Facet Biotech Corporation (NASDAQ: FACT) today reported financial
results for the fourth quarter and full year ended December 31,
2009.
"In our first full year as an independent company, we made
significant progress on each of our strategic objectives by
advancing key pipeline programs into later stages of development;
transitioning our proprietary next-generation protein engineering
platform technologies to become a potential revenue source; and
acquiring the rights to TRU-016, a candidate with encouraging
clinical data in oncology and promise in multiple sclerosis, all
while demonstrating financial discipline," said Faheem Hasnain,
president and chief executive officer of Facet Biotech. "2010 will
be an important year for the company, as we set the stage for
important value inflection points for the daclizumab, elotuzumab
and TRU-016 programs that we expect will unfold within the next two
years. Supported by a strong balance sheet that will enable us to
achieve these milestones and fund our programs through the end of
2012, we are confident in our ability to create significant
long-term value for our stockholders."
Summary of Financial Results
The financial results for the fourth quarter and full year ended
December 31, 2009 represent the fourth full quarter and first full
year of operations for Facet Biotech as an independent company
since its spin-off from PDL BioPharma, Inc. (PDL) on December 18,
2008. The results for the fourth quarter and full year ended
December 31, 2008 are comprised of the results of PDL's former
biotechnology operations, which were derived from PDL's historical
consolidated financial statements, prior to the spin-off.
-- Total revenues for the fourth quarter of 2009 were $15.1 million
compared to $6.7 million in the same period of 2008. Total revenues
for the full year 2009 were $46.1 million compared to $18.3 million
for the prior year. The increases in revenues for both the fourth
quarter and full year 2009 were primarily due to higher collaboration
revenues related to the company's collaboration with Bristol-Myers
Squibb Company, which was entered into in the third quarter of 2008,
and an increase in royalties from EKR Therapeutics, Inc. related to
sales of pre-mixed bag formulations of Cardene®, which first
generated royalties in the fourth quarter of 2008.
-- Total costs and expenses for the fourth quarter of 2009 were
$45.1 million compared to $56.2 million in the comparable 2008 period.
Total costs and expenses for the full year 2009 were $189.7 million
compared to $178.3 million for 2008.
-- R&D expenses were $25.9 million for the fourth quarter of 2009
compared to $27.8 million for the same period of 2008. For the
full year 2009, R&D expenses decreased to $122.2 million from
$151.3 million in the prior year comparable period. The decreases
in R&D expenses for both periods in 2009 were primarily due to
lower personnel and related costs as a result of the company's
restructuring activities in 2008 and early 2009. In addition,
for the full year 2009 as compared to 2008, the company incurred
reduced manufacturing costs as a result of the sale of the
company's prior manufacturing facility in March 2008 and reduced
development program expenses. These decreases were partially offset
by $23.3 million in costs resulting from the company's
collaboration with Trubion Pharmaceuticals, Inc. that was entered
into in the third quarter of 2009, including the $20.0 million
upfront license payment made to Trubion in September 2009.
-- G&A expenses for the fourth quarter of 2009 were $10.2 million
compared to $11.3 million for the prior year comparable period.
G&A expenses for the full year 2009 were $38.1 million, a decrease
from $46.3 million for 2008. The decreases in G&A expenses for
both periods in 2009 were primarily due to lower personnel and
related costs as a result of the company's restructuring
activities in 2008 and early 2009, and legal, financial and
advisory costs incurred in 2008 related to the strategic
initiatives that culminated in the spin-off of the company
from PDL. These decreases were partially offset by $2.3 million
and $4.7 million, respectively, in G&A expenses incurred in the
three and 12 months ended December 31, 2009 in connection with
the unsolicited offers to acquire the company made by
Biogen Idec Inc.
-- Restructuring charges for the fourth quarter of 2009 were
$8.9 million compared to $1.0 million for the same period in 2008.
