Full Press Release Details
GERMANTOWN, Md. , Nov. 9, 2020 /PRNewswire/ -- 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 third quarter and year-to-date financial results for 2020.
Business Highlights:
"The Precigen team has made impressive progress this quarter in driving value across our preclinical and clinical pipeline. In particular, we made several advances in our quest to meet unmet needs for patients, including dosing the first patient in our first-in-human study of PRGN-2009 AdenoVerse in HPV-positive solid tumors, and advancing our proprietary UltraPorator system towards clinical implementation," said Helen Sabzevari , PhD, President and CEO of Precigen. "In early December, we are excited to share a comprehensive update on our clinical pipeline progress towards meeting our 2020 goals laid out earlier this year as well as looking forward to the PRGN-3006 presentation at the 2020 meeting of the American Society of Hematology by the trial's Principal Investigator, Dr. David Sallman from the Moffitt Cancer Center."
Third Quarter 2020 Financial Highlights:
Year-to-Date 2020 Financial Highlights:
Third Quarter 2020 Financial Results Compared to Prior Year Period
Total revenues increased $5.3 million , or 29%, over the quarter ended September 30, 2019 . Collaboration and licensing revenues increased $2.9 million primarily due to the accelerated recognition of previously deferred revenue upon the mutual termination of one of the Company's collaboration agreements in July 2020 . Product and service revenues generated by the Company's Trans Ova and Exemplar subsidiaries increased $2.4 million due to an increase in services performed for new and existing customers and the expansion of Trans Ova's commercial dairy business. Gross margin on products and services improved as a result of operational efficiencies gained through reductions in workforce and improved inventory management as well as a decrease in the cost of cows used in production.
Research and development expenses decreased $13.5 million , or 53%, from the quarter ended September 30, 2019 . Salaries, benefits, and other personnel costs decreased $6.8 million and contract research organization costs and lab supplies decreased $5.1 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter and deprioritized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. Selling, general and administrative (SG&A) expenses were comparable period over period.
Year-to-Date 2020 Financial Results Compared to Prior Year Period
Total revenues increased $10.1 million , or 14%, over the nine months ended September 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 two of its collaboration agreements in 2020. Product and service revenues generated by Trans Ova and Exemplar increased $4.8 million due to an increase in services performed for new and existing customers and the expansion of Trans Ova's commercial dairy business. Gross margin on products and services improved as a result of operational efficiencies gained through reductions in workforce, improved inventory management, a reduction in third-party royalty rate obligations for certain licensed technologies and a decrease in the cost of cows used in production.
Research and development expenses decreased $35.6 million , or 44%, from the nine months ended September 30, 2019 . Salaries, benefits, and other personnel costs decreased $13.7 million and contract research organization costs and lab supplies decreased $17.9 million as Precigen suspended the operations of its MBP Titan subsidiary in the second quarter and deprioritized certain internal programs at its ActoBio subsidiary in the fourth quarter of 2019. SG&A expenses decreased $8.4 million and include a net decrease in fees payable to certain third-party vendors and a reduction of 30% in corporate headcount to support a more streamlined organization. Other corporate expenses decreased $1.9 million as part of the streamlined organization and the impact of the COVID-19 pandemic on travel. These decreases were partially offset by increased share-based compensation expense attributable to equity grants made in in the first quarter of 2020 and one-time severance costs for terminated employees. The Company also recorded $23.0 million of impairment charges for the nine months ended September 30, 2020 primarily due to the write down of goodwill and intangible assets related to the MBP Titan subsidiary.
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 studies, clinical trials, discovery programs and related milestones, the promise of the Company's portfolio of therapies, and in particular its CAR-T therapies, and the Company's refocus to a healthcare-oriented business. 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) 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.
