Roseville, Minnesota, USA
November 3, 2022

—Successfully produced squalene, an important ingredient for personal care products and vaccine adjuvants

—Continued to progress customer acquisition activities, including evaluating an incremental 37 customer chemistries for development using PlantSpring™ and BioFactory™ technologies

—Signed agreement with Evologic Technologies to further develop and scale production of its Plant Cell Matrix™ technology platform

—Continuing board-level evaluation of a full range of potential strategic alternatives to maximize shareholder value

—Selected for membership to BioMADE, a Department of Defense-sponsored initiative that brings together industrial, academic and non-profit entities to advance US bioindustrial manufacturing

—Management to host conference call and webcast today at 4:30 p.m. ET

Calyxt, Inc. (Nasdaq: CLXT), a plant-based synthetic biology company, today announced operating and financial results for its third quarter ended September 30, 2022.

“Last month, we announced we had made substantial technical progress by successfully using  a Calyxt-engineered Plant Cell Matrix to produce squalene. This is a desired ingredient for many cosmetics products and also serves as critical vaccine adjuvant. This milestone is another validation of the promise of our platform to engineer plant metabolism to produce innovative high value chemistries for use in our customers’ materials and products across the end markets of cosmeceuticals, nutraceuticals, and pharmaceuticals,” said Michael A. Carr, President and Chief Executive Officer at Calyxt. “Further, in the third quarter, we continued to progress our customer acquisition activities and evaluated 37 additional customer demand driven chemistries for development and production. These achievements, which come despite unprecedented headwinds in the capital markets and macro economy and resulting liquidity challenges for the Company, reflect our determination to drive our business forward and realize value for our shareholders, while continuing to carefully manage operating expenses.”

Mr. Carr added: “In addition, we signed an agreement with Evologic Technologies, our first global infrastructure partner, which enables us to power our speed-to-scale strategy and supports our ability to meet the growing interest in high-quality sustainable ingredients across the cosmeceutical, nutraceutical, and pharmaceutical markets. With our new pilot program initiated, our first infrastructure partner on board, and additional discussions ongoing, we are encouraged by the increasing traction of our business. We also were selected for membership in BioMADE, a Department of Defense-sponsored manufacturing innovation initiative, which will give us access to a network of industrial and academic entities focused on advancing bioindustrial manufacturing and will enable us to apply for government grants to progress research in plant-based biomanufacturing.  In all, these accomplishments made for a highly productive quarter notwithstanding current capital constraints.”

Key accomplishments in the third quarter of 2022, and through the date of this press release, include the following:

Chemistries under Development for Potential Customers

• On October 25, 2022, Calyxt announced that using a Calyxt-engineered Plant Cell MatrixTM biomass, it has successfully produced squalene, an important ingredient in many personal care products and vaccine adjuvants, including several strands of flu and COVID-19 vaccines. Traditionally sourced from shark liver, many companies who require the ingredient for their products have already begun to seek out alternative squalene sources that represent a more sustainable path forward. With the increasing demand for natural ingredients in cosmetics along with the urgency to develop more vaccines that are effective at boosting our immune response, the global squalene market represents a significant and growing market opportunity.
• In the third quarter, Calyxt received 37 new chemistries from potential customers for evaluation, bringing the total number of chemistries cumulatively evaluated for development with PlantSpring for production in its BioFactory to 132. Of the 132 chemistries, 43 have met Calyxt’s target product profile, or TPP, criteria and, subject to prioritization in light of available resources, are subject to further evaluation and discussion with the potential customers. Additionally, the evaluated chemistries include several that were identified by potential customers as having been unsuccessfully attempted by others in the synthetic biology industry.

Current Customer Projects Under Development are on Track

• Calyxt continued to progress the pilot project for a major consumer packaged goods company with delivery of the plant-based chemistry expected in early 2023. This delivery has the potential to lead to a development agreement for this and potentially other chemistries.
• Calyxt continued to progress the development of its soybean-based palm oil alternative plant trait, and it expects to achieve the first $100 thousand milestone payment as early as the fourth quarter of 2022, with the overall project scheduled for completion in the first quarter of 2024, at which time the second milestone payment of $100 thousand would be due.

Signed Agreement with First Global Infrastructure Partner to Enable Growth and Scale of Calyxt’s Proprietary Technology

• On October 6, 2022, Calyxt announced that it signed an agreement with its first manufacturing partner, Evologic Technologies GmbH (Evologic), to further develop and scale Calyxt’s proprietary Plant Cell Matrix (PCM™) technology platform. The agreement supports the continued build-out of Calyxt’s plant-based synthetic biology capabilities. Evologic’s contract development and manufacturing services, based on its proprietary bioprocess platform and technology, support companies delivering unique and sustainable bioproducts. Under the terms of the agreement, Evologic will work alongside Calyxt to grow and scale Calyxt’s proprietary PCM technology. Specifically, Evologic will advance the manufacturing of PCM-derived compounds and establish proof of concept for the subsequent scaling of multiple PCMs simultaneously for commercial production. Calyxt anticipates sending a PCM that will produce squalene to Evologic for scaling in the fourth quarter of 2022.

