Full Press Release Details
Intrexon Reports Third Quarter 2019 Financial Results
Tightened focus on healthcare and on track to meet yearend transactional and cash goals
Quarterly GAAP revenues of $23.0 million and net loss attributable to Intrexon of $53.6 million including non-cash charges of $19.5
GERMANTOWN, MD, November 12, 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 third quarter financial results for 2019.
Recent Business Highlights:
In 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.
Third Quarter 2019 Financial Highlights:
Year-to-Date 2019 Financial Highlights:
Intrexon s longstanding focus on Health and, in particular, in cancer therapeutics may be
vindicated as Precigen s clinical programs further develop, commented Mr. Kirk.
Mr. Kirk concluded, When I became CEO in 2009,
when the company entered into its first collaboration in 2011, when it IPO d in 2013 and through last year s reacquisition of the vast majority of its commercial rights pertaining to its cancer therapeutics programs, healthcare has been
our greatest area of investment and potential. When Helen Sabzevari joined us in 2017 as President of Precigen, truly the repository of the original Intrexon technology as well as its most substantial technology acquisitions, we saw great potential
if these technologies could be unlocked by a great drug development team. Today we begin to share with the world what Helen and her team have accomplished and, equally importantly, to let you hear this formidable pharmaceutical executive tell you
this in her own words.
Third Quarter 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $9.4 million from the quarter ended September 30, 2018. Collaboration and licensing revenues decreased $8.1 million, or 57%, from
the quarter ended September 30, 2018 primarily due to the reacquisition of rights previously licensed to some of Intrexon s most significant collaborators in the second half of 2018 and the result of which eliminated or substantially
reduced revenues previously generated from those collaborations. Additionally, collaboration and licensing revenues from collaborations with other collaborators decreased due to lower demand for research and development services in the current year
Research and development expenses decreased $13.4 million, or 30%. The 2018 amounts include an $8.7 million expense related to in-process
research and development reacquired as part of an asset acquisition in September 2018. 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 $14.0 million, or 36%, and of this amount, $11.2 million was primarily attributable to (i) decreased compensation expenses related to performance and retention incentives for SG&A employees
and (ii) decreased share-based compensation expense which arose primarily from the departure of former employees during the first half of the current year.
Year-to-Date 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $35.0 million from the nine months ended September 30, 2018. Collaboration and licensing revenues decreased $30.4 million, or
59%, from the nine months ended September 30, 2018 primarily due to the reacquisition of rights previously licensed to some of Intrexon s 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 $5.0 million, or 21%, primarily due to lower customer demand. Gross margin on products also declined in the current period for the same reason.
Research and development expenses decreased $25.0 million, or 20%. The 2018 amounts include (i) an $8.7 million expense related to in-process
research and development reacquired as part of an asset acquisition in September 2018 and (ii) $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 $6.5 million primarily due to intangible assets that were impaired or abandoned in 2018. SG&A expenses decreased $33.1 million, or 29%, and
of this amount, $26.7 million was primarily attributable to (i) decreased share-based compensation expense which arose primarily from the departure of former employees as well as a result of certain stock option grants becoming fully vested in
2018 and (ii) decreased compensation expenses related to performance and retention incentives for SG&A employees.
Conference Call and Webcast
Precigen, Inc., a biopharmaceutical company specializing in the development of innovative gene and cellular therapies to improve the lives of patients and a
wholly owned subsidiary of Intrexon, will host a conference call today Tuesday, November 12th at 11:00 AM ET to provide Precigen business and pipeline updates. 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 4454504 to join the Precigen Business and Pipeline Update Call.
Participants may also access the live webcast through Intrexon s website in the Investors section at http://investors.dna.com/events or Precigen s website in the Presentations section at https://precigen.com/media/#id-presentations.
