Full Press Release Details
Intrexon Reports Second Quarter and First Half 2019 Financial Results
Quarterly GAAP revenues of $36.0 million and net loss attributable to Intrexon of $38.8 million including non-cash charges of $8.0 million
GERMANTOWN, MD, August 8, 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 second quarter and first half financial results for 2019.
Recent Business Highlights:
Second Quarter 2019 Financial Highlights:
First Half 2019 Financial Highlights:
Earlier this year we announced our intent to focus the
Company s business, directing capital to certain of our most strategic programs. We also established a goal of ending the year with approximately the same net cash and short-term investment position that the company held on April 3, 2019,
which included initiating plans to sell or partner certain divisions and to reduce our original 2019 operating budget by approximately $70 million, commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon.
Mr. Kirk concluded, Based on the significant steps we have taken with respect to the sales of certain subsidiaries and assets, the partnering of
programs, as well as operating cost reductions, we continue to believe our goal with respect to achieving the same net cash and short-term investment position should be achieved. Moreover, I believe we will meet this goal while retaining for the
company the core technologies and valuable product candidates that represent the most important future value for our shareholders.
identified and implemented significant operating cost reductions. However, based on progress to date and the ongoing evaluation of the Company s strategic direction and long-term best interest, management has determined not to proceed in
continuing its efforts to achieve the full initial target of $70 million in operating cost reductions. Instead, we will concentrate our focus on our overall net cash and short-term investment position, added LTG (Ret.) Thomas Bostick,
PhD, PE, Chief Operating Officer of Intrexon and President, Intrexon Bioengineering.
There are risks and uncertainties inherent in forecasts of this
nature, including with respect to the challenges in identifying and negotiating with counterparties, transactions taking longer or generating lower proceeds than expected, changes in strategic directions, general market developments, costs and
expenses being higher than anticipated, developments in clinical, market or competitive data, and other factors of the type generally applicable to the Company s business, including those discussed under the Safe Harbor Statement below.
With regard to the agreement to build a standalone energy company to be led by Governor Dewhurst on the foundation of Intrexon s Methane Bioconversion
Platform, Mr. Kirk further commented,
Governor Dewhurst brings a lifetime of experience that perfectly suits him to lead the revolution in energy that should be made possible through our Methane Bioconversion Platform. From his
experience as an intelligence officer, in public service (including serving as Lieutenant Governor of Texas for twelve years) and in building successful energy companies, he has throughout demonstrated leadership, intelligence, courage and personal
integrity that inspire and that achieve significant results. We look forward to his leadership at MBP and to working with him to fully realize its great potential.
As I have followed Intrexon, I have learned to admire and respect RJ s acumen and visionary creation to improve the quality of life for all people.
As an innovator, who has repeatedly implemented technologies successfully, I feel driven to seize this opportunity to work alongside RJ and the incredibly talented team as CEO of the Methanotroph Bioconversion Platform, to build a safer, healthier
planet, and a more promising future. I m excited by this opportunity and dedicated to bringing together great minds in synthetic biology with industry to solve big challenges facing today s society, Governor Dewhurst stated.
Second Quarter 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $9.3 million from the quarter ended June 30, 2018. Collaboration and licensing revenues decreased $8.4 million, or 48%,
from the quarter ended June 30, 2018 primarily due to the reacquisition of rights previously licensed to some of our most significant collaborators in the second half of 2018 and the result of which eliminated or substantially reduced revenues
previously generated from those collaborations.
Research and development expenses decreased $7.5 million, or 18%. The 2018 amounts include
$5.3 million of one-time costs associated with closing one of Oxitec s research and development facilities as the Company decentralized operations previously conducted in this facility. Additionally,
depreciation and amortization decreased $2.2 million primarily due to intangible assets that were impaired or abandoned in 2018. Selling, general and administrative (SG&A) expenses decreased $12.9 million, or 38% and of this amount,
$10.6 million was primarily attributable to decreased share-based compensation expense which arose primarily from the departure of former employees.
