PDL Biopharma (PDLI) 8-K/A Results of Operations and Financial Condition

Exhibit 99.1

For Immediate Release

Contacts:
Ami Knoefler	Jim Goff
Corporate and Investor Relations	Investor Relations
(510) 284-8851	(510) 574-1421
ami.knoefler@pdl.com	james.goff@pdl.com

PDL BIOPHARMA RELEASES REVISED 2005 FINANCIAL TABLES

Fremont, Calif., March 17, 2006—PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) is releasing revised financial tables in conjunction with the company’s filing of its 2005 Annual Report on Form 10-K, filed on March 16, 2006. The tables reflect certain revisions to the company’s 2005 GAAP financial results, principally related to the purchase accounting for its acquisition of ESP Pharma, Inc. in March 2005. PDL has also updated the number of shares used in calculations of basic and diluted net loss per share to reflect shares of common stock issued in connection with a collaboration.

These revisions have no effect on the Company’s full year 2006 non-GAAP forward looking financial guidance as provided on February 27, 2006.

A table showing the changes from PDL’s previously announced results for four quarters of fiscal 2005 is attached. Further information regarding these financial results and the revisions described above are in PDL’s Annual Report on Form 10-K for Fiscal 2005.

PDL BioPharma, Inc. is a biopharmaceutical company focused on discovering, developing and commercializing innovative therapies for severe or life-threatening illnesses.

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 include our expectations regarding financial results, our expectations regarding the continuation of existing and new collaborative agreements, the possibility that the off-patent branded products will be sold and the anticipated sale price for those products, and the timing of clinical developments as well as other statements regarding our expectations. Factors that may cause differences between current expectations and actual results include, but are not limited to, the following: The continued successful integration of ESP Pharma and Retavase as part of PDL, including the retention of the sales force; changes in our development plans as we and our collaborators consider development plans and alternatives; factors affecting the clinical timeline such as enrollment rates and availability of clinical materials; changes in the market due to

alternative treatments or other actions by competitors; and variability in expenses particularly on a quarterly basis, due, in principal part, to total headcount of the organization and the timing of expenses. In addition, PDL revenues depend in part on the success and timing of sales of our licensees, including in particular the continued success of Avastin and Herceptin antibody products by Genentech, Inc. as well as the seasonality of sales of Synagis^® from MedImmune, Inc. Quarterly revenues may be impacted by our ability to maintain and increase our revenues from collaborative arrangements such as our co-development agreements with Biogen Idec and Roche. Our revenues and expenses would be affected by new collaborations, material patent licensing arrangements or other strategic transactions.

Other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in our filings with the Securities and Exchange Commission. 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 our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

PDL BioPharma and the PDL BioPharma logo are considered trademarks of PDL BioPharma, Inc.

# # #

The following tables reflect the adjustments to fiscal 2005 GAAP results and revised reconciliations to non-GAAP results.

PDL BIOPHARMA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data )	Years ended December 31,
	2005
	As Furnished GAAP			Revisions (1)			Revised GAAP
Revenues:
Product sales, net	$	118,449			2,742		$	121,191
Royalties		130,068						130,068
License and other		28,395						28,395
Total revenues		276,912			2,742			279,654
Costs and expenses:
Cost of product sales		60,257						60,257
Research and development		172,039						172,039
Selling, general and administrative		82,295			91			82,386
Acquired in-process research and development		79,417						79,417
Other acquisition-related charges		—			19,434			19,434
Asset impairment charges		31,269						31,269
Total costs and expenses		425,277			19,525			444,802
Operating income (loss)		(148,365	)		(16,783	)		(165,148	)
Interest and other income, net		9,616						9,616
Interest expense		(10,177	)					(10,177	)
Income (loss) before income taxes		(148,926	)		(16,783	)		(165,709	)
Income taxes expense		868						868
Net income (loss)	$	(149,794	)	$	(16,783	)	$	(166,577	)
Net income (loss) per basic share	$	(1.45	)				$	(1.60	)
Net income (loss) per diluted share	$	(1.45	)				$	(1.60	)
Shares used in computation of net income (loss) per basic share		103,311						104,326
Shares used in computation of net income (loss) per diluted share		103,311						104,326

(1) Revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press Release for the fourth quarter. See Note 1 to the Consolidated Financial Statements in our Form 10-K for the year ended December 31, 2005.

