PR Newswire | Nov 9, 2020 08:06AM EST

11/09 07:05 CST

Precigen Reports Third Quarter 2020 and Year-to-Date Financial Results- Company to provide comprehensive clinical pipeline and data updates in early December -- Continues to advance healthcare portfolio and improve fiscal performance by executing operational efficiencies -- Company to present PRGN-3006 UltraCAR-T(r) data at ASH annual meeting on December 7th - GERMANTOWN, Md., Nov. 9, 2020

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:

* Clinical Pipeline and Data Update Conference Call: In light of the substantive progress made in advancing its clinical pipeline, as well as anticipated data disclosures for several key programs, Precigen will host a conference call in early December dedicated to reviewing these important milestones. The Company plans to announce timing and details about the call in the coming weeks; * UltraPorator(tm): Precigen announced that the US Food and Drug Administration (FDA) cleared UltraPorator as a manufacturing device for its UltraCAR-T manufacturing process. The Company announced that it has successfully completed technology transfer of the UltraPorator system for the manufacturing of PRGN-3005 in ovarian cancer at the University of Washington/Fred Hutchinson Cancer Research Center and for PRGN-3006 in acute myeloid leukemia (AML) at the Moffitt Cancer Center. UltraPorator is a semi-closed, high-throughput system with a proprietary hardware and software solution designed to significantly reduce processing time and contamination risk, limitations inherent in existing electroporation devices that contribute to current hurdles for viable scale-up and commercialization of certain therapeutic programs; * PRGN-2009 AdenoVerse(tm) Immunotherapy: Precigen announced that the first patient has been dosed in the Phase I/II trial for PRGN-2009, a first-in-class, off-the-shelf investigational immunotherapy utilizing the AdenoVerse platform and designed to activate the immune system to recognize and target HPV-positive solid tumors; * PRGN-3005 UltraCAR-T: Precigen completed dosing of patients in dose level 3 of the intraperitoneal (IP) arm of the Phase 1 clinical trial of PRGN-3005 UltraCAR-T for the treatment of advanced, recurrent platinum resistant ovarian, fallopian tube or primary peritoneal cancer (clinical trial identifier: NCT03907527); and * PRGN-3006 UltraCAR-T: Precigen completed dosing of patients in dose level 2 of the non-lymphodepletion arm and dose level 1 in the lymphodepletion arm of the Phase 1 trial of PRGN-3006 UltraCAR-T for treatment of patients with relapsed or refractory acute myeloid leukemia (AML) or higher-risk myelodysplastic syndromes (MDS) (clinical trial identifier: NCT03927261).

"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:

* Total revenues of $23.6 million in 2020 compared to $18.3 million in 2019; * Net loss from continuing operations of $29.5 million, or $(0.18) per basic share, of which $10.1 million was for non-cash charges in 2020, compared to net loss from continuing operations of $49.1 million, or $(0.32) per basic share, of which $15.7 million was for non-cash charges in 2019; and * Cash, cash equivalents, and short-term investments totaled $113.1 million as of September 30, 2020.

Year-to-Date 2020 Financial Highlights:

* Total revenues of $83.8 million in 2020 compared to $73.7 million in 2019; and * Net loss from continuing operations of $102.8 million, or $(0.63) per basic share, of which $50.6 million was for non-cash charges in 2020 compared to net loss from continuing operations attributable to Precigen of $132.7 million, or $(0.86) per basic share, of which $36.2 million was for non-cash charges in 2019.

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.

Precigen: Advancing Medicine with Precision(tm)

Precigen (Nasdaq: PGEN) is a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cell therapies using precision technology to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. Our technologies enable us to find innovative solutions for affordable biotherapeutics in a controlled manner. Precigen operates as an innovation engine progressing a preclinical and clinical pipeline of well-differentiated unique therapies toward clinical proof-of-concept and commercialization. For more information about Precigen, visit www.precigen.com or follow us on LinkedIn.

Trademarks

Precigen, UltraPorator, UltraCAR-T, AdenoVerse and Advancing Medicine with Precision are trademarks of Precigen and/or its affiliates. Other names may be trademarks of their respective owners.

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.

For more information, contact:

Investor Contact: Media Contact: Steven Harasym Glenn Silver Vice President, Investor Relations Lazar-FINN Partners Tel: +1 (301) 556-9850 glenn.silver@finnpartners.com investors@precigen.com

Precigen