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Precigen Reports Second Quarter and First Half 2020 Financial Results

Aug 10, 2020
- Announced proprietary electroporation device, UltraPorator™, designed to scale-up UltraCAR-T® manufacturing at multiple medical centers -
 
- Announced positive topline results from Phase 1b study of AG019 ActoBiotics™ for type 1 diabetes -
 
- Met primary endpoints of safety and feasibility in Phase I study of INXN-4001 for heart failure -
 
- Guidance maintained for clinical readouts in 2020 -

GERMANTOWN, Md., Aug. 10, 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 second quarter and first half financial results for 2020.

Business Highlights:

  • UltraPorator: Precigen advanced the development of its proprietary electroporation device, UltraPorator, including the initiation of both the manufacturing of a cGMP-compliant system and the process of technology transfer to its clinical sites. UltraPorator is a semi-closed, high-throughput system with a proprietary hardware and software solution designed to significantly reduce processing time and contamination risk, limitations of other electroporation devices and hurdles to the viable scale-up and commercialization of certain therapeutic programs. The Company expects to implement the system at multiple medical centers for the expansion phases of PRGN-3005, PRGN-3006 and the future UltraCAR-T clinical trials;
  • PRGN-3005 UltraCAR-T®: Precigen initiated the dosing of patients in the third dose level of the intraperitoneal (IP) arm of the Phase 1 clinical trial of PRGN-3005 UltraCAR-T for treatment of advanced, recurrent platinum resistant ovarian, fallopian tube or primary peritoneal cancer (clinical trial identifier: NCT03907527). Preclinical data for PRGN-3005 UltraCAR-T presented at the American Association for Cancer Research (AACR) Virtual Annual Meeting II demonstrated significantly superior expansion, persistence and preferred memory phenotype of UltraCAR-T in vivo and significantly superior efficacy in an ovarian cancer model compared to traditional CAR-T;
  • AG019 ActoBiotics: Precigen ActoBio, Inc., a wholly-owned subsidiary of Precigen, announced the Phase 1b monotherapy portion of the ongoing Phase 1b/2a clinical trial for investigational therapy AG019 ActoBiotics met the primary endpoint assessing safety and tolerability in patients with early-onset type 1 diabetes (T1D) (clinical trial identifier: NCT03751007, EudraCT 2017-002871-24). The Phase 1b portion of the study evaluates safety and tolerability of 2 different doses of AG019 monotherapy, a capsule formulation composed of ActoBiotics delivering the autoantigen human proinsulin (hPINS) and the tolerance-enhancing cytokine human interleukin-10 (hIL-10). Preliminary results demonstrate an encouraging trend in C-peptide levels, a biomarker for T1D disease progression, as well as, an increase in the frequency of islet-specific Tregs, a potential mechanistic indicator of therapeutic activity; and
  • INXN-4001: Precigen Triple-Gene, a majority-owned subsidiary of Precigen, announced six-month follow-up data from the Phase I trial of INXN-4001 (clinical trial identifier: NCT03409627), a multigenic, non-viral, plasmid-based investigational therapeutic candidate under evaluation for the treatment of heart failure. The study met the primary endpoints to evaluate safety and feasibility for INXN-4001. INXN-4001, delivered via retrograde coronary sinus infusion (RCSI), was well-tolerated. Preliminary data suggest an overall improvement in patient reported outcomes in 50% of patients six months after treatment;

Second Quarter 2020 Financial Highlights:

  • Total revenues of $30.4 million;
  • Net loss of $43.4 million, or $(0.26) per basic share, of which $31.7 million was for non-cash charges; and
  • Cash, cash equivalents, and short-term investments totaled $133.0 million at June 30, 2020.

First Half 2020 Financial Highlights:

  • Total revenues of $60.3 million;
  • Net loss from continuing operations of $73.3 million, or $(0.45) per basic share, of which $40.4 million was for non-cash charges.

"Precigen has continued this quarter to streamline operations and focus efforts on delivering value to stakeholders through forward progress on our programs," said Helen Sabzevari, PhD, President and CEO of Precigen.  "In the clinic, we recently announced encouraging data from the AG019 Phase 1b monotherapy study in Type 1 diabetes and the INXN-4001 Phase I study of patients with chronic heart failure and expect additional results on these and other clinical programs in the coming months. Additionally, we are pleased to announce our proprietary UltraPorator manufacturing device, which we believe sets Precigen on the path to commercial viability for rapid decentralized manufacturing of UltraCAR-T at multiple medical centers."

Second Quarter 2020 Financial Results Compared to Prior Year Period

Total revenues declined $2.4 million from the quarter ended June 30, 2019 primarily due to a decline in Precigen's collaboration and licensing revenues as the Company continues to transition from a collaboration business model to a model where the Company develops and advances its most valuable healthcare products on its own. While Trans Ova's revenues were comparable period over period, gross margins on their products and services increased $1.3 million over the comparable prior quarter as a result of the implementation of operational efficiencies gained through improved inventory management, reduction in workforce, and lower royalty rates on certain licensed technologies.