PDL BIOPHARMA, INC.

NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

We use certain non-GAAP financial measures in evaluating our operating performance. These non-GAAP financial results are based upon earnings before interest income, interest expense, income taxes, depreciation and amortization (EBITDA), further adjusted to exclude certain other charges, including acquired in-process research and development, other acquisition-related charges, asset impairment charges and stock-based compensation. We believe that these non-GAAP financial measures enhance an investor’s overall understanding of our financial performance and future prospects by reconciling more closely to the actual cash expenses of the Company in its operations.

	Years ended December 31,
	2005									2004
(In thousands, except per share data )	Revised GAAP			Adjustments			Revised Non-GAAP			GAAP			Adjustments			Non-GAAP
Revenues:
Product sales, net	$	121,191					$	121,191	(4)	$	—					$	—
Royalties		130,068						130,068			83,807						83,807
License and other		28,395						28,395			12,217						12,217
Total revenues		279,654			—			279,654			96,024						96,024
Costs and expenses:
Cost of product sales		60,257			(35,434	)(1)		24,823			—
Research and development		172,039			(16,396	)(2)		155,643			122,563			(14,280	)(2)		108,283
Selling, general and administrative		82,386			(2,094	)(3)		80,292			31,806			(1,519	)(3)		30,287
Acquired in-process research and development		79,417			(79,417	)		—			—						—
Other acquisition-related charges		19,434			(19,434	)(4)		—			—						—
Asset impairment charges		31,269			(31,269	)(5)		—			—						—
Total costs and expenses		444,802			(184,044	)		260,758			154,369			(15,799	)		138,570
Operating income (loss)		(165,148	)		184,044			18,896			(58,345	)		15,799			(42,546	)
Interest and other income, net		9,616			(9,664	)(6)		(48	)		10,212			(9,739	)(6)		473
Interest expense		(10,177	)		10,177			—			(5,028	)		5,028			—
Income (loss) before income taxes		(165,709	)		184,557			18,848			(53,161	)		11,088			(42,073	)
Income taxes expense		868			(868	)		—			80			(80	)		—
Net income (loss)	$	(166,577	)	$	185,425		$	18,848		$	(53,241	)	$	11,168		$	(42,073	)
Net income (loss) per basic share	$	(1.60	)				$	0.18		$	(0.56	)				$	(0.44	)
Net income (loss) per diluted share	$	(1.60	)				$	0.17		$	(0.56	)				$	(0.44	)
Shares used in computation of net income (loss) per basic share		104,326						104,326			94,982						94,982
Shares used in computation of net income (loss) per diluted share		104,326						109,222			94,982						94,982

⁽¹⁾ Amortization of intangible assets for our marketed products in 2005.

⁽²⁾ Depreciation expenses for our fixed assets ($14.2M in 2005, $11.0M in 2004), amortization of intangible assets associated with the Eos Biotechnology, Inc. acquisition and the re-acquisition from Roche of rights to Zenapax ($2.1M in 2005, $2.5M in 2004), restructuring charges (none in 2005, $0.3M in 2004), and stock-based compensation ($0.2M in 2005, $0.6M in 2004).

⁽³⁾ Depreciation expenses for our fixed assets ($1.2M in 2005, $0.8M in 2004), and stock-based compensation ($0.8M in 2005, $0.6M in 2004).

⁽⁴⁾ Revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press Release for the fourth quarter. See Note 1 to the Consolidated Financial Statements in our Form 10-K for the year ended December 31, 2005.

⁽⁵⁾ Asset impairment charges for off-patent brands of $15.5M and write-off of option to re-acquire rights to manufacture and marketZenapax for acute renal transplant rejection of $15.8M in 2005.

⁽⁶⁾ Interest income.

