Roseville, Minnesota, USA
Aug. 4, 2022

• Evaluated nine new customer demand-driven plant-based chemistries in the quarter, bringing cumulative chemistries evaluated for development to 95, of these 31 meet Calyxt’s target profile and several are the subject of term sheet discussions
• Engineering solution for a high-value molecule planned to be delivered in early 2023 to a large global consumer packaged goods company
• Progressing discussions with multiple potential infrastructure partners who would produce chemistries in various sizes of bioreactors from pilot to commercial scale
• Evaluating term sheets for technology licensing and for licensing of traits

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

“Throughout the second quarter of 2022, the Calyxt team tangibly advanced our business and related milestones. We are very pleased to be discussing term sheets for the development and production of chemistries with potential customers in our large and innovative initial target end markets. Calyxt’s progress is evidenced by the 95 customer demand-driven chemistries we have evaluated for development for potential customers, up from 86 at the end of last quarter. Chemistries identified by customers are screened and prioritized by Calyxt to focus on those with the highest probability of success. In terms of our infrastructure partner milestones, we are in discussions with several companies with capabilities to manufacture multiple chemistries concurrently from pilot to multiple commercial scale vessels on a global basis. Also importantly, we are evaluating multiple term sheets for technology licensing and for the licensing of traits, reflecting significant interest in our second-generation high oleic soybean and high fiber wheat offerings. Throughout the quarter, we also continued to work on scaling and standardizing our production in our pilot BioFactory system and building out related capabilities. We are proud of the significant progress we have made in a short period of time, and it is a testament to our new strategic direction gaining traction. We continue our focused drive to realize value for our stakeholders and look forward to providing updates in the coming months,” said Michael A. Carr, President and Chief Executive Officer at Calyxt.

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

Chemistries under Development for Potential Customers

• The breadth and depth of Calyxt’s business development activities continue to grow. In the second quarter, Calyxt received nine 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 95. Of the 95 chemistries, 31 have met Calyxt’s target product profile, or TPP, criteria and 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.
• Leveraging the 31 customer demand-driven chemistries that have passed its TPP criteria, Calyxt is currently negotiating term sheets with several potential customers for the development of a select number of those plant-based chemistries.
• Calyxt is performing a pilot project for a potential high-value chemistry for a large global consumer packaged goods (CPG) company. Calyxt expects to deliver an engineered solution in early 2023. This could form the basis for a formal engagement to complete development and produce the chemistry for that CPG company, or another company in the space who may be interested in the chemistry.
• The Company’s goal remains two to four customer demand-driven compounds for development by year end using its TPP selection criteria to determine the compounds to pursue.

Discussions with Multiple Global Infrastructure Partners Underway for Production of Chemistries in Various Size Bioreactors from Pilot to Commercial Scale

• In the second quarter of 2022, Calyxt initiated discussions with multiple potential infrastructure partners and exchanged a term sheet with one of them. These potential infrastructure partners offer a global footprint and capabilities to enable Calyxt to have the speed to scale quickly, as they have capacities from pilot to commercial scale production. These partnerships have the potential to enable the development and production of chemistries at industrial scale for customers within Calyxt’s key end markets of cosmeceuticals, nutraceuticals, and pharmaceuticals. Calyxt’s asset-lite approach enables the deployment of capital that would otherwise be spent on large scale manufacturing to its development of a robust customer base and accelerates the speed at which Calyxt can bring chemistries to potential customers.

Mr. Carr added: “The state of our discussions with potential infrastructure partners advanced during the quarter, offering a foundation to support the scalability of large customers in our key end markets. These advancements potentially accelerate Calyxt forward in terms of the speed at which we could bring our chemistries to said customers. The feedback we have thus far received from these infrastructure partners is that they understand and appreciate that Calyxt is going after hard-to-solve chemistries that are high-value and potentially high-margin. Importantly, Calyxt’s progress with these infrastructure partners not only supports future deals, but also brings value to ongoing customer conversations.”

Multiple Term Sheets for Licensing of Technology and Traits under Evaluation

• Since Calyxt refocused its licensing business in late 2021, it has developed its strategy for maximizing potential revenue from the licensing of its technology and plant traits as announced last quarter. In the second quarter, Calyxt procured term sheets for the licensing of its patents and the licensing of its plant traits. For plant traits specifically, there has been significant interest in Calyxt’s high fiber wheat and second generation high oleic soybean offerings. These term sheet discussions with potential licensees are continuing to advance.
• In the fourth quarter of 2021, Calyxt contracted with a large food ingredient manufacturer to develop a soybean intended to produce an oil that could serve as a replacement for palm oil. The project remains on track for a first quarter of 2024 completion. The food ingredient manufacturer is funding Calyxt’s development costs over the term of the agreement and holds an option for future development and commercialization. Given world events, Calyxt has received inbound interest from other manufacturers and users of palm oil during the quarter. Calyxt was also recently featured in an article by the Wall Street Journal focused on the Company’s licensing of traits and the potential of Calyxt’s innovation to be a solution to global supply chain restraints.

“Late last year, we announced the strategic hire of Pete Ball as Technology Licensing Leader. He has been leading our licensing business, including technology and traits, and Calyxt has since made substantial progress in discussions with potential licensees in this area. It is clear these potential licensees see the value of our offerings, especially in these times of global supply issues and food insecurity. We continue our focused drive to realize value for our stakeholders and look forward to providing updates in the coming months,” Mr. Carr continued.

