Full Press Release Details
Precigen Reports Second Quarter and First Half 2020 Financial Results
Announced proprietary electroporation device, UltraPorator , designed to scale-up UltraCAR-T manufacturing at multiple medical centers
Announced positive topline results from Phase 1b study of AG019 ActoBiotics
Met primary endpoints of safety and feasibility in Phase I study of INXN-4001 for heart failure
Guidance maintained for clinical readouts in 2020
GERMANTOWN, MD, August 10, 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 second quarter and first half financial results for 2020.
Business Highlights:
Second Quarter 2020 Financial Highlights:
First Half 2020 Financial Highlights:
Precigen has continued this quarter to
streamline operations and focus efforts on delivering value to stakeholders through forward progress on our programs, said Helen Sabzevari, PhD, President and CEO of Precigen. In the clinic, we recently announced encouraging data from
the AG019 Phase 1b monotherapy study in Type 1 diabetes and the INXN-4001 Phase I study of patients with chronic heart failure and expect additional results on these and other clinical programs in the coming months. Additionally, we are pleased to
announce our proprietary UltraPorator manufacturing device, which we believe sets Precigen on the path to commercial viability for rapid decentralized manufacturing of UltraCAR-T at multiple medical
Second Quarter 2020 Financial Results Compared to Prior Year Period
Total revenues declined $2.4 million from the quarter ended June 30, 2019 primarily due to a decline in Precigen s collaboration and licensing
revenues as the Company continues to transition from a collaboration business model to a model where the Company develops and advances its most valuable healthcare products on its own. While Trans Ova s revenues were comparable period over
period, gross margins on their products and services increased $1.3 million over the comparable prior quarter as a result of the implementation of operational efficiencies gained through improved inventory management, reduction in workforce,
and lower royalty rates on certain licensed technologies.
Research and development expenses decreased $14.0 million, or 50%, from the quarter ended
June 30, 2019. Salaries, benefits, and other personnel costs decreased $4.8 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter. Precigen s research and development expenses for third-party
vendors decreased $7.8 million primarily as a result of the suspension of its MBP Titan operations and also depriortized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. Selling, general and administrative
(SG&A) expenses decreased $0.5 million and include a decrease of $4.0 million in fees paid to third-party vendors as well as a reduction in salaries and benefits for corporate employees as Precigen reduced its corporate headcount by
25% from December 31, 2019 to June 30, 2020 as it scaled down the Company s corporate functions to support a more streamlined organization. These decreases were partially offset by an increase in compensation costs which primarily
resulted from stock compensation expenses related to equity grants made in the first quarter of 2020 and one-time severance costs for terminated employees. In conjunction with the suspension of MBP
Titan s operations in the second quarter of 2020, Precigen recorded $22.0 million in non-cash impairment charges related to the write-down of goodwill and long-lived assets.
First Half 2020 Financial Results Compared to Prior Year Period
Total revenues increased $4.8 million over the six months ended June 30, 2019 primarily due to an increase in Precigen s collaboration and
licensing revenues as the Company accelerated the recognition of previously deferred revenue upon the mutual termination of one of its collaboration agreements in February 2020. This increase was partially offset by a decrease in collaboration
revenues related to other programs as Precigen continues to transition from a collaboration business model to a model where it develops and advances its most valuable healthcare programs on its own. Trans Ova s revenues increased
$1.3 million over the six months ended June 30, 2019 primarily due to an increase in services performed and the expansion of its commercial dairy business. Gross margins on their products and services increased $4.6 million over the
comparable prior period as a result of the implementation of operational efficiencies gained through improved inventory management, reduction in workforce, and lower royalty rates on certain licensed technologies.
Research and development expenses decreased $22.1 million, or 40%, from the six months ended June 30, 2019. Salaries, benefits, and other personnel
costs decreased $6.9 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter. Precigen s research and development expenses for third-party vendors decreased $12.8 million primarily as a result of
the suspension of its MBP Titan operations and also depriortized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. SG&A expenses decreased $8.5 million and include a decrease of $7.9 million in fees
paid to third-party vendors as well as a reduction in salaries and benefits for corporate employees as Precigen reduced its corporate headcount by 25% from December 31, 2019 to June 30, 2020 as it scaled down its corporate functions to
support a more streamlined organization. These decreases were partially offset by an increase in compensation costs which primarily resulted from stock compensation expenses related to equity grants made in the first quarter of 2020 and one-time severance costs for terminated employees. In conjunction with the suspension of MBP Titan s operations in the second quarter of 2020, Precigen recorded $22.0 million of noncash impairment charges
related to the write-down of goodwill and long-lived assets.
