--  declared a special cash dividend of $4.25 per share of common stock,    payable to stockholders of record on May 5, 2008, using proceeds from    recent asset sales; and--  decided that the company will separate its antibody humanization    royalty assets from its biotechnology operations to enable investors to    invest in and realize the benefits of each asset independently; to effect    this separation, PDL is planning to spin off its biotechnology assets into    a separate publicly traded entity.    

"Consistent with our commitment to return the proceeds from our recentasset sale transactions, we are pleased to declare this special cashdividend," said Karen A. Dawes, chairperson of the board. "Further,following our stated plan to evaluate mechanisms to distribute to ourstockholders the benefit of our royalty stream, we are taking thisdefinitive step of separating our biotechnology operations from ourantibody humanization royalty assets, including such royalty revenues fromall current and future licensed products. With this plan to spin off thebiotechnology operations, investors can realize the value of each assetfully and independently."

PDL declared the special cash dividend following receipt of the proceedsfrom the company's recent sales of its commercial and cardiovascularproducts, and its biologics manufacturing facility. PDL will distributeapproximately $502 million to stockholders based on current sharesoutstanding. The record date and dividend payment date will be May 5, 2008and, pursuant to applicable Nasdaq rules, the ex-dividend date will be May6, 2008.

The biotechnology company resulting from the spin-off will continue toleverage its core and novel antibody engineering technologies and developits promising antibody product pipeline. PDL expects to capitalize the newcompany with approximately $375 million of cash at the completion of thetransaction. PDL expects that this initial capitalization, along withpotential milestone payments, non-humanization royalties and other paymentsunder collaboration and other agreements, including the contingentconsideration related to the company's sale of its cardiovascular products,would fund the biotechnology spin-off for approximately three years basedon the company's current operating plans. As of December 31, 2007, andprior to the receipt of the proceeds from recent asset sales, PDL's cash,cash equivalents, marketable securities and restricted cash and investmentstotaled $440.8 million. PDL does not expect the spin-off to change therecently announced organizational structure supporting its biotechnologyoperations.

Following the spin-off of the biotechnology company, PDL BioPharma willcontinue to hold the rights to antibody humanization royalty revenues fromall current and future licensed products. The company plans to distributefuture antibody humanization royalty revenues, net of any operatingexpenses, debt service and income taxes, to its stockholders and does notintend to make any acquisitions or engage in any material capitalexpenditures. PDL believes the separation will enhance its ability to sellor securitize all or part of such antibody royalties, either before orafter the spin-off, should it decide to do so. PDL's outstandingconvertible notes would remain as obligations of the company. PDL expectsthat it would require a nominal number of employees to support itsintellectual properties and provide for essential reporting and managementfunctions of a public company.

PDL anticipates 2008 royalty revenues to be $240 million to $260 million.PDL's royalty revenues for the full year 2007 were $221.1 million, whichwere earned on worldwide net sales of eight antibody products licensedunder PDL's antibody humanization patents: Avastin®, Herceptin®, Xolair®,Raptiva® and Lucentis® antibody products from Genentech, Inc.; Synagis®antibody product from MedImmune, Inc.; Tysabri® antibody product from ElanPharmaceuticals, Inc.; and Mylotarg® antibody product from Wyeth. PDL alsoexpects to receive royalty revenues on potential future sales of Actemra®from Hoffmann La-Roche and Cimzia® from UCB S.A., two antibody productsthat are licensed under the company's humanization patents, should theseproducts be approved for marketing.

PDL expects that the separation of its assets will be completed by the endof 2008. Additional details regarding the structure, leadership andfinancial operations of the two separate companies that would result fromthe spin-off transaction will be disclosed at a later time.

Tax Implications

The tax treatment of the special cash dividend to stockholders will dependupon PDL's 2008 results and will be provided to stockholders of record byJanuary 31, 2009.

