UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9, 2019
INTREXON CORPORATION
(Exact Name of Registrant as Specified in Charter)
| Virginia | 001-36042 | 26-0084895 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
20374 Seneca Meadows Parkway, Germantown, Maryland 20876
(Address of Principal Executive Offices) (Zip Code)
(301) 556-9900
(Registrant’s Telephone Number, including area code)
N/A
(Former Name or Former Address, if change since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Intrexon Corporation Common Stock, No Par Value | XON | Nasdaq Global Select Market |
| Item 2.02 | Results of Operations and Financial Condition. |
Attached as Exhibit 99.1 is a copy of a press release of Intrexon Corporation, dated May 9, 2019, reporting its financial results for the quarter ended March 31, 2019.
This information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
| Item 7.01 | Regulation FD Disclosure. |
On May 9, 2019, Intrexon Corporation provided two slide presentations to accompany its press release. A copy of each presentation is furnished as Exhibit 99.2 and 99.3 hereto.
This information, including the Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Intrexon Corporation | ||
| By: | /s/ Rick L. Sterling | |
| Rick L. Sterling | ||
| Chief Financial Officer | ||
Dated: May 9, 2019
Exhibit 99.1
Intrexon Reports First Quarter 2019 Financial Results
– Quarterly GAAP revenues of $23.3 million and net loss attributable to Intrexon of $60.7 million
including non-cash charges of $17.8 million –
– Quarterly Adjusted EBITDA of $(39.2) million –
GERMANTOWN, MD, May 9, 2019 – Intrexon Corporation (NASDAQ: XON), a leader in the engineering and industrialization of biology to improve the quality of life and health of the planet, today announced its first quarter financial results for 2019.
Recent Business Highlights:
| • | Intrexon announced alignment of its operations into two units, Intrexon Health and Intrexon Bioengineering, to better deploy resources, realize inherent synergies and position the company for growth with a core focus on healthcare. Intrexon Health, will be led by Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon while Intrexon Bioengineering will be led by LTG (Ret.) Thomas Bostick, PhD, PE, Chief Operating Officer of Intrexon, who will also assume the title of President, Intrexon Bioengineering; and |
| • | As Intrexon announced previously, the Company believes it will end the year with approximately the same net cash and short-term investment position that it held on April 3, 2019. The Company is making progress toward this goal through a combination of partnering, asset sales and operating cost reductions. The Company has initiated plans to reduce its original 2019 operating budget by approximately $70 million and commenced actions toward achieving this goal. |
Intrexon Health
| • | Precigen, Inc., a wholly-owned subsidiary of Intrexon, opened its new nearly 5,000 square foot facility in Germantown, Maryland to support gene therapy manufacturing. The U.S. Food and Drug Administration (FDA) good manufacturing practices (GMP) compliant facility was designed with agility and control in mind, focusing on rapid manufacturing and the ability to scale production appropriately to meet early stage clinical trial needs; |
| • | Intrexon and its majority-owned subsidiary Triple-Gene LLC (formerly Xogenex LLC) completed enrollment in the first cohort of a Phase 1 clinical trial of INXN-4001, an investigational new drug which is the world’s first triple effector gene drug candidate being evaluated for the treatment of heart failure; and |
| • | Intrexon continues advancing its proprietary yeast-based platform for robust production of cannabinoids with consistent yield and purity and with production of CBGA at 700 mg/L in stirred tank fermenter. The platform is on track to realize a target cost of goods of <$1000 USD/kg. |
Intrexon Bioengineering
| • | Intrexon entered into a strategic licensing agreement with Surterra Wellness to utilize Intrexon’s Botticelli™ next generation plant propagation platform to enable rapid production of Surterra’s proprietary cannabis cultivars for the Florida market; |
| • | Oxitec, Ltd., a wholly-owned subsidiary of Intrexon, signed two, multi-year development agreements with a collaborator to apply its 2nd generation, self-limiting technology to develop solutions for the soybean looper and fall armyworm, two insect pests that cause significant damage to agricultural crops globally; and |
| • | AquaBounty Technologies, Inc. (NASDAQ: AQB), an investment of Intrexon, announced the FDA lifted the Import Alert on AquAdvantage® Salmon (AAS) in March. Environment and Climate Change Canada has also approved the company’s Rollo Bay production facility for the commercial manufacture and grow-out of AAS. |
First Quarter 2019 Financial Highlights:
| • | Total revenues of $23.3 million; |
| • | Net loss of $60.7 million attributable to Intrexon, or $(0.40) per basic share, including non-cash charges of $17.8 million; |
| • | Adjusted EBITDA of $(39.2) million, or $(0.26) per basic share; and |
| • | Cash, cash equivalents, and short-term investments totaled $181.6 million and the value of common equity securities totaled $1.8 million at March 31, 2019. |
“Our realignment into Intrexon Health and Intrexon Bioengineering is well underway,” commented Mr. Kirk. “On the healthcare side it is satisfying and exciting for all of us that we currently are dosing in clinical trials several novel therapeutic candidates of our design that incorporate our unique technology. Moreover, as we prepare to get underway with patient dosing of two Ultra-CAR-T candidates, we see the potential realization of a set of aspirations that we have held — and declared — since before our IPO and believe that these should constitute major advances in immuno-oncology. We await data with great anticipation.”
Mr. Kirk concluded, “Our share price carries implications as well, so we are determined to prosecute all that we have set ourselves to accomplish in healthcare while realizing maximum value for our shareholders from our non-healthcare assets, the portfolio of Intrexon Bioengineering. These realizations may be participating or transactional in nature, but we are determined to achieve them and indeed are currently advancing several such prospects. Combined with the cost-cutting program that we have implemented, we expect our company will be a leaner, more-focused enterprise but not one lacking ambition or impact.”
“Intrexon Bioengineering’s highly skilled teams are contributing their breadth of expertise across diverse fields to advance programs in food, agriculture, environmental, and industrial fields. We believe these programs offer a unique opportunity to realize the potential of engineered solutions in generating more efficient and sustainable approaches than current industry practices. Intrexon Bioengineering is focused on delivering these technologies and products with the goal of increasing shareholder value,” added Dr. Bostick.
First Quarter 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $16.3 million from the quarter ended March 31, 2018. Collaboration and licensing revenues decreased $13.9 million from the quarter ended March 31, 2018 primarily due to the reacquisition of rights previously licensed to certain significant collaborators, including ZIOPHARM Oncology, Inc., and ARES Trading S.A., the result of which eliminated or substantially reduced revenues generated from those collaborations. The decline was also attributable to the mutual termination of the Company’s ECC with OvaScience, Inc., in March 2018. Product revenues decreased $2.3 million, or 32%, primarily due to lower customer demand for pregnant cows and cloned products. Gross margin on products declined in the current period as a result of fewer products sold and increased costs associated with new product offerings. Service revenues decreased $0.9 million, or 7%. The decrease in service revenues and the gross margin thereon relates to fewer embryos produced per bovine in vitro fertilization cycle performed as a result of unfavorable production results.