For the full year 2009, restructuring charges were $28.3 million
compared to $10.5 million for the full year 2008. Of the full
year 2009 charges, $24.3 million was related to the company's
idle capacity at its corporate headquarters and the balance was
primarily associated with personnel costs resulting from the
company's January 2009 restructuring activities. Of the full year
2008 charges, $10.2 million was related to personnel costs
resulting from the company's March 2008 restructuring activities.
-- Asset impairment charges in the fourth quarter of 2009 were
$38,000 compared to $16.1 million for the comparable period in
2008. Asset impairment charges for the full year 2009 were
$1.1 million compared to $19.9 million for 2008. The 2008 charges
primarily consisted of impairments of certain leasehold
improvements and idle equipment as a result of the company's post
spin-off restructuring activities and related facilities
consolidation.
-- The company recognized a gain of $49.7 million for the full year
2008 related to the sale of its former manufacturing facility.
-- Net loss for the fourth quarter of 2009 was $30.7 million, or
$1.27 per basic and diluted share, compared to a net loss of
$50.0 million, or $2.09 per basic and diluted share, for the
fourth quarter of 2008. Net loss for the full year 2009 was
$141.7 million, or $5.90 per basic and diluted share, compared to a
net loss of $161.8 million, or $6.77 per basic and diluted share,
for the full year 2008.
-- Cash, cash equivalents, marketable securities and restricted cash
totaled $307.2 million at December 31, 2009, a decrease from
$403.4 million at December 31, 2008. For the year ended
December 31, 2009, cash utilization was $96.2 million, which includes
the $20.0 million collaboration upfront license payment made to
Trubion in September 2009.
Recent Updates
-- In February 2010, Facet Biotech and its development partner,
Biogen Idec, announced the publication of the results of the CHOICE
trial, which was a phase 2, randomized study of daclizumab added to
interferon treatment in patients with relapsing multiple sclerosis
(MS). The manuscript was published in the online edition of
The Lancet Neurology on February 16, 2010 and will be published
in print in the April 2010 issue.
-- Separately, the SELECT monotherapy trial, the first of two
required registration-enabling trials for the daclizumab MS
program, continues to enroll patients, and the data readout
from this trial is expected in the second half of 2011. The
second registration-enabling trial, the DECIDE phase 3 trial,
is expected to be initiated in the second quarter of 2010.
Enrollment of the first patient into the DECIDE trial will
trigger a $30 million milestone payment to Facet Biotech from
Biogen Idec.
-- In January 2010, Facet Biotech announced enrollment of the first
patient into the randomized phase 2 portion of the ongoing phase
1/2 study of elotuzumab, an investigational humanized antibody being
studied for the treatment of relapsed multiple myeloma (MM) in
combination with lenalidomide and low-dose dexamethasone. As a
result, Facet Biotech received a $15 million milestone payment
from Bristol-Myers Squibb, its elotuzumab development partner. In the
phase 2 portion of this study, up to 60 patients with relapsed MM
will be randomized to receive elotuzumab at 10 or 20 mg/kg in
combination with lenalidomide and low-dose dexamethasone. The primary
endpoint is to evaluate objective response of the combination.
Additional endpoints include safety, pharmacokinetics and
pharmacodynamics. The study is expected to complete enrollment by
the end of 2010 and a decision whether to move the program forward
into phase 3 is expected to be made in the first half of 2011.
-- Separately, Bristol-Myers Squibb notified Facet Biotech that it
elected not to expand the existing collaboration between the two
companies to include PDL241, an investigational humanized antibody
in preclinical development for immunologic diseases. As a result
of this decision, Facet Biotech will not receive from
Bristol-Myers Squibb the $15 million opt-in payment or any of the
milestone payments related to this compound under Facet Biotech's
collaboration agreement with Bristol-Myers Squibb.
