Spin-off will be seeded with $375 million, while the original PDL will retain the antibody licensing unit.

PDL BioPharma is spinning off its biotechnology R&D operations to concentrate on its antibody licensing franchise and will pay shareholders a $500 million dividend. In October the company began looking for a buyer but has since only managed to sell a part of its business, its cardiovascular segment, to EKR Therapeutics.

Shareholders will receive a cash dividend of $4.25 per share of common stock, financed by the EKR deal and the sale of PDL’s biologic manufacturing facility to Genmab. The EKR transaction is valued at $170 million, while PDL received $240 million from Genmab.

PDL plans to capitalize the new company with approximately $375 million in cash at the completion of the transaction, expected by the end of this year. This seed money along with other fees will fund the spin-off for approximately three years, according to PDL. Anticipated future payments include potential milestone fees and certain royalties.

The original PDL will focus on its antibody humanization royalty assets. The company plans to distribute future related revenues, net of any operating expenses, debt service, and income taxes, to its stockholders and does not intend to make any acquisitions or engage in any material capital expenditures. The firm says that it will require a nominal number of employees to continue this business.

PDL anticipates 2008 royalty revenues to be $240 million to $260 million, up from $221.1 million in 2007. Earnings are related to antibody products including Avastin, Herceptin, Xolair, Raptiva, Lucentis, Synagis, Tysabri, and Mylotarg.

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