UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported):

August 18, 2008

PDL BioPharma, Inc.

(Exact name of registrant as specified in its charter)

1400 Seaport Boulevard

Redwood City, California 94063
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(650) 454-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into a Material Definitive Agreement.

On August 18, 2008, PDL BioPharma, Inc. (“PDL”) and Bristol-Myers Squibb Company (“BMS”) entered into a Collaboration Agreement (the “Agreement”) regarding the global development and commercialization of PDL’s anti-CS1 antibody, elotuzumab (previously known as HuLuc63).

Pursuant to the terms of the Agreement, BMS would pay to PDL an upfront cash payment of $30 million and would receive development and marketing rights to elotuzumab and an option to expand the collaboration to include PDL241, another anti-CS1 antibody.  PDL also could receive additional payments from BMS of up to $480 million in development and regulatory milestones and up to $200 million in sales-based milestones for elotuzumab in multiple myeloma and other potential oncology indications.

If BMS exercises its option to expand the collaboration to include PDL241, upon completion of pre-agreed preclinical studies, PDL would receive an additional cash payment of $15 million and could receive additional development and regulatory milestone payments of up to $230 million and sales-based milestone payments of up to $200 million.

BMS would fund 80 percent of the worldwide development costs of elotuzumab and PDL241, should it be included in the collaboration, and PDL would fund the remainder 20 percent of worldwide development costs.  BMS and PDL would share profits on sales of elozutumab and PDL241, should it be included in the collaboration, in the U.S., with PDL receiving a higher portion of the profit share than represented by its share of funding. PDL would receive royalties on net sales of elotuzumab and PDL241, should it be included in the collaboration, outside the U.S.

PDL would complete the ongoing phase 1 elotuzumab program and provide support for phase 2 studies and BMS would otherwise lead global development activities.

BMS has the right to terminate the Agreement without cause on a product by product and region by region basis with advance written notice.

The closing of the transaction is subject to antitrust clearance under the Hart-Scott-Rodino Act and other customary regulatory approvals.

A copy of the joint press release issued on August 19, 2008 by PDL and BMS announcing the Agreement (the “Joint Release”) is filed hereto as Exhibit 99.1 and incorporated herein by reference.

Forward-Looking Statements

This Current Report and the Joint Release contain forward-looking statements, including regarding PDL’s potential receipt of an upfront cash payment, a potential option payment, development, regulatory and sale-based milestone payments, a share of profits and royalties.  Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those, express or implied, in these forward-looking statements. For example:

·                  PDL would not be entitled to receive the $30 million upfront cash payment or any other payments under the collaboration agreement if antitrust authorities do not clear the collaboration transaction between PDL and BMS under applicable antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

·                  BMS may not elect to exercise its option to include PDL241 in the collaboration, even if pre-clinical testing demonstrates the development potential of PDL241; and

·                  PDL’s rights to elotuzumab-related milestone payments, PDL241-related milestone payments (should BMS elect to include PDL241 in the collaboration), share of profits and royalties are subject to the successful achievement of numerous development, regulatory and sales milestones, which may be delayed or not achieved for a variety of reasons, including because:

·                  Elotuzumab is an early-stage development product, which has not been extensively tested in humans, and PDL241 is a preclinical candidate, which has not been tested in humans, and additional clinical studies

2

would need to be successfully conducted to demonstrate that either elotuzumab or PDL241 is safe and effective as a human therapeutic;

·                  Delays in contracting with clinical sites, slow enrollment rates, lack of availability of clinical materials or safety or manufacturing issues could adversely impact the development of elotuzumab or PDL241;

·                  Even if elotuzumab or PDL241 is successfully developed through pivotal studies, the parties may not be able to meet applicable regulatory standards or regulatory authorities may fail to approve the marketing of elotuzumab; and

·                  Even if elotuzumab or PDL241 is approved for marketing, PDL’s receipt of a share of profits, royalties or any of the sales-related milestones 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.

In addition, most of the potential payments to PDL, even if made, would occur a number of years in the future and the present value of these future payments would be less than what may be implied by these forward-looking statements.  Other factors that may cause PDL’s actual results to differ materially from those expressed or implied in these forward-looking statements are discussed in PDL’s filings with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” sections of PDL’s annual and quarterly reports filed with the SEC. PDL expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein or in the Joint Release to reflect any change in PDL’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based for any reason, except as required by law, even as new information becomes available or other events occur in the future. Each forward-looking statement in this Current Report or the Joint Release is qualified in its entirety by this cautionary statement.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    August 19, 2008

4

Exhibit 99.1

Bristol-Myers Squibb and PDL BioPharma Enter Global Alliance to Develop Novel Treatment for Multiple Myeloma

Elotuzumab Antibody Designed to Target Highly Expressed Cell Surface Protein and Selectively Kill Multiple Myeloma Cells

PRINCETON, New Jersey, and REDWOOD CITY, California – August 19, 2008 – Bristol-Myers Squibb Company (NYSE: BMY) and PDL BioPharma, Inc. (NASDAQ: PDLI) today announced an agreement for the global development and commercialization of PDL BioPharma’s anti-CS1 antibody, elotuzumab, previously known as HuLuc63, currently in Phase I development for multiple myeloma.