The spin-off by PDL of the new biotechnology company will not qualify fortax-free treatment. As a result, PDL would recognize taxable gain, if any,in connection with the spin-off to the extent that the fair market value ofthe new company's stock, which would be based on its trading price afterthe spin-off, exceeds PDL's tax basis in the assets transferred to the newcompany. As with the special cash dividend, the tax treatment of the stockdistribution to PDL stockholders will depend upon PDL's 2008 results,including any gain recognized by PDL on the distribution, and will beprovided to stockholders of record by January 31, 2009.

Conference Call Today

Members of PDL's board and management team will hold a conference calltoday at 2:30 p.m. PT/5:30 p.m. ET to respond to questions from theinvestment community regarding today's announcement. A webcast of theconference call will be available through the PDL website:http://www.pdl.com.

Forward-Looking Statements

This press release contains forward-looking statements, including regardingPDL's:

--  Plan to separate certain royalty and biotech assets and liabilities    through  a taxable spin-off of its biotechnology assets and expectation    that the spin-off is expected to be consummated by the end of 2008;--  Expectations regarding assets and liabilities to be transferred to the    biotechnology spin-off;--  Expectations regarding the initial cash funding for the spin-off and    the period of time the initial capitalization would fund the operations of    the biotechnology spin-off;--  The possibility of selling or securitizing PDL's antibody humanization    royalty assets; and--  Expectations regarding royalty revenues from potential future sales,    including expectations of royalties from Roche's Actemra antibody product    and UCB's Cimzia antibody product.    

Each of these forward-looking statements involves risks and uncertainties.Actual results may differ materially from those, express or implied, inthese forward-looking statements. Factors that may cause differencesbetween current expectations and actual results include, but are notlimited to, the following:

--  The failure to obtain necessary consents from third parties could    delay or make impractical to effect a spin off of PDL's biotechnology    assets;--  Changes in development or operations plans could affect the initial    cash funding needed to adequately capitalize the biotechnology entity;--  PDL may not be able to negotiate a sale or securitization of its    antibody humanization royalty assets on terms acceptable to it, or at all;--  Roche's Actemra antibody product or UCB's Cimzia antibody product may    not be approved for marketing and PDL would not receive any royalty revenue    with respect to these antibody products;--  Even if Roche's Actemra antibody product or UCB's Cimzia are approved    for marketing, the royalties PDL may receive from these antibody products    could be adversely impacted by the lack of market penetration, availability    of drug supply, changes in the markets for these products due to    alternative treatments, other actions by competitors or regulatory actions;    and--  Alternative transactions or opportunities could arise or be pursued    which would alter the timing or advisability of anticipated or planned    transactions.    

Other factors that may cause PDL's actual results to differ materially fromthose expressed or implied in the forward-looking statements in this pressrelease are discussed in PDL's filings with the Securities and ExchangeCommission (SEC), including the "Risk Factors" sections of its annual andquarterly reports filed with the SEC. Copies of PDL's filings with the SECmay be obtained at the "Investors" section of PDL's website athttp://www.pdl.com. PDL expressly disclaims any obligation or undertakingto release publicly any updates or revisions to any forward-lookingstatements contained herein to reflect any change in PDL's expectationswith regard thereto or any change in events, conditions or circumstances onwhich any such statements are based for any reason, except as required bylaw, even as new information becomes available or other events occur in thefuture. All forward-looking statements in this press release are qualifiedin their entirety by this cautionary statement.

About PDL

PDL BioPharma, Inc. is a biopharmaceutical company focused on the discoveryand development of novel antibodies in oncology and select immunologicdiseases. For more information, please visit http://www.pdl.com.

NOTE: PDL BioPharma and the PDL BioPharma logo are considered trademarks ofPDL BioPharma, Inc. Herceptin, Avastin, Lucentis and Raptiva are registeredU.S. trademarks of Genentech, Inc. Xolair is a registered trademark ofNovartis AG. Synagis is a registered trademark of MedImmune, Inc. Mylotargis a registered trademark of Wyeth. Tysabri is a registered trademark ofElan Pharmaceuticals, Inc. Cimzia is a registered trademark of UCB PharmaS.A. Actemra is a registered trademark of Chugai Seiyaku Kabushiki KaishaCorporation.