Investors are looking favourably on troubled PDL BioPharma, which has been selling off its assets but has now announced a $502 million special cash dividend to shareholders and a spin-off of its biotechnology operations.

The California-based company, which last year put itself up for sale but failed to attract any suitable bids, saw its shares rise 4% after the board declared the special dividend ($4.25 per share held) following receipt of the proceeds from recent sales of certain products, and a manufacturing facility. In December, PDL sold the rights to the oncology drug IV Busulfex (busulfan) to Japan’s Otsuka Pharmaceutical Co for $200 million in cash, while Denmark’s Genmab is paying $240 million in order to acquire an antibody manufacturing facility from the firm.

The company has also decided to separate the antibody drug royalties it receives from its biotechnology operations so that “investors can realise the value of each asset fully and independently”. PDL receives royalties on sales of eight high-profile humanised antibodies, including Genentech’s cancer drugs Avastin (bevacizumab) and Herceptin (trastuzumab), Xolair (omalizumab) for severe asthma and Lucentis (ranibuzumab) for wet age-related macular degeneration.

PDL said it expects to capitalise the new company with around $375 million of cash which, along with potential milestone payments and other royalties and payments, would fund the biotechnology spin-off for about three years, based on current operating plans. The company has forecast 2008 antibody royalty revenue of $240 million to $260 million, up from $221 million in 2007.