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Precigen Reports Fourth Quarter and Year End 2019 Financial Results

Mar 02, 2020
- Company completed series of transactions to support tighter focus on healthcare -
- Quarterly GAAP revenues from continuing operations of $17.0 million and net loss attributable to Precigen of $169.2 million, of which $95.7 million was from discontinued operations and an additional $33.8 million was for non-cash charges related to continuing operations -

GERMANTOWN, Md., March 2, 2020 /PRNewswire/ -- Precigen, Inc. (Nasdaq: PGEN), a biopharmaceutical company specializing in the development of innovative gene and cell therapies to improve the lives of patients, today announced its fourth quarter financial results for 2019.

Recent Business Highlights:

  • The Company announced the appointment of Helen Sabzevari, PhD as President and CEO of Precigen and Randal J. Kirk as Executive Chairman effective as of January 1, 2020. The Company also changed its name to Precigen, Inc. from Intrexon Corporation and its Nasdaq stock symbol to PGEN from XON effective February 1, 2020;
  • The Company closed sales of a number of its assets for an aggregate of $65.2 million and sold $35 million of its common stock in January 2020, thereby alleviating the going concern qualification associated with its 2019 consolidated financial statements as well as further streamlining corporate focus;
  • The Company sold its ownership stake in AquaBounty Technologies, Inc. (Nasdaq: AQB) in October 2019 for proceeds of $21.6 million;
  • Precigen announced that the US Food and Drug Administration (FDA) granted orphan drug designation (ODD) to PRGN-3006, a first-in-class investigational therapy using Precigen's non-viral UltraCAR-T™ therapeutic platform for patients with relapsed or refractory acute myeloid leukemia (AML) and higher risk myelodysplastic syndromes (MDS) (clinical trial identifier: NCT03927261);
  • Precigen ActoBio, Inc., a wholly-owned subsidiary of Precigen, collaboration partner Oragenics, Inc. (NYSE American: OGEN) completed enrollment in the Phase 2 trial of AG013, an easy to use oral rinsing system designed to prevent and treat oral mucositis; and
  • Triple-Gene LLC, a majority-owned subsidiary of Precigen, completed the Phase 1 trial enrollment and reported preliminary data of its investigational multigenic gene therapy INXN-4001 for the treatment of heart failure.

Fourth Quarter 2019 Financial Highlights:

  • Total revenues from continuing operations of $17.0 million;
  • Net loss of $169.2 million attributable to Precigen, or $(1.09) per basic share, of which $95.7 million was from discontinued operations and an additional $33.8 million was for non-cash charges related to continuing operations; and
  • Cash, cash equivalents, and short-term investments for continuing operations totaled $75.1 million at December 31, 2019.

Full Year 2019 Financial Highlights:

  • Total revenues from continuing operations of $90.7 million;
  • Net loss of $322.3 million attributable to Precigen, or $(2.09) per basic share, of which $116.2 million was from discontinued operations and an additional $70.4 million was for non-cash charges related to continuing operations.

"I am confident that we will make important advances this year in our mission to improve patient care through innovative gene and cell therapies," said Dr. Sabzevari.  "We enter 2020 with cash resources that we believe are sufficient for us to deliver on several value-creating milestones during the year across our clinical pipeline. At the same time, we are laser-focused on aligning our portfolio, streamlining operations and maximizing organizational structures to improve operational efficiency going forward."

Fourth Quarter 2019 Financial Results Compared to Prior Year Period

Total revenues decreased $24.2 million from the quarter ended December 31, 2018. Collaboration and licensing revenues decreased $24.6 million, or 103%, from the quarter ended December 31, 2018 primarily due to the reacquisition of rights previously licensed to some of Precigen's collaborators in the second half of 2018 and the result of which eliminated or substantially reduced revenues previously generated from those collaborations. Additionally, collaboration and licensing revenues from collaborations with other collaborators decreased due to lower demand for research and development services in the current year period.

Research and development expenses decreased $252.2 million, or 92%. The 2018 amounts include a $228.0 million expense related to in-process research and development reacquired from former collaborators. Selling, general and administrative (SG&A) expenses increased $6.3 million, or 28% which was primarily attributable to increased compensation expenses related to performance and retention incentives for SG&A employees, partially offset by (i) decreased share-based compensation expense which arose primarily from the departure of former employees during the first half of the current year; and (ii) fewer legal fees associated with the Company's Trans Ova subsidiary. The Company also recorded a $29.6 million goodwill impairment charge in the fourth quarter of 2019 related to its Trans Ova subsidiary.

