SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 5)
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
May 31, 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
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CUSIP No. 69329Y104 Page 2 of 8 Pages
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- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Point LLC I.D. #13-3922602
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
0
--------- ------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 11,400,000
OWNED BY --------- ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,400,000
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
11,400,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8%
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14 TYPE OF REPORTING PERSON*
OO
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SCHEDULE 13D
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CUSIP No. 69329Y104 Page 3 of 8 Pages
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- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Point Offshore Fund, Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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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 7,339,400
OWNED BY --------- ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,339,400
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,339,400
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.3%
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14 TYPE OF REPORTING PERSON*
OO
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SCHEDULE 13D
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CUSIP No. 69329Y104 Page 4 of 8 Pages
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- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Daniel S. Loeb
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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 11,400,000
OWNED BY --------- ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,400,000
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
11,400,000
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8%
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14 TYPE OF REPORTING PERSON*
IN
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SCHEDULE 13D
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CUSIP No. 69329Y104 Page 5 of 8 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
0
--------- ------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 62,783
OWNED BY --------- ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
62,783
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
62,783
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.05%
- ----------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
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This Amendment No. 5 to Schedule 13D ("Amendment No. 5") 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 and this Amendment No. 5, 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. 5 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 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by adding the following
thereto:
On May 31, 2007, Third Point sent a letter to the Board of Directors of the
Company (the "Board") inviting each member of the Board to contact Third Point
to discuss its serious concerns regarding Mark McDade, the Chief Executive
Officer of the Company, L. Patrick Gage, the Chairman of the Board, and
Jeanmarie Guenot, the Company's Vice President, Corporate & Business
Development. The May 31 letter was prompted in part by the lack of response to
the letter sent by Third Point on May 22 to the unconflicted members of the
Board, consisting of all members of the Board other than Mr. McDade and Dr.
Gage.
In the May 31 letter, Third Point once again urges the Board to act in the
interest of shareholders by (i) terminating Mark McDade's employment as Chief
Executive Officer, (ii) adding three shareholder representatives to the PDLI
Board, and (iii) retaining an investment bank to explore strategic alternatives
for the Company. Additionally, Third Point requests
6
that Jean-Jacques Bienaime, Chief Executive Officer of BioMarin Pharmaceutical
Inc., be added to the Board along with two of the other four candidates whose
names were previously provided by Third Point. Third Point urges the Board to
pursue sources of information underlying Third Point's concern over what it sees
as Mr. McDade's poor performance and unsuitability to lead the Company.
A copy of Third Point's May 31, 2007 letter is attached to this Schedule
13D as an exhibit and incorporated herein by reference in its entirety.
Item 7. Material to be Filed as Exhibits.
99.1. Letter, dated May 31, 2007, from Third Point to the members of the
Board of Directors of the Company.
[Signatures on following page]
7
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: May 31, 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. 5 TO SCHEDULE 13D
WITH RESPECT TO PDL BIOPHARMA, INC.]
Exhibit 99.1
[Third Point Letterhead]
May 31, 2007
Samuel Broder, M.D.
Ms. Karen A. Dawes
Mr. Bradford S. Goodwin
Laurence Jay Korn, Ph.D.
Richard Murray, Ph.D.
John S. Saxe, Esq.
L. Patrick Gage, Ph.D
Mr. Mark McDade
PDL BioPharma, Inc.
34801 Campus Drive
Fremont, CA 94555
Dear PDLI Board Members:
As you know, in our private letter to you three weeks ago we urged the Board to
promptly act in the best interest of PDL BioPharma, Inc. ("PDLI" or the
"Company") and its shareholders and toward that end;
o terminate Mark McDade's employment as Chief Executive Officer,
o add three shareholder representatives to the PDLI Board, and
o retain an investment bank to explore strategic alternatives for the
Company.
Last week, in a follow-up letter, we reiterated these demands to the six
unconflicted Board members, asking them to act expeditiously for the benefit of
all PDLI shareholders. In addition, we called for the termination of L. Patrick
Gage as Chairman and Jeanmarie Guenot as head of business development for the
reasons spelled out in that letter. We have yet to hear back from you regarding
any of these demands.
We trust that your silence is the result of an assiduous and expeditious effort
on the part of the Board to conduct its own thorough investigation into the very
serious concerns we and others have raised. As you know, these concerns are over
potentially significant ethical breaches by Mr. McDade, and circumstances where
Mr. McDade appears to have elevated his personal interests above the best
interests of PDLI's shareholders. In doing so, he may have damaged shareholder
interests and destroyed shareholder value. In our view, and in the view of many
other PDLI shareholders, these issues render Mr. McDade unsuitable to continue
to serve as PDLI's CEO.
Board of Directors
PDL BioPharma, Inc.
May 31, 2007
Page 2
Equally concerning, despite repeated assurances from Mr. McDade and Dr. Gage
over the past month that our four Board candidates would be contacted shortly by
the Company's nominating committee or its representatives, not one of these
candidates has yet heard from PDLI (nor have any of the references for these
candidates, supplied to Mr. McDade two months ago, been contacted). Today, we
would like to add a fifth candidate to our nominee list for the PDLI Board -
Jean-Jacques Bienaime, Chief Executive Officer of BioMarin Pharmaceutical Inc.,
and request that he be one of the three shareholder nominees added to the PDLI
Board (along with two of our other four candidates). Mr. Bienaime recently
contacted Third Point to offer to join the PDLI Board and shared our concerns
that company mismanagement is obscuring significant asset value. As you know,
Mr. Bienaime is a highly-respected executive in the industry, and in sharp
contrast to Mr. McDade, has a demonstrated track record of turning around
underperforming companies, commercializing products, and, most importantly,
creating significant value for shareholders at the companies that he has
managed. Specifically, Mr. Bienaime sold Genencor International roughly 2 1/2
years after taking over as CEO of that company, resulting in an almost 100%
return for shareholders during his tenure there, and BioMarin's stock has nearly
tripled during his two years as CEO of that company. In sharp contrast, during
this same period, Mr. McDade bankrupted Signature Bioscience and significantly
harmed value for PDLI shareholders as we have well documented in our previous
correspondence. (Mr. Bienaime's competence and value creating abilities are well
known to Dr. Gage; Flagship Ventures, where Dr. Gage is a venture partner,
installed Mr. Bienaime as a director of one of its portfolio companies.) Given
his impressive credentials, we trust you will support Mr. Bienaime's candidacy.
Again, we extend our invitation to all un-conflicted directors to contact us
directly so we may share in an unfiltered fashion our concerns regarding Mr.
McDade, Dr.Gage and Ms. Guenot. We cannot overstate the importance of your
quickly pursuing all sources of information that can shed light on the serious
concerns we and others have raised about Mr. McDade's lack of performance and
his unsuitability to lead the Company at this critical time. Every day that Mr.
McDade continues to run PDLI, critical drug research is compromised, employee
morale deteriorates and shareholder value is impaired.
Sincerely,
/s/ Daniel S. Loeb
Daniel S. Loeb