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Precigen Reports Third Quarter 2020 and Year-to-Date Financial Results

Nov 09, 2020
- Company to provide comprehensive clinical pipeline and data updates in early December -
 
- Continues to advance healthcare portfolio and improve fiscal performance by executing operational efficiencies -
 
- Company to present PRGN-3006 UltraCAR-T® data at ASH annual meeting on December 7th -

GERMANTOWN, Md., Nov. 9, 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 third quarter and year-to-date financial results for 2020.

Business Highlights:

  • Clinical Pipeline and Data Update Conference Call: In light of the substantive progress made in advancing its clinical pipeline, as well as anticipated data disclosures for several key programs, Precigen will host a conference call in early December dedicated to reviewing these important milestones. The Company plans to announce timing and details about the call in the coming weeks;
  • UltraPoratorPrecigen announced that the US Food and Drug Administration (FDA) cleared UltraPorator as a manufacturing device for its UltraCAR-T manufacturing process. The Company announced that it has successfully completed technology transfer of the UltraPorator system for the manufacturing of PRGN-3005 in ovarian cancer at the University of Washington/Fred Hutchinson Cancer Research Center and for PRGN-3006 in acute myeloid leukemia (AML) at the Moffitt Cancer Center. 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 inherent in existing electroporation devices that contribute to current hurdles for viable scale-up and commercialization of certain therapeutic programs;
  • PRGN-2009 AdenoVerse Immunotherapy: Precigen announced that the first patient has been dosed in the Phase I/II trial for PRGN-2009, a first-in-class, off-the-shelf investigational immunotherapy utilizing the AdenoVerse platform and designed to activate the immune system to recognize and target HPV-positive solid tumors;
  • PRGN-3005 UltraCAR-T: Precigen completed dosing of patients in dose level 3 of the intraperitoneal (IP) arm of the Phase 1 clinical trial of PRGN-3005 UltraCAR-T for the treatment of advanced, recurrent platinum resistant ovarian, fallopian tube or primary peritoneal cancer (clinical trial identifier: NCT03907527); and
  • PRGN-3006 UltraCAR-T: Precigen completed dosing of patients in dose level 2 of the non-lymphodepletion arm and dose level 1 in the lymphodepletion arm of the Phase 1 trial of PRGN-3006 UltraCAR-T for treatment of patients with relapsed or refractory acute myeloid leukemia (AML) or higher-risk myelodysplastic syndromes (MDS) (clinical trial identifier: NCT03927261).

"The Precigen team has made impressive progress this quarter in driving value across our preclinical and clinical pipeline. In particular, we made several advances in our quest to meet unmet needs for patients, including dosing the first patient in our first-in-human study of PRGN-2009 AdenoVerse in HPV-positive solid tumors, and advancing our proprietary UltraPorator system towards clinical implementation," said Helen Sabzevari, PhD, President and CEO of Precigen. "In early December, we are excited to share a comprehensive update on our clinical pipeline progress towards meeting our 2020 goals laid out earlier this year as well as looking forward to the PRGN-3006 presentation at the 2020 meeting of the American Society of Hematology by the trial's Principal Investigator, Dr. David Sallman from the Moffitt Cancer Center."

Third Quarter 2020 Financial Highlights:

  • Total revenues of $23.6 million in 2020 compared to $18.3 million in 2019;
  • Net loss from continuing operations of $29.5 million, or $(0.18) per basic share, of which $10.1 million was for non-cash charges in 2020, compared to net loss from continuing operations of $49.1 million, or $(0.32) per basic share, of which $15.7 million was for non-cash charges in 2019; and
  • Cash, cash equivalents, and short-term investments totaled $113.1 million as of September 30, 2020.

Year-to-Date 2020 Financial Highlights:

  • Total revenues of $83.8 million in 2020 compared to $73.7 million in 2019; and
  • Net loss from continuing operations of $102.8 million, or $(0.63) per basic share, of which $50.6 million was for non-cash charges in 2020 compared to net loss from continuing operations attributable to Precigen of $132.7 million, or $(0.86) per basic share, of which $36.2 million was for non-cash charges in 2019.