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, energy, and industrial fields by advancing biologically engineered solutions to improve sustainability and efficiency. Our integrated
Intrexon, UltraCAR-T, Arctic, 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; (xvii) the successful formation of a stand-alone company for our Methane Bioconversion Platform; and (xviii) the successful completion of certain
anticipated transactions. 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) | September 30, 2019 | December 31, 2018 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 44,428 | $ | 102,768 | ||||
| Restricted cash | 6,987 | |||||||
| Short-term investments | 45,285 | 119,688 | ||||||
| Equity securities | 16,320 | 384 | ||||||
| Receivables | ||||||||
| Trade, net | 20,413 | 21,195 | ||||||
| Related parties, net | 2,588 | 4,129 | ||||||
| Other, net | 1,970 | 2,754 | ||||||
| Inventory | 17,295 | 21,447 | ||||||
| Prepaid expenses and other | 9,033 | 6,131 | ||||||
| Total current assets | 157,332 | 285,483 | ||||||
| Equity securities, noncurrent | 6,515 | 1,798 | ||||||
| Property, plant and equipment, net | 122,706 | 128,874 | ||||||
| Intangible assets, net | 107,141 | 129,291 | ||||||
| Goodwill | 147,949 | 149,585 | ||||||
| Investments in affiliates | 17,487 | 18,859 | ||||||
| Right-of-use assets | 43,211 | |||||||
| Other assets | 2,564 | 2,287 | ||||||
| Total assets | $ | 604,905 | $ | 716,177 | ||||
| Current liabilities | ||||||||
| Accounts payable | $ | 7,395 | $ | 13,420 | ||||
| Accrued compensation and benefits | 9,862 | 10,687 | ||||||
| Other accrued liabilities | 13,664 | 20,620 | ||||||
| Deferred revenue | 12,764 | 15,554 | ||||||
| Lines of credit | 569 | 466 | ||||||
| Current portion of long-term debt | 31,433 | 559 | ||||||
| Current portion of lease liabilities | 6,224 | |||||||
| Related party payables | 44 | 256 | ||||||
| Total current liabilities | 81,955 | 61,562 | ||||||
| Long-term debt, net of current portion | 184,034 | 211,235 | ||||||
| Deferred revenue, net of current portion | 66,360 | 54,210 | ||||||
| Lease liabilities, net of current portion | 38,182 | |||||||
| Deferred tax liabilities, net | 5,732 | 7,213 | ||||||
| Other long-term liabilities | 221 | 3,235 | ||||||
| Total liabilities | 376,484 | 337,455 | ||||||
| Commitments and contingencies | ||||||||
| Total equity | ||||||||
| Common stock | ||||||||
| Additional paid-in capital | 1,745,177 | 1,722,012 | ||||||
| Accumulated deficit | (1,483,654 | ) | (1,330,545 | ) | ||||
| Accumulated other comprehensive loss | (33,102 | ) | (28,612 | ) | ||||
| Total Intrexon shareholders equity | 228,421 | 362,855 | ||||||
| Noncontrolling interests | 15,867 | |||||||
| Total equity | 228,421 | 378,722 | ||||||
| Total liabilities and total equity | $ | 604,905 | $ | 716,177 |
Intrexon Corporation and Subsidiaries
Consolidated Statements of Operations
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Amounts in thousands, except share and per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Revenues | ||||||||||||||||
| Collaboration and licensing revenues | $ | 6,185 | $ | 14,324 | $ | 21,252 | $ | 51,622 | ||||||||
| Product revenues | 5,852 | 6,829 | 18,528 | 23,549 | ||||||||||||
| Service revenues | 9,924 | 10,414 | 39,707 | 40,379 | ||||||||||||
| Other revenues | 1,082 | 881 | 2,877 | 1,839 | ||||||||||||
| Total revenues | 23,043 | 32,448 | 82,364 | 117,389 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of products | 8,263 | 8,877 | 25,729 | 28,046 | ||||||||||||
| Cost of services | 6,550 | 6,449 | 21,860 | 21,127 | ||||||||||||
| Research and development | 31,480 | 44,885 | 99,060 | 124,072 | ||||||||||||
| Selling, general and administrative | 24,741 | 38,708 | 79,818 | 112,872 | ||||||||||||
| Impairment loss | 626 | 626 | ||||||||||||||
| Total operating expenses | 71,660 | 98,919 | 227,093 | 286,117 | ||||||||||||
| Operating loss | (48,617 | ) | (66,471 | ) | (144,729 | ) | (168,728 | ) | ||||||||
| Other Expense, Net | ||||||||||||||||
| Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net | (3,068 | ) | (7,287 | ) | 2,634 | (27,565 | ) | |||||||||
| Interest expense | (4,471 | ) | (3,999 | ) | (13,140 | ) | (4,240 | ) | ||||||||
| Interest and dividend income | 885 | 6,107 | 3,280 | 17,323 | ||||||||||||
| Other income, net | 2,772 | 1,452 | 673 | 571 | ||||||||||||
| Total other expense, net | (3,882 | ) | (3,727 | ) | (6,553 | ) | (13,911 | ) | ||||||||
| Equity in net loss of affiliates | (1,647 | ) | (2,870 | ) | (5,034 | ) | (9,880 | ) | ||||||||
| Loss before income taxes | (54,146 | ) | (73,068 | ) | (156,316 | ) | (192,519 | ) | ||||||||
| Income tax benefit | 512 | 14,322 | 1,615 | 19,535 | ||||||||||||
| Net loss | $ | (53,634 | ) | $ | (58,746 | ) | $ | (154,701 | ) | $ | (172,984 | ) | ||||
| Net loss attributable to the noncontrolling interests | 1,422 | 1,592 | 4,113 | |||||||||||||
| Net loss attributable to Intrexon | $ | (53,634 | ) | $ | (57,324 | ) | $ | (153,109 | ) | $ | (168,871 | ) | ||||
| Net loss attributable to Intrexon per share, basic and diluted | $ | (0.35 | ) | $ | (0.44 | ) | $ | (1.00 | ) | $ | (1.31 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 154,596,257 | 129,518,989 | 153,770,785 | 128,843,991 |