Research and development expenses decreased $4.2 million, or 11%. Research and development depreciation and amortization expense decreased $2.0 million primarily due to intangible assets that were impaired or abandoned in 2018. Research and development salaries, benefits and other personnel costs decreased $1.3 million primarily due to the closing of one of the Company’s research
and development facilities in Brazil in 2018. Selling, general and administrative (SG&A) expenses decreased $6.1 million, or 16%. SG&A salaries, benefits and other personnel costs decreased $4.8 million primarily due to decreased compensation expenses related to performance and retention incentives for SG&A employees as well as decreased share-based compensation expense as a result of certain 2014 stock option grants becoming fully vested in March 2018.
The Company will not host a conference call associated with this financial results release.
About Intrexon Corporation
Intrexon Corporation (NASDAQ: XON) is Powering the Bioindustrial Revolution with Better DNA™ to create biologically-based products that improve the quality of life and the health of the planet through two operating units – Intrexon Health and Intrexon Bioengineering. Intrexon Health is focused on addressing unmet medical needs through a diverse spectrum of therapeutic modalities, including gene and cell therapies, microbial bioproduction, and regenerative medicine. Intrexon Bioengineering seeks to address global challenges across food, agriculture, environmental, and industrial fields by advancing biologically engineered solutions to improve sustainability and efficiency. Our integrated technology suite provides industrial-scale design and development of complex biological systems delivering unprecedented control, quality, function, and performance of living cells. We call our synthetic biology approach Better DNA®, and we invite you to discover more at www.dna.com or follow us on Twitter at @Intrexon, on Facebook, and LinkedIn.
Non-GAAP Financial Measures
This press release presents Adjusted EBITDA and Adjusted EBITDA per share, which are non-GAAP financial measures within the meaning of applicable rules and regulations of the Securities and Exchange Commission (SEC). For a reconciliation of these measures to the most directly comparable financial measure calculated in accordance with generally accepted accounting principles and for a discussion of the reasons why the Company believes that these non-GAAP financial measures provide information that is useful to investors see the tables below under “Reconciliation of GAAP to Non-GAAP Measures.” Such information is provided as additional information, not as an alternative to Intrexon’s consolidated financial statements presented in accordance with GAAP, and is intended to enhance an overall understanding of the Intrexon’s current financial performance.
Trademarks
Intrexon, UltraCAR-T, Botticelli, Powering the Bioindustrial Revolution with Better DNA, and Better DNA are trademarks of Intrexon and/or its affiliates. Other names may be trademarks of their respective owners.
Safe Harbor Statement
Some of the statements made in this press release are forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements made in this press release include, but are not limited to, statements regarding clinical and pre-clinical development activities by Intrexon and its collaborators, commercial and business development plans and the submission of regulatory filings. These forward-looking statements are based upon Intrexon’s current expectations and projections about future events and generally relate to Intrexon’s plans, objectives and expectations for the development of Intrexon’s business. 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. These risks and uncertainties include, but are not limited to, (i) Intrexon’s strategy and overall approach to its business model, including its ability to successfully enter into optimal strategic relationships with its subsidiaries and operating companies that Intrexon may form in the future, its ability to develop prospective new
platforms and partnering opportunities, and its ability to exercise more control and ownership over the development process and commercialization path; (ii) Intrexon’s ability to successfully enter new markets or develop additional products, whether with its collaborators or independently; (iii) actual or anticipated variations in Intrexon’s operating results; (iv) actual or anticipated fluctuations in Intrexon’s competitors’ or its collaborators’ operating results or changes in their respective growth rates; (v) Intrexon’s cash position; (vi) market conditions in Intrexon’s industry; (vii) the volatility of Intrexon’s stock price; (viii) Intrexon’s ability, and the ability of its collaborators, to protect Intrexon’s intellectual property and other proprietary rights and technologies; (ix) Intrexon’s ability, and the ability of its collaborators, to adapt to changes in laws or regulations and policies; (x) the outcomes of pending or future litigation; (xi) the rate and degree of market acceptance of any products developed by a collaborator under an ECC or through a joint venture; (xii) Intrexon’s ability to retain and recruit key personnel; (xiii) Intrexon’s expectations related to the use of proceeds from its public offerings and other financing efforts; (xiv) Intrexon’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and (xv) Intrexon’s expectations relating to its subsidiaries and other affiliates. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Intrexon’s actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in Intrexon’s Annual Report on Form 10-K, as well as discussions of potential risks, uncertainties, and other important factors in Intrexon’s subsequent filings with the SEC. All information in this press release is as of the date of the release, and Intrexon undertakes no duty to update this information unless required by law.
###
For more information regarding Intrexon Corporation, contact:
| Investor Contact: Steven Harasym Vice President, Investor Relations Tel: +1 (301) 556-9850 investors@dna.com |
Corporate Contact: Marie Rossi, PhD Vice President, Communications Tel: +1 (301) 556-9850 publicrelations@dna.com |
Intrexon Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
| (Amounts in thousands) |
March 31, 2019 | December 31, 2018 | ||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 106,544 | $ | 102,768 | ||||
| Restricted cash |
— | 6,987 | ||||||
| Short-term investments |
75,090 | 119,688 | ||||||
| Equity securities |
187 | 384 | ||||||
| Receivables |
||||||||
| Trade, net |
19,859 | 21,195 | ||||||
| Related parties, net |
2,444 | 4,129 | ||||||
| Other, net |
2,578 | 2,754 | ||||||
| Inventory |
19,896 | 21,447 | ||||||
| Prepaid expenses and other |
5,577 | 6,131 | ||||||
|
|
|
|
|
|||||
| Total current assets |
232,175 | 285,483 | ||||||
