ermantown, Maryland, USA
May 9, 2019
- Quarterly GAAP revenues of $23.3 million and net loss attributable to Intrexon of $60.7 million including non-cash charges of $17.8 million
- Quarterly Adjusted EBITDA of $(39.2) million --
Intrexon Corporation (NASDAQ: XON), a leader in the engineering and industrialization of biology to improve the quality of life and health of the planet, today announced its first quarter financial results for 2019.
Recent Business Highlights:
- Intrexon announced alignment of its operations into two units, Intrexon Health and Intrexon Bioengineering, to better deploy resources, realize inherent synergies and position the company for growth with a core focus on healthcare. Intrexon Health, will be led by Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon while Intrexon Bioengineering will be led by LTG (Ret.) Thomas Bostick, PhD, PE, Chief Operating Officer of Intrexon, who will also assume the title of President, Intrexon Bioengineering; and
- As Intrexon announced previously, the Company believes it will end the year with approximately the same net cash and short-term investment position that it held on April 3, 2019. The Company is making progress toward this goal through a combination of partnering, asset sales and operating cost reductions. The Company has initiated plans to reduce its original 2019 operating budget by approximately $70 million and commenced actions toward achieving this goal.
Intrexon Health
- Precigen, Inc., a wholly-owned subsidiary of Intrexon, opened its new nearly 5,000 square foot facility in Germantown, Maryland to support gene therapy manufacturing. The U.S. Food and Drug Administration (FDA) good manufacturing practices (GMP) compliant facility was designed with agility and control in mind, focusing on rapid manufacturing and the ability to scale production appropriately to meet early stage clinical trial needs;
- Intrexon and its majority-owned subsidiary Triple-Gene LLC (formerly Xogenex LLC) completed enrollment in the first cohort of a Phase 1 clinical trial of INXN-4001, an investigational new drug which is the world's first triple effector gene drug candidate being evaluated for the treatment of heart failure; and
- Intrexon continues advancing its proprietary yeast-based platform for robust production of cannabinoids with consistent yield and purity and with production of CBGA at 700 mg/L in stirred tank fermenter. The platform is on track to realize a target cost of goods of <$1000 USD/kg.
Intrexon Bioengineering
- Intrexon entered into a strategic licensing agreement with Surterra Wellness to utilize Intrexon's Botticelli™ next generation plant propagation platform to enable rapid production of Surterra's proprietary cannabis cultivars for the Florida market;
- Oxitec, Ltd., a wholly-owned subsidiary of Intrexon, signed two, multi-year development agreements with a collaborator to apply its 2nd generation, self-limiting technology to develop solutions for the soybean looper and fall armyworm, two insect pests that cause significant damage to agricultural crops globally; and
- AquaBounty Technologies, Inc. (NASDAQ: AQB), an investment of Intrexon, announced the FDA lifted the Import Alert on AquAdvantage® Salmon (AAS) in March. Environment and Climate Change Canada has also approved the company's Rollo Bay production facility for the commercial manufacture and grow-out of AAS.
First Quarter 2019 Financial Highlights:
- Total revenues of $23.3 million;
- Net loss of $60.7 million attributable to Intrexon, or $(0.40) per basic share, including non-cash charges of $17.8 million;
- Adjusted EBITDA of $(39.2) million, or $(0.26) per basic share; and
- Cash, cash equivalents, and short-term investments totaled $181.6 million and the value of common equity securities totaled $1.8 million at March 31, 2019.
"Our realignment into Intrexon Health and Intrexon Bioengineering is well underway," commented Mr. Kirk. "On the healthcare side it is satisfying and exciting for all of us that we currently are dosing in clinical trials several novel therapeutic candidates of our design that incorporate our unique technology. Moreover, as we prepare to get underway with patient dosing of two Ultra-CAR-T candidates, we see the potential realization of a set of aspirations that we have held -- and declared -- since before our IPO and believe that these should constitute major advances in immuno-oncology. We await data with great anticipation."
Mr. Kirk concluded, "Our share price carries implications as well, so we are determined to prosecute all that we have set ourselves to accomplish in healthcare while realizing maximum value for our shareholders from our non-healthcare assets, the portfolio of Intrexon Bioengineering. These realizations may be participating or transactional in nature, but we are determined to achieve them and indeed are currently advancing several such prospects. Combined with the cost-cutting program that we have implemented, we expect our company will be a leaner, more-focused enterprise but not one lacking ambition or impact."
"Intrexon Bioengineering's highly skilled teams are contributing their breadth of expertise across diverse fields to advance programs in food, agriculture, environmental, and industrial fields. We believe these programs offer a unique opportunity to realize the potential of engineered solutions in generating more efficient and sustainable approaches than current industry practices. Intrexon Bioengineering is focused on delivering these technologies and products with the goal of increasing shareholder value," added Dr. Bostick.
First Quarter 2019 Financial Results Compared to Prior Year Period
Total revenues decreased $16.3 million from the quarter ended March 31, 2018. Collaboration and licensing revenues decreased $13.9 million from the quarter ended March 31, 2018 primarily due to the reacquisition of rights previously licensed to certain significant collaborators, including ZIOPHARM Oncology, Inc., and ARES Trading S.A., the result of which eliminated or substantially reduced revenues generated from those collaborations. The decline was also attributable to the mutual termination of the Company's ECC with OvaScience, Inc., in March 2018. Product revenues decreased $2.3 million, or 32%, primarily due to lower customer demand for pregnant cows and cloned products. Gross margin on products declined in the current period as a result of fewer products sold and increased costs associated with new product offerings. Service revenues decreased $0.9 million, or 7%. The decrease in service revenues and the gross margin thereon relates to fewer embryos produced per bovine in vitro fertilization cycle performed as a result of unfavorable production results.
Research and development expenses decreased $4.2 million, or 11%. Research and development depreciation and amortization expense decreased $2.0 million primarily due to intangible assets that were impaired or abandoned in 2018. Research and development salaries, benefits and other personnel costs decreased $1.3 million primarily due to the closing of one of the Company's research and development facilities in Brazil in 2018. Selling, general and administrative (SG&A) expenses decreased $6.1 million, or 16%. SG&A salaries, benefits and other personnel costs decreased $4.8 million primarily due to decreased compensation expenses related to performance and retention incentives for SG&A employees as well as decreased share-based compensation expense as a result of certain 2014 stock option grants becoming fully vested in March 2018.
The Company will not host a conference call associated with this financial results release.
About Intrexon Corporation
Intrexon Corporation (NASDAQ: XON) is Powering the Bioindustrial Revolution with Better DNA™ to create biologically-based products that improve the quality of life and the health of the planet through two operating units – Intrexon Health and Intrexon Bioengineering. Intrexon Health is focused on addressing unmet medical needs through a diverse spectrum of therapeutic modalities, including gene and cell therapies, microbial bioproduction, and regenerative medicine. Intrexon Bioengineering seeks to address global challenges across food, agriculture, environmental, and industrial fields by advancing biologically engineered solutions to improve sustainability and efficiency. Our integrated technology suite provides industrial-scale design and development of complex biological systems delivering unprecedented control, quality, function, and performance of living cells. We call our synthetic biology approach Better DNA®, and we invite you to discover more at www.dna.com or follow us on Twitter at @Intrexon, on Facebook, and LinkedIn.
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