Full Press Release Details
Intrexon Announces Third Quarter 2017 Financial Results
Quarterly GAAP revenues of $46.0 million and net loss attributable to Intrexon of $39.7 million
including non-cash charges of $24.0 million
Adjusted EBITDA of $(16.4) million
GERMANTOWN, MD, November 9, 2017 Intrexon Corporation (NYSE: XON), a leader in the engineering and industrialization
of biology to improve the quality of life and health of the planet, today announced its third quarter financial results for 2017.
and Recent Developments:
Third Quarter 2017 Financial Highlights:
Year-to-Date 2017 Financial
our team for its astonishing number of significant accomplishments. We continue our transition from a company with substantial potential to one that is realizing that promise scientifically and commercially, commented Randal J. Kirk, Chairman
and Chief Executive Officer of Intrexon. Four years ago, we were focused almost exclusively on early stage programs but now are engaged in partnering efforts to capitalize on certain of our mature programs, including Methane Bioconversion
Platform and Intrexon Crop Protection. We believe that these efforts will allow us to increase our investments in ground-breaking new programs while realizing, sometimes with partners, the available potential of our earlier work.
Today, for example, with earlier-developed therapeutic candidates moving into Phase 3 and Phase 2 clinical trials, we mark a historic technical
achievement in the fight against heart failure with the filing of an IND for the world s first multigenic gene therapy targeting the leading cause of human death. This candidate generated promising safety and efficacy data in large animal
models, and we are hopeful that it will greatly improve the prospects for the many patients 5.7M adults in the U.S. alone with this grim diagnosis. We shall be introducing additional complex, multigenic therapies into the clinic, both
through our partners and on behalf of Precigen, in the near future.
We see a similar pattern in our Energy and Food portfolios and look forward to
developing this in Environment and Consumer as well and so believe that the balance of this year and 2018 will be validating for our strategy and ambition, concluded Mr. Kirk.
Third Quarter 2017 Financial Results Compared to Prior Year Period
Total revenues decreased $3.0 million, or 6%, from the quarter ended September 30, 2016. Collaboration and licensing revenues decreased
$2.4 million from the quarter ended September 30, 2016 due to a decrease in research and development services for certain of the Company s collaborations as the Company temporarily redeployed certain resources towards supporting
prospective new platforms and partnering opportunities. Product revenues decreased $1.6 million, or 17%, primarily due to lower customer demand for cows and live calves. Gross margin on products also decreased in the current period primarily
due to customer demand. Service revenues increased $1.3 million, or 15%, due to an increase in the number of bovine in vitro fertilization cycles performed due to higher customer demand. Gross margin on these services was consistent period over
Research and development expenses increased $7.4 million, or 26%, due primarily to increases in (i) salaries, benefits and other
personnel costs for research and development employees, (ii) depreciation and amortization, (iii) rent and utilities expenses, and (iv) lab supplies and consulting expenses. Salaries, benefits and other personnel costs increased
$2.6 million due to an increase in research and development headcount necessary to invest in current or expanding platforms and to develop new prospective collaborations and other partnering opportunities. Depreciation and amortization
increased $2.0 million primarily as a result of (i) the amortization of developed technology acquired from Oxitec, which began in November 2016 upon the completion of certain operational and regulatory events, and (ii) the
amortization of developed technology acquired from GenVec in June 2017. Rent and utilities expenses increased $1.4 million primarily due to the expansion of certain facilities to support the Company s increased headcount. Lab supplies and
consulting expenses increased $1.1 million as a result of (i) the progression of certain programs into the preclinical and clinical phases with certain of Intrexon s collaborators and (ii) the expansion or improvement of certain
of the Company s platform technologies. Selling, general and administrative (SG&A) expenses increased $5.5 million, or 16%. Salaries, benefits and other personnel costs increased $2.7 million primarily due to (i) increased
headcount to support the Company s expanding operations and (ii) increased stock-based compensation expense resulting from grants to certain of the Company s officers in February 2017. Legal and professional fees increased
$0.9 million primarily due to (i) increased legal fees to defend ongoing litigation and (ii) increased fees incurred for business development and prospective partnering efforts.
Total other income, net, increased $1.4 million, or 31%. This increase was primarily attributable to (i) increases in fair market value of the
Company s equity securities portfolio and (ii) dividend income from the Company s investments in preferred stock.
Equity in net loss of
affiliates, which includes the Company s pro-rata share of the net losses of its investments accounted for using the equity method of accounting, decreased $3.3 million, or 52%. This decrease was
primarily due to the temporary redeployment of certain of the Company s resources away from these joint venture programs towards supporting prospective new platforms and additional collaborations.