| Equity securities, noncurrent |
1,602 | 1,798 | ||||||
| Property, plant and equipment, net |
136,357 | 128,874 | ||||||
| Intangible assets, net |
125,868 | 129,291 | ||||||
| Goodwill |
150,755 | 149,585 | ||||||
| Investments in affiliates |
17,627 | 18,859 | ||||||
| Right-of-use assets |
43,099 | — | ||||||
| Other assets |
2,381 | 2,287 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 709,864 | $ | 716,177 | ||||
|
|
|
|
|
|||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 12,601 | $ | 13,420 | ||||
| Accrued compensation and benefits |
7,784 | 10,687 | ||||||
| Other accrued liabilities |
14,096 | 20,620 | ||||||
| Deferred revenue |
17,149 | 15,554 | ||||||
| Lines of credit |
277 | 466 | ||||||
| Current portion of long-term debt |
564 | 559 | ||||||
| Current portion of lease liabilities |
4,778 | — | ||||||
| Related party payables |
2,173 | 256 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
59,422 | 61,562 | ||||||
| Long-term debt, net of current portion |
214,010 | 211,235 | ||||||
| Deferred revenue, net of current portion |
54,042 | 54,210 | ||||||
| Lease liabilities, net of current portion |
40,185 | — | ||||||
| Deferred tax liabilities, net |
6,720 | 7,213 | ||||||
| Other long-term liabilities |
662 | 3,235 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
375,041 | 337,455 | ||||||
|
|
|
|
|
|||||
| Commitments and contingencies |
||||||||
| Total equity |
||||||||
| Common stock |
— | — | ||||||
| Additional paid-in capital |
1,732,608 | 1,722,012 | ||||||
| Accumulated deficit |
(1,391,254 | ) | (1,330,545 | ) | ||||
| Accumulated other comprehensive loss |
(28,325 | ) | (28,612 | ) | ||||
|
|
|
|
|
|||||
| Total Intrexon shareholders’ equity |
313,029 | 362,855 | ||||||
| Noncontrolling interests |
21,794 | 15,867 | ||||||
|
|
|
|
|
|||||
| Total equity |
334,823 | 378,722 | ||||||
|
|
|
|
|
|||||
| Total liabilities and total equity |
$ | 709,864 | $ | 716,177 | ||||
|
|
|
|
|
|||||
Intrexon Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
| Three months ended March 31, |
||||||||
| (Amounts in thousands, except share and per share data) |
2019 | 2018 | ||||||
| Revenues |
||||||||
| Collaboration and licensing revenues |
$ | 5,970 | $ | 19,848 | ||||
| Product revenues |
4,857 | 7,152 | ||||||
| Service revenues |
11,383 | 12,247 | ||||||
| Other revenues |
1,125 | 419 | ||||||
|
|
|
|
|
|||||
| Total revenues |
23,335 | 39,666 | ||||||
|
|
|
|
|
|||||
| Operating Expenses |
||||||||
| Cost of products |
8,290 | 8,530 | ||||||
| Cost of services |
7,092 | 6,783 | ||||||
| Research and development |
33,062 | 37,267 | ||||||
| Selling, general and administrative |
33,594 | 39,737 | ||||||
|
|
|
|
|
|||||
| Total operating expenses |
82,038 | 92,317 | ||||||
|
|
|
|
|
|||||
| Operating loss |
(58,703 | ) | (52,651 | ) | ||||
|
|
|
|
|
|||||
| Other Income (Expense), Net |
||||||||
| Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net |
70 | (1,096 | ) | |||||
| Interest expense |
(4,311 | ) | (99 | ) | ||||
| Interest and dividend income |
1,364 | 5,470 | ||||||
| Other income (expense), net |
506 | (659 | ) | |||||
|
|
|
|
|
|||||
| Total other income (expense), net |
(2,371 | ) | 3,616 | |||||
| Equity in net loss of affiliates |
(1,640 | ) | (2,460 | ) | ||||
|
|
|
|
|
|||||
| Loss before income taxes |
(62,714 | ) | (51,495 | ) | ||||
| Income tax benefit |
578 | 4,086 | ||||||
|
|
|
|
|
|||||
| Net loss |
$ | (62,136 | ) | $ | (47,409 | ) | ||
| Net loss attributable to the noncontrolling interests |
1,427 | 1,244 | ||||||
|
|
|
|
|
|||||
| Net loss attributable to Intrexon |
$ | (60,709 | ) | $ | (46,165 | ) | ||
|
|
|
|
|
|||||
| Net loss attributable to Intrexon per share, basic and diluted |
$ | (0.40 | ) | $ | (0.36 | ) | ||
|
|
|
|
|
|||||
| Weighted average shares outstanding, basic and diluted |
152,948,058 | 127,693,336 | ||||||
|
|
|
|
|
|||||
Intrexon Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
Adjusted EBITDA and Adjusted EBITDA per share. To supplement Intrexon’s financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), Intrexon presents Adjusted EBITDA and Adjusted EBITDA per share. A reconciliation of Adjusted EBITDA to net income or loss attributable to Intrexon under GAAP appears below. Adjusted EBITDA is a non-GAAP financial measure that Intrexon calculates as net income or loss attributable to Intrexon adjusted for income tax expense or benefit, interest expense, depreciation and amortization, stock-based compensation, shares issued as compensation for services, impairment loss, expense for in-process research and development reacquired from former collaborators, bad debt expense, litigation expense, realized and unrealized appreciation or depreciation in the fair value of equity securities and preferred stock, and equity in net loss of affiliates. Adjusted EBITDA and Adjusted EBITDA per share are key metrics for Intrexon’s management and Board of Directors for evaluating the Company’s financial and operating performance, generating future operating plans and making strategic decisions about the allocation of capital. Intrexon’s management and Board of Directors believe that Adjusted EBITDA and Adjusted EBITDA per share are useful to understand the long-term performance of Intrexon’s core business and facilitate comparisons of the Company’s operating results over multiple reporting periods. Intrexon is providing this information to investors and others to assist them in understanding and evaluating the Company’s operating results in a manner similar to how its management and Board of Directors evaluate operating results (except for the impact of the change in deferred revenue related to upfront and milestone payments, which is adjusted in the measures evaluated by management and the Board of Directors as discussed below). While Intrexon believes that its non-GAAP financial measures are useful in evaluating its business, and may be of use to investors, this information should be considered supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as non-GAAP financial measures presented by other companies. Adjusted EBITDA and Adjusted EBITDA per share are not measures of financial performance under GAAP, and are not intended to represent cash flows from operations nor earnings per share under GAAP and should not be used as an alternative to net income or loss as an indicator of operating performance or to represent cash flows from operating, investing or financing activities as a measure of liquidity. Intrexon compensates for the limitations of Adjusted EBITDA and Adjusted EBITDA per share by using them only to supplement the Company’s GAAP results to provide a more complete understanding of the factors and trends affecting the Company’s business. Adjusted EBITDA and Adjusted EBITDA per share have limitations as an analytical tool and you should not consider them in isolation or as a substitute for analysis of Intrexon’s results as reported under GAAP.