Full Year 2019 Financial Results Compared to Prior Year Period

Total revenues decreased $60.5 million from the year ended December 31, 2018. Collaboration and licensing revenues decreased $55.5 million, or 80%, from the year ended December 31, 2018 primarily due to the reacquisition of rights previously licensed to some of Precigen's collaborators in the second half of 2018 and the result of which eliminated or substantially reduced revenues previously generated from those collaborations. Additionally, in 2018, the Company recognized additional revenues from the acceleration of previously deferred revenue upon mutual termination of certain collaborations. Product revenues decreased $4.7 million, or 17%, primarily due to lower customer demand in the beef and dairy industries resulting in fewer sales of pregnant cows and calf products. Gross margin on products also declined in the current period as a result of fewer products sold.

Research and development expenses decreased $264.4 million, or 72%. The 2018 amounts include $236.7 million of expenses related to in-process research and development reacquired from former collaborators. SG&A expenses decreased $24.9 million, or 20%. SG&A salaries, benefits, and other personnel costs decreased $14.9 million primarily due to decreased share-based compensation expense as a result of the reversal of previously recognized expense for unvested options granted to former employees as well as the conclusion of the vesting period for other previously granted stock options. Legal and professional fees decreased $6.1 million primarily due to fewer legal fees associated with the Company's Trans Ova subsidiary. The Company also recorded a $29.6 million goodwill impairment charge in the fourth quarter of 2019 related to its Trans Ova subsidiary.

Conference Call and Webcast

Precigen will host a conference call today Monday March 2nd at 5:30 PM ET to discuss the results and provide a general business update.  The conference call may be accessed by dialing 1-888-317-6003 (Domestic US), 1-866-284-3684 (Canada), and 1-412-317-6061 (International) and providing the number 4230814 to join the Precigen Conference Call.  Participants may also access the live webcast through Precigen's website in the Events section at https://investors.precigen.com/press-events/event-calendar

Precigen: Advancing Medicine with Precision

Precigen (Nasdaq: PGEN) is a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cell therapies using precision technology to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. Our technologies enable us to find innovative solutions for affordable biotherapeutics in a controlled manner. Precigen operates as an innovation engine progressing a preclinical and clinical pipeline of well-differentiated unique therapies toward clinical proof-of-concept and commercialization. For more information about Precigen, visit www.precigen.com or follow us on Twitter @Precigen and LinkedIn.

Trademarks

Precigen, UltraCAR-T, and Advancing Medicine with Precision are trademarks of Precigen and/or its affiliates. Other names may be trademarks of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

Some of the statements made in this press release are forward-looking statements. These forward-looking statements are based upon the Company's current expectations and projections about future events and generally relate to plans, objectives, and expectations for the development of the Company's business, including the timing and progress of preclinical and clinical trials and discovery programs, the promise of the Company's portfolio of therapies, the Company's refocus to a healthcare-oriented business, and its continuing evaluation of options for the Company's non-healthcare businesses. Although management believes that the plans and objectives reflected in or suggested by these forward-looking statements are reasonable, all forward-looking statements involve risks and uncertainties and actual future results may be materially different from the plans, objectives and expectations expressed in this press release. The Company has no obligation to provide any updates to these forward-looking statements even if its expectations change. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For further information on potential risks and uncertainties, and other important factors, any of which could cause the Company's actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in the Company's most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission.

For more information, contact:


Investor Contact:

Steven Harasym

Vice President, Investor Relations

Tel: +1 (301) 556-9850

investors@precigen.com   

Corporate Contact:

Marie Rossi, PhD

Vice President, Communications

Tel: +1 (301) 556-9850

press@precigen.com 


 

 


Precigen, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)


(Amounts in thousands)