QUARTERLY FINANCIAL DATA (UNAUDITED)

(in thousands, except per share data)	2005 Quarter Ended
	December 31						September 30						June 30							March 31
	Revised(1)			As Furnished			Revised(1)			As reported			Revised(1)			As Reported				Revised(1)			As Reported
Revenues:
Product sales	$	39,012		$	39,012		$	43,144		$	43,144		$	38,087		$	35,345			$	948		$	948
Royalties		33,373			33,373			26,003			26,003			37,528			37,528				33,164			33,164
License and other		11,268			11,268			7,536			7,536			4,888			4,888				4,703			4,703
Total revenues		83,653			83,653			76,683			76,683			80,503			77,761				38,815			38,815
Costs and expenses:
Cost of product sales		16,776			16,776			22,209			22,209			20,135			20,135				1,137			1,137
Research and development		46,959			46,959			49,480			49,480			40,339			40,339				35,261			35,261
Selling, general and administrative		28,119			28,028			26,795			26,795			19,806			19,806	��			7,666			7,666
Acquired in-process research and development(2)		—			—			—						—			—				79,417			79,417
Other acquisition-related charges(3)		10,876			—			5,816			—			2,742			—				—			—
Asset impairment charge(4)		16,044			16,044			15,225			15,225			—			—				—			—
Total costs and expenses		118,774			107,807			119,525			113,709			83,022			80,280				123,481			123,481
Gross profit from product sales		22,236			22,236			20,935			20,935			17,952			15,210				-189			-189
Operating income (loss)		(35,121	)		(25,154	)		(42,842	)		(37,026	)		(2,519	)		(2,519	)			(84,666	)		(84,666	)
Interest and other income, net		2,781			2,781			2,027			2,027			1,873			1,873				2,935			2,935
Interest expense		(2,655	)		(2,655	)		(2,671	)		(2,671	)		(2,709	)		(2,709	)			(2,142	)		(2,142	)
Loss before income taxes		(34,995	)		(24,028	)		(43,486	)		(37,670	)		(3,355	)		(3,355	)			(83,873	)		(83,873	)
Income tax expense (benefit)		(899	)		(899	)		1,680			1,680			65			65				22			22
Net loss	$	(34,096	)	$	(23,129	)	$	(45,166	)	$	(39,350	)	$	(3,420	)	$	(3,420	)		$	(83,895	)	$	(83,895	)
Basic and diluted net loss per share	$	(0.31	)	$	(0.22	)	$	(0.43	)	$	(0.37	)	$	(0.03	)	$	(0.03	)		$	(0.87	)	$	(0.87	)
Shares used in computation of basic and diluted net loss per share		111,571			107,512			105,272			105,272			103,705			103,705				96,754			96,754
(in thousands, except per share data)	2005
	December 31						September 30						June 30							March 31
	revised(1)			as furnished			revised(1)			as reported			revised(1)			as reported				revised(1)			as reported
Goodwill	$	57,783			N/A		$	56,714		$	57,520		$	31,262		$	67,359			$	31,262		$	67,359
Total Assets		1,166,001		$	1,170,262			1,176,171			1,176,977			1,018,799			1,054,896				1,012,680			1,048,777
Total Liabilities		639,936			N/A			625,003			625,003			577,303			577,303		��		578,234			578,234
Total Stockholders’ Equity		526,065			531,144			551,168			551,974			441,496			477,593				434,446			470,543

(1) Represents revisions of certain amounts previously reported in our Form 10-Q for the first and second quarters, Form 10-Q/A for the third quarter and as furnished in our Form 8-K dated March 3, 2006 which included the February 27, 2006 Press Release for the fourth quarter. See Note 1 to the Consolidated Financial Statements.

(2) Represents acquired in-process research and development. The amount for 2005 relates to the ESP Pharma acquisition. For a description of these charges, see Notes 1, 4 and 6 to the Consolidated Financial Statements.

(3) Represents product sales returns, accounts receivable allowances and other liabilities related to ESP Pharma operations prior to our acquisition of the business. See Note 1 to the Consolidated Financial Statements.

(4) Represents non-cash charges related to the impairment of off-patent branded products and termination of reversion right. For a description of these charges, see Note 4 to the Consolidated Financial Statements.