In addition to the reasons stated above, which are generally applicable to each of the items Intrexon excludes from its non-GAAP financial measure, Intrexon believes it is appropriate to exclude certain items from the definition of Adjusted EBITDA for the following reasons:
| • | Interest expense may be subject to changes in interest rates which are beyond Intrexon’s control; |
| • | Depreciation of Intrexon’s property and equipment and amortization of acquired identifiable intangibles can be affected by the timing and magnitude of business combinations and capital asset purchases; |
| • | Stock-based compensation expense is a noncash expense and may vary significantly based on the timing, size and nature of awards granted and also because the value is determined using formulas which incorporate variables, such as market volatility; |
| • | Shares issued as compensation for services and bad debt expense are noncash expenses which Intrexon excludes in evaluating its financial and operating performance; |
| • | Impairment loss is a noncash expense which represents the write down of the book value of acquired goodwill and intangible assets when fair value is determined to be less than book value. These charges are nonrecurring and may vary significantly based on economic, regulatory, political and other circumstances; |
| • | Expense for in-process research and development reacquired from former collaborators is a noncash expense which is expected to be an infrequent item and may vary significantly based on the scope of the repurchased rights; |
| • | Unrealized and realized appreciation or depreciation in the fair value of securities which Intrexon holds in its collaborators may be significantly impacted by market volatility and other factors which are outside of the Company’s control in the short term and Intrexon intends to hold these securities over the long term, except as otherwise disclosed; and |
| • | Equity in net loss of affiliate reflects Intrexon’s proportionate share of the income or loss of entities over which the Company has significant influence, but not control, and accounts for using the equity method of accounting. Intrexon believes excluding the impact of such losses or gains on these types of strategic investments from its operating results is important to facilitate comparisons between periods. |
The following table presents a reconciliation of net loss attributable to Intrexon to EBITDA and also to Adjusted EBITDA, as well as the calculation of Adjusted EBITDA per share, for each of the periods indicated:
| Three months ended March 31, |
||||||||
| 2019 | 2018 | |||||||
| (In thousands) | ||||||||
| Net loss attributable to Intrexon |
$ | (60,709 | ) | $ | (46,165 | ) | ||
| Interest expense |
4,283 | 87 | ||||||
| Income tax benefit |
(578 | ) | (4,086 | ) | ||||
| Depreciation and amortization |
6,326 | 8,236 | ||||||
|
|
|
|
|
|||||
| EBITDA |
$ | (50,678 | ) | $ | (41,928 | ) | ||
| Stock-based compensation |
8,989 | 11,340 | ||||||
| Shares issued as payment for services |
831 | 2,941 | ||||||
| Bad debt expense |
64 | 218 | ||||||
| Unrealized and realized (appreciation) depreciation in fair value of equity securities and preferred stock, net |
(70 | ) | 1,096 | |||||
| Equity in net loss of affiliates |
1,640 | 2,460 | ||||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
$ | (39,224 | ) | $ | (23,873 | ) | ||
|
|
|
|
|
|||||
| Weighted average shares outstanding, basic and diluted |
152,948,058 | 127,693,336 | ||||||
| Adjusted EBITDA per share, basic and diluted |
$ | (0.26 | ) | $ | (0.19 | ) | ||
|
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|
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Intrexon Health Overview May 2019 Exhibit 99.2
Forward Looking Statements © 2019 Intrexon Corp. All rights reserved. Intrexon Corporation is sharing the following materials for informational purposes only. Such materials do not constitute an offer to sell or the solicitation of an offer to buy any securities of Intrexon. Any offer and sale of Intrexon’s securities will be made, if at all, only upon the registration and qualification of such securities under all applicable federal and state securities laws or pursuant to an exemption from such requirements. The attached information has been prepared in good faith by Intrexon. However, Intrexon makes no representations or warranties as to the completeness or accuracy of any such information. Any representations or warranties as to Intrexon shall be limited exclusively to any agreements that may be entered into by Intrexon and to such representations and warranties as may arise under law upon distribution of any prospectus or similar offering document by Intrexon. Safe Harbor Statement Some of the statements made in this presentation are forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon Intrexon’s current expectations and projections about future events and generally relate to Intrexon’s plans, objectives and expectations for the development of Intrexon’s business, discussion of anticipated clinical trials and future collaborations. 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 presentation. These risks and uncertainties include, but are not limited to, (i) Intrexon’s strategy and overall approach to its business model and its ability to exercise more control and ownership over the development process and commercialization path; (ii) Intrexon’s ability to successfully enter new markets or develop additional products, whether with its collaborators or independently; (iii) Intrexon's ability to successfully enter into optimal strategic relationships with its subsidiaries and operating companies that it may form in the future; (iv) actual or anticipated variations in Intrexon’s operating results; (v) actual or anticipated fluctuations in Intrexon’s competitors’ or its collaborators’ operating results or changes in their respective growth rates; (vi) Intrexon’s cash position; (vii) market conditions in Intrexon’s industry; (viii) the volatility of Intrexon’s stock price; (ix) Intrexon’s ability, and the ability of its collaborators, to protect Intrexon’s intellectual property and other proprietary rights and technologies; (x) Intrexon’s ability, and the ability of its collaborators, to adapt to changes in laws or regulations and policies; (xi) the outcomes of pending and future litigation; (xii) the rate and degree of market acceptance of any products developed by Intrexon, its subsidiaries, collaborations or joint ventures; (xiii) Intrexon’s ability to retain and recruit key personnel; (xiv) Intrexon’s expectations related to the use of proceeds from its public offerings and other financing efforts; and (xv) Intrexon’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Intrexon’s actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in Intrexon’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. All information in this presentation is as of the date of the release, and Intrexon undertakes no duty to update this information unless required by law. All of the pharmaceutical products described in this presentation are investigational new drugs, which are currently undergoing pre-clinical and/or human clinical trial testing. As a result, none of them have had their safety or efficacy established or are approved by the U.S. Food and Drug Administration or any other regulatory agency.
