforts, and our renewed focus on antibody discovery and development not only will maximize stockholder value, but also will enhance the opportunity for attractive partnering transactions in the future."

The company is actively evaluating several alternative structures that would result in the distribution to its stockholders of 50 per cent or more of the value of future antibody humanization royalties that would be received from currently marketed products. PDL is carefully evaluating numerous factors, including tax implications, structural considerations, and market conditions, in order to select the alternative that would maximise the value of the humanization royalties for its stockholders. The structures being evaluated include, among others, a sale of the right to receive future royalties, a securitisation of future royalties or a distribution to stockholders of securities related to the royalty stream.

Moving forward, PDL will focus on advancing its current product portfolio and discovering and developing additional innovative antibodies for cancer and immunologic diseases.

"As a substantially more streamlined biotechnology organization, PDL will work to efficiently maximize the value of its core technical strengths and 21 years of antibody expertise, while successfully advancing its current portfolio and partnering, when appropriate, to maximize value, offset the costs and mitigate the risks of mid- to late-stage development," said L. Patrick Gage, Ph.D., interim chief executive officer, PDL. "In addition to PDL's technical competencies, our talented employees, who have continued to move our company forward during the strategic review, are a fundamental strength of our company, and I thank them for their ongoing dedication and hard work."

PDL's current pipeline consists of three novel antibody products in the clinic and its 2008 IND candidate: daclizumab for the treatment of multiple sclerosis (MS) and asthma, for which the company has presented positive data from placebo-controlled phase II clinical trials in each indication; volociximab (M200), currently in phase I/II studies targeted at various solid tumours; the HuLuc63 antibody under phase 1 investigation in multiple myeloma; and PDL192, another antibody with potential in solid tumours for which the company plans to file an IND in the second quarter of this year. PDL is co-developing daclizumab in MS, and M200 in all indications, with Biogen Idec. In addition to advancing these product candidates, PDL intends to move a new antibody into the clinic each year. The company also maintains its strong process development and preclinical support capabilities.

PDL's new operating plan includes a reduction of its workforce across all functions by approximately 260 positions, starting immediately and continuing over the next 12 months. This reduction is in addition to previously planned reductions of approximately 320 positions resulting from the recently announced sales of the company's manufacturing plant and commercial and cardiovascular products. Subsequent to the transition period, PDL expects that its workforce will consist of approximately 300 employees.