December 31, 2019



December 31, 2018

Assets








Current assets








Cash and cash equivalents


$

65,793



$

96,876

Restricted cash






6,987

Short-term investments



9,260




119,614

Equity securities






384

Receivables








Trade, net



20,650




21,179

Related parties, net



600




4,129

Other, net



4,978




1,257

Inventory



16,097




20,575

Prepaid expenses and other



6,444




5,327

Current assets held for sale



110,821




9,155









Total current assets



234,643




285,483

Equity securities, noncurrent






640

Property, plant and equipment, net



60,969




86,896

Intangible assets, net



68,346




88,962

Goodwill



63,754




93,627

Investments in affiliates



1,461




2,139

Right-of-use assets



25,228




Other assets



1,362




2,069

Noncurrent assets held for sale






156,361









Total assets


$

455,763



$

716,177





Current liabilities








Accounts payable


$

5,917



$

11,973

Accrued compensation and benefits



14,091




9,955

Other accrued liabilities



12,049




19,005

Deferred revenue



5,697




11,088

Lines of credit



1,922




466

Current portion of long-term debt



31,670




479

Current portion of lease liabilities



4,182




Related party payables



51




256

Current liabilities held for sale



47,333




8,340









Total current liabilities



122,912




61,562

Long-term debt, net of current portion



186,321




211,216

Deferred revenue, net of current portion



48,136




46,728

Lease liabilities, net of current portion



23,849




Deferred tax liabilities, net



2,834




3,856

Other long-term liabilities






3,135

Long-term liabilities held for sale






10,958









Total liabilities



384,052




337,455









Commitments and contingencies








Total equity








Common stock






Additional paid-in capital



1,752,048




1,722,012

Accumulated deficit



(1,652,869)




(1,330,545)

Accumulated other comprehensive loss



(27,468)




(28,612)









Total Precigen shareholders' equity



71,711




362,855

Noncontrolling interests






15,867









Total equity



71,711




378,722









Total liabilities and total equity


$

455,763



$

716,177

 

 

Precigen, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)


(Amounts in thousands, except
share and per share data)



Three months ended



Year ended



December 31,



December 31,



2019



2018



2019



2018














Revenues













Collaboration and licensing revenues


$

(658)


$

23,947


$

14,059


$

69,540

Product revenues



5,297



4,974



23,780



28,486

Service revenues



12,096



12,040



51,803



52,419

Other revenues



267



231



1,080



733

Total revenues



17,002



41,192



90,722



151,178














Operating Expenses













Cost of products



7,800



7,531



31,930



35,087

Cost of services



7,611



6,462



29,471



27,589

Research and development



21,035



273,229



101,879



366,248

Selling, general and administrative



28,358



22,089



100,844



125,751

Impairment loss



30,184





30,810



Total operating expenses



94,988



309,311



294,934



554,675

Operating loss



(77,986)



(268,119)



(204,212)



(403,497)














Other Income (Expense), Net













Unrealized and realized appreciation (depreciation)
  in fair value of equity securities and preferred
  stock, net



5,221



(2,255)



8,291



(28,273)

Interest expense



(4,542)



(4,307)



(17,666)



(8,473)

Interest and dividend income



603



1,758



3,871



19,017

Other income (expense), net



2,774



(65)



3,445



470

Total other income (expense), net



4,056



(4,869)



(2,059)



(17,259)

Equity in net loss of affiliates



(473)



(913)



(2,416)



(8,986)

Loss from continuing operations before income
  taxes



(74,403)



(273,901)



(208,687)



(429,742)

Income tax benefit (expense)



905



(686)



930



15,425

Loss from continuing operations


$

(73,498)


$

(274,587)


$

(207,757)


$

(414,317)

Loss from discontinued operations, net of income
  tax benefit



(95,717)



(67,135)



(116,159)



(100,389)

Net loss


$

(169,215)


$

(341,722)


$

(323,916)


$

(514,706)

Net loss attributable to the noncontrolling interests





1,257



1,592



5,370

Net loss attributable to Precigen


$

(169,215)


$

(340,465)


$

(322,324)


$

(509,336)

Amounts Attributable to Precigen













Net loss from continuing operations attributable to
  Precigen


$

(73,498)


$

(273,330)


$

(206,165)


$

(408,947)

Net loss from discontinued operations attributable
  to Precigen



(95,717)



(67,135)



(116,159)



(100,389)

Net loss attributable to Precigen


$

(169,215)


$

(340,465)


$

(322,324)


$

(509,336)

Net Loss per Share













Net loss from continuing operations attributable to
  Precigen per share, basic and diluted


$

(0.47)


$

(2.08)


$

(1.34)


$

(3.16)

Net loss from discontinued operations attributable
  to Precigen per share, basic and diluted



(0.62)



(0.51)



(0.75)



(0.77)

Net loss attributable to Precigen per share, basic
  and diluted


$

(1.09)


$

(2.59)


$

(2.09)


$

(3.93)

Weighted average shares outstanding, basic and
  diluted



155,230,741



131,532,851



154,138,774



129,521,731

 

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SOURCE Precigen, Inc.