Intrexon Health Investment Overview Possessing the broadest and deepest gene and cell therapy technologies and capabilities Addressing unmet medical needs with therapeutics that are Targeted, Controllable, and Multigenic Eight clinical stage assets across diverse indications, more coming to the clinic Offering significantly improved COGS as compared with current generations Multiple near-term catalysts for value recognition
Board of Directors Randal J. Kirk Chairman Chairman & CEO of Intrexon Former Chairman/CEO of New River Pharmaceuticals, Inc. and Chairman of Clinical Data, Inc. Cesar Alvarez Senior Chairman of Greenberg Traurig Recognized as one of the “100 Most Influential Lawyers in America” Vinita Gupta CEO of Lupin Limited Named 2015 Ernst & Young Entrepreneur of the Year Jeffrey Kindler CEO of Centrexion Corporation Former Chairman/CEO of Pfizer, Inc. Dean Mitchell Executive Chairman and Board member of Covis Pharma Holdings S.a.r.l. Former CEO, Alpharma Robert Shapiro Lead Independent Chairman, Managing Director, and Co-Founder of Sandbox Industries, LLC Former Chairman/CEO of Monsanto Company Steve Frank Chairman of Global Healthcare Investment Banking at J.P. Morgan Former head of Bear Stearns Worldwide Health Care Investment Banking Group James Turley Director of Citigroup and Emerson Electric Co. Former Chairman/CEO of Ernst & Young Fred Hassan Partner and Managing Director of Warburg Pincus LLC Former Chairman/CEO of Schering-Plough
Executive Leadership Co-Founder & COO of General Injectables and Vaccines (now the medical business of Henry Schein) Co-founder and first President of King Pharmaceuticals (now part of Pfizer) Board member and largest shareholder of Scios, Inc. (now part of Johnson & Johnson) Founder, Chairman, CEO and largest shareholder of New River Pharmaceuticals (now part of Takeda) Chairman and largest shareholder of Clinical Data, Inc. (now part of Allergan) Board member (11 years) and largest shareholder of Halozyme (traded on Nasdaq) Chairman, CEO and largest shareholder of Intrexon Randal J. Kirk Chairman and CEO Helen Sabzevari, PhD President, Precigen, Inc. President of Precigen Inc., a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cellular therapies Co-founder and Chief Science Officer of Compass Therapeutics, a fully-integrated drug discovery and development company focused on manipulating the immune system to treat human disease Global Head of Immuno-Oncology Global Research and Early Development at EMD Serono (a subsidiary of Merck KGaA, Darmstadt, Germany). Led discovery and development of the anti-PD-L1 checkpoint inhibitor Bavencio® (avelumab), designated by the US FDA as a breakthrough therapy and approved to treat metastatic Merkel cell carcinoma and urothelial carcinoma. Led the Molecular Immunology Group at the Laboratory of Tumor Immunology and Biology at the US National Cancer Institute PhD in cell and molecular immunology and postdoctoral fellow at the department of immunology at the Scripps Research Institute
Intrexon Health’s Integrated GeneRx Platform AttSite-mediated Genome Integration Library of serine recombinases for integrating large DNA payloads into cell lines RheoSwitch-mediated Transcription Control Clinically demonstrated small molecule-based inducible control over timing and dose of therapeutic effectors AdenoVerse-mediated Gene Delivery Extensive portfolio of high-payload capacity adenoviral vectors with improved tissue selectivity and proven clinical safety, built on a highly scalable manufacturing platform Protein Engineering Bioinformatics approaches to design enhanced and/or novel protein functionalities including stability, localization, and catalytic activity Microbial Strain Engineering Producing heterologous proteins through robust and versatile microbial expression systems for enzyme discovery, gene expression, and biomolecule production UltraVector-optimized Gene Networks Rapid design and construction of multigenic DNA vectors for controlling gene expression employing a library of genetic parts Bioinformatics Analysis of Gene Regulation Integrating data and analysis of gene regulation at the transcriptional or epigenetic level to inform design of gene therapy products
Intrexon Therapeutics are Targeted, Controllable, Multigenic Intrexon’s technology and expertise facilitate the creation of sophisticated solutions designed to treat complex diseases Targeted: We employ cell and genome delivery systems designed to match disease and/or injury-related specifications. Our platforms include viral or non-viral gene delivery, engineered microbes, exosome-mediated RNA delivery, transient or persistent genome modifications, and autologous or universal cell therapies. Controllable: We create modulated gene systems (including RheoSwitch® technology), in concert with DNA/RNA/protein-based regulatory motifs, to enable spatiotemporal controls over one or more therapeutic effector molecules. Multigenic: We optimize multi-effector therapies to advance treatment or cure underlying disease etiologies and also to ameliorate effects of chronic comorbid tissue damage.
Intrexon Health Spans Broad Therapeutic Areas Precision therapeutics Immuno-oncology Autoimmunity Infectious Diseases Autoimmunity Inflammation Gastrointestinal Disorders Allergy Oral Mucositis RDEB Localized Scleroderma Friedreich's Ataxia Exosome Delivery Platform Others - undisclosed Regen. Med. Large Animal Disease Models Cannabinoids Opioids Steroids Others - undisclosed Precigen Gene and Cell Therapies ActoBio Therapeutics Microbe-based Biotherapeutics Additional Therapeutic Modalities Exemplar Genetics GE MiniSwine Microbial Metabolic Engineering Small molecules Cardiac Disease Triple-Gene Multigenic Gene Therapies wholly-owned subsidiary wholly-owned subsidiary wholly-owned subsidiary majority-owned subsidiary Triple-Gene LLC was formerly Xogenex LLC
Therapeutic Area Disease Target Therapeutic Candidate Preclinical Phase I Phase II Phase III Oncology [Precigen] Ovarian Cancer PRGN-3005 Oncology [Precigen] Relapsed/Refractory AML Higher Risk MDS PRGN-3006 Oncology [Precigen] Relapsed/Refractory AML INXN-3004 Cardiac Disease [Triple-Gene] Heart Failure INXN-4001 Rare Skin Disorders [Fibrocell] Recessive Dystrophic EB FCX-007 Rare Skin Disorders [Fibrocell] Moderate to Severe Localized Scleroderma FCX-013 Immunotherapy [Oragenics] Oral Mucositis AG013 Autoimmunity [ActoBio Therapeutics] Type 1 Diabetes AG019 Eight Therapeutic Candidates in Clinical Development Gene Therapy Biotherapeutics
Precigen’s Pipeline Offers Rapid Value Creation and Potential for Novel Combinations Precigen pipeline as of February 2019 TA Product Platform Indication Discovery Preclinical Phase I Immuno-oncology PRGN-3006 UltraCAR-T AML, MDS INXN-3004 Viral CAR-T AML PRGN-3005 UltraCAR-T Ovarian Cancer PRGN-3007 UltraCAR-T Undisclosed PRGN-3008 UltraCAR-T Undisclosed PRGN-2009 AdenoVerse Vaccine Solid Tumors PRGN-2010 AdenoVerse Vaccine Solid Tumors PRGN-5001 Multifunctional Therapeutic Solid Tumors PRGN-2011 AdenoVerse Cytokine Therapy Solid Tumors PRGN-5002 Multifunctional Therapeutic Solid Tumors Infectious disease PRGN-2012 AdenoVerse Vaccine Undisclosed PRGN-2013 AdenoVerse Vaccine Undisclosed Autoimmune disorders PRGN-3009 Undisclosed Undisclosed PRGN-3010 Undisclosed Undisclosed PRGN-3005 UltraCAR-T PRGN-3006 UltraCAR-T PRGN-2009 PRGN-2010 PRGN-2008 PRGN-3007 (Autologous cell therapy) PRGN-3008 (Autologous cell therapy) PRGN-3009 (Autologous cell therapy) PRGN-5001 (Bi-specific antibody) PRGN-5001 (Bi-specific antibody) PRGN-3007 UltraCAR-T PRGN-3008 UltraCAR-T PRGN-2011 PRGN-3009 (Autologous cell therapy) PRGN-3010 (Autologous cell therapy)
