Full Press Release Details
Precigen Reports Second Quarter and First Half
2021 Financial Results
GERMANTOWN, MD, August 9, 2021 - 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 2021 financial results.
"We have made significant progress in the
first half of 2021 and are well on our way to meet or exceed the goals we set at the beginning of the year. We are excited about the advancement
of our portfolio and look forward to providing further clinical updates and data readouts at a planned R&D call on November 4th
as well as at medical congresses in the fourth quarter of the year," said Helen Sabzevari, PhD, President and CEO of Precigen. "We
see 2021 as a pivotal year for the UltraCAR-T, ActoBiotics and AdenoVerse platforms with significant new clinical data on our most advanced
therapeutic candidates from these core therapeutic platforms."
Business Highlights:
PRGN-3005 UltraCAR-T
PRGN-3006 UltraCAR-T
PRGN-2009 AdenoVerse Immunotherapy
PRGN-2012 AdenoVerse Immunotherapy
Second Quarter and First Half 2021 Financial
Second Quarter 2021 Financial Results Compared
to Prior Year Period
Research and development expenses increased $4.2
million, or 44%, over the quarter ended June 30, 2020. Contract research organization costs and lab supplies increased $3.8 million with
the advancement of the Company's clinical and preclinical programs. Selling, general and administrative ("SG&A")
expenses increased $2.1 million, or 12%. The majority of the SG&A increase was due to an increase in professional fees. Net loss from
continuing operations was $20.1 million, or $(0.10) per basic share, of which $8.2 million was for non-cash charges in 2021 compared to
net loss from continuing operations of $15.7 million, or $(0.10) per basic share, of which $8.7 million was for non-cash charges in 2020.
Total revenues increased $3.2 million, or 10%,
over the quarter ended June 30, 2020. Collaboration and licensing revenues decreased $4.0 million primarily due to a decrease in the recognition
of previously deferred revenue in the current period resulting from fewer services being performed pursuant to the Company's collaboration
agreements. Product and service revenues generated by Trans Ova and Exemplar increased $7.2 million primarily due to higher customer demand
for Trans Ova's products and services as a result of stronger beef and dairy industries in the current year and a change in pricing
structure with certain customers, as well as increased services provided by Exemplar to new and existing customers. Gross margin on products
and services improved as a result of the increased revenues, the change in pricing structure for certain customers, and operational efficiencies
that have been gained through reductions in workforce and improved inventory management.
First Half 2021 Financial Results Compared to
Research and development expenses increased $3.4
million, or 16%, over the six months ended June 30, 2020. Contract research organization costs and lab supplies increased $3.8 million
with the advancement of the Company's clinical and preclinical programs. SG&A expenses were comparable period over period due
to offsetting changes. Salaries, benefits, and other personnel costs decreased $1.6 million in 2021 primarily due to a reduced headcount
as the Company scaled down its corporate functions to support a more streamlined organization and reduced stock compensation costs for
previously granted awards that became fully vested in early 2021. These decreases were partially offset by an increase in professional
fees. Net loss from continuing operations was $41.9 million, or $(0.21) per basic share, of which $17.9 million was for non-cash charges
in 2021 compared to net loss from continuing operations of $36.6 million, or $(0.23) per basic share, of which $16.4 million was for non-cash
Total revenues decreased $2.2 million, or 4%, from
the six months ended June 30, 2020. Collaboration and licensing revenues decreased $14.7 million as the Company accelerated the recognition
of previously deferred revenue in the prior period upon the mutual termination of one of its collaboration agreements in February 2020.
Product and service revenues generated by Trans Ova and Exemplar increased $12.6 million primarily due to higher customer demand for Trans
Ova's products and services as a result of stronger beef and dairy industries in the current year and a change in pricing structure
with certain customers, as well as increased services provided by Exemplar to new and existing customers. Gross margin on products and
services improved as a result of the increased revenues, the change in pricing structure for certain customers, and operational efficiencies
that have been gained through reductions in workforce and improved inventory management.
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
the most 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 proof-of-concept
Precigen, UltraCAR-T, ActoBiotics, AdenoVerse and
Advancing Medicine with Precision are trademarks of Precigen and/or its affiliates. Other names may be trademarks of their respective
Cautionary Statement Regarding Forward-Looking
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 studies, clinical trials, discovery programs and related milestones, and the promise
of the Company's portfolio of therapies, and in particular its CAR-T therapies. 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 clinical trials, businesses, operating
results, cash flows and/or financial condition, (ii) Precigen's strategy and overall approach to its health-focused business model;
(iii) 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; (iv) the ability to successfully enter into optimal strategic relationships with its subsidiaries
and operating companies that it may form in the future; (v) the ability to hold or generate significant operating capital, including through
partnering, asset sales and operating cost reductions; (vi) actual or anticipated variations in operating results; (vii) actual or anticipated
fluctuations in competitors' or collaborators' operating results or changes in their respective growth rates; (viii) cash position; (ix)
market conditions in Precigen's industry; (x) the volatility of Precigen's stock price; (xi) the ability, and the
ability of collaborators, to protect Precigen's intellectual property and other proprietary rights and technologies; (xii) 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; (xiii) outcomes of pending and future litigation; (xiv) the rate and degree of market acceptance
of any products developed by Precigen, its subsidiaries, collaborations or joint ventures; (xv) the ability to retain and recruit
key personnel; (xvi) expectations related to the use of proceeds from public offerings and other financing efforts; and (xvii) estimates
regarding expenses, future revenue, capital requirements and needs for additional financing. 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.
