PDL Biopharma (PDLI) 8-K PDL BioPharma Announces Third Quarter 2009 Financial Results

$300 Million Securitization

and Special Dividend:

Investor Presentation

Exhibit 99.3

PDL Mission

Manage patent portfolio

Manage license agreements

Optimize return for stockholders

2

Optimizing Return

Reduce expenses

Reduced staff to less than 10 persons

Relocated to Nevada to eliminate state taxes

Increase revenue

Audit existing licensees

Seek additional licenses

Monetization alternatives

Sale of some or all of royalties to royalty buyer

Royalty buy out/buy down by one or more of licensees

Securitization or high yield debt

Tax structure

No structure could be identified to improve tax efficiencies for

federal tax purposes

3

Royalty Securitization Transaction

Initial Purchaser Purchase Agreement signed on Tuesday, October 27 with closing

scheduled for Monday, November 2, 2009

The Notes have not been and will not be registered under the Securities Act of 1933, as amended

(the “Securities Act”), or under any applicable state securities laws and may not be offered or sold

in the United States or to U.S. persons unless the Notes are registered under the Securities Act

or an exemption from the registration requirements of the Securities Act is available.  Accordingly,

the

Notes

have

been

initially

offered

and

sold

only

to

“qualified

institutional

buyers”

under

Rule

144A

under

the

Securities

Act

and

to

“institutional

accredited

investors”

under

Rule

501(a)(1),

(2),

(3) or (7) under the Securities Act who are non-U.S. persons in offshore transactions under

Regulation S under the Securities Act.

This presentation is neither an offer to sell nor the solicitation of an offer to buy the Notes or any

other

securities

and

shall

not

constitute

an

offer,

solicitation

or

sale

in

any

jurisdiction

in

which,

or

to any persons to whom, such an offer, solicitation or sale in unlawful.

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Securitization Terms

Issuer…………………….....

QHP Royalty Sub LLC, Delaware limited liability company, initially 100% owned by PDL

Security……………………..

60%

of

the

Genentech

royalties

in

Avastin,

Herceptin,

Xolair,

Lucentis

and

future

licensed

products

Principal Amount…………

$300 million

Coupon ……………………..

10.25% per annum

Loan Type…………………..

Amortizing in relation to 60% of Genentech royalties

Loan-to-Value………………

41.2%

Expected Closing Date……

Monday, November 2

Payment Dates……………..

March 15, June 15, September 15, and December 15 beginning on March 15, 2010

Expected Average Life……

1.9 years based on sales, manufacturing and FX waterfall assumptions

Expected Final Maturity…..

December 15, 2012 (3.1 years) based on sales, manufacturing and FX waterfall assumptions

Legal Maturity………………

March 15, 2015 (coincides with expected duration of royalty payments)

Non-Recourse……………...

The obligation to pay debt service is an obligation solely of QHP and is without recourse to any other entity, except to

the extent of the pledge of the equity in QHP by PDL

Redemption…………………

The

Notes

have

an

optional

redemption

feature

which

allows

QHP

to

redeem

the

Notes

at

any

time

with

payment

of

a

premium.

The

premium

is

calculated

by

the

following

formula:

the

greater

of

(x)

the

outstanding

principal

balance

of the Notes being redeemed and (y) the present value, discounted at the applicable Treasury Rate plus 2.0%, of

such principal payment amounts and interest (assuming the principal balances are amortized at the times and in the

amounts

set

forth

in

Schedule

B

to

the

Indenture)

plus,

in

each

case,

the

accrued

and

unpaid

interest

to

the

redemption date on the Notes that are being redeemed.

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60% of Genentech Royalties

Avastin

Treatment of metastatic colorectal cancer, advanced non-small cell lung cancer,

HER2-

breast cancer, gliobastoma

and renal cell carcinoma

2008 worldwide revenues of $4.9Bn and royalties of $75.9MM

Herceptin

Approved for the treatment of HER2+ patients in breast cancer, adjuvant node

positive and node negative breast cancer

2008 worldwide revenues of $4.8Bn and royalties of $98.6MM

Lucentis

Treatment of (wet) advanced macular degeneration of the eye

2008 worldwide revenues of $1.8Bn and royalties of $27.9MM

Xolair

Treatment of moderate-to-severe persistent asthma

2008 worldwide revenues of $700MM and royalties of $13.9MM

Future Products

Other humanized antibodies commercialized by Genentech and under

license from PDL while the securitization bond is outstanding

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Schedule of Next Steps

Monday, November 2

Close of $300 million securitization, and issue closing press release

Wednesday, November 11

Board of Directors meeting to determine total amount of special dividend,

record date and dividend payment date

Thursday, November 12

Announcement of total amount of special dividend, record date and

dividend payment date

Record Date (likely early December)

Announcement of actual dividend to be paid on per share basis

Payment Date (in 2009)

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Why Securitization?

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Multiple operating strategies were evaluated based on relative IRR & NPV of dividends

to stockholders

Securitization increases shareholder return

Allows PDL to leverage time value of money for the benefit of shareholders by returning

sizable sum to shareholders now and using 60% of Genentech royalties to pay off the

principal and interest on the securitization bond in the future

Recourse

is

limited

to

60%

of

Genentech

royalties

so

maintains

upside

optionality

on

total portfolio to PDL & limits some of downside risk

Transaction size allows PDL to continue to pay dividends in the future

Other monetization options proved to be less favorable at this time

PDL had discussions with potential buyers about buying some or

all of our

royalties

Securitization offers more advantageous terms and structure than those offered by

potential buyers

We expect that conversations with potential royalty buyers will

continue

Securitization does not limit future options

Option to pay off the securitization bond early if necessary for royalty sale or sale of

company

Why $300 Million Securitization

Four Considerations

1.

IRR to shareholders over life of the company

2.

NPV of dividends returned to shareholders over the life of the company

3.

Effect on 2023 and 2012 Convertible Notes

•

Preferred not to trigger early repayment of either set of Notes

•

Didn’t want to swap 2.00% -

2.75% money for 10.25% money

4.

Control of Patent and License Assets

Optimal Figure

$300 million offered good balance among above considerations

Offered comparable or better IRR and NPV than other securitization /

monetization alternatives

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