Evaluation of Strategic and Financing Alternatives

• On September 22, 2022, Calyxt announced that its Board of Directors is evaluating a full range of potential strategic alternatives and that it had engaged Canaccord Genuity as an advisor. The evaluation of these alternatives as well as the engagement of Canaccord Genuity demonstrates Calyxt’s management and Board of Directors’ commitment to maximize shareholder value.
• While Calyxt continues to actively assess market conditions and to pursue potential financing alternatives to fund its operations, in light of Calyxt’s current liquidity challenges and market headwinds, management has implemented cost reduction and other cash-focused measures to manage liquidity and prioritize capital resources.

Gained Membership Inclusion to BioMADE

• On November 1, Calyxt announced that it had been selected for membership in BioMADE, a Department of Defense-sponsored manufacturing innovation initiative. As a result, Calyxt joins a network of industry, academic, not-for-profit and United States government members dedicated to innovating and growing the bioeconomy. Membership also enables Calyxt to apply for government grants to advance research in plant-based biomanufacturing.

Additional Updates

• In early November 2022, Calyxt reached a settlement with one of its technology vendors regarding alleged intellectual property infringement. As a result of the settlement, Calyxt will receive $750 thousand upon execution of an amended master services agreement (MSA) and another $750 thousand by January 31, 2023. The execution of the MSA is anticipated to occur in the fourth quarter of 2022.

Financial Results for the Three Months Ended September 30, 2022

• Cash, cash equivalents, and restricted cash totaled $7.2 million as of September 30, 2022.
• Revenue was nominal in the third quarter of 2022 compared to $7.8 million in the third quarter of 2021. The decrease in revenue was driven by the late 2021 completion of the wind-down of the Company’s soybean product line. Revenue in the third quarter of 2022 was primarily associated with the Company’s agreement with a food ingredient manufacturer to develop a palm oil alternative.
• Total operating expenses were $6.2 million in the third quarter of 2022 compared to $6.4 million in the third quarter of 2021. The decrease was primarily driven by improved gross margins as a result of lower operating expenses in the period, partially offset by the Company’s adoption of the lease accounting standard which shifted amounts previously reported in interest, net to operating expenses.
• Net loss was $6.0 million in the third quarter of 2022 compared to $7.3 million in the third quarter of 2021. The improvement in net loss was driven by the late 2021 completion of the wind-down of the Company’s soybean product line, lower operating expenses, a decrease in interest, net resulting from the adoption of the lease accounting standard which shifted amounts previously reported in interest, net to operating expenses, and non-operating income (expenses) including the mark-to-market of the Common Warrants derivative liability, which declined in value due to a decline in stock price in 2022. Net loss per share was $0.13 in the third quarter of 2022 compared to $0.20 in the third quarter of 2021. The improvement in net loss per share was driven by the improvement in net loss and a year-over-year increase in weighted average shares outstanding.
• Adjusted net loss was $6.2 million in the third quarter of 2022 compared to $9.1 million in the third quarter of 2021. The improvement in adjusted net loss was driven by the completion of the wind-down of the soybean product line in late 2021. Adjusted net loss per share was $0.13 in the third quarter of 2022 compared to $0.24 in the third quarter of 2021. The improvement in adjusted net loss per share was driven by the improvement in adjusted net loss and a year-over-year increase in weighted average shares outstanding.
• On October 3, 2022, Calyxt entered into an amendment to its Open Market Sale Agreement with Jefferies that enables it, subject to a maximum sale of up to one-third of Calyxt’s public float in any twelve month period, to offer and sell up to 15,661,000 shares of its common stock. From that date to the date of this release, Calyxt issued 2.0 million shares of its common stock, raising $0.1 million, net of offering fees and expenses. As a result of the issuance of these shares, Cellectis, S. A., once Calyxt’s majority shareholder, now has an ownership percentage of 49.1 percent.

“We continue to be focused on the effective and prudent use of our cash resources and we have reduced costs while executing on near term milestones. In the third quarter of 2022 we achieved the lowest burn rate the Company has seen in recent years,” said Bill Koschak, Chief Financial Officer at Calyxt. “Our cash burn in the third quarter of 2022 was $4.7 million, $1.2 million less than the second quarter of 2022. The results of our cost saving efforts, which are ongoing and include discretionary actions in management’s control, and the legal settlement, have provided cash runway into the second quarter of 2023.  Calyxt is also exploring its ability to pursue certain U.S. government grant programs that were previously unavailable to us because of Cellectis’ majority ownership.”

Website: http://www.calyxt.com

Published: November 3, 2022