By Benjamin Shepherd, Personal Finance

A major trend in the pharmaceuti­cal business has been toward tailor­ing treatment to fit an individual pa­tient's biology and disease. As a result, advanced biotechnology has come to play an increasingly critical role in the health care sector.

PDL BioPharma (PDLI) owns a portfolio of patents covering the production of "humanized anti­bodies," which are a mixture of mouse and human components. Antibodies are the gendarmerie of our immune systems. Each antibody fights a particular sort of pathogenic invader by binding with specific pro­teins.

Using antibodies to fight specif­ic diseases has become a cornerstone of personalized medicine and the basis of several next-generation drugs for the treatment of cancer, multiple sclerosis and other diseases.

However, the antibodies used in those drugs are derived from mice, which means our immune systems of­ten recognize them as foreign invad­ers and destroy them.

That biologi­cal response can be overcome by PDL's process of humanization, which essentially reorganizes the antibod­ies' proteins into a more human form, thereby tricking an immune system into believing the mice antibodies be­long within the host.

Several major drug companies -- including Roche and Genentech, Wyeth (PFE) and Novartis (NVS) -- have licensed PDL's technology to produce block­buster drugs such as the cancer treat­ment Herceptin, the macular degenera­tive disease treatment Lucentis and the asthma drug Xolair.

The technology is also used to produce Perjeta, a breast cancer treatment that was approved in early June and is widely predicted to become a blockbuster drug with annual sales in excess of $1 billion.

Under licensing agreements, PDL collects a sliding percentage of drug sales based on total revenue gener­ated. PDL's revenues have grown an average of 22.4% over the past five years.

Annual revenue growth is expected to slow to about 13%, as the current slate of drugs in­corporating PDL's technology mature. However, it's unlikely that PDL won't strike new licensing deals, because a growing number of new drugs incorporate antibodies.

PDL is trading at its lowest valua­tion in several years, with a price-to-earnings ratio of 5.6. The company also offers an attractive 15-cent quar­terly dividend, which amounts to a yield of about 9%. PDL Bio­Pharma is a buy under $7.

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