Third Quarter 2020 Financial Results Compared to Prior Year Period

Total revenues increased $5.3 million, or 29%, over the quarter ended September 30, 2019. Collaboration and licensing revenues increased $2.9 million primarily due to the accelerated recognition of previously deferred revenue upon the mutual termination of one of the Company's collaboration agreements in July 2020. Product and service revenues generated by the Company's Trans Ova and Exemplar subsidiaries increased $2.4 million due to an increase in services performed for new and existing customers and the expansion of Trans Ova's commercial dairy business. Gross margin on products and services improved as a result of operational efficiencies gained through reductions in workforce and improved inventory management as well as a decrease in the cost of cows used in production.

Research and development expenses decreased $13.5 million, or 53%, from the quarter ended September 30, 2019. Salaries, benefits, and other personnel costs decreased $6.8 million and contract research organization costs and lab supplies decreased $5.1 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter and deprioritized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. Selling, general and administrative (SG&A) expenses were comparable period over period.

Year-to-Date 2020 Financial Results Compared to Prior Year Period

Total revenues increased $10.1 million, or 14%, over the nine months ended September 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 two of its collaboration agreements in 2020. Product and service revenues generated by Trans Ova and Exemplar increased $4.8 million due to an increase in services performed for new and existing customers and the expansion of Trans Ova's commercial dairy business. Gross margin on products and services improved as a result of operational efficiencies gained through reductions in workforce, improved inventory management, a reduction in third-party royalty rate obligations for certain licensed technologies and a decrease in the cost of cows used in production.

Research and development expenses decreased $35.6 million, or 44%, from the nine months ended September 30, 2019. Salaries, benefits, and other personnel costs decreased $13.7 million and contract research organization costs and lab supplies decreased $17.9 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter and deprioritized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. SG&A expenses decreased $8.4 million and include a net decrease in fees payable to certain third-party vendors and a reduction of 30% in corporate headcount to support a more streamlined organization. Other corporate expenses decreased $1.9 million as part of the streamlined organization and the impact of the COVID-19 pandemic on travel. These decreases were partially offset by increased share-based compensation expense attributable to equity grants made in in the first quarter of 2020 and one-time severance costs for terminated employees. The Company also recorded $23.0 million of impairment charges for the nine months ended September 30, 2020 primarily due to the write down of goodwill and intangible assets related to the MBP Titan subsidiary.

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 LinkedIn.

Trademarks

Precigen, UltraPorator, UltraCAR-T, AdenoVerse 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 studies, clinical trials, discovery programs and related milestones, the promise of the Company's portfolio of therapies, and in particular its CAR-T therapies, and the Company's refocus to a healthcare-oriented business. 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 clinical trials, 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 

Media Contact:

Glenn Silver

Lazar-FINN Partners

glenn.silver@finnpartners.com 

 

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

 

(Amounts in thousands)

 

September 30, 2020

   

December 31, 2019

Assets

             

Current assets

             

Cash and cash equivalents

 

$

27,740

   

$

65,793

Short-term investments

   

85,358

     

9,260

Receivables

             

Trade, net

   

19,063

     

20,650

Related parties, net

   

12

     

600

Other

   

285

     

4,978

Inventory

   

10,348

     

16,097

Prepaid expenses and other

   

8,310

     

6,444

Current assets held for sale

   

     

110,821

               

Total current assets

   

151,116

     

234,643

Property, plant and equipment, net

   

44,685

     

60,969

Intangible assets, net

   

65,018

     

68,346

Goodwill

   

54,237

     

63,754

Investments in affiliates

   

337

     

1,461

Right-of-use assets

   

19,296

     

25,228

Other assets

   

1,497

     

1,362

               

Total assets

 

$

336,186

   

$

455,763

       

Current liabilities

             

Accounts payable

 

$

4,233

   

$

5,917

Accrued compensation and benefits

   

7,567

     

14,091

Other accrued liabilities

   

9,355

     

12,049

Deferred revenue

   

4,144

     

5,697

Lines of credit

   

     

1,922

Current portion of long-term debt

   

421

     

31,670

Current portion of lease liabilities

   

4,584

     

4,182

Related party payables

   

357

     

51

Current liabilities held for sale

   

     

47,333

               

Total current liabilities

   

30,661

     

122,912

Long-term debt, net of current portion

   

193,801

     

186,321

Deferred revenue, net of current portion

   

30,015

     

48,136

Lease liabilities, net of current portion

   

20,323

     

