Mark McDade won”t resign. Instead, he’s heading off for the San Francisco Bay.

That’s how the chief executive at PDL BioPharma is coping with the stress caused by Daniel Loeb, who runs Third Point LLC, a hedge fund and the company’s largest shareholder. He’s been after McDade to resign for weeks.

In his usual brazen way, Loeb has been questioning McDade’s decision to spend $100 million to move PDL headquarters from Fremont, California, to nearby Redwood City, which - can you believe it? - will be closer to his home. There’ll also be a lovely boat slip for a…kayak.

In a statement last month, Loeb called the move an example of “McDade’s empire-building philosophy, pathological selfishness and poor business judgment.” He’s also accused McDade of rejecting a takeover bid from a drugmaker for more than $30 a share, or 50 percent more than the stock price at the time.

For the first time since Loeb’s tonguelashing, McDade defended himself. He admits his adversaries have “valid concerns,” but tells Bloomberg News that he has “very strong support from the board…the board has never had a greater sense of urgency than it has today. We have changed. You’ll see more and more transparency, so investors can see exactly where we put our bucks.”

He also maintains that PDL is responding by reviewing spending practices and recruiting another director. Meanwhile, PDL Chairman L. Patrick Gage said in a letter May 16, filed with the Securities and Exchange Commission, that the board wants to continue to exchange ideas in a “productive fashion” and asks that Loeb “not include personal allegations and other distractions that are detrimental to building the value of our company.”

Gage said in his letter he continues to provide “firm support” for McDade and the company’s management team. And he wrote that the board is investigating allegations that McDade put his personal interests ahead of the company’s welfare.

“I love what I’m doing,” says McDade (that’s him to the right). “The company is in great shape. As long as the board wants me, I’m here for the long haul.

But Loeb’s activism has attracted followers, Bloomberg reports. In a May 7 letter to the board, PDL co-founder Cary Queen wrote that he credits Loeb for a recent gain in PDL’s stock price. PDL, he wrote, suffers from a “lack of focus that has led to critical product development delays, out-of-control spending and an especially ill-considered acquisition of ESP Pharma” in 2005

The personal attacks “are not healthy,” retorts McDade, who can practically hear the waves lapping around his kayak. “It’s a great way to blow off steam; there’s no IPod, I can just listen to nature.”

You can read more about McDade’s questionable judgement here.
And you can read more about Dan Loeb’s sharp tongue here.

Source: Bloomberg News[tags]Daniel Loeb, Mark McDade, PDL BioPharma, Third Point[/tags]