Conference Call and Webcast
Precigen will host a conference call today, Monday, August 10th at 4:30 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) or
1-412-317-6061 (International) and providing the number 6003292 to join the Precigen Conference Call. Participants are asked to
dial in 10-15 minutes in advance of the scheduled call time to facilitate timely connection to the call. Participants may also access the live webcast through Precigen s website in the Events section at
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
@Precigen and LinkedIn.
Precigen, UltraPorator, UltraCAR-T, ActoBiotics, and Advancing Medicine with Precision are trademarks of Precigen
and/or its affiliates. Other names may be trademarks of their respective owners.
Cautionary 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 Precigen s current
expectations and projections about future events and generally relate to plans, objectives, and expectations for the development of Precigen s business, including the timing,
pace and progress of preclinical and clinical trials and discovery programs, potential benefits of platforms and product candidates including in comparison to competitive platforms and products,
and future plans for Precigen s remaining non-healthcare assets. Although management believes that the plans, objectives and results 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. These risks and uncertainties include, but are not limited to,
(i) the impact of the COVID-19 pandemic on our businesses, operating results, cash flows and/or financial condition, (ii) ongoing transition efforts following Precigen s recent divestment of
several assets and businesses; (iii) Precigen s strategy and overall approach to its business model, its recent efforts to realign its business, and its ability to exercise more control and ownership over the development process and
commercialization path; (iv) the ability to successfully enter new markets or develop additional products, including the expected timing and results of investigational studies and preclinical and clinical trials, including any delays or
potential delays as a result of the COVID-19 pandemic, whether with its collaborators or independently; (v) the ability to successfully enter into optimal strategic relationships with its subsidiaries and
operating companies that it may form in the future; (vi) the ability to hold or generate significant operating capital, including through partnering, asset sales and operating cost reductions; (vii) actual or anticipated variations in
operating results; (viii) actual or anticipated fluctuations in competitors or collaborators operating results or changes in their respective growth rates; (ix) cash position; (x) market conditions in Precigen s
industry; (xi) the volatility of Precigen s stock price; (xii) the ability, and the ability of collaborators, to protect Precigen s intellectual property and other proprietary rights and technologies; (xiii) the ability, and
the ability of collaborators, to adapt to changes in laws or regulations and policies, including federal, state, and local government responses to the COVID-19 pandemic; (xiv) outcomes of pending and
future litigation; (xv) the rate and degree of market acceptance of any products developed by Precigen, its subsidiaries, collaborations or joint ventures; (xvi) the ability to retain and recruit key personnel; (xvii) expectations
related to the use of proceeds from public offerings and other financing efforts; (xviii) estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and (xix) the challenges inherent in
leadership transitions. For further information on potential risks and uncertainties, and other important factors, any of which could cause Precigen s actual results to differ from those contained in the forward-looking statements, see the
section entitled Risk Factors in Precigen 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) | June 30, 2020 | December 31, 2019 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 46,713 | $ | 65,793 | ||||
| Short-term investments | 86,292 | 9,260 | ||||||
| Receivables | ||||||||
| Trade, net | 23,337 | 20,650 | ||||||
| Related parties, net | 294 | 600 | ||||||
| Other | 364 | 4,978 | ||||||
| Inventory | 12,729 | 16,097 | ||||||
| Prepaid expenses and other | 3,266 | 6,444 | ||||||
| Current assets held for sale | 110,821 | |||||||
| Total current assets | 172,995 | 234,643 | ||||||
| Property, plant and equipment, net | 46,956 | 60,969 | ||||||
| Intangible assets, net | 64,759 | 68,346 | ||||||
| Goodwill | 54,122 | 63,754 | ||||||
| Investments in affiliates | 859 | 1,461 | ||||||
| Right-of-use assets | 20,683 | 25,228 | ||||||
| Other assets | 1,341 | 1,362 | ||||||
| Total assets | $ | 361,715 | $ | 455,763 | ||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,650 | $ | 5,917 | ||||