-- In December, Facet Biotech and its development partners announced
preliminary data from ongoing studies for elotuzumab, a humanized
antibody in development for MM, and TRU-016, a CD37-directed Small
Modular ImmunoPharmaceutical (SMIP™) protein therapeutic in
development for the treatment of B-cell malignancies, at the
American Society of Hematology (ASH) 2009 Annual Meeting in
New Orleans.
-- Facet Biotech and Bristol-Myers Squibb announced promising
preliminary data from an ongoing phase 1/2 study of elotuzumab
in combination with lenalidomide and low-dose dexamethasone in
patients with relapsed MM. The interim results, which were given
as an oral presentation, showed that of the 28 treated patients
in the trial, 23 patients (82 percent) had an objective response
(OR), defined as a partial response or better, by International
Myeloma Working Group (IMWG) criteria. In a subset of 22 patients
who had not previously received lenalidomide treatment,
21 patients (95 percent) achieved an OR. No dose-limiting
toxicities (DLT) were reported in the study up to the highest
dose level of 20 mg/kg and a maximum-tolerated dose (MTD)
was not established.
-- Facet Biotech and Bristol-Myers Squibb announced preliminary
results from an ongoing phase 1/2 study of elotuzumab in
combination with bortezomib in patients with relapsed MM.
The interim results, presented as a poster, showed that in
20 evaluable patients, 40 percent achieved an OR and 60 percent
achieved a clinical response, defined as minimal response or better
using the combined European Group for Blood and Marrow
Transplant (EBMT) and IMWG criteria. No DLTs were reported and
an MTD was not established. The company expects to report updated
data from this trial in 2010.
-- Facet Biotech and Trubion announced the presentation of positive
data from an ongoing phase 1 monotherapy study of TRU-016 in
patients with relapsed and refractory chronic lymphocytic
leukemia (CLL). Evidence of TRU-016's biological activity was seen
at the 0.3 mg/kg dose level and higher, including in high-risk
patients. Of the 33 patients evaluated, partial response was
observed in five patients, including one patient with the
chromosome 17p deletion, generally considered a high-risk
abnormality. Two patients with leukemia cutis experienced
clearing, one complete and one partial. At the 10 mg/kg dose,
four of five patients with elevated peripheral lymphocyte counts
were reduced to normal levels. The MTD has not yet been reached.
-- In December, Facet Biotech presented data at the 2009 IBC Antibody
Engineering and Therapeutics Conference in San Diego for the company's
proprietary next-generation protein engineering capabilities. These
capabilities include Facet Biotech's PxP technologies, which offer
the ability to efficiently and comprehensively map the entire antigen
binding site of an antibody to determine the tolerability to mutation
of each amino acid. This allows the identification of large numbers
of novel, higher affinity point mutations and the ability to reduce
immunogenicity, improve half-life and engineer cross-reactivity.
The data presented showed the utility of these technologies in
identifying multiple novel optimized variants of four commercial
antibodies: bevacizumab (Avastin®), cetuximab (Erbitux®),
adalimumab (Humira®) and omalizumab (Xolair®). Since then,
the company has identified multiple novel variants for a fifth
commercial antibody, trastuzumab (Herceptin®). As a result of
this work, the company has filed composition of matter patent
applications covering hundreds of engineered variants of these
five commercial antibodies.
-- In December, Biogen Idec's unsolicited conditional tender offer to
acquire all of the outstanding shares of common stock of Facet Biotech
was rejected by Facet Biotech's stockholders. As a result, the tender
offer expired on December 16, 2009. Biogen Idec initially filed
an unsolicited conditional tender offer on September 21, 2009 to
acquire all of the outstanding shares of common stock of Facet Biotech.
