Facet Biotech Corp. (FACT) is a biotechnology company that identifies and develops oncology therapeutics. The Company has four clinical stage monoclonal antibodies: Daclizumab, Volociximab, Elotuzumab, and PDL192. In addition to developing its clinical-stage products, the Company focuses on leveraging its research and development capabilities to identify and develop new oncology drugs and applying its proprietary next-generation protein engineering technologies to improve the clinical performance of protein therapeutics.

The Company was launched in December 2008 as a spin-off from PDL BioPharma Inc. and is headquartered in Redwood City, California.

Source: Google Finance.

FACT reported a net loss for the three months ended June 30, 2009, of $40.8 million ($1.71 per share), as compared to a net loss of $49.7 million ($2.08 per share) for the three months ended June 30, 2008.

Operating Results

The Company’s total revenues for the three months ended June 30, 2009, were $10.6 million, as compared to $2.0 million in the same period in 2008. The increase was primarily the result of revenue recognized under FACT’s collaboration with Bristol-Myers Squibb Company (NYSE: BMY), which it entered into in the third quarter 2008. Total costs and expenses for the three months ended June 30, 2009, were $52.9 million, a 3.3% increase over the year. As part of a restructuring plan initiated in January 2009, the Company incurred $16.9 million in restructuring charges after it vacated a portion of leased space in its corporate headquarters. The restructuring charges were partially offset by a $12.8 million reduction in research and development, and general and administrative expenses. Reductions in these expenses were primarily due to reduced personnel-related expenses related to the Company’s restructuring plan.

Liquidity and Capital Resources

As of June 30, 2009, the Company’s cash, cash equivalents, marketable securities and restricted cash totaled $371.1 million. During the three months ended June 30, 2009, the Company used $12.3 million in cash. The Company’s future capital needs will depend on the progress of developing and commercializing its potential products and the level of additional R&D and clinical trial support provided by its collaborators and other third parties. In order to develop and obtain regulatory approval for its potential products, the Company will need to raise substantial additional funds through equity or debt financings, collaborative or out-licensing arrangements, or other means

Outlook

The Company anticipates that it will use approximately $80 million in cash for 2009. FACT also expects to receive a $30 million milestone payment from Biogen Idec. (Nasdaq: BIIB) related to the start of a phase III trial for Daclizumab in 2010. The Company predicts that its total costs and expenses will range between $155 million to $165 million for 2009, which includes $22 million to $25 million related to depreciation, amortization and stock-based compensation and $22 million in total restructuring impairment charges.

Analysts polled by Thompson Reuters rate FACT as a “Buy” with one analyst rating the stock as a “Buy,” the same number as three months ago.

Biogen Takeover Bid

On September 8, 2009, FACT rejected an unsolicited takeover bid from BIIB for $356 million, stating that the offer was “inadequate.” BIIB offered to pay the Company $14.50 a share on September 4, 2009, a 64% premium over the market price. The Company said that the offer only represented cash on its balance sheet and did not attribute any value to Daclizumab or to the rest of the Company’s existing R&D pipeline and platform. The decision to reject the bid caused FACT’s share price to rise 11%, which could suggest that investors expect a higher offer in the future.

BIIB initially offered FACT $15 a share on August 21, 2009, which FACT rejected on August 25, 2009. On August 28, 2009, FACT announced that it signed a $186.5 million in-licensing deal with Trubion Pharmaceuticals Inc. (Nasdaq: TRBN) for TRU-016, a phase I drug for chronic lymphocytic leukemia (CLL). BIIB said the agreement reduces the value of FACT and noted that FACT’s share prices fell substantially after the announcement of the collaboration.

Daclizumab Developments

On August 3, 2009, FACT announced that, along with its partner BIIB, it would continue planning for the phase III trial of Daclizumab in multiple sclerosis (MS). FACT and BIIB expect to initiate the trial during the first half of 2010. FACT also plans to request an assessment from the U.S. Food and Drug Administration (FDA) that the trial meets the organization’s approval. According to some estimates, milestone payments from BIIB to FACT related to the phase III trial could be as high as $200 million.

Source: http://stockcharts.com/h-sc/ui

Source: Google Finance, Reuters.com.

Net Share Purchase Activity

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