SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 13D
                                (Amendment No. 7)

                   Under the Securities Exchange Act of 1934*

                               PDL BioPharma, Inc.
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                                (Name of Issuer)

                     Common Stock, par value $0.01 per share
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                         (Title of Class of Securities)

                                    69329Y104
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                      (CUSIP Number of Class of Securities)

                                 Daniel S. Loeb
                                 Third Point LLC
                                 390 Park Avenue
                               New York, NY 10022
                                 (212) 224-7400
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                  (Name, Address and Telephone Number of Person
                Authorized to Receive Notices and Communications)

                                   Copies to:
                            Michael A. Schwartz, Esq.
                          Willkie Farr & Gallagher LLP
                               787 Seventh Avenue
                             New York, NY 10019-6099
                                 (212) 728-8000

                                 August 29, 2007
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                          (Date of Event which Requires
                            Filing of this Schedule)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: [ ]

NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).


SCHEDULE 13D - -------------------------------- ------------------ CUSIP No. 69329Y104 Page 2 of 12 Pages - -------------------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point LLC I.D. #13-3922602 - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 11,300,000 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 11,300,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 11,300,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.7% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- --------------------------------------------------------------------

SCHEDULE 13D - -------------------------------- ------------------ CUSIP No. 69329Y104 Page 3 of 12 Pages - -------------------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point Offshore Fund, Ltd. - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 7,598,200 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 7,598,200 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 7,598,200 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- --------------------------------------------------------------------

SCHEDULE 13D - -------------------------------- ------------------ CUSIP No. 69329Y104 Page 4 of 12 Pages - -------------------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Daniel S. Loeb - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 11,300,000 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 11,300,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 11,300,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.7% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ----------- --------------------------------------------------------------------

SCHEDULE 13D - -------------------------------- ------------------ CUSIP No. 69329Y104 Page 5 of 12 Pages - -------------------------------- ------------------ - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Jason Aryeh - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 1,011 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 0 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 1,011 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,011 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.001% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ----------- --------------------------------------------------------------------

This Amendment No. 7 to Schedule 13D ("Amendment No. 7") amends the Schedule 13D filed on March 5, 2007 (as amended by Amendment No. 1 thereto filed on March 21, 2007, Amendment No. 2 thereto filed on April 11, 2007, Amendment No. 3 thereto filed on April 18, 2007, Amendment No. 4 thereto filed on May 22, 2007, Amendment No. 5 thereto filed on May 31, 2007, Amendment No. 6 thereto filed on July 17, 2007 and this Amendment No. 7, the "Schedule 13D") and is being filed on behalf of Third Point LLC, a Delaware limited liability company (the "Management Company" or "Third Point"), Third Point Offshore Fund, Ltd., a Cayman Islands limited liability exempted company (the "Offshore Fund"), Daniel S. Loeb, an individual ("Mr. Loeb", and together with the Management Company and the Offshore Fund, the "Third Point Reporting Persons"), and Jason Aryeh, an individual ("Mr. Aryeh", and together with the Third Point Reporting Persons, the "Reporting Persons"). This Amendment No. 7 relates to the common stock, par value $0.01 per share (the "Common Stock"), of PDL BioPharma, Inc., a Delaware corporation (the "Company"). The Management Company is the investment manager or adviser to a variety of hedge funds and managed accounts (such funds and accounts, including the Offshore Fund, the "Funds"). The Funds directly own the Common Stock to which this Schedule 13D relates, and Mr. Loeb and the Management Company may be deemed to have beneficial ownership over such Common Stock by virtue of the authority granted to them by the Funds to vote and to dispose of the securities held by the Funds, including the Common Stock. Mr. Aryeh may be deemed to have beneficial ownership of the shares of Common Stock directly owned by JALAA Equities, LP ("JALAA") by virtue of his ability to vote and/or to dispose of the securities held by JALAA, including the Common Stock. Item 3. Source and Amount of Funds or Other Consideration. Item 3 of the Schedule 13D is hereby amended and restated as follows: The Funds have expended an aggregate of approximately $224,260,930 of their own investment capital to acquire the 11,300,000 shares of Common Stock held by them. The Offshore Fund has expended an aggregate of approximately $152,747,490 of its own investment capital to acquire its 7,598,200 shares of Common Stock. JALAA has expended an aggregate of approximately $20,780 of its own investment capital to acquire the 1,011 shares of Common Stock that it holds. Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is hereby amended by adding the following thereto: On August 29, 2007, Third Point sent a letter to the Board of Directors of the Company, demanding that L. Patrick Gage resign immediately as Chairman and as a member of the Board and that the Company's management and Board focus on the prompt sale of the Company. A copy of the letter is attached to this Schedule 13D as an exhibit and incorporated herein by reference in its entirety. 6