Year-to-Date 2017 Financial Results Compared to Prior Year Period
Total revenues increased $9.0 million, or 6%, over the nine months ended September 30, 2016. Collaboration and licensing revenues increased
$7.2 million, or 9%, over the nine months ended September 30, 2016, primarily due to the recognition of deferred revenue associated with the payment received in June 2016 from ZIOPHARM to amend the collaborations between the parties and
increased revenues associated with collaborations entered into with the Harvest start-up entities in 2016. Product revenues decreased $2.9 million, or 10%, primarily due to lower customer demand for cows
and live calves. Gross margin on products improved in the current period primarily due to a decline in the average cost of cows. Service revenues increased $4.6 million, or 14%, due to an increase in the number of bovine in vitro fertilization
cycles performed due to higher customer demand. Gross margin on services decreased slightly in the current period primarily due to an increase in royalties and commissions due to vendors.
Research and development expenses increased $21.4 million, or 26%, due primarily to increases in
(i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, (iii) depreciation and amortization, and (iv) rent and utilities expenses. Salaries, benefits and
other personnel costs increased $7.4 million due to an increase in research and development headcount necessary to invest in current or expanding platforms and to develop new prospective collaborations and other partnering opportunities. Lab
supplies and consulting expenses increased $6.3 million as a result of (i) the progression of certain programs into the preclinical and clinical phases with certain of Intrexon s collaborators and (ii) the expansion or
improvement of certain of the Company s platform technologies. Depreciation and amortization increased $4.3 million primarily as a result of (i) the amortization of developed technology acquired from Oxitec, which began in November
2016 upon the completion of certain operational and regulatory events, and (ii) the amortization of developed technology acquired from GenVec in June 2017. Rent and utilities expenses increased $2.5 million due to the expansion of certain
facilities to support the Company s increased headcount. SG&A expenses increased $6.3 million, or 6%. Salaries, benefits and other personnel costs increased $4.2 million primarily due to (i) increased headcount to support the
Company s expanding operations and (ii) increased stock-based compensation expense resulting from grants to certain of the Company s officers in February 2017. Legal and professional fees increased $4.7 million primarily due to
(i) increased legal fees to defend ongoing litigation, (ii) increased business development and public relations consulting expenses, and (iii) the Company s acquisition of GenVec that was completed in June 2017. These increases
were offset by $4.2 million in litigation expenses recorded in the prior period arising from the entrance of a court order in Trans Ova Genetics, L.C. s trial with XY, LLC.
Total other income (expense), net, increased $66.8 million, or 171%. This increase was primarily attributable to (i) increases in fair market value
of the Company s equity securities portfolio, investments in preferred stock and other convertible instruments and (ii) dividend income from the Company s investments in preferred stock.
Equity in net loss of affiliates, which includes the Company s pro-rata share of the net losses of its
investments accounted for using the equity method of accounting, decreased $5.7 million, or 33%. This decrease was primarily due to the temporary redeployment of certain of the Company s resources away from these joint venture programs
towards supporting prospective new platforms and additional collaborations.
Conference Call and Webcast
The Company will host a conference call today Thursday, November 9th, at 5:30 PM ET to discuss the third
quarter 2017 financial results and provide a general business update. The conference call may be accessed by dialing
1-888-317-6003 (Domestic US),
1-866-284-3684 (Canada), and
1-412-317-6061 (International) and providing the number 7741944 to join the Intrexon Corporation Call. Participants may also
access the live webcast through Intrexon s website in the Investors section at http://investors.dna.com/events.
About Intrexon Corporation
Intrexon Corporation (NYSE: 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. Intrexon s integrated technology suite provides its partners across diverse markets with 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
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.