Elotuzumab provides a novel approach to treating multiple myeloma because it is an antibody that binds to the CS1 glycoprotein, allowing the immune system to selectively kill myeloma cells with minimal effects on other cell types. CS1 is a cell surface glycoprotein that is widely expressed on multiple myeloma cells but is minimally expressed on normal cells. Elotuzumab is currently being investigated in Phase I studies as a monotherapy and in combination with other therapies.  There are currently no approved monoclonal antibodies on the market to treat multiple myeloma.

Under the terms of the collaboration, Bristol-Myers Squibb would pay PDL BioPharma an upfront cash payment of $30 million for the development and marketing rights to elotuzumab and for an option to expand the collaboration to include PDL241, another anti-CS1 antibody, upon completion of pre-agreed preclinical studies.  PDL BioPharma could receive additional payments of up to $480 million based on pre-defined development and regulatory milestones and up to $200 million based on pre-defined sales-based milestones for elotuzumab in multiple myeloma and other potential oncology indications.

The companies will share development costs, with Bristol-Myers Squibb providing 80 percent of the funding and PDL BioPharma providing 20 percent. Bristol-Myers Squibb will lead global development activities, and PDL BioPharma will complete the ongoing Phase I program and provide support for Phase II studies.  The companies would share profits on sales of elozutumab in the U.S. PDL BioPharma would receive royalties on net sales of elotuzumab outside the U.S.

If Bristol-Myers Squibb exercises its option to expand the collaboration to include PDL241, PDL BioPharma would receive an additional cash payment of $15 million and could receive additional payments of up to $230 million based on pre-defined development and regulatory milestones and up to $200 million based on pre-defined sales-based milestones.  The same division of development costs and profit sharing that apply to elotuzumab would apply to PDL241.

The closing of the transaction is subject to antitrust clearance under the Hart-Scott-Rodino Act and other customary regulatory approvals.

“Elotuzumab provides us with the opportunity to develop and market an innovative therapy that has the potential to meaningfully address the significant unmet medical need in multiple myeloma,” said Francis Cuss, MD, senior vice president, Discovery and Exploratory Clinical Research, Bristol-Myers Squibb. “Consistent with our company’s strategy to integrate external innovation and to expand our capabilities, this collaboration will further strengthen our pipeline of agents targeting hematologic malignancies, which includes Sprycel and tanespimycin, an Hsp90 inhibitor from our recent acquisition of Kosan Biosciences.”

“We are delighted to enter this global alliance with Bristol-Myers Squibb, which we believe will maximize the potential benefit of elotuzumab to patients, and highlight the value of our scientific discoveries and antibody technologies to the field,” said Mark McCamish, MD, PhD, PDL’s senior vice president and chief medical officer.  “In addition, Bristol-Myers Squibb brings extensive oncology development experience and resources and we look forward to collaborating with them to increase the scope of the elotuzumab development program moving forward.”

About Bristol-Myers Squibb

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to extend and enhance human life. For more information visit www.bms.com

About PDL BioPharma

PDL BioPharma, Inc. is a biotechnology company focused on the discovery and development of novel antibodies in oncology and immunologic diseases. For more information, please visit www.pdl.com.

Bristol-Myers Squibb Forward-Looking Statements

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995, regarding the research, development and commercialization of pharmaceutical products.  Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations.  No forward-looking statement can be guaranteed.  Among other risks, there can be no guarantee that the clinical trials will begin on the timeframe described in this release, that the clinical studies described in this release will support a regulatory filing or that the product will receive regulatory approval.  There can be no assurance that if approved, the product described in this release will be commercially successful.  Nor is there any assurance that the transaction described in this release will receive the necessary regulatory approvals to close. Forward-looking statements in the press release should be evaluated together with the many uncertainties that affect Bristol-Myers Squibb’s business, particularly those identified in the cautionary factors discussion in Bristol-Myers Squibb’s Annual Report

on Form 10-K for the year ended December 31, 2007, its Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.  Bristol-Myers Squibb undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

PDL BioPharma Forward-Looking Statements

This press release contains forward-looking statements regarding the entry into and potential for success of a development and commercialization collaboration between PDL BioPharma and BMS, including whether antitrust approval will be obtained to permit the effectiveness of the agreement; the ability of BMS or PDL BioPharma to achieve any or all of the milestone payments for products covered by the collaboration; the scope of the collaboration, including the option exercise and milestones payments related to the exercise of the PDL241 product option by BMS;  the ability of PDL BioPharma to maintain the collaboration in effect; the ability of the parties to achieve regulatory approval; and if approved, the commercial potential of any products developed pursuant to the collaboration. Other factors that may cause PDL’s actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are discussed in the Current Report on Form 8-K filed by PDL BioPharma with the Securities and Exchange Commission (SEC) in connection with this press release and PDL BioPharma’s periodic filings with the SEC, including the “Risk Factors” sections of its annual and quarterly reports filed with the SEC. Copies of PDL’s filings with the SEC may be obtained at the “Investors” section of PDL’s website at www.pdl.com. 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 PDL’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based for any reason, except as required by law, even as new information becomes available or other events occur in the future. All forward-looking statements in this press release are qualified in their entirety by this cautionary statement.

##