Item 5. Interest in Securities of the Issuer. Items 5(a), 5(b) and 5(c) of the Schedule 13D are hereby amended and restated as follows: (a) As of the date hereof, the Management Company and Mr. Loeb beneficially own 11,300,000 shares of Common Stock (the "Third Point Shares"). The Third Point Shares represent 9.7% of the 116,831,008 shares of Common Stock outstanding as of August 2, 2007, as reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007. The percentages used herein and in the rest of this statement are calculated based upon this number of outstanding shares. As of the date hereof, the Offshore Fund directly beneficially owns 7,598,200 shares of Common Stock, representing 6.5% of the outstanding shares of Common Stock. None of the other individual Funds owns a number of shares of Common Stock representing more than 5% of such total. As of the date hereof, Mr. Aryeh beneficially owns 1,011 shares of Common Stock, which represent less than 0.001% of the outstanding shares of Common Stock. (b) The Management Company and Mr. Loeb share voting and dispositive power over the 11,300,000 shares of Common Stock held by the Funds. The Management Company, Mr. Loeb and the Offshore Fund share voting power and dispositive power over the 7,598,200 shares of Common Stock held by the Offshore Fund. Mr. Aryeh has sole voting power and dispositive power over the 1,011 shares of Common Stock held by JALAA. (c) Schedule A hereto sets forth certain information with respect to transactions by the Funds (at the direction of the Management Company and Mr. Loeb) in the Common Stock since the most recent filing on Schedule 13D. Schedule B hereto sets forth certain information with respect to transactions by the Offshore Fund (at the direction of the Management Company and Mr. Loeb) in the Common Stock since the most recent filing on Schedule 13D. Schedule C sets forth certain information with respect to transactions by Mr. Aryeh in the Common Stock since the most recent filing on Schedule 13D. All of the transactions set forth on Schedules A, B and C were effected in open market transactions in the NASDAQ Global Select Market. Except as set forth on Schedules A, B and C since the most recent filing on Schedule 13D there were no transactions in the Common Stock effected by any of the Management Company, Mr. Loeb, the Offshore Fund or Mr. Aryeh, nor, in the case of the Management Company and the Offshore Fund and to the best of their knowledge, any of their directors, executive officers, general partners or members. 7

Item 7. Material to be Filed as Exhibits. 99.1. Letter, dated August 29, 2007, from Third Point to Samuel Broder, M.D., Karen A. Dawes, Bradford S. Goodwin, Joseph Klein III, Laurence Jay Korn, Ph.D., Mark McDade, Richard Murray, John S. Saxe, Esq., and L. Patrick Gage, Ph.D., the members of the Board of Directors of the Company. [Signatures on following page] 8

SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: August 29, 2007 THIRD POINT LLC By: Daniel S. Loeb, Chief Executive Officer By: /s/ Justin Nadler ---------------------------------------- Name: Justin Nadler Title: Attorney-in-Fact THIRD POINT OFFSHORE FUND, LTD. By: Daniel S. Loeb, Director By: /s/ Justin Nadler ---------------------------------------- Name: Justin Nadler Title: Attorney-in-Fact DANIEL S. LOEB By: /s/ Justin Nadler ---------------------------------------- Name: Justin Nadler Title: Attorney-in-Fact /s/ Jason Aryeh --------------------------------------------- Jason Aryeh [SIGNATURE PAGE TO AMENDMENT NO. 7 TO SCHEDULE 13D WITH RESPECT TO PDL BIOPHARMA, INC.]

Schedule A ---------- (Transactions by the Funds in Common Stock since the most recent filing on Schedule 13D) Date Transaction Shares Price Per Share($) ---- ----------- ------ ------------------ - ---------------- ------------------- ---------------- -------------------------- 07/25/07 BUY 299,000 25.22 - ---------------- ------------------- ---------------- -------------------------- 07/25/07 SELL (299,000) 25.22 - ---------------- ------------------- ---------------- -------------------------- 08/08/07 SELL (100,000) 23.50 - ---------------- ------------------- ---------------- --------------------------