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| Precigen, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) | |||||||
| (Amounts in thousands) | September 30, 2020 | December 31, 2019 | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 27,740 | $ | 65,793 | |||
| Short-term investments | 85,358 | 9,260 | |||||
| Receivables | |||||||
| Trade, net | 19,063 | 20,650 | |||||
| Related parties, net | 12 | 600 | |||||
| Other | 285 | 4,978 | |||||
| Inventory | 10,348 | 16,097 | |||||
| Prepaid expenses and other | 8,310 | 6,444 | |||||
| Current assets held for sale | — | 110,821 | |||||
| Total current assets | 151,116 | 234,643 | |||||
| Property, plant and equipment, net | 44,685 | 60,969 | |||||
| Intangible assets, net | 65,018 | 68,346 | |||||
| Goodwill | 54,237 | 63,754 | |||||
| Investments in affiliates | 337 | 1,461 | |||||
| Right-of-use assets | 19,296 | 25,228 | |||||
| Other assets | 1,497 | 1,362 | |||||
| Total assets | $ | 336,186 | $ | 455,763 | |||
| Current liabilities | |||||||
| Accounts payable | $ | 4,233 | $ | 5,917 | |||
| Accrued compensation and benefits | 7,567 | 14,091 | |||||
| Other accrued liabilities | 9,355 | 12,049 | |||||
| Deferred revenue | 4,144 | 5,697 | |||||
| Lines of credit | — | 1,922 | |||||
| Current portion of long-term debt | 421 | 31,670 | |||||
| Current portion of lease liabilities | 4,584 | 4,182 | |||||
| Related party payables | 357 | 51 | |||||
| Current liabilities held for sale | — | 47,333 | |||||
| Total current liabilities | 30,661 | 122,912 | |||||
| Long-term debt, net of current portion | 193,801 | 186,321 | |||||
| Deferred revenue, net of current portion | 30,015 | 48,136 | |||||
| Lease liabilities, net of current portion | 20,323 | 23,849 | |||||
| Deferred tax liabilities | 2,734 | 2,834 | |||||
| Other long-term liabilities | 100 | — | |||||
| Total liabilities | 277,634 | 384,052 | |||||
| Commitments and contingencies | |||||||
| Shareholders' equity | |||||||
| Common stock | — | — | |||||
| Additional paid-in capital | 1,838,919 | 1,752,048 | |||||
| Accumulated deficit | (1,781,729) | (1,652,869) | |||||
| Accumulated other comprehensive income (loss) | 1,362 | (27,468) | |||||
| Total shareholders' equity | 58,552 | 71,711 | |||||
| Total liabilities and shareholders' equity | $ | 336,186 | $ | 455,763 |
| Precigen, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) | |||||||||||||
| (Amounts in thousands, except share and per share data) | Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | ||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||
| Revenues | |||||||||||||
| Collaboration and licensing revenues | $ | 5,223 | $ | 2,296 | $ | 20,259 | $ | 14,717 | |||||
| Product revenues | 6,896 | 5,846 | 20,397 | 18,483 | |||||||||
| Service revenues | 11,288 | 9,924 | 42,615 | 39,707 | |||||||||
| Other revenues | 176 | 233 | 574 | 813 | |||||||||
| Total revenues | 23,583 | 18,299 | 83,845 | 73,720 | |||||||||
| Operating Expenses | |||||||||||||
| Cost of products | 7,296 | 7,906 | 21,526 | 24,130 | |||||||||
| Cost of services | 5,891 | 6,550 | 20,197 | 21,860 | |||||||||
| Research and development | 12,154 | 25,667 | 45,253 | 80,844 | |||||||||
| Selling, general and administrative | 22,300 | 22,187 | 64,057 | 72,486 | |||||||||
| Impairment of goodwill | — | 178 | 9,635 | 178 | |||||||||
| Impairment of other noncurrent assets | 920 | 448 | 13,326 | 448 | |||||||||
| Total operating expenses | 48,561 | 62,936 | 173,994 | 199,946 | |||||||||
| Operating loss | (24,978) | (44,637) | (90,149) | (126,226) | |||||||||
| Other Expense, Net | |||||||||||||
| Unrealized and realized appreciation (depreciation) in fair value of equity securities and preferred stock, net | — | (3,139) | — | 3,070 | |||||||||
| Interest expense | (4,646) | (4,466) | (13,830) | (13,124) | |||||||||
| Interest and dividend income | 579 | 883 | 2,025 | 3,268 | |||||||||
| Other income, net | 10 | 2,781 | 145 | 671 | |||||||||
| Total other expense, net | (4,057) | (3,941) | (11,660) | (6,115) | |||||||||
| Equity in net loss of affiliates | (523) | (479) | (1,125) | (1,943) | |||||||||
| Loss from continuing operations before income taxes | (29,558) | (49,057) | (102,934) | (134,284) | |||||||||
| Income tax benefit | 50 | 3 | 130 | 25 | |||||||||
| Loss from continuing operations | $ | (29,508) | $ | (49,054) | $ | (102,804) | $ | (134,259) | |||||
| Loss from discontinued operations, net of income taxes | — | (4,580) | (26,056) | (20,442) | |||||||||
| Net loss | $ | (29,508) | $ | (53,634) | $ | (128,860) | $ | (154,701) | |||||
| Net loss attributable to the noncontrolling interests | — | — | — | 1,592 | |||||||||
| Net loss attributable to Precigen | $ | (29,508) | $ | (53,634) | $ | (128,860) | $ | (153,109) | |||||
| Amounts Attributable to Precigen | |||||||||||||
| Net loss from continuing operations attributable to Precigen | $ | (29,508) | $ | (49,054) | $ | (102,804) | $ | (132,667) | |||||
| Net loss from discontinued operations attributable to Precigen | — | (4,580) | (26,056) | (20,442) | |||||||||
| Net loss attributable to Precigen | $ | (29,508) | $ | (53,634) | $ | (128,860) | $ | (153,109) | |||||
| Net Loss per Share | |||||||||||||
| Net loss from continuing operations attributable to Precigen per share, basic and diluted | $ | (0.18) | $ | (0.32) | $ | (0.63) | $ | (0.86) | |||||
| Net loss from discontinued operations attributable to Precigen per share, basic and diluted | — | (0.03) | (0.16) | (0.14) | |||||||||
| Net loss attributable to Precigen per share, basic and diluted | $ | (0.18) | $ | (0.35) | $ | (0.79) | $ | (1.00) | |||||
| Weighted average shares outstanding, basic and diluted | 165,527,024 | 154,596,257 | 163,318,375 | 153,770,785 |
SOURCE Precigen, Inc.