Intrexon, Arctic, ActoBiotics, RTS, 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. 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 current and future collaborations and joint ventures; (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 Securities and Exchange Commission. 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:
Intrexon Corporation and Subsidiaries
Consolidated Balance Sheets
| (Amounts in thousands) | September 30, 2017 | December 31, 2016 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 64,216 | $ | 62,607 | ||||
| Restricted cash | 6,987 | 6,987 | ||||||
| Short-term investments | 44,502 | 174,602 | ||||||
| Receivables | ||||||||
| Trade, net | 18,134 | 21,637 | ||||||
| Related parties | 17,866 | 16,793 | ||||||
| Notes, net | 1,500 | |||||||
| Other | 2,253 | 2,555 | ||||||
| Inventory | 17,730 | 21,139 | ||||||
| Prepaid expenses and other | 8,052 | 7,361 | ||||||
| Total current assets | 179,740 | 315,181 | ||||||
| Long-term investments | 5,993 | |||||||
| Equity securities | 26,642 | 23,522 | ||||||
| Investments in preferred stock | 148,499 | 129,545 | ||||||
| Property, plant and equipment, net | 102,876 | 64,672 | ||||||
| Intangible assets, net | 240,897 | 225,615 | ||||||
| Goodwill | 166,821 | 157,175 | ||||||
| Investments in affiliates | 22,942 | 23,655 | ||||||
| Other assets | 9,844 | 3,710 | ||||||
| Total assets | $ | 898,261 | $ | 949,068 | ||||
| Current liabilities | ||||||||
| Accounts payable | $ | 7,852 | $ | 8,478 | ||||
| Accrued compensation and benefits | 11,206 | 6,540 | ||||||
| Other accrued liabilities | 18,960 | 15,776 | ||||||
| Deferred revenue | 48,289 | 53,364 | ||||||
| Lines of credit | 234 | 820 | ||||||
| Current portion of long term debt | 439 | 386 | ||||||
| Deferred consideration | 8,801 | |||||||
| Related party payables | 816 | 440 | ||||||
| Total current liabilities | 87,796 | 94,605 | ||||||
| Long term debt, net of current portion | 7,673 | 7,562 | ||||||
| Deferred revenue, net of current portion | 227,998 | 256,778 | ||||||
| Deferred tax liabilities | 15,868 | 17,007 | ||||||
| Other long term liabilities | 5,747 | 3,868 | ||||||
| Total liabilities | 345,082 | 379,820 | ||||||
| Commitments and contingencies | ||||||||
| Total equity | ||||||||
| Common stock | ||||||||
| Additional paid-in capital | 1,370,917 | 1,325,780 | ||||||
| Accumulated deficit | (820,554 | ) | (729,341 | ) | ||||
| Accumulated other comprehensive loss | (16,750 | ) | (36,202 | ) | ||||
| Total Intrexon shareholders equity | 533,613 | 560,237 | ||||||
| Noncontrolling interests | 19,566 | 9,011 | ||||||
| Total equity | 553,179 | 569,248 | ||||||
| Total liabilities and total equity | $ | 898,261 | $ | 949,068 |
Intrexon Corporation and Subsidiaries
Consolidated Statements of Operations
| (Amounts in thousands, except share and per share data) | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues | ||||||||||||||||
| Collaboration and licensing revenues | $ | 28,155 | $ | 30,590 | $ | 89,384 | $ | 82,144 | ||||||||
| Product revenues | 7,670 | 9,260 | 25,780 | 28,699 | ||||||||||||
| Service revenues | 9,975 | 8,706 | 37,890 | 33,298 | ||||||||||||
| Other revenues | 216 | 429 | 899 | 783 | ||||||||||||
| Total revenues | 46,016 | 48,985 | 153,953 | 144,924 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of products | 8,001 | 9,156 | 25,625 | 29,471 | ||||||||||||
| Cost of services | 7,013 | 5,803 | 21,805 | 17,807 | ||||||||||||
| Research and development | 36,472 | 29,035 | 104,663 | 83,266 | ||||||||||||
| Selling, general and administrative | 39,277 | 33,812 | 113,258 | 106,956 | ||||||||||||
| Total operating expenses | 90,763 | 77,806 | 265,351 | 237,500 | ||||||||||||
| Operating loss | (44,747 | ) | (28,821 | ) | (111,398 | ) | (92,576 | ) | ||||||||
| Other Income (Expense), Net | ||||||||||||||||
| Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock | 2,175 | 412 | 9,240 | (45,388 | ) | |||||||||||
| Interest expense | (138 | ) | (227 | ) | (498 | ) | (759 | ) | ||||||||
| Interest and dividend income | 5,070 | 4,494 | 14,437 | 5,817 | ||||||||||||
| Other income, net | (1,021 | ) | (32 | ) | 4,453 | 1,205 | ||||||||||
| Total other income (expense), net | 6,086 | 4,647 | 27,632 | (39,125 | ) | |||||||||||
| Equity in net loss of affiliates | (2,993 | ) | (6,255 | ) | (11,273 | ) | (16,951 | ) | ||||||||
| Loss before income taxes | (41,654 | ) | (30,429 | ) | (95,039 | ) | (148,652 | ) | ||||||||
| Income tax benefit | 818 | 418 | 2,164 | 3,290 | ||||||||||||
| Net loss | $ | (40,836 | ) | $ | (30,011 | ) | $ | (92,875 | ) | $ | (145,362 | ) | ||||
| Net loss attributable to the noncontrolling interests | 1,147 | 1,029 | 3,123 | 2,887 | ||||||||||||
| Net loss attributable to Intrexon | $ | (39,689 | ) | $ | (28,982 | ) | $ | (89,752 | ) | $ | (142,475 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.33 | ) | $ | (0.24 | ) | $ | (0.75 | ) | $ | (1.21 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 120,518,885 | 118,346,782 | 119,741,291 | 117,785,160 |
Intrexon Corporation and Subsidiaries