Research and development expenses decreased $14.0 million, or 50%, from the quarter ended June 30, 2019. Salaries, benefits, and other personnel costs decreased $4.8 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter. Precigen's research and development expenses for third-party vendors decreased $7.8 million primarily as a result of the suspension of its MBP Titan operations and also depriortized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. Selling, general and administrative (SG&A) expenses decreased $0.5 million and include a decrease of $4.0 million in fees paid to third-party vendors as well as a reduction in salaries and benefits for corporate employees as Precigen reduced its corporate headcount by 25% from December 31, 2019 to June 30, 2020 as it scaled down the Company's corporate functions to support a more streamlined organization. These decreases were partially offset by an increase in compensation costs which primarily resulted from stock compensation expenses related to equity grants made in the first quarter of 2020 and one-time severance costs for terminated employees. In conjunction with the suspension of MBP Titan's operations in the second quarter of 2020, Precigen recorded $22.0 million in non-cash impairment charges related to the write-down of goodwill and long-lived assets.

First Half 2020 Financial Results Compared to Prior Year Period

Total revenues increased $4.8 million over the six months ended June 30, 2019 primarily due to an increase in Precigen's collaboration and licensing revenues as the Company accelerated the recognition of previously deferred revenue upon the mutual termination of one of its collaboration agreements in February 2020. This increase was partially offset by a decrease in collaboration revenues related to other programs as Precigen continues to transition from a collaboration business model to a model where it develops and advances its most valuable healthcare programs on its own. Trans Ova's revenues increased $1.3 million over the six months ended June 30, 2019 primarily due to an increase in services performed and the expansion of its commercial dairy business. Gross margins on their products and services increased $4.6 million over the comparable prior period as a result of the implementation of operational efficiencies gained through improved inventory management, reduction in workforce, and lower royalty rates on certain licensed technologies.

Research and development expenses decreased $22.1 million, or 40%, from the six months ended June 30, 2019. Salaries, benefits, and other personnel costs decreased $6.9 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter. Precigen's research and development expenses for third-party vendors decreased $12.8 million primarily as a result of the suspension of its MBP Titan operations and also depriortized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. SG&A expenses decreased $8.5 million and include a decrease of $7.9 million in fees paid to third-party vendors as well as a reduction in salaries and benefits for corporate employees as Precigen reduced its corporate headcount by 25% from December 31, 2019 to June 30, 2020 as it scaled down its corporate functions to support a more streamlined organization. These decreases were partially offset by an increase in compensation costs which primarily resulted from stock compensation expenses related to equity grants made in the first quarter of 2020 and one-time severance costs for terminated employees. In conjunction with the suspension of MBP Titan's operations in the second quarter of 2020, Precigen recorded $22.0 million of noncash impairment charges related to the write-down of goodwill and long-lived assets.

Conference Call and Webcast

Precigen will host a conference call today, Monday, August 10th at 4:30 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) or 1-412-317-6061 (International) and providing the number 6003292 to join the Precigen Conference Call.  Participants are asked to dial in 10-15 minutes in advance of the scheduled call time to facilitate timely connection to the call.  Participants may also access the live webcast through Precigen's website in the Events section at https://investors.precigen.com/press-and-events.

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, UltraPorator, UltraCAR-T, ActoBiotics, 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 Precigen's current expectations and projections about future events and generally relate to plans, objectives, and expectations for the development of Precigen's business, including the timing, pace and progress of preclinical and clinical trials and discovery programs, potential benefits of platforms and product candidates including in comparison to competitive platforms and products, and future plans for Precigen's remaining non-healthcare assets. Although management believes that the plans, objectives and results 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. These risks and uncertainties include, but are not limited to, (i) the impact of the COVID-19 pandemic on our businesses, operating results, cash flows and/or financial condition, (ii) ongoing transition efforts following Precigen's recent divestment of several assets and businesses; (iii) Precigen's strategy and overall approach to its business model, its recent efforts to realign its business, and its ability to exercise more control and ownership over the development process and commercialization path; (iv) the ability to successfully enter new markets or develop additional products, including the expected timing and results of investigational studies and preclinical and clinical trials, including any delays or potential delays as a result of the COVID-19 pandemic, whether with its collaborators or independently; (v) the ability to successfully enter into optimal strategic relationships with its subsidiaries and operating companies that it may form in the future; (vi) the ability to hold or generate significant operating capital, including through partnering, asset sales and operating cost reductions; (vii) actual or anticipated variations in operating results; (viii) actual or anticipated fluctuations in competitors' or collaborators' operating results or changes in their respective growth rates; (ix) cash position; (x) market conditions in Precigen's industry; (xi) the volatility of Precigen's stock price; (xii) the ability, and the ability of collaborators, to protect Precigen's intellectual property and other proprietary rights and technologies; (xiii) the ability, and the ability of collaborators, to adapt to changes in laws or regulations and policies, including federal, state, and local government responses to the COVID-19 pandemic; (xiv) outcomes of pending and future litigation; (xv) the rate and degree of market acceptance of any products developed by Precigen, its subsidiaries, collaborations or joint ventures; (xvi) the ability to retain and recruit key personnel; (xvii) expectations related to the use of proceeds from public offerings and other financing efforts; (xviii) estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and (xix) the challenges inherent in leadership transitions. For further information on potential risks and uncertainties, and other important factors, any of which could cause Precigen's actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in Precigen'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)


