  We present two XMM-Newton observations of the luminous (L_x > 10^46 erg/s),
radio-quiet quasar, PG 1407+265, separated by eleven months. The data indicate
two distinct states: a highly variable, bright state (first epoch); and a
quiescent, low-flux one (second epoch). During the low-flux state the spectrum
is consistent with a single, unabsorbed power law. However, during the brighter
state a highly variable, steep component is statistically required.
Contemporaneous UV data from the Optical Monitor allow an estimate of the
optical-to-X-ray spectral index (alpha_ox), which appears typical of
radio-quiet quasars during the low-flux state, but extremely flat during the
high-flux state. The XMM-Newton data can be described as originating from a
combination of jet and accretion disc processes, in which the (relativistic)
X-ray jet only works intermittently. The scenario could help describe some of
the complexities seen in the broadband spectral energy distribution of PG
1407+265, such as weak high-ionisation emission lines, strong Fe II, unbeamed
continuum, and the weak radio emission relative to the optical.
