Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: PDL BioPharma, (Nasdaq: PDLI) popped 19% in intraday trading today after announcing plans to begin paying a quarterly dividend of $0.15 per share and an agreement with Novartis AG (NYSE: NVS) that resolves a legal dispute between the two companies.

So what: Novartis markets an eye-care drug that uses patented PDLI technology in Europe. Novartis has agreed not to challenge PDLI's patent in Europe, while PDLI has agreed to pay Novartis a portion of European sales of the drug.

Now what: The Novartis agreement reduces risk to the outlook and provides potential for higher sales in Europe. Initiating a dividend, which management teams hate to cancel, signals confidence in PDLI's outlook. On a less positive note, PDLI remains in a legal dispute with its US marketing partners and has missed consensus EPS estimates for four consecutive quarters. The stock appears compelling at a P/E ratio of 5.6x, but the risks are high.

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