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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

PDL BioPharma, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
69329Y104
(CUSIP Number)
Michael Colvin
Highland Capital Management, L.P.
Two Galleria Tower
13455 Noel Road, Suite 800
Dallas, Texas 75240
(972) 628-4100
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 7, 2007
(Date of Event Which Requires Filing of this Statement)

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

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 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).

 
 

 

                     
CUSIP No.
  
69329Y104 
   Page  
2 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

Highland Capital Management, L.P.
75-2716725
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  AF/OO
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  Delaware
       
  7   SOLE VOTING POWER
     
NUMBER OF   7,811,475
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   382,064
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   7,811,475
       
WITH 10   SHARED DISPOSITIVE POWER
     
    382,064
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  8,193,539
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  7.0%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  PN,IA

2

 

                     
CUSIP No.
  
69329Y104 
   Page  
3 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

Strand Advisors, Inc.
95-4440863
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  AF/OO
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  Delaware
       
  7   SOLE VOTING POWER
     
NUMBER OF   7,811,475
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   382,064
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   7,811,475
       
WITH 10   SHARED DISPOSITIVE POWER
     
    382,064
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  8,193,539
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  7.0%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  CO, HC

3

 

                     
CUSIP No.
  
69329Y104 
   Page  
4 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

James D. Dondero
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  AF/OO
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  United States
       
  7   SOLE VOTING POWER
     
NUMBER OF   7,811,475
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   382,064
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   7,811,475
       
WITH 10   SHARED DISPOSITIVE POWER
     
    382,064
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  8,193,539
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  7.0%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  IN, HC

4

 

                     
CUSIP No.
  
69329Y104 
   Page  
5 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

Highland Distressed Opportunities Fund, Inc. (1)
20-5423854
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   þ 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  WC
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  Delaware
       
  7   SOLE VOTING POWER
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   221,600
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER
     
    221,600
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  221,600
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  0.2%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  CO
(1) The Reporting Persons may be deemed to be the beneficial owners of the shares of the Issuer’s Common Stock beneficially owned by the other Reporting Persons. However, with respect to the matters described herein, no other Reporting Person may bind, obligate or take any action, directly or indirectly, on behalf of Highland Distressed Opportunities, Inc. The Reporting Person expressly disclaims membership in a group with respect to the Issuer or securities of the Issuer for the purpose of Section 13(d) or 13(g) of the Act.

5

 

                     
CUSIP No.
  
69329Y104 
   Page  
6 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

Highland Funds I, on behalf of its
Highland Equity Opportunities Fund Series (1)
20-4570552
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   þ 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  WC
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  Delaware
       
  7   SOLE VOTING POWER
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   31,800
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER
     
    31,800
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  31,800
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  0.1%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  OO
(1) The Reporting Persons may be deemed to be the beneficial owners of the shares of the Issuer’s Common Stock beneficially owned by the other Reporting Persons. However, with respect to the matters described herein, no other Reporting Person may bind, obligate or take any action, directly or indirectly, on behalf of Highland Equity Opportunities Fund. The Reporting Person expressly disclaims membership in a group with respect to the Issuer or securities of the Issuer for the purpose of Section 13(d) or 13(g) of the Act.

6

 

                     
CUSIP No.
  
69329Y104 
   Page  
7 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

Highland Multi-Strategy Onshore Master SubFund, L.L.C.
20-5237152
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  WC
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  Delaware
       
  7   SOLE VOTING POWER
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   128,664
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER
     
    128,664
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  128,664
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  0.1%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  OO

7

 

                     
CUSIP No.
  
69329Y104 
   Page  
8 
   of   
13 

 

           
1   NAMES OF REPORTING PERSONS

Highland Multi-Strategy Master Fund, L.P.
20-5237085
     
     
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
  (a)   o 
  (b)   o 
     
3   SEC USE ONLY
   
   
     
4   SOURCE OF FUNDS (SEE INSTRUCTIONS)
   
  AF/OO
     
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
   
  o
     
6   CITIZENSHIP OR PLACE OF ORGANIZATION
   
  Bermuda
       
  7   SOLE VOTING POWER
     
NUMBER OF   0
       
SHARES 8   SHARED VOTING POWER
BENEFICIALLY    
OWNED BY   128,664
       
EACH 9   SOLE DISPOSITIVE POWER
REPORTING    
PERSON   0
       
WITH 10   SHARED DISPOSITIVE POWER
     
    128,664
     
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
   
  128,664
     
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
   
  o
     
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
   
  0.1%
     
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
   
  PN/HC

8

 