Precigen’s UltraCAR-T™ Platform Advantages: Enhanced Potency, Safety, and Scalability CAR mbIL-15 Kill Switch CAR – targeting for tumor types, optimized designs mbIL15 – improves potency, no ex vivo expansion needed Kill switch – designed to improve safety, can selectively deplete cell therapy Multigenic expression Optimized CAR design Long-term persistence Preferred/less differentiated T cell phenotype POTENCY Kill switch Controlled gene expression with RheoSwitch® Non-viral gene delivery SAFETY Rapid manufacturing Quick turnaround for patients No ex vivo expansion Decentralized manufacturing SCALABILITY
Transformative UltraCAR-T™ Candidates PRGN-3005 and PRGN-3006 Status FDA IND clearance in Feb ‘19 Phase1 study to evaluate safety and maximal tolerated dose Study in collaboration with University of Washington Patient Population Advanced stage platinum resistant ovarian cancer 300k diagnosed annually1/22k in US2 Stage IV survival as low as 20%3 PRGN-3005 UltraCAR-T™ 1World Health Organization, International Agency for Research on Cancer, Global Cancer Observatory. Cancer Today, Estimated number of new cases in 2018, worldwide, both sexes, all ages. Accessed December 2018 via WHO IARC GCO website. 2American Cancer Society Ovarian Cancer Special Section. Access December 2018 via ACS website. 3American Cancer Society. Survival Rates for Ovarian Cancer, by Stage. Accessed December 2018 via ACS website. 4American Cancer Society. Key Statistics for Acute Myeloid Leukemia (AML). Accessed December 2018 via ACS website. 5American Cancer Society. Key Statistics for Myelodysplastic Syndromes. Accessed December 2018 via ACS website. Status FDA IND clearance in Dec ‘18 Phase 1/1b study to evaluate safety and maximal tolerated dose Study in collaboration with Moffitt Cancer Center Patient Population Relapsed or refractory acute myeloid leukemia (AML) 20k diagnosed in US in 20184 Higher risk myelodysplastic syndrome (MDS) US incidence >10k per year5 PRGN-3006 UltraCAR-T™ Non-viral Sleeping Beauty system to co-express CAR, mbIL15 and kill switch UltraCAR-T™ CAR mbIL-15 Kill Switch
UltraCAR-T™ Platform Enables Rapid Manufacturing Electroporation Leukapheresis UltraCAR-T™ Infusion Less than two days Leukapheresis and T cell isolation from patient UltraCAR-T™ cells expand in patients UltraCAR-T™ cells Electroporation of non-viral Sleeping Beauty for expression of CAR, mbIL15 and kill switch Electroporation Unmodified T-cell Sleeping Beauty Plasmid DNA UltraCAR-T Advantages : Potency + Safety + Scalability Precigen’s UltraCAR-T Platform enables patient reinfusion within two days following non-viral gene transfer 1 2 3 UltraCAR-T™ Advantages : Potency + Safety + Scalability
Multigenic Candidate Displays Robust Biofunctional Activity Precigen’s multigenic candidate PRGN-5001 provides improved T cell activation in vitro and anti-tumor response in mice compared to approved anti-PD-1 checkpoint inhibitor Improved T cell activation Improved anti-tumor activity
Vaccine Candidates Generate Superior Immune Responses Novel antigen designs for infectious disease vaccine candidates produce robust antigen-specific response AdenoVerse™ vaccine (PRGN-2013) produces superior immune response Precigen AdenoVerse™ vaccine candidates and technology platform generate superior immune responses in a mouse model system compared to competitor vaccines Antigen specific immune response In vivo screening
Autoimmunity Candidate Demonstrates Potent Bioactivity Precigen’s autoimmunity asset PRGN-3009 demonstrated potent suppression of effector cell function in vitro PRGN-3009 PRGN-3009 Suppression of effector T cell proliferation Novel multigenic approach for treatment of autoimmune disorders with unmet medical need PRGN-3009 No Activation No Treatment Suppression of inflammatory cytokine production
ActoBiotics® Platform – A Novel Class of Oral Biotherapeutics ActoBiotics® is a fully integrated, cost-effective & unique food microbe-based delivery platform for therapeutics Potential for superior efficacy and safety through oral or local targeted delivery Platform based on using Lactococcus lactis Safe, food grade, living, lactic acid bacteria Ongoing animal and human studies Not a gut commensal: no replication in the GI tract Designed to perform specific biological interventions Accelerates development and validated regulatory path for new IND candidates Scalable and low cost of manufacturing
AG019 Ib/IIa trial in the treatment of early onset type 1 diabetes is ongoing and patient enrollment is proceeding in the US and Europe Collaborator Oragenics, Inc. continues patient enrollment in the Phase IIb trial for AG013 in the treatment for oral mucositis ANTIGEN-SPECIFIC TREGS MIGRATE TO INFLAMED TISSUE THERAPY TO TARGET MUCOSAL DISEASE PATHWAYS Oral cavity – OM AG013 Microbe-based Delivery of Biopharmaceuticals to Site of Disease Oral ActoBiotics® Intestinal (capsule) Buccal (Sublingual/rinse) GI Track – Celiac AG017 We continue to target an IND in Q2 2019 for AG017, an immune tolerance approach for the treatment of celiac disease Pancreas – T1D AG019
We are continuing patient enrollment and dosing in Phase I trial of INXN-4001, an investigational drug which is the world’s first triple gene drug candidate to target heart failure, the leading cause of death in humans Triple-Gene LLC: First Triple Gene Drug to Target Heart Failure in Clinic Angiogenesis Cell Homing Immunomodulation Scar Remodeling Energetics Multi-effector therapeutics 1. Comparison of prognosis data from 1990 (Matoba et al, Jpn Circ, Jan 1990 accessed at https://www.ncbi.nlm.nih.gov/pubmed/2332933) and from 2016 (Mozzafarian et al, Circulation 2016) Existing treatments improve quality of life in the short-term and offer some improvement in long-term survival though at high cost and with associated complications1 INXN-4001 addresses the multiple malfunctions of cardiomyocytes in patients with heart failure Triple-Gene LLC (formerly Xogenex LLC) is Intrexon’s majority-owned subsidiary
Preliminary Data Suggests Improvements in Cardiac Performance Characteristic Subject 01-01 Subject 01-03 Subject 01-04 Baseline 10% 10% 10% 90 Days 20% 15% 35% 6 months 20% - 40% Left Ventricular Ejection Fraction (LVEF) LVEF refers to the amount of blood being pumped out of the left ventricle each time it contracts LVEF was measured via echocardiogram after the six minute walk test when patient’s LVAD was turned OFF Congested Heart Healthy Heart LVEF Range* Normal 50% to 70% Mild dysfunction 40% to 49% Moderate dysfunction 30% to 39% Severe dysfunction Less than 30% *LVEF Range according to American College of Cardiology: Heart Failure An ACC Clinical Toolkit Human Clinical Data for INXN-4001: Off Left Ventricular Assist Device (LVAD), LVEF
Exemplar: Advancing Swine for Regenerative Medicine and Research Focus on regenerative medicine continues with Exemplar and the Mayo Clinic launching a joint venture, Cytotheryx, to develop high-quality source of human liver cells to advance medical research and address an estimated $250 million annual market opportunity Exemplar Genetics is developing porcine research models, which more accurately replicate human pathology as compared to traditional research models
Cannabinoids for Medical Use Intrexon’s proprietary yeast strains enable a transformative process for robust production of cannabinoids with consistent yield and purity Platform is designed to enable production of multiple target cannabinoids Intrexon Labs Hungary: Robust Microbial Production of Therapeutic Compounds Active Pharmaceutical Ingredients (APIs) Microbial production of APIs avoids resource intensive isolation from plant and animal sources offering potential for better consistency and purity of final product Intrexon’s proprietary pathway engineering has enabled development of microbial strains producing APIs, including the opioid intermediate thebaine