June 30, 2020



December 31, 2019

Assets








Current assets








Cash and cash equivalents


$

46,713



$

65,793

Short-term investments



86,292




9,260

Receivables








Trade, net



23,337




20,650

Related parties, net



294




600

Other



364




4,978

Inventory



12,729




16,097

Prepaid expenses and other



3,266




6,444

Current assets held for sale






110,821









Total current assets



172,995




234,643

Property, plant and equipment, net



46,956




60,969

Intangible assets, net



64,759




68,346

Goodwill



54,122




63,754

Investments in affiliates



859




1,461

Right-of-use assets



20,683




25,228

Other assets



1,341




1,362









Total assets


$

361,715



$

455,763





Current liabilities








Accounts payable


$

3,650



$

5,917

Accrued compensation and benefits



7,719




14,091

Other accrued liabilities



9,342




12,049

Deferred revenue



6,592




5,697

Lines of credit






1,922

Current portion of long-term debt



32,108




31,670

Current portion of lease liabilities



4,514




4,182

Related party payables



175




51

Current liabilities held for sale






47,333









Total current liabilities



64,100




122,912

Long-term debt, net of current portion



191,205




186,321

Deferred revenue, net of current portion



32,858




48,136

Lease liabilities, net of current portion



21,212




23,849

Deferred tax liabilities



2,698




2,834

Other long-term liabilities



100












Total liabilities



312,173




384,052









Commitments and contingencies








Shareholders' equity








Common stock






Additional paid-in capital



1,802,413




1,752,048

Accumulated deficit



(1,752,221)




(1,652,869)

Accumulated other comprehensive loss



(650)




(27,468)









Total shareholders' equity



49,542




71,711









Total liabilities and shareholders' equity


$

361,715



$

455,763

 

 

Precigen, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

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



Three months ended



Six months ended




June 30,






June 30,




2020



2019



2020



2019
















Revenues














Collaboration and licensing revenues


$

4,315


$

6,450


$

15,036


$

12,421


Product revenues



8,540



7,800



13,501



12,637


Service revenues



17,381



18,400



31,327



29,783


Other revenues



188



186



398



580


Total revenues



30,424



32,836



60,262



55,421
















Operating Expenses














Cost of products



8,141



8,502



14,230



16,224


Cost of services



6,770



8,218



14,306



15,310


Research and development



14,208



28,239



33,099



55,177


Selling, general and administrative



18,739



19,250



41,757



50,299


Impairment of goodwill



9,635





9,635




Impairment of assets



12,406





12,406




Total operating expenses



69,899



64,209



125,433



137,010


Operating loss



(39,475)



(31,373)



(65,171)



(81,589)
















Other Expense, Net














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





5,760





6,209


Interest expense



(4,592)



(4,353)



(9,184)



(8,658)


Interest and dividend income



773



1,024



1,446



2,385


Other income (expense), net



71



(2,656)



135



(2,110)


Total other expense, net



(3,748)



(225)



(7,603)



(2,174)


Equity in net loss of affiliates



(251)



(716)



(602)



(1,464)


Loss from continuing operations before
   income taxes



(43,474)



(32,314)



(73,376)



(85,227)


Income tax benefit



120



9



80



22


Loss from continuing operations


$

(43,354)


$

(32,305)


$

(73,296)


$

(85,205)


Loss from discontinued operations, net of
    income taxes





(6,626)



(26,056)



(15,862)


Net loss


$

(43,354)


$

(38,931)


$

(99,352)


$

(101,067)


Net loss attributable to the noncontrolling
    interests





165





1,592


Net loss attributable to Precigen


$

(43,354)


$

(38,766)


$

(99,352)


$

(99,475)


Amounts Attributable to Precigen














Net loss from continuing operations
    attributable to Precigen


$

(43,354)


$

(32,140)


$

(73,296)


$

(83,613)


Net loss from discontinued operations
   attributable to Precigen





(6,626)



(26,056)



(15,862)


Net loss attributable to Precigen


$

(43,354)


$

(38,766)


$

(99,352)


$

(99,475)


Net Loss per Share














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


$

(0.26)


$

(0.21)


$

(0.45)


$

(0.55)


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





(0.04)



(0.16)



(0.10)


Net loss attributable to Precigen per share,
   basic and diluted


$

(0.26)


$

(0.25)


$

(0.61)


$

(0.65)


Weighted average shares outstanding, basic
   and diluted



164,065,087



153,749,929



162,201,915



153,351,208


 

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SOURCE Precigen, Inc.