Full Press Release Details
Precigen Reports Fourth Quarter and Year End 2019 Financial Results
Company completed series of transactions to support tighter focus on healthcare
Quarterly GAAP revenues from continuing operations of $17.0 million and net loss attributable to Precigen of
$169.2 million, of which $95.7 million was from discontinued operations and an additional $33.8 million was for
non-cash charges related to continuing operations
GERMANTOWN, MD, March 2, 2020 Precigen, Inc. (Nasdaq: PGEN), a biopharmaceutical company specializing in the
development of innovative gene and cell therapies to improve the lives of patients, today announced its fourth quarter financial results for 2019.
Recent Business Highlights:
Financial Highlights:
Full Year 2019 Financial Highlights:
I am confident that we will make important advances this year in our mission to improve patient care through innovative gene and cell therapies,
said Dr. Sabzevari. We enter 2020 with cash resources that we believe are sufficient for us to deliver on several value-creating milestones during the year across our clinical pipeline. At the same time, we are laser-focused on
aligning our portfolio, streamlining operations and maximizing organizational structures to improve operational efficiency going forward.
Quarter 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $24.2 million from the quarter ended December 31,
2018. Collaboration and licensing revenues decreased $24.6 million, or 103%, from the quarter ended December 31, 2018 primarily due to the reacquisition of rights previously licensed to some of Precigen s 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 period.
Research and development expenses decreased $252.2 million, or 92%. The
2018 amounts include a $228.0 million expense related to in-process research and development reacquired from former collaborators. Selling, general and administrative (SG&A) expenses increased
$6.3 million, or 28% which was primarily attributable to increased compensation expenses related to performance and retention incentives for SG&A employees, partially offset by (i) decreased share-based compensation expense which arose
primarily from the departure of former employees during the first half of the current year; and (ii) fewer legal fees associated with the Company s Trans Ova subsidiary. The Company also recorded a $29.6 million goodwill impairment
charge in the fourth quarter of 2019 related to its Trans Ova subsidiary.
Full Year 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $60.5 million from the year ended December 31, 2018. Collaboration and licensing revenues decreased $55.5 million, or
80%, from the year ended December 31, 2018 primarily due to the reacquisition of rights previously licensed to some of Precigen s collaborators in the second half of 2018 and the result of which eliminated or substantially reduced revenues
previously generated from those collaborations. Additionally, in 2018, the Company recognized additional revenues from the acceleration of previously deferred revenue upon mutual termination of certain collaborations. Product revenues decreased
$4.7 million, or 17%, primarily due to lower customer demand in the beef and dairy industries resulting in fewer sales of pregnant cows and calf products. Gross margin on products also declined in the current period as a result of fewer
Research and development expenses decreased $264.4 million, or 72%. The 2018 amounts include $236.7 million of expenses related
to in-process research and development reacquired from former collaborators. SG&A expenses decreased $24.9 million, or 20%. SG&A salaries, benefits, and other personnel costs decreased
$14.9 million primarily due to decreased share-based compensation expense as a result of the reversal of previously recognized expense for unvested options granted to former employees as well as the conclusion of the vesting period for other
previously granted stock options. Legal and professional fees decreased $6.1 million primarily due to fewer legal fees associated with the Company s Trans Ova subsidiary. The Company also recorded a $29.6 million goodwill impairment
charge in the fourth quarter of 2019 related to its Trans Ova subsidiary.
Conference Call and Webcast
Precigen will host a conference call today Monday March 2nd at 5:30 PM ET to discuss the 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 4230814 to join the Precigen Conference Call. Participants may also
access the live webcast through Precigen s website in the Events section at https://investors.precigen.com/press-events/event-calendar.
Precigen: Advancing Medicine with Precision
Precigen (Nasdaq: PGEN) is a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cell therapies using
precision technology to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. Our technologies enable us to find innovative solutions for affordable biotherapeutics in
a controlled manner. Precigen operates as an innovation engine progressing a preclinical and clinical pipeline of well-differentiated unique therapies toward clinical
Precigen, UltraCAR-T, and Advancing
Medicine with Precision are trademarks of Precigen and/or its affiliates. Other names may be trademarks of their respective owners.