Financial Results for the Three Months Ended June 30, 2022

• Cash, cash equivalents, and restricted cash totaled $11.9 million as of June 30, 2022.
• Revenue was nominal in the second quarter of 2022 compared to $11.9 million in the second 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 second 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 $6.8 million in the second quarter of 2022 compared to $6.3 million in the second quarter of 2021. The increase was primarily driven by the Company’s adoption of the lease accounting standard which shifted amounts previously reported in interest, net to operating expenses.
• Net loss was $2.5 million in the second quarter of 2022 compared to $4.8 million in the second quarter of 2021. The improvement in net loss was driven by 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, partially offset by the gain realized on the forgiveness of the Payroll Protection Program loan in the second quarter of 2021. Net loss per share was $0.05 in the second quarter of 2022 compared to $0.13 in the second 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 $6.7 million in the second quarter of 2022 compared to $7.8 million in the second 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 $0.14 in the second quarter of 2022 compared to $0.21 in the second 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.

“We are happy with the progress we are making across both our product development activities using PlantSpring for BioFactory production and licensing of patents and traits. Additionally, the discussions we are having with potential infrastructure partners brings us closer to enabling our ability to confidently scale production for potential customers while deploying an asset-lite approach that accelerates the speed in which Calyxt can bring chemistries to potential customers,” said Bill Koschak, Chief Financial Officer at Calyxt. “We continue to be disciplined in our use of cash and thanks to the successful offering of our common stock and warrants in February 2022 that resulted in $10.0 million dollars in net proceeds, and assessing our discretionary spending, we continue to expect Calyxt’s cash runway to reach into early 2023.”

About the PlantSpring™ Technology Platform and BioFactory™ Production System

Calyxt’s technology platform, PlantSpring, is founded on the Company’s more than a decade of experience engineering plant metabolism, and incorporates its scientific knowledge, its proprietary systems, tools, and technologies; and an expanding set of related capabilities. In PlantSpring, the Company identifies metabolic pathways to produce plant-based chemistries, designs strategies to reprogram host cells, engineers plant cell metabolism to optimally produce targeted compounds, and produces those targeted compounds at laboratory scale. The Company has implemented AIML capabilities for the identification of targets for editing specific genetic pathways and continues to develop AIML capabilities across the PlantSpring platform, which will enable learning and adaptation of knowledge gained from past activity and are expected to be combined with predictive analytics to rapidly prototype and provide feedback, accelerate the time to complete the development cycle and help mitigate the risk associated with commercial scale-up. As a result, Calyxt believes it can develop biomolecules in plants for customers at both a greater breadth and level of complexity and at faster speeds than its competitors in the synthetic biology industry. The output from the PlantSpring platform integrates with the Company’s BioFactory production system. The Company uses the term “compounds” to describe compounds, molecules, and plant-based chemistries interchangeably.

The BioFactory is a bioreactor-based production system that is designed to be capable of continuous production of plant-based chemistries. The bioreactor can be of any size depending upon factors including yield and titer necessary to reach the required commercial scale. For production, multicellular Plant Cell Matrix™ (PCM™) structures are placed inside the bioreactor, and growth media bathes the PCM structures to provide them with nutrition, which differentiates the Company’s process from other methods that require complete submersion of cells in growth media and/or the application of hormones to facilitate growth. A PCM structure is a living system of various cell types, which is designed to emulate the intercellular metabolism of an entire plant, which grows over time, produces, and stores, or excretes, the target chemistries. The growth media is the feedstock of the BioFactory production system and contains the essential inputs to support growth of the PCM structures and necessary chemistry production. The growth media is expected to be reused throughout the production cycle, which may run for an extended time period. To scale production in the BioFactory productions system, the Company expects to move the PCM structures from its current bioreactor into larger capacity bioreactors or groups of bioreactors. Calyxt began running lab-scale bioreactors in early 2021. The Company’s first pilot-scale bioreactor became operational in December 2021 and is scalable up to 200 liters. The pilot stage of development takes a compound developed with the PlantSpring platform through to commercial production. Depending on the compound to be produced, there may be a range of vessel sizes between the initial pilot facility and the commercial production facility. The Company’s current plan is to engage third parties, referred to as infrastructure partners, for at-scale commercial production. Infrastructure partners are likely to be companies with processing assets that can be converted from current production to the Company’s bioreactor-based approach. If an infrastructure partner is used for production, the Company expects to pay a fee for that production. Because of the expected modular nature of the BioFactory production system and the types of high value compounds the Company expects to develop for customers, it is also possible that commercial production could also occur in a customer’s in-house facility. The Company expects to expand the scope of its pilot facilities based on customer demand, and the scope of production could extend, subject to regulatory and other considerations, outside the United States. Because of its production methodology, Calyxt believes the BioFactory has the potential to be one of the most sustainable production systems across industries.  

About Calyxt

Calyxt (Nasdaq: CLXT) is a plant-based synthetic biology company. The Company leverages its proprietary PlantSpring™ technology platform to engineer plant metabolism to produce innovative high value plant-based chemistries for use in customers’ materials and products. As plant-based solutions, the Company’s synthetic biology products can be used in helping customers meet their sustainability targets and financial goals. Calyxt’s diversified offerings are primarily delivered through its proprietary BioFactory™ production system. For more information, visit www.calyxt.com.

PlantSpring, BioFactory, Plant Cell Matrix™, and the Calyxt logo are trademarks of Calyxt, Inc. Any other trademarks belong to their respective owners.

Website: http://www.calyxt.com

Published: August 4, 2022