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What: Shares of PDL BioPharma (NASDAQ:PDLI) fell by as much as 19% today after the company released its second-quarter earnings report. Investors are heading for the exits on the news that the company's total revenue dropped by a whopping 85% year over year, combined with management's decision to eliminate the quarterly cash dividend payment.. 

So what: This ginormous drop-off in quarterly revenue, and resulting demise of the company's dividend program, isn't exactly a surprise, given that PDL lost the bulk of the royalties from its Queen patent licensing agreement with Roche's Genentech at the end of the first quarter of 2016. However, PDL's former yield of around 6% was perhaps the main reason why investors were willing to stick around following this game-changing event, as PDL lacks a traditional clinical pipeline and product portfolio that are the bread and butter of biopharma stocks. 

Now what: PDL's management has been searching for years for a way to replace around 86% of the company's revenue following the expiration of the Queen patents. But as this dismal earnings release clearly shows, they still have a long way to go in this effort.

Going forward, the company plans to use its remaining resources to make strategic investments and financing decisions in the hope of driving long-term growth and creating value for shareholders. Until the details of this strategic plan are known, however, investors may want to remain safety on the sidelines with this speculative biopharma stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.