This Amendment No. 1 to Schedule 13D is jointly filed by and on behalf of each reporting person to amend and/or supplement the Schedule 13D relating to shares of Common Stock of the Issuer filed by such reporting person with the Securities and Exchange Commission on October 29, 2007. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Schedule 13D. Except as otherwise provided herein, all Items of the Schedule 13D remain unchanged.
Item 3. Source and Amount of Funds or Other Consideration.
     Item 3 is amended and restated in its entirety as follows:
     The Reporting Persons have acquired an aggregate of 8,193,539 shares of Common Stock (the “Shares”), which are reported herein, in open market transactions for an aggregate purchase price of approximately $183,200,729, with a combination of funds from accounts managed by Highland Capital.
Item 4. Purpose of Transaction.
     Item 4 is amended to include the following letter attached hereto as Exhibit 3, which is incorporated herein by reference in its entirety.

Page 9 of 13

 

A copy of the letter is attached hereto as Exhibit 3 and incorporated herein by reference in its entirety.
Item 5. Interest in Securities of the Issuer.
     Sections (a), (b), (d) and (e) of Item 5 remain unchanged. Section (c) of Item 5 is amended and restated in its entirety as follows:
     (c) The following table describes transactions in the Common Stock that were effected during the past sixty days or since the most recent filing of Schedule 13D, whichever is less, by the persons named in response to paragraph (a) of this Item 5.
                                   
  Transaction
Date 		    Reporting
Person 		    Number of
Shares Acquired 		    Number of
Shares Disposed 		    Price Per
Share ($) 		    Description of
Transaction		  
  11/1/2007     Highland Capital     141,900           20.9168     Open Market  
  11/14/2007     Highland Capital     37,940           18.5088     Open Market  
  11/26/2007     Highland Capital     552,000           18.1198     Open Market  
  12/7/2007     Highland Capital     23,700           17.8087     Open Market  
  12/7/2007     Highland Capital     476,300           17.9404     Open Market  
  12/11/2007     Highland Capital     850,000           18.2476     Open Market  
 
Item 7. Material to be Filed as Exhibits.
     Item 7 is amended to include the following:
Exhibit 3     Letter from Highland Capital to the Issuer, dated December 10, 2007.

Page 10 of 13

 

SIGNATURES
     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: December 11, 2007
Highland Multi-Strategy Onshore Master SubFund, L.L.C.
By: Highland Multi-Strategy Master Fund, L.P., its managing member
By: Highland Multi-Strategy Fund GP, L.P., its general partner
By: Highland Multi-Strategy Fund GP, L.L.C., its general partner
By: Highland Capital Management, L.P., its sole member
By: Strand Advisors, Inc., its general partner
         
     
  By:   /s/  James D. Dondero    
    James D. Dondero, President   
       
 
Highland Multi-Strategy Master Fund, L.P.
By: Highland Multi-Strategy Fund GP, L.P., its general partner
By: Highland Multi-Strategy Fund GP, L.L.C., its general partner
By: Highland Capital Management, L.P., its sole member
By: Strand Advisors, Inc., its general partner
         
     
  By:   /s/  James D. Dondero    
    James D. Dondero, President   
       
 
Highland Funds I, on behalf of its
Highland Equity Opportunities Fund Series
By: Highland Capital Management, L.P., its manager
By: Strand Advisors, Inc., its general partner
         
     
  By:   /s/  James D. Dondero    
    James D. Dondero, President   
       
 
         
  Highland Distressed Opportunities Fund, Inc.
 		  
  By:   /s/  James D. Dondero    
    James D. Dondero, President   
       
 
Highland Capital Management, L.P.
By: Strand Advisors, Inc., its general partner
         
     
  By:   /s/  James D. Dondero    
    James D. Dondero, President   
       
 
         
  Strand Advisors, Inc.
 		  
  By:   /s/  James D. Dondero    
    James D. Dondero, President   
       
 
         
  James D. Dondero
 		  
  /s/  James D. Dondero    
     
     
 

Page 11 of 13