The wonders of compounding are comical when viewed over short durations. Since I wrote about and subsequently purchased Facet Biotech (FACT) in February my CAGR is 5,633%, which is good but utterly pathetic compared to my 14,151,664% CAGR on LUK.

Being a control freak I eschew package software for my finances and portfolio management and there is zero chance I’d trust a web based package. I use Excel and due to the lack of integration to most banks and investment accounts, I know exactly what is going in and coming out. Plus I can forever tweak it to show me what I want. Hey what do you expect from a guy who consulted for SAP for ten years, it vill verk, it vill. That’s a long way of saying I display actual return along side CAGR. I focus on actual return for stocks owned less than a year and CAGR for stocks owned more than a year, but like seeing both side by side. For those that need to know LUK is up 21.5% and FACT is up 42.6%.

But what about Facet Biotech Q1 Results I sense you scream. Results were good and revealed a company in slightly better financial shape than I had anticpated, with reduced cash burn and improved focus on their oncology compounds. 

FACET BIOTECH PROVIDES 2009 FINANCIAL GUIDANCE AND LOWERS CASH UTILIZATION ESTIMATE

• The company anticipates cash utilization for 2009 of approximately $95 to $100 million, which is a reduction from the $110 million announced in January.
• Total revenues for the full year 2009 are expected to be $35 to $40 million, consisting of $30 to $35 million in collaboration revenues and approximately $5 million in other revenues.
• The company anticipates 2009 total costs and expenses of $140 to $160 million, which includes $22 to $25 million of anticipated depreciation, amortization and stock-based compensation…
• Cash, cash equivalents and restricted cash of $403.4 million and Total Asset of $537.9M

With that cash and assets and 23,901,000 shares outstanding Facet had $16.88 cash and equivalents per share at year end. That’s 83% more than Thursday’s closing price of $9.22, a large margin of safety by anyone’s reckoning. Total assets weigh in at $22.50 per share. Importantly the cash represents four years of self funding, though it is highly doubtful I’ll still be a shareholder then. Going by Facet’s guidance and allowing for 5% dilution they will still have over $12 in cash and equivalents at the start of 2010. An investment in Facet today is still a net cash positive investment plus a free call on their early development stage pipeline of three oncology and one MS compound.

Transcript of 2008 Financial Results Webcast Conference Call 
Edited snips:

• our strategic plan is to advance our current pipeline and simultaneously build upon our key capabilities with a focus on oncology drug development
• We are also in the process of forming a scientific advisory board
• pursuing business development activities to augment our oncology-focused pipeline. It is clear that many opportunities exist in today’s environment.  Nonetheless, we are going to proceed carefully
• The preliminary data from phase 1 program for elotuzumab trials look encouraging from a safety and response perspective
• Also progressing in phase 1 is the PDL192 program in patients with advanced solid tumors. The trial is enrolling patients and Facet expect to provide a preliminary safety update later in the year
• Their third oncology candidate, volociximab, is being developed in collaboration with Biogen Idec. Volociximab is currently being tested in phase 1 trials in ovarian cancer and non-small cell lung cancer. Facet expect to provide an update on the program within the first half of this year.
• Also in partnership with Biogen Idec is Facet’s most clinically advanced program, daclizumab, currently in phase 2 study for multiple sclerosis. Now, while this program is outside of their stated future focus in oncology, it is a significant asset and presents opportunities for value creation. You will recall that Facet previously conducted and reported a successful phase 2 study – known as CHOICE – of daclizumab added to interferon therapy for MS. Facet’s partner, Biogen Idec, is now conducting an additional phase 2 trial – known as SELECT – which is evaluating daclizumab as a monotherapy in patients with relapsing MS.

More on Facet Biotech.

If any nerd/geek readers noticed my “cool” new html tags in this post, then I tip my hat to this great blog post at NetTuts+. For you norms, try mousing over the words with dotted lines.

Related posts:

1. Abbott Acquires Facet Biotech
2. What Does Klarman see in Facet Biotech?
3. Biogen wants Facet
4. Facet Biotech Update and Analysis
5. Baupost Ups Stake in Facet Biotech
6. Leucadia Q4 2009