Diverse Delivery Modalities for Innovative Therapeutics FCX-007: An autologous dermal fibroblast genetically modified to express functional Type VII collagen (COL7) that is missing or deficient in patients with Recessive Dystrophic Epidermolysis Bullosa (RDEB) is currently in a Phase 1/2 clinical trial FCX-013: An autologous fibroblast genetically modified using lentivirus and encoded for matrix metalloproteinase 1 (MMP-1), a protein responsible for breaking down collagen to treat moderate to severe localized scleroderma is currently enrolling Phase 1 portion of a Phase 1/2 clinical trial Autologous Gene Therapies for Rare Skin Disorders Human exosomes developed for delivering diverse payloads to treat a broad array of diseases. Lead programs are focused on delivering bioactive RNAs to treat leukemias. Exosome-based Delivery of Bioactive Molecules UltraVector-optimized adeno-associated virus (AAV)-Frataxin for treatment of Friedreich’s Ataxia Gene Replacement Therapies for Rare Neurological Diseases Intrexon is collaborating with Fibrocell Science, Inc. (NASDAQ: FCSC) on FCX-007 and FCX-013; AAV-Frataxin is licensed to PTC Therapeutics, Inc. (NASDAQ: PTCT) Cell Manufacturing Photo courtesy of Fibrocell Science
Upcoming Milestones 2Q 2019 2Q 2019 2019 2Q 2019 2Q 2019 2Q 2019 3Q 2019 Anticipated Timing First patient dosing in Phase 1 clinical trial for PRGN-3005 UltraCAR-T™ First patient dosing in Phase 1 clinical trial for PRGN-3006 UltraCAR-T™ Completion of patient enrollment for Phase Ib/IIa for AG019 IND submission for ActoBiotics AG017 Completion of first cohort enrollment in a Phase 1 trial of INXN-4001 Initiation of Phase 3 trial for FCX-007 Completion of adult patient enrollment in Phase 1 for FCX-013
Intrexon Bioengineering Elite Bovine Genetics and Embryo Production Land-based Sustainable Aquaculture Non-browning apples Microbial Production of Fuels and Chemicals Precision Genetics for Sustainable Crop Production Insect Protein for Animal Feed Self-limiting Insect Control Ag Bio Division Industrial Products Division AquaBounty Technologies, Inc. (NASDAQ: AQB) is an investment of Intrexon and Intrexon’s collaborator in aquaculture; EnviroFlight, LLC is a joint venture between Intrexon and Darling Ingredients Inc. (NYSE: DAR) Addressing global challenges across food, agriculture, environmental, and industrial fields by advancing biologically engineered solutions to improve sustainability and efficiency Portfolio of companies are leaders in their respective industries Led by LTG (Ret.) Thomas Bostick, PhD, PE, Chief Operating Officer of Intrexon and President of Intrexon Bioengineering
Intrexon Corporate Highlights We are realigning to focus on Healthcare by forming Intrexon Health and Intrexon Bioengineering while streamlining management We believe the company will end the year with approximately the same net cash and short-term investment position that it held on April 3, 2019, achieving this through a combination of partnering, asset sales and operating cost reductions Numerous processes and conversations underway relative to asset sales and partnering We prepare for an IPO of Precigen, pending data and/or transaction
Intrexon Bioengineering Overview May 2019 Exhibit 99.3
Some of the statements made in this presentation are forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon Intrexon’s current expectations and projections about future events and generally relate to Intrexon’s plans, objectives and expectations for the development of Intrexon’s business, discussion of anticipated clinical trials and future collaborations. 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 presentation. These risks and uncertainties include, but are not limited to, (i) Intrexon’s strategy and overall approach to its business model and its ability to exercise more control and ownership over the development process and commercialization path; (ii) Intrexon’s ability to successfully enter new markets or develop additional products, whether with its collaborators or independently; (iii) Intrexon's ability to successfully enter into optimal strategic relationships with its subsidiaries and operating companies that it may form in the future; (iv) actual or anticipated variations in Intrexon’s operating results; (v) actual or anticipated fluctuations in Intrexon’s competitors’ or its collaborators’ operating results or changes in their respective growth rates; (vi) Intrexon’s cash position; (vii) market conditions in Intrexon’s industry; (viii) the volatility of Intrexon’s stock price; (ix) Intrexon’s ability, and the ability of its collaborators, to protect Intrexon’s intellectual property and other proprietary rights and technologies; (x) Intrexon’s ability, and the ability of its collaborators, to adapt to changes in laws or regulations and policies; (xi) the outcomes of pending and future litigation; (xii) the rate and degree of market acceptance of any products developed by Intrexon, its subsidiaries, collaborations or joint ventures; (xiii) Intrexon’s ability to retain and recruit key personnel; (xiv) Intrexon’s expectations related to the use of proceeds from its public offerings and other financing efforts; and (xv) Intrexon’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Intrexon’s actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in Intrexon’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. All information in this presentation is as of the date of the release, and Intrexon undertakes no duty to update this information unless required by law. Safe Harbor Statement
Diverse areas of expertise (investments across categories) Addressing real world challenges (solving unmet needs) Robust, diverse pipeline in various stages of development (hedge against timing) World-first milestones (category defining solutions) Accomplished scientists & engineers (most valued asset) Developing solutions to improve the quality of life & health of the planet Overview
Intrexon Bioengineering Leadership Lt. Gen (Ret.) Thomas P. Bostick, PhD, PE, NAE Chief Operating Officer President, Intrexon Bioengineering Extensive experience in environmental sustainability, significant leadership skills and an established track record in engineering solutions for the nation’s toughest challenges 53rd U.S. Army Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers (USACE) serving as the senior military officer overseeing and supervising most of the nation’s civil works infrastructure and military construction, hundreds of environmental protection projects, as well as managing 34,000 civilian employees and military personnel in over 110 countries around the world Thirty eight years with the U.S. Army serving in a variety of command and staff assignments both in the U.S. and abroad Special assistant to the Secretary of Veterans Affairs during his time as a White House Fellow Bachelor’s of Science degree from the U.S. Military Academy at West Point Master’s degrees in Civil Engineering and Mechanical Engineering from Stanford University Doctorate in Systems Engineering from George Washington University