2010 Guidance
-- The company anticipates cash utilization for 2010 of approximately
$60 to $65 million, an improvement compared to the $96.2 million
cash utilization for 2009. The current cash utilization estimate
assumes the continued advancement of key pipeline programs, including
daclizumab, elotuzumab and TRU-016, and the company's protein
engineering technologies. In addition, the estimate reflects (1)
the $15 million milestone payment from Bristol-Myers Squibb for
the initiation of the phase 2 portion of the elotuzumab study that
was received in February 2010; (2) the expected receipt of the
$30 million milestone payment from Biogen Idec for the initiation
of the DECIDE phase 3 study for daclizumab; and (3) a $6 million
milestone payable to Trubion upon the initiation of a phase 2 study
for TRU-016. Based on the 2010 cash utilization estimate, the company
expects to have $242 to $247 million in cash, cash equivalents,
marketable securities and restricted cash at December 31, 2010.
-- Total revenues for 2010 are expected to be $70 to $78 million,
consisting of $65 to $68 million in collaboration revenues and
approximately $5 to $10 million in other revenues. The collaboration
revenues estimate includes the $45 million in inbound collaboration
milestone payments as described above; $11 to $14 million in revenues
related to reimbursement of R&D activities from the company's
collaboration with Bristol-Myers Squibb; and the recognition of
approximately $9 million of deferred revenue related to previously
received upfront and milestone payments under the company's
collaborations with Biogen Idec and Bristol-Myers Squibb.
-- The company anticipates 2010 total costs and expenses of
$151 to $163 million. The estimate includes $21 to $23 million of
anticipated depreciation, amortization and stock-based compensation.
The estimate for total costs and expenses does not include any
potential restructuring charges that the company may incur in 2010
related to changes in estimates for the existing lease restructuring
liability or any potential asset impairment charges that may result
from the outcome of the company's sublease efforts. For 2009,
total costs and expenses excluding restructuring and asset impairment
charges were $160.3 million.
The company's financial results conference call for the fourth
quarter will be accessible through the Investors section at
www.facetbiotech.com at 1:30 p.m., Pacific Time, on February 23,
2010. Supplemental information in the form of a slide presentation
will be accessible at the same location on the internet at the time
of the conference call.
Forward-looking Statements
This press release contains forward-looking statements,
including regarding Facet Biotech's
-- expectation that it will be able to fund its programs through
the end of 2012;
-- expected achievement of important value inflection points for the
daclizumab, elotuzumab and TRU-016 programs within the next two years;
-- expected initiation of the DECIDE phase 3 trial of daclizumab in MS
in the second quarter of 2010 and receipt of a $30 million milestone
payment from Biogen Idec, which would be triggered upon the enrollment
of the first patient in the DECIDE trial; and
-- expected cash utilization, total revenues, collaboration revenues,
other revenues, total costs and expenses, and depreciation,
amortization and stock-based compensation expense for 2010.
Each of these forward-looking statements involves risks and
uncertainties. Actual results may differ materially from those,
express or implied, in these forward-looking statements. Factors
that may cause differences between current expectations and actual
results include, but are not limited to, the following:
-- The development of its pipeline candidates, including daclizumab,
elotuzumab and TRU-016, could be adversely impacted by changes in
Facet Biotech's development plans or timelines, including because
of unexpected safety or efficacy data observed during clinical trials,
enrollment rates in clinical trials, changes in expected competition
and changes in regulatory support for the path towards registration.
As a result, the phase 3 trial of daclizumab in MS may not be
initiated in the second quarter of 2010 or at all, which would
adversely impact the receipt of or delay the receipt of the $30 million
milestone payment Facet Biotech would otherwise receive upon
enrollment of the first patient into the phase 3 study. The results
observed to date in clinical trials of Facet Biotech's pipeline
products may not be predictive of results that may be obtained in the
additional evaluations and studies that would be necessary to
demonstrate these development products to be effective as human
therapeutics with an acceptable safety profile.
-- Facet Biotech's revenue expectations depend in part on the success
of third parties from which Facet Biotech expects to receive royalty,
milestone and other payments.