23,849

Deferred tax liabilities

   

2,734

     

2,834

Other long-term liabilities

   

100

     

               

Total liabilities

   

277,634

     

384,052

               

Commitments and contingencies

             

Shareholders' equity

             

Common stock

   

     

Additional paid-in capital

   

1,838,919

     

1,752,048

Accumulated deficit

   

(1,781,729)

     

(1,652,869)

Accumulated other comprehensive income (loss)

   

1,362

     

(27,468)

               

Total shareholders' equity

   

58,552

     

71,711

               

Total liabilities and shareholders' equity

 

$

336,186

   

$

455,763

 

 

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

 

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

   

Three months ended

   

Nine months ended

 
   

September 30,

   

September 30,

 
   

2020

   

2019

   

2020

   

2019

 
                           

Revenues

                         

Collaboration and licensing revenues

 

$

5,223

 

$

2,296

 

$

20,259

 

$

14,717

 

Product revenues

   

6,896

   

5,846

   

20,397

   

18,483

 

Service revenues

   

11,288

   

9,924

   

42,615

   

39,707

 

Other revenues

   

176

   

233

   

574

   

813

 

Total revenues

   

23,583

   

18,299

   

83,845

   

73,720

 
                           

Operating Expenses

                         

Cost of products

   

7,296

   

7,906

   

21,526

   

24,130

 

Cost of services

   

5,891

   

6,550

   

20,197

   

21,860

 

Research and development

   

12,154

   

25,667

   

45,253

   

80,844

 

Selling, general and administrative

   

22,300

   

22,187

   

64,057

   

72,486

 

Impairment of goodwill

   

   

178

   

9,635

   

178

 

Impairment of other noncurrent assets

   

920

   

448

   

13,326

   

448

 

Total operating expenses

   

48,561

   

62,936

   

173,994

   

199,946

 

Operating loss

   

(24,978)

   

(44,637)

   

(90,149)

   

(126,226)

 
                           

Other Expense, Net

                         

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

   

   

(3,139)

   

   

3,070

 

Interest expense

   

(4,646)

   

(4,466)

   

(13,830)

   

(13,124)

 

Interest and dividend income

   

579

   

883

   

2,025

   

3,268

 

Other income, net

   

10

   

2,781

   

145

   

671

 

Total other expense, net

   

(4,057)

   

(3,941)

   

(11,660)

   

(6,115)

 

Equity in net loss of affiliates

   

(523)

   

(479)

   

(1,125)

   

(1,943)

 

Loss from continuing operations before
      income taxes

   

(29,558)

   

(49,057)

   

(102,934)

   

(134,284)

 

Income tax benefit

   

50

   

3

   

130

   

25

 

Loss from continuing operations

 

$

(29,508)

 

$

(49,054)

 

$

(102,804)

 

$

(134,259)

 

Loss from discontinued operations, net of
      income taxes

   

   

(4,580)

   

(26,056)

   

(20,442)

 

Net loss

 

$

(29,508)

 

$

(53,634)

 

$

(128,860)

 

$

(154,701)

 

Net loss attributable to the noncontrolling
      interests

   

   

   

   

1,592

 

Net loss attributable to Precigen

 

$

(29,508)

 

$

(53,634)

 

$

(128,860)

 

$

(153,109)

 

Amounts Attributable to Precigen

                         

Net loss from continuing operations 
     attributable to Precigen

 

$

(29,508)

 

$

(49,054)

 

$

(102,804)

 

$

(132,667)

 

Net loss from discontinued operations
      attributable to Precigen

   

   

(4,580)

   

(26,056)

   

(20,442)

 

Net loss attributable to Precigen

 

$

(29,508)

 

$

(53,634)

 

$

(128,860)

 

$

(153,109)

 

Net Loss per Share

                         

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

 

$

(0.18)

 

$

(0.32)

 

$

(0.63)

 

$

(0.86)

 

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

   

   

(0.03)

   

(0.16)

   

(0.14)

 

Net loss attributable to Precigen per 
     share, basic and diluted

 

$

(0.18)

 

$

(0.35)

 

$

(0.79)

 

$

(1.00)

 

Weighted average shares outstanding,
      basic and diluted

   

165,527,024

   

154,596,257

   

163,318,375

   

153,770,785

 
 

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SOURCE Precigen, Inc.