First Half 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $25.6 million from the six months ended June 30, 2018. Collaboration and licensing revenues decreased $22.2 million, or
60%, from the six months ended June 30, 2018 primarily due to the reacquisition of rights previously licensed to some of our most significant collaborators in the second half of 2018 and the result of which eliminated or substantially reduced
revenues previously generated from those collaborations. Product revenues decreased $4.0 million, or 24%, primarily due to lower customer demand for pregnant cows, live and weaned calves, and cloned products. Gross margin on products declined
in the current period as a result of fewer products sold, decreased sales prices, and increased costs associated with new product offerings.
development expenses decreased $11.6 million, or 15%. The 2018 amounts include $5.3 million of one-time costs associated with closing one of Oxitec s research and development facilities as the
Company decentralized operations previously conducted in this facility. Additionally, depreciation and amortization decreased $4.3 million primarily due to intangible assets that were impaired or abandoned in 2018. Research and development
salaries, benefits and other personnel costs decreased $2.0 million primarily due to the closing of one of Oxitec s research and development facilities. SG&A expenses decreased $19.1 million, or 26% and of this amount,
$15.5 million was primarily attributable to decreased share-based compensation expense which arose primarily from the departure of former employees.
Conference Call and Webcast
The Company will host a
conference call today Thursday, August 8th, at 5:30 PM ET to discuss the second quarter and first half 2019 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 4443860 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.
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, energy, 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
Intrexon, UltraCAR-T, GreenVenus, Friendly,
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, its efforts to realign its business, 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, including the expected timing and results of investigational studies and preclinical and clinical trials, 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) Intrexon s ability to hold or generate significant operating capital, including through partnering, asset sales and operating cost
reductions; (v) actual or anticipated variations in Intrexon s operating results; (vi) actual or anticipated fluctuations in Intrexon s competitors or its collaborators operating results or changes in their respective
growth rates; (vii) Intrexon s cash position; (viii) market conditions in Intrexon s industry; (ix) the volatility of Intrexon s stock price; (x) Intrexon s ability, and the ability of its collaborators, to
protect Intrexon s intellectual property and other proprietary rights and technologies; (xi) Intrexon s ability, and the ability of its collaborators, to adapt to changes in laws or regulations and policies; (xii) the outcomes of
pending and future litigation; (xiii) the rate and degree of market acceptance of any products developed by Intrexon, its subsidiaries, collaborations or joint ventures; (xiv) Intrexon s ability to retain and recruit key personnel;
(xv) Intrexon s expectations related to the use of proceeds from its public offerings and other financing efforts; (xvi) Intrexon s estimates regarding expenses, future revenue, capital requirements and needs for additional
financing; and (xvii) the successful formation of a stand-alone company for our Methane Bioconversion Platform. 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 for the fiscal year ended December 31, 2018 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.
For more information regarding Intrexon
Corporation, contact:
Intrexon Corporation and Subsidiaries
Consolidated Balance Sheets
| (Amounts in thousands) | June 30, 2019 | December 31, 2018 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 58,162 | $ | 102,768 | ||||
| Restricted cash | 6,987 | |||||||
| Short-term investments | 67,641 | 119,688 | ||||||
| Equity securities | 384 | |||||||
| Receivables | ||||||||
| Trade, net | 24,496 | 21,195 | ||||||