| Accrued compensation and benefits | 7,719 | 14,091 | ||||||
| Other accrued liabilities | 9,342 | 12,049 | ||||||
| Deferred revenue | 6,592 | 5,697 | ||||||
| Lines of credit | 1,922 | |||||||
| Current portion of long-term debt | 32,108 | 31,670 | ||||||
| Current portion of lease liabilities | 4,514 | 4,182 | ||||||
| Related party payables | 175 | 51 | ||||||
| Current liabilities held for sale | 47,333 | |||||||
| Total current liabilities | 64,100 | 122,912 | ||||||
| Long-term debt, net of current portion | 191,205 | 186,321 | ||||||
| Deferred revenue, net of current portion | 32,858 | 48,136 | ||||||
| Lease liabilities, net of current portion | 21,212 | 23,849 | ||||||
| Deferred tax liabilities | 2,698 | 2,834 | ||||||
| Other long-term liabilities | 100 | |||||||
| Total liabilities | 312,173 | 384,052 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders equity | ||||||||
| Common stock | ||||||||
| Additional paid-in capital | 1,802,413 | 1,752,048 | ||||||
| Accumulated deficit | (1,752,221 | ) | (1,652,869 | ) | ||||
| Accumulated other comprehensive loss | (650 | ) | (27,468 | ) | ||||
| Total shareholders equity | 49,542 | 71,711 | ||||||
| Total liabilities and shareholders equity | $ | 361,715 | $ | 455,763 |
Precigen, Inc. and Subsidiaries
Consolidated Statements of Operations
| (Amounts in thousands, except share and per share data) | Three months ended | Six months ended | ||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenues | ||||||||||||||||
| Collaboration and licensing revenues | $ | 4,315 | $ | 6,450 | $ | 15,036 | $ | 12,421 | ||||||||
| Product revenues | 8,540 | 7,800 | 13,501 | 12,637 | ||||||||||||
| Service revenues | 17,381 | 18,400 | 31,327 | 29,783 | ||||||||||||
| Other revenues | 188 | 186 | 398 | 580 | ||||||||||||
| Total revenues | 30,424 | 32,836 | 60,262 | 55,421 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of products | 8,141 | 8,502 | 14,230 | 16,224 | ||||||||||||
| Cost of services | 6,770 | 8,218 | 14,306 | 15,310 | ||||||||||||
| Research and development | 14,208 | 28,239 | 33,099 | 55,177 | ||||||||||||
| Selling, general and administrative | 18,739 | 19,250 | 41,757 | 50,299 | ||||||||||||
| Impairment of goodwill | 9,635 | 9,635 | ||||||||||||||
| Impairment of assets | 12,406 | 12,406 | ||||||||||||||
| Total operating expenses | 69,899 | 64,209 | 125,433 | 137,010 | ||||||||||||
| Operating loss | (39,475 | ) | (31,373 | ) | (65,171 | ) | (81,589 | ) | ||||||||
| Other Expense, Net | ||||||||||||||||
| Unrealized and realized appreciation in fair value of equity securities and preferred stock, net | 5,760 | 6,209 | ||||||||||||||
| Interest expense | (4,592 | ) | (4,353 | ) | (9,184 | ) | (8,658 | ) | ||||||||
| Interest and dividend income | 773 | 1,024 | 1,446 | 2,385 | ||||||||||||
| Other income (expense), net | 71 | (2,656 | ) | 135 | (2,110 | ) | ||||||||||
| Total other expense, net | (3,748 | ) | (225 | ) | (7,603 | ) | (2,174 | ) | ||||||||
| Equity in net loss of affiliates | (251 | ) | (716 | ) | (602 | ) | (1,464 | ) | ||||||||
| Loss from continuing operations before income taxes | (43,474 | ) | (32,314 | ) | (73,376 | ) | (85,227 | ) | ||||||||
| Income tax benefit | 120 | 9 | 80 | 22 | ||||||||||||
| Loss from continuing operations | $ | (43,354 | ) | $ | (32,305 | ) | $ | (73,296 | ) | $ | (85,205 | ) | ||||
| Loss from discontinued operations, net of income taxes | (6,626 | ) | (26,056 | ) | (15,862 | ) | ||||||||||
| Net loss | $ | (43,354 | ) | $ | (38,931 | ) | $ | (99,352 | ) | $ | (101,067 | ) | ||||
| Net loss attributable to the noncontrolling interests | 165 | 1,592 | ||||||||||||||
| Net loss attributable to Precigen | $ | (43,354 | ) | $ | (38,766 | ) | $ | (99,352 | ) | $ | (99,475 | ) | ||||
| Amounts Attributable to Precigen | ||||||||||||||||
| Net loss from continuing operations attributable to Precigen | $ | (43,354 | ) | $ | (32,140 | ) | $ | (73,296 | ) | $ | (83,613 | ) | ||||
| Net loss from discontinued operations attributable to Precigen | (6,626 | ) | (26,056 | ) | (15,862 | ) | ||||||||||
| Net loss attributable to Precigen | $ | (43,354 | ) | $ | (38,766 | ) | $ | (99,352 | ) | $ | (99,475 | ) | ||||
| Net Loss per Share | ||||||||||||||||
| Net loss from continuing operations attributable to Precigen per share, basic and diluted | $ | (0.26 | ) | $ | (0.21 | ) | $ | (0.45 | ) | $ | (0.55 | ) | ||||
| Net loss from discontinued operations attributable to Precigen per share, basic and diluted | (0.04 | ) | (0.16 | ) | (0.10 | ) | ||||||||||
| Net loss attributable to Precigen per share, basic and diluted | $ | (0.26 | ) | $ | (0.25 | ) | $ | (0.61 | ) | $ | (0.65 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 164,065,087 | 153,749,929 | 162,201,915 | 153,351,208 |