Woburn, Massachusetts, USA
May 11, 2022
Yield10 Bioscience, Inc. (Nasdaq:YTEN) ("Yield10" or the "Company"), an agricultural bioscience company, today reported financial results for the three months ended March 31, 2022.
“The development of Camelina as a commercial oilseed crop addresses three fundamental challenges facing not just our generation but future generations as well: climate change, global food security and plastic waste,” said Oliver Peoples, Ph.D., Chief Executive Officer of Yield10 Bioscience. “We are operationalizing our commercial plan to launch Camelina as a platform crop to supply low-carbon feedstock oil for the biofuel market and to produce omega-3 nutritional oil and PHA bioplastic longer term. In the first quarter, we hired Darren Greenfield to lead seed operations and we recently named Dr. Willie Loh, a former Cargill executive, as a commercial and technical advisor who will provide important insights and guidance as we execute our commercial plans for Camelina oil.
"We are poised to begin engaging growers for seed production under contract in the U.S. and Canada as well as securing supply chain partners for offtake of seed for crushing. This activity has been initiated in 2022 and will continue to ramp up in 2023. In support of this plan, we have identified spring and winter Camelina varieties for initial commercialization in the North American biofuels market.
“Harvest of our 2021/2022 winter field trials is currently underway and will enable us to evaluate the performance of various spring and winter varieties across a range of geographies and provide seed for scale up. Designed to generate proof points on a broad range of Camelina varieties and traits, our 2022 spring field program will be our most extensive to date. Permitting is now complete and planting has begun for this program that is designed to evaluate herbicide tolerance, pest resistance, seed yield, oil content and other key aspects of Camelina performance. In addition, we also expect to plant PHA Camelina at acre-scale during the second quarter of 2022 and continue to support Rothamsted Research in the development of Camelina omega-3 (DHA+EPA) nutritional oil.
“As 2022 progresses, we expect to continue building our commercial capabilities and to continue protecting our crop discoveries with intellectual property and plant variety registrations in our target markets. As global trends drive interest in Camelina and in new crop yield traits discovered by our team using GRAIN, we remain encouraged by ongoing discussions around collaborative opportunities for Yield10,” said Peoples.
Recent Accomplishments
- Establishing commercial capabilities: In the first quarter, Yield10 appointed Darren Greenfield as senior director of seed operations. Mr. Greenfield brings more than 25 years of experience with major agricultural companies managing the development and commercial production of proprietary canola plant varieties. Yield10 recently named Willie Loh, Ph.D. as a special commercial advisor to the Company. Dr. Loh most recently served as Vice President, Market Development, Global Edible Oils division at Cargill and brings more than 25 years of experience in the area of commodity and specialty oils, including omega-3.
- 2022 seed scale up and field test program underway: Yield10 plans to evaluate candidate Camelina lines for herbicide tolerance to identify lead and back up lines for commercial development and regulatory approval. In addition, a prototype Camelina PHA line will be grown at acre-scale to produce PHA for process development and business development purposes. Further objectives for the field test program include the ongoing evaluation of traits C3007 and C3020 as well as identifying candidate Camelina lines resistant to downy mildew, a fungal pathogen.
- 2021/2022 winter season field testing and seed scale up on track: Yield10's winter season Camelina program remains on track. The objective of the program is to scale up seed of Camelina line E3902 and two winter Camelina lines, as well as to determine if winter planting in certain U.S. geographies could be viable for spring Camelina lines. The harvest of seed from sites in the U.S. and Canada is ongoing and is expected to be completed by the end of the second quarter of 2022.
- New patents granted: A new patent was granted in Australia covering trait C3007 for boosting seed oil content in oilseed crops. Yield10 is the exclusive licensee of this intellectual property from the University of Missouri. A new patent was also granted in Canada covering advanced technology to produce omega-3 oil in Camelina. Yield10 has an exclusive option to secure a commercial license to this technology.
Geopolitical Uncertainty and COVID-19 Impact on Operations
The Company has implemented business continuity plans to address the COVID-19 pandemic and minimize disruptions to ongoing operations. In addition, the conflict in Ukraine has resulted in significant uncertainty in the agriculture and commodities markets, and may have a significant impact on the Company’s business and operations. To date, despite the pandemic, Yield10 has been able to move forward with the operational steps required to execute its 2021-2022 winter field trials and start up its 2022 spring field trials in Canada and the United States. However, it is possible that any potential future closures of research facilities, should they continue for an extended time, or delays in receiving supplies and materials needed to conduct field trials and research, or economic repercussions of the pandemic or other geopolitical uncertainty, such as the ongoing conflict between Ukraine and Russia, could adversely impact the Company's anticipated time frames for evaluating and/or reporting data from our field trials and other work we plan to accomplish during 2022 and beyond.
FIRST QUARTER 2022 FINANCIAL OVERVIEW
Cash Position
Yield10 Bioscience is managed with an emphasis on cash flow and deploys its financial resources in a disciplined manner to achieve its key strategic objectives.
Yield10 ended the first quarter of 2022 with $12.7 million in unrestricted cash and investments; a net decrease of $3.3 million from unrestricted cash and investments of $16.0 million reported as of December 31, 2021. The Company used $3.1 million in cash for its operating activities during the three months ended March 31, 2022, in comparison to $2.6 million used for operating activities during the three months ended March 31, 2021. The greater use of cash for operating activities was primarily the result of Yield10's greater net loss of $3.3 million during the first quarter of 2022 in comparison to a net loss of $2.6 million reported for the same quarter of last year. The greater loss is due to the Company's increased operating expenses related to staffing, expanded Camelina spring and winter field trials, increased regulatory-related expenditures as well as due to seed scale up and other early stage seed commercialization activities.
The Company continues to estimate total net cash usage for the full year ended December 31, 2022 in a range of $12.0 to $12.5 million as it continues its controlled growth to develop proprietary Camelina plant varieties and to support the launch of its Camelina products. Yield10's present capital resources are expected to fund its planned operations into the first quarter of 2023. The Company's ability to continue operations after its current cash resources are exhausted is dependent upon its ability to obtain additional financing, including public or private equity financing, secured or unsecured debt financing, receipt of additional government research grants, as well as licensing or other collaborative arrangements.
Operating Results
Research grant revenue for the three months ended March 31, 2022 was $0.1 million in comparison to grant revenue of $0.2 million recorded during the three months ended March 31, 2021. Research and development expenses were $1.8 million during the first three months of 2022 compared to $1.3 million recorded during the first three months of 2021. General and administrative expenses were $1.7 million and $1.4 million for the three months ended March 31, 2022 and 2021, respectively.
Yield10 reported a net loss of $3.3 million for the quarter ended March 31, 2022, or $0.68 per share, as compared to a net loss of $2.6 million, or $0.60 per share, for the quarter ended March 31, 2021.
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