Schedule B ---------- (Transactions by the Offshore Fund in Common Stock since the most recent filing on Schedule 13D) Date Transaction Shares Price Per Share($) ---- ----------- ------ ------------------ - ---------------- ------------------- ---------------- -------------------------- 07/25/07 BUY 299,000 25.22 - ---------------- ------------------- ---------------- -------------------------- 08/08/07 SELL (36,000) 23.50 - ---------------- ------------------- ---------------- --------------------------

Schedule C ---------- (Transactions by Mr. Aryeh in Common Stock since the most recent filing on Schedule 13D) Date Transaction Shares Price Per Share($) ---- ----------- ------ ------------------ - ---------------- ------------------- ---------------- -------------------------- 07/31/07 SELL (2,640) 23.50 - ---------------- ------------------- ---------------- -------------------------- 08/01/07 SELL (16,377) 23.50 - ---------------- ------------------- ---------------- -------------------------- 08/02/07 SELL (43,766) 23.55 - ---------------- ------------------- ---------------- -------------------------- 08/09/07 BUY 511 21.54 - ---------------- ------------------- ---------------- -------------------------- 08/10/07 BUY 2,200 20.70 - ---------------- ------------------- ---------------- -------------------------- 08/16/07 BUY 1,675 20.56 - ---------------- ------------------- ---------------- -------------------------- 08/21/07 SELL (3,375) 23.74 - ---------------- ------------------- ---------------- --------------------------

                                                                    Exhibit 99.1

                            [Third Point Letterhead]

August 29, 2007

Samuel Broder, M.D.
Ms. Karen A. Dawes
Mr. Bradford S. Goodwin
Mr. Joseph Klein III
Laurence Jay Korn, Ph.D.
Mr. Mark McDade
Dr. Richard Murray
John S. Saxe, Esq.
L. Patrick Gage, Ph.D

PDL BioPharma, Inc.
34801 Campus Drive
Fremont, CA  94555

PDL Board Members:

In the August 28th conference call, PDL BioPharma ("PDL" or the "Company")
Chairman, Patrick Gage, sent a confusing and unwelcome message about PDL's
strategy. Dr. Gage's message is especially disconcerting because we believe a
significant majority of PDL's shareholders and board members share the view that
the Company should be sold in its entirety or in pieces and that the entire
proceeds should be returned to shareholders.

Only eight days before the conference call, the Company announced that the board
was continuing its ongoing corporate strategic review in conjunction with
Merrill Lynch & Co. While we understand that the announced sale of the Company's
commercial operations is simply the first step in exploring the sale of the
entire Company, Dr. Gage failed to communicate this clearly. Instead, he gave
the impression that repositioning the Company could be an alternative to selling
the Company.

Dr. Gage's destructive, "go-it-alone" research and development approach
(contrary to the wishes of PDL's shareholders) - combined with his history as
chief apologist for Mark McDade's failed strategies and his own spotty record as
a Board member at other public companies (witness the poor stock price
performance of Neose Technologies, where he is also Chairman, as well as the
similarly dismal performance of ArQule during his time on that Board) - lead us
to respectfully request that Dr. Gage step down from his role as Chairman and a
member of the Board. We believe that his chances for re-election to the
Company's staggered board at the next annual meeting are slim, and his "lame
duck" status further impairs his credibility.


Although we are mystified as to why it took so long, we view favorably the belated adoption of Third Point's recommendations: that PDL has agreed to sell its specialty pharmaceuticals business, drastically reduce operating and r&d costs, and retain an investment banker to examine all options to maximize value for shareholders. We also acknowledge the resignation of Mark McDade as CEO, which we have also been advocating. We were, however, perplexed as to why he was present on yesterday's conference call, and why he has retained anything more than a consulting role at the Company. A prompt sale of all of PDL, in whole or in pieces, will generate significant value for shareholders. In this regard, while we are of course disappointed by the termination of Phase III trials of Nuvion after 6 years of development - a failure that underscores the Company's inability to successfully commercialize drugs - we remain convinced that there is substantial value and interest in the Company's royalty stream, commercial products, manufacturing assets and pipeline of promising drugs, provided they are placed under the management of companies better suited to exploit the assets and successfully develop and commercialize the pipeline. Nuvion was not a major component of our estimated value of PDL, and we continue to believe that PDL's shareholders would realize a substantial premium in a change of control transaction. We reiterate the previous offer of the Third Point nominees to serve on the board, where they can be expected to work constructively with management, other board members and representatives of Merrill Lynch to bring the strategic review to the successful conclusion of maximizing value for all PDL shareholders. Sincerely, Daniel S. Loeb