Regulation FD

As previously disclosed, PDL BioPharma, Inc. (the Company) extended waivers through November 30, 2016 under the credit agreement between the Company and Direct Flow Medical, Inc. (Direct Flow Medical) related to certain defaults of Direct Flow Medical pursuant to the credit agreement. During this waiver period, the Company explored its options while Direct Flow Medical continued to seek additional financing. Late in the morning, Pacific Standard Time, on November 16, 2016, Direct Flow Medical advised the Company that its potential additional financing source had significantly modified its financing proposal, changing from an equity investment to a loan in a substantially lower amount and proposing other less favorable terms. The Company is evaluating its alternatives regarding its in vestment in Direct Flow Medical in light of this development. The Company may elect to initiate foreclosure proceedings with respect to Direct Flow Medicals assets that secure the Direct Flow Medical loan. If it does so, there is no assurance as to the value the Company may realize upon foreclosure, and it is likely the investment will be further impaired, resulting in a write down of a portion or all of the value of the investment.

Limitation of Incorporation by Reference

In accordance with General Instruction B.2. of Form 8-K, the information in this report is furnished pursuant to Items 7.01 and shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended or the Exchange Act.

Cautionary Statements

This filing includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could impair the Companys royalty assets or business are disclosed in the Risk Factors contained in the Companys Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 23, 2016, as updated by subsequent periodic filings. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.


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




/s/ Peter S. Garcia

Peter S. Garcia

Vice President and Chief Financial Officer


November17, 2016

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