Statement Regarding Forward-Looking Statements
Some of the statements made in this press release are forward-looking statements. These forward-looking
statements are based upon the Company s current expectations and projections about future events and generally relate to plans, objectives, and expectations for the development of the Company s business, including the timing and progress
of preclinical and clinical trials and discovery programs, the promise of the Company s portfolio of therapies, the Company s refocus to a healthcare-oriented business, and its continuing evaluation of options for the Company s non-healthcare businesses. 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. The Company has no obligation to provide any updates to these forward-looking statements even if its
expectations change. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For further information on potential risks and uncertainties, and other important factors, any of which could cause the
Company s actual results to differ from those contained in the forward-looking statements, see the section entitled Risk Factors in the Company s most recent Annual Report on Form 10-K
and subsequent reports filed with the Securities and Exchange Commission.
For more information, contact:
Precigen, Inc. and Subsidiaries
Consolidated Balance Sheets
| (Amounts in thousands) | December 31, 2019 | December 31, 2018 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 65,793 | $ | 96,876 | ||||
| Restricted cash | 6,987 | |||||||
| Short-term investments | 9,260 | 119,614 | ||||||
| Equity securities | 384 | |||||||
| Receivables | ||||||||
| Trade, net | 20,650 | 21,179 | ||||||
| Related parties, net | 600 | 4,129 | ||||||
| Other, net | 4,978 | 1,257 | ||||||
| Inventory | 16,097 | 20,575 | ||||||
| Prepaid expenses and other | 6,444 | 5,327 | ||||||
| Current assets held for sale | 110,821 | 9,155 | ||||||
| Total current assets | 234,643 | 285,483 | ||||||
| Equity securities, noncurrent | 640 | |||||||
| Property, plant and equipment, net | 60,969 | 86,896 | ||||||
| Intangible assets, net | 68,346 | 88,962 | ||||||
| Goodwill | 63,754 | 93,627 | ||||||
| Investments in affiliates | 1,461 | 2,139 | ||||||
| Right-of-use assets | 25,228 | |||||||
| Other assets | 1,362 | 2,069 | ||||||
| Noncurrent assets held for sale | 156,361 | |||||||
| Total assets | $ | 455,763 | $ | 716,177 | ||||
| Current liabilities | ||||||||
| Accounts payable | $ | 5,917 | $ | 11,973 | ||||
| Accrued compensation and benefits | 14,091 | 9,955 | ||||||
| Other accrued liabilities | 12,049 | 19,005 | ||||||
| Deferred revenue | 5,697 | 11,088 | ||||||
| Lines of credit | 1,922 | 466 | ||||||
| Current portion of long-term debt | 31,670 | 479 | ||||||
| Current portion of lease liabilities | 4,182 | |||||||
| Related party payables | 51 | 256 | ||||||
| Current liabilities held for sale | 47,333 | 8,340 | ||||||
| Total current liabilities | 122,912 | 61,562 | ||||||
| Long-term debt, net of current portion | 186,321 | 211,216 | ||||||
| Deferred revenue, net of current portion | 48,136 | 46,728 | ||||||
| Lease liabilities, net of current portion | 23,849 | |||||||
| Deferred tax liabilities, net | 2,834 | 3,856 | ||||||
| Other long-term liabilities | 3,135 | |||||||
| Long-term liabilities held for sale | 10,958 | |||||||
| Total liabilities | 384,052 | 337,455 | ||||||
| Commitments and contingencies | ||||||||
| Total equity | ||||||||
| Common stock | ||||||||
| Additional paid-in capital | 1,752,048 | 1,722,012 | ||||||
| Accumulated deficit | (1,652,869 | ) | (1,330,545 | ) | ||||
| Accumulated other comprehensive loss | (27,468 | ) | (28,612 | ) | ||||
| Total Precigen shareholders equity | 71,711 | 362,855 | ||||||