-- Facet Biotech's ability to realize expected 2010 total costs and
expenses could be adversely impacted by changes in Facet Biotech's
development plans or timelines, enrollment rates in clinical trials,
unexpected litigation or other disputes and the occurrence of other
unexpected events that could affect anticipated costs and expenses.
Other factors that may cause Facet Biotech's actual results to
differ materially from those expressed or implied in the
forward-looking statements in this press release are discussed in
Facet Biotech's filings with the Securities and Exchange Commission
(SEC), including the "Risk Factors" sections of the Company's
periodic reports on Form 10-K and Form 10-Q filed with the SEC.
Copies of Facet Biotech's filings with the SEC may be obtained at
the "Investors" section of Facet Biotech's website at
www.facetbiotech.com. Facet Biotech expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in Facet Biotech's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based for any reason, except as
required by law, even as new information becomes available or other
events occur in the future. All forward-looking statements in this
press release are qualified in their entirety by this cautionary
statement.
About Facet Biotech
Facet Biotech is a biotechnology company dedicated to advancing
its pipeline of five clinical-stage products focused in multiple
sclerosis and oncology, leveraging its research and development
capabilities to identify and develop new oncology drugs and
applying its proprietary next-generation protein engineering
technologies to potentially improve the clinical performance of
protein therapeutics. For additional information about the company,
please visit www.facetbiotech.com.
NOTE: Facet Biotech and the Facet Biotech logo are considered
trademarks of Facet Biotech Corporation.
FACET BIOTECH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
REVENUES:
Collaboration $ 9,453 $ 6,464 $ 34,424 $ 15,002
Other 5,650 186 11,677 3,261
---------- ---------- ---------- ----------
Total revenues 15,103 6,650 46,101 18,263
COSTS AND EXPENSES:
Research and development
(1) 25,878 27,821 122,166 151,276
General and administrative
(1) 10,224 11,261 38,087 46,339
Restructuring charges 8,920 1,029 28,338 10,470
Asset impairment charges 38 16,118 1,066 19,902
Gain on sale of assets - - - (49,671)
---------- ---------- ---------- ----------
Total costs and
expenses 45,060 56,229 189,657 178,316
---------- ---------- ---------- ----------
Operating loss (29,957) (49,579) (143,556) (160,053)
Other income (expense), net 741 16 3,544 29
Interest expense (412) (415) (1,668) (1,708)
---------- ---------- ---------- ----------
Loss before income
taxes (29,628) (49,978) (141,680) (161,732)
Income tax expense
(benefit) 1,106 5 (10) 81
---------- ---------- ---------- ----------
Net loss $ (30,734) $ (49,983) $ (141,670) $ (161,813)
========== ========== ========== ==========
NET LOSS PER BASIC AND
DILUTED SHARE (2) $ (1.27) $ (2.09) $ (5.90) $ (6.77)
========== ========== ========== ==========
WEIGHTED-AVERAGE SHARES -
BASIC AND DILUTED (2) 24,269 23,901 24,023 23,901
========== ========== ========== ==========
(1) Amounts include
stock-based compensation
as follows:
Research and
development $ 679 $ (936) $ 5,351 $ 3,322
General and
administrative 734 (33) 3,265 2,326
---------- ---------- ---------- ----------
Total stock-based
compensation $ 1,413 $ (969) $ 8,616 $ 5,648
========== ========== ========== ==========
(2) For the 2008 periods presented, the computation of net loss per basic
and diluted share and the weighted-average shares outstanding
are based on 23.9 million shares that were issued in connection with
the spin-off on December 18, 2008.
CONSOLIDATED BALANCE SHEET DATA
(in thousands)
(unaudited)
December 31,
-------------------
2009 2008
--------- ---------
Cash, cash equivalents, marketable securities and
restricted cash $ 307,222 $ 403,418
Total assets $ 423,624 $ 538,021
Total stockholders' equity $ 306,523 $ 435,633
Contact: Jean Suzuki Investor Relations (650) 454-2648
jean.suzuki@facetbiotech.com
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