| Related parties, net | 7,095 | 4,129 | ||||||
| Other, net | 2,866 | 2,754 | ||||||
| Inventory | 18,192 | 21,447 | ||||||
| Prepaid expenses and other | 4,712 | 6,131 | ||||||
| Total current assets | 183,164 | 285,483 | ||||||
| Equity securities, noncurrent | 21,503 | 1,798 | ||||||
| Property, plant and equipment, net | 120,401 | 128,874 | ||||||
| Intangible assets, net | 112,526 | 129,291 | ||||||
| Goodwill | 149,916 | 149,585 | ||||||
| Investments in affiliates | 18,093 | 18,859 | ||||||
| Right-of-use assets | 41,558 | |||||||
| Other assets | 8,027 | 2,287 | ||||||
| Total assets | $ | 655,188 | $ | 716,177 | ||||
| Current liabilities | ||||||||
| Accounts payable | $ | 8,563 | $ | 13,420 | ||||
| Accrued compensation and benefits | 9,034 | 10,687 | ||||||
| Other accrued liabilities | 11,701 | 20,620 | ||||||
| Deferred revenue | 16,593 | 15,554 | ||||||
| Lines of credit | 387 | 466 | ||||||
| Current portion of long-term debt | 468 | 559 | ||||||
| Current portion of lease liabilities | 4,813 | |||||||
| Related party payables | 74 | 256 | ||||||
| Total current liabilities | 51,633 | 61,562 | ||||||
| Long-term debt, net of current portion | 212,479 | 211,235 | ||||||
| Deferred revenue, net of current portion | 66,542 | 54,210 | ||||||
| Lease liabilities, net of current portion | 38,757 | |||||||
| Deferred tax liabilities, net | 6,332 | 7,213 | ||||||
| Other long-term liabilities | 222 | 3,235 | ||||||
| Total liabilities | 375,965 | 337,455 | ||||||
| Commitments and contingencies | ||||||||
| Total equity | ||||||||
| Common stock | ||||||||
| Additional paid-in capital | 1,737,449 | 1,722,012 | ||||||
| Accumulated deficit | (1,430,020 | ) | (1,330,545 | ) | ||||
| Accumulated other comprehensive loss | (28,206 | ) | (28,612 | ) | ||||
| Total Intrexon shareholders equity | 279,223 | 362,855 | ||||||
| Noncontrolling interests | 15,867 | |||||||
| Total equity | 279,223 | 378,722 | ||||||
| Total liabilities and total equity | $ | 655,188 | $ | 716,177 |
Intrexon Corporation and Subsidiaries
Consolidated Statements of Operations
| (Amounts in thousands, except share and per share data) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues | ||||||||||||||||
| Collaboration and licensing revenues | $ | 9,097 | $ | 17,450 | $ | 15,067 | $ | 37,298 | ||||||||
| Product revenues | 7,819 | 9,568 | 12,676 | 16,720 | ||||||||||||
| Service revenues | 18,400 | 17,718 | 29,783 | 29,965 | ||||||||||||
| Other revenues | 670 | 539 | 1,795 | 958 | ||||||||||||
| Total revenues | 35,986 | 45,275 | 59,321 | 84,941 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of products | 9,176 | 10,639 | 17,466 | 19,169 | ||||||||||||
| Cost of services | 8,218 | 7,895 | 15,310 | 14,678 | ||||||||||||
| Research and development | 34,518 | 42,049 | 67,580 | 79,187 | ||||||||||||
| Selling, general and administrative | 21,483 | 34,427 | 55,077 | 74,164 | ||||||||||||
| Total operating expenses | 73,395 | 95,010 | 155,433 | 187,198 | ||||||||||||
| Operating loss | (37,409 | ) | (49,735 | ) | (96,112 | ) | (102,257 | ) | ||||||||
| Other Expense, Net | ||||||||||||||||
| Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net | 5,632 | (19,182 | ) | 5,702 | (20,278 | ) | ||||||||||
| Interest expense | (4,358 | ) | (142 | ) | (8,669 | ) | (241 | ) | ||||||||
| Interest and dividend income | 1,031 | 5,746 | 2,395 | 11,216 | ||||||||||||
| Other expense, net | (2,605 | ) | (93 | ) | (2,099 | ) | (881 | ) | ||||||||
| Total other expense, net | (300 | ) | (13,671 | ) | (2,671 | ) | (10,184 | ) | ||||||||
| Equity in net loss of affiliates | (1,747 | ) | (4,550 | ) | (3,387 | ) | (7,010 | ) | ||||||||
| Loss before income taxes | (39,456 | ) | (67,956 | ) | (102,170 | ) | (119,451 | ) | ||||||||
| Income tax benefit | 525 | 1,127 | 1,103 | 5,213 | ||||||||||||
| Net loss | $ | (38,931 | ) | $ | (66,829 | ) | $ | (101,067 | ) | $ | (114,238 | ) | ||||
| Net loss attributable to the noncontrolling interests | 165 | 1,447 | 1,592 | 2,691 | ||||||||||||
| Net loss attributable to Intrexon | $ | (38,766 | ) | $ | (65,382 | ) | $ | (99,475 | ) | $ | (111,547 | ) | ||||
| Net loss attributable to Intrexon per share, basic and diluted | $ | (0.25 | ) | $ | (0.51 | ) | $ | (0.65 | ) | $ | (0.87 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 153,749,929 | 129,299,584 | 153,351,208 | 128,500,897 |