Precigen, Inc. and Subsidiaries
Consolidated Balance Sheets
| (Amounts in thousands) | June 30, 2021 | December 31, 2020 | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 36,412 | $ | 51,792 | |||
| Short-term investments | 78,694 | 48,325 | |||||
| Receivables | |||||||
| Trade, net | 26,016 | 16,487 | |||||
| Related parties, net | 22 | 19 | |||||
| Notes | - | 3,689 | |||||
| Other | 633 | 232 | |||||
| Inventory | 11,413 | 11,359 | |||||
| Prepaid expenses and other | 3,484 | 7,192 | |||||
| Current assets held for sale or abandonment | 11 | 9,853 | |||||
| Total current assets | 156,685 | 148,948 | |||||
| Long-term investments | 85,269 | - | |||||
| Property, plant and equipment, net | 32,745 | 34,924 | |||||
| Intangible assets, net | 59,942 | 65,396 | |||||
| Goodwill | 54,273 | 54,363 | |||||
| Right-of-use assets | 12,327 | 9,353 | |||||
| Other assets | 1,332 | 1,603 | |||||
| Total assets | $ | 402,573 | $ | 314,587 | |||
| Liabilities and Shareholders' Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 4,937 | $ | 4,598 | |||
| Accrued compensation and benefits | 7,766 | 8,097 | |||||
| Other accrued liabilities | 10,473 | 9,549 | |||||
| Deferred revenue | 3,276 | 2,800 | |||||
| Current portion of long-term debt | 356 | 360 | |||||
| Current portion of lease liabilities | 1,937 | 2,657 | |||||
| Related party payables | 22 | 19 | |||||
| Current liabilities held for sale or abandonment | 102 | 14,047 | |||||
| Total current liabilities | 28,869 | 42,127 | |||||
| Long-term debt, net of current portion | 176,922 | 171,522 | |||||
| Deferred revenue, net of current portion | 23,023 | 23,023 | |||||
| Lease liabilities, net of current portion | 11,821 | 7,744 | |||||
| Deferred tax liabilities | 2,692 | 2,897 | |||||
| Other long-term liabilities | 50 | 100 | |||||
| Total liabilities | 243,377 | 247,413 | |||||
| Commitments and contingencies | |||||||
| Shareholders' equity | |||||||
| Common stock | - | - | |||||
| Additional paid-in capital | 2,017,413 | 1,886,567 | |||||
| Accumulated deficit | (1,860,758) | (1,823,390) | |||||
| Accumulated other comprehensive income | 2,541 | 3,997 | |||||
| Total shareholders' equity | 159,196 | 67,174 | |||||
| Total liabilities and shareholders' equity | $ | 402,573 | $ | 314,587 |
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, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||
| Revenues | |||||||||||||
| Collaboration and licensing revenues | $ | 301 | $ | 4,315 | $ | 367 | $ | 15,036 | |||||
| Product revenues | 8,335 | 8,540 | 14,716 | 13,501 | |||||||||
| Service revenues | 24,803 | 17,381 | 42,734 | 31,327 | |||||||||
| Other revenues | 141 | 188 | 274 | 398 | |||||||||
| Total revenues | 33,580 | 30,424 | 58,091 | 60,262 | |||||||||
| Operating Expenses | |||||||||||||
| Cost of products | 6,135 | 8,141 | 11,709 | 14,230 | |||||||||
| Cost of services | 8,898 | 6,770 | 16,300 | 14,306 | |||||||||
| Research and development | 13,681 | 9,474 | 24,202 | 20,801 | |||||||||
| Selling, general and administrative | 19,997 | 17,869 | 38,699 | 39,355 | |||||||||
| Impairment of other noncurrent assets | 543 | - | 543 | - | |||||||||
| Total operating expenses | 49,254 | 42,254 | 91,453 | 88,692 | |||||||||
| Operating loss | (15,674) | (11,830) | (33,362) | (28,430) | |||||||||
| Other Expense, Net | |||||||||||||
| Interest expense | (4,667) | (4,592) | (9,206) | (9,184) | |||||||||
| Interest income | 410 | 773 | 802 | 1,446 | |||||||||
| Other income (expense), net | (192) | 71 | (250) | 135 | |||||||||
| Total other expense, net | (4,449) | (3,748) | (8,654) | (7,603) | |||||||||
| Equity in net loss of affiliates | - | (251) | (3) | (602) | |||||||||
| Loss from continuing operations before income taxes | (20,123) | (15,829) | (42,019) | (36,635) | |||||||||
| Income tax benefit | 60 | 120 | 112 | 80 | |||||||||
| Loss from continuing operations | $ | (20,063) | $ | (15,709) | $ | (41,907) | $ | (36,555) | |||||
| Income (loss) from discontinued operations, net of income taxes | 13 | (27,645) | 4,539 | (62,797) | |||||||||
| Net loss | $ | (20,050) | $ | (43,354) | $ | (37,368) | $ | (99,352) | |||||
| Net Loss per Share | |||||||||||||
| Net loss from continuing operations per share, basic and diluted | $ | (0.10) | $ | (0.10) | $ | (0.21) | $ | (0.23) | |||||
| Net income (loss) from discontinued operations per share, basic and diluted | - | (0.16) | 0.02 | (0.38) | |||||||||
| Net loss per share, basic and diluted | $ | (0.10) | $ | (0.26) | $ | (0.19) | $ | (0.61) | |||||
| Weighted average shares outstanding, basic and diluted | 199,021,587 | 164,065,087 | 196,275,820 | 162,201,915 |