Intrexon Bioengineering Elite Bovine Genetics and Embryo Production Land-based Sustainable Aquaculture Non-browning apples Microbial Production of Fuels and Chemicals Precision Genetics for Sustainable Crop Production Insect Protein for Animal Feed Self-limiting Insect Control Ag Bio Division Industrial Products Division AquaBounty Technologies, Inc. (NASDAQ: AQB) is an investment of Intrexon and Intrexon’s collaborator in aquaculture; EnviroFlight, LLC is a joint venture between Intrexon and Darling Ingredients Inc. (NYSE: DAR) Addressing global challenges across food, agriculture, environmental, and industrial fields by advancing biologically engineered solutions to improve sustainability and efficiency Portfolio of companies are leaders in their respective industries
Deep Biological Expertise Drives Solution Development We are addressing global challenges with precise control of biological systems Harnessing the power of living cells: At its core, Intrexon is a gene expression and regulation company focused on precise control of a wide collection of cells and organisms Synthetic biology rests on biology: Intrexon’s deep knowledge of biology combined with our bioinformatics and computational biology tools enables the discovery, generation, and validation of innovative products Unique toolbox two decades in the making: Intrexon’s precision engineering capabilities allow for controllable, multi-genic payload capacity of our gene programs
Highlights: Addressing Real World Needs Across Categories ANIMALS Animal Agriculture Need: Improved quality and production of beef & dairy cattle to meet demand for animal protein Solution: Elite bovine genetics and reproductive technologies Need: Vector control for disease-carrying mosquitoes Solution: Friendly™ Aedes, self-limiting mosquitoes Need: Crop protection from insect pests Solution: Self-limiting insect control platform for crop pests Insect Control Plant Agriculture PLANTS Need: Eliminate waste in food production for growers and consumers Solution: Non-browning Arctic® apples Need: More efficient plant propagation Solution: Botticelli™ high-throughput plant regeneration platform (e.g. tomato, cannabis) MICROBES Need: Efficient production of fuels and chemicals Solution: Methane Bioconversion Platform to generate high value fuels & chemicals from natural gas Industrial Chemicals/Fuels Food/Feed Need: Sustainable fish farming Solution: Land-based aquaculture with AquAdvantage® salmon Need: Demand for high quality nutritional feed for animals Solution: Black soldier fly larvae Representative list of programs to demonstrate the company’s overall strategy; not a complete list
History of World-First Milestones 1st FDA approved engineered food animal (fish) 1st engineered apple approved in U.S. and Canada 1st bioengineered insect with commercial applications 1st natural gas bioconversion with engineered methanotroph Additional first-in-class engineering of biology applications ongoing
Portfolio Snapshot
Industrial Products – Methane Bioconversion Platform (MBP) Differentiated Approach Proprietary DNA platform enables engineering of methanotrophs to produce targeted high-value fuels and chemical products through bioconversion of natural gas MBP holds the potential to transform the gas-to-liquids industry by generating valuable fuels and chemicals at a fraction of the costs of more traditional methods Biologically based process enables significantly less opex than LNG and less capex than Fischer-Tropsch Notable Achievements Building of a proprietary genetic toolbox for methanotroph engineering Producing 2,3 BDO from natural gas CH4 Methane CH3OH Methanol Methane oxidization enzyme CH2O Formaldehyde Methanol dehydrogenation enzyme C6H13O9P fructose-6-phosphate C3H4O3 Pyruvate CxHxOx Feedstock Product Methanotroph cell DNA
Okanagan Specialty Fruits – Reducing Food Waste with Non-browning Apples Differentiated Approach Non-browning Arctic® apples reduce food waste and provide benefits from growers to consumers Apples utilize RNAi technology to knock down enzyme polyphenol oxidase which causes browning Notable Achievements Okanagan Specialty Fruits’ (OSF) picked more than 2,100 bins of Arctic® apples in the 2018 harvest Select retailers are now selling fresh Arctic® sliced apples and ApBitz™ dehydrated apple snacks (also available on Amazon.com)
Oxitec – Self-limiting Insects for Vector and Crop Pest Control Differentiated Approach Targeted species-specific method to suppress wild populations of disease-carrying mosquitoes and crop-destroying insect pests 2nd generation self-limiting, male-selecting strains with better economics than prior strains, without need for large-scale production facilities Notable Achievements Two collaborative Agreements with the Bill & Melinda Gates Foundation to develop Friendly™ Anopheles targeting Anopheles mosquito strains that spread malaria Two collaborative agreements to develop self-limiting strains against significant crop pests – fall armyworm and soybean looper
Trans Ova – Elite Bovine Genetics Technology * Based on the most current Council of Dairy Cattle Breeding genomic testing results Differentiated Approach Trans Ova Genetics is the preeminent leader of bovine genetics in North America focused on continuing to expand and improve herd genetics in support of embryo sales Notable Achievements More than 575 heifers added in the last year, with two Jersey heifers ranking #2 and #9 in the world* The herd also includes 15 of the world’s 37 top Holstein bulls based on an industry accepted dairy production index
AquaBounty – Sustainable Aquaculture Differentiated Approach AquAdvantage® approach enables salmon to grow to market weight in half the time with one-quarter less feed in land based systems bringing productivity and environmental benefits to the aquaculture industry Notable Achievements AquAdvantage® Salmon (AAS) currently distributed throughout Canada US FDA import alert lifted in March 2019 Prince Edward Island 250 metric ton production facility on track for Q2 2019 completion AquaBounty Technologies, Inc. (NASDAQ: AQB) is an investment of Intrexon and Intrexon’s collaborator in aquaculture
Ag Biotech – Precision Genetics for Sustainable Crop Production Differentiated Approaches Proprietary Botticelli™ non-GMO tissue culture technology designed to enable rapid production of clean plants with product consistency and reduced phytosanitary risk On-Off Florian™ gene switch technology for selective regulation of specific genes to enable “on demand” traits in plants Notable Achievements Strategic licensing agreements to advance our Botticelli™ platform for production of proprietary cannabis cultivars: With Next Green Wave for the California market With Surterra Wellness for the Florida market
EnviroFlight – Black Soldier Fly (BSF) Larvae for Animal Feed Maysville commercial facility Differentiated Approach EnviroFlight’s BSF larvae holds considerable promise as an environmentally-friendly toxin-free, sustainable source of high-value nutrients for animal feed (pets, exotic animals, poultry, fish) Notable Achievements Received approval by Association of American Feed Control Officials (AAFCO) to include use in poultry diets Opened largest BSF larvae facility in the US in November 2018 Facility has ability to produce 900 metric tons of product a year and is designed to scale up to 3,200 metric tons Commercial production underway, orders for products from new facility already accounting for ~1/3 of anticipated annual output EnviroFlight, LLC is a joint venture between Intrexon and Darling Ingredients Inc. (NYSE: DAR)
Intrexon Bioengineering Summary Accomplished non-health biotech team, operating in diverse organisms Achievements range from early discovery to regulatory approval to market acceptance of novel, bioengineered products Mature assets that are on the market or coming to market represent significant historic firsts Strong partners in place