| Noncontrolling interests | 15,867 | |||||||
| Total equity | 71,711 | 378,722 | ||||||
| Total liabilities and total equity | $ | 455,763 | $ | 716,177 |
Precigen, Inc. and Subsidiaries
Consolidated Statements of Operations
| (Amounts in thousands, except share and per share data) | Three months ended | Year ended | ||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenues | ||||||||||||||||
| Collaboration and licensing revenues | $ | (658 | ) | $ | 23,947 | $ | 14,059 | $ | 69,540 | |||||||
| Product revenues | 5,297 | 4,974 | 23,780 | 28,486 | ||||||||||||
| Service revenues | 12,096 | 12,040 | 51,803 | 52,419 | ||||||||||||
| Other revenues | 267 | 231 | 1,080 | 733 | ||||||||||||
| Total revenues | 17,002 | 41,192 | 90,722 | 151,178 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of products | 7,800 | 7,531 | 31,930 | 35,087 | ||||||||||||
| Cost of services | 7,611 | 6,462 | 29,471 | 27,589 | ||||||||||||
| Research and development | 21,035 | 273,229 | 101,879 | 366,248 | ||||||||||||
| Selling, general and administrative | 28,358 | 22,089 | 100,844 | 125,751 | ||||||||||||
| Impairment loss | 30,184 | 30,810 | ||||||||||||||
| Total operating expenses | 94,988 | 309,311 | 294,934 | 554,675 | ||||||||||||
| Operating loss | (77,986 | ) | (268,119 | ) | (204,212 | ) | (403,497 | ) | ||||||||
| Other Income (Expense), Net | ||||||||||||||||
| Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net | 5,221 | (2,255 | ) | 8,291 | (28,273 | ) | ||||||||||
| Interest expense | (4,542 | ) | (4,307 | ) | (17,666 | ) | (8,473 | ) | ||||||||
| Interest and dividend income | 603 | 1,758 | 3,871 | 19,017 | ||||||||||||
| Other income (expense), net | 2,774 | (65 | ) | 3,445 | 470 | |||||||||||
| Total other income (expense), net | 4,056 | (4,869 | ) | (2,059 | ) | (17,259 | ) | |||||||||
| Equity in net loss of affiliates | (473 | ) | (913 | ) | (2,416 | ) | (8,986 | ) | ||||||||
| Loss from continuing operations before income taxes | (74,403 | ) | (273,901 | ) | (208,687 | ) | (429,742 | ) | ||||||||
| Income tax benefit (expense) | 905 | (686 | ) | 930 | 15,425 | |||||||||||
| Loss from continuing operations | $ | (73,498 | ) | $ | (274,587 | ) | $ | (207,757 | ) | $ | (414,317 | ) | ||||
| Loss from discontinued operations, net of income tax benefit | (95,717 | ) | (67,135 | ) | (116,159 | ) | (100,389 | ) | ||||||||
| Net loss | $ | (169,215 | ) | $ | (341,722 | ) | $ | (323,916 | ) | $ | (514,706 | ) | ||||
| Net loss attributable to the noncontrolling interests | 1,257 | 1,592 | 5,370 | |||||||||||||
| Net loss attributable to Precigen | $ | (169,215 | ) | $ | (340,465 | ) | $ | (322,324 | ) | $ | (509,336 | ) | ||||
| Amounts Attributable to Precigen | ||||||||||||||||
| Net loss from continuing operations attributable to Precigen | $ | (73,498 | ) | $ | (273,330 | ) | $ | (206,165 | ) | $ | (408,947 | ) | ||||
| Net loss from discontinued operations attributable to Precigen | (95,717 | ) | (67,135 | ) | (116,159 | ) | (100,389 | ) | ||||||||
| Net loss attributable to Precigen | $ | (169,215 | ) | $ | (340,465 | ) | $ | (322,324 | ) | $ | (509,336 | ) | ||||
| Net Loss per Share | ||||||||||||||||
| Net loss from continuing operations attributable to Precigen per share, basic and diluted | $ | (0.47 | ) | $ | (2.08 | ) | $ | (1.34 | ) | $ | (3.16 | ) | ||||
| Net loss from discontinued operations attributable to Precigen per share, basic and diluted | (0.62 | ) | (0.51 | ) | (0.75 | ) | (0.77 | ) | ||||||||
| Net loss attributable to Precigen per share, basic and diluted | $ | (1.09 | ) | $ | (2.59 | ) | $ | (2.09 | ) | $ | (3.93 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 155,230,741 | 131,532,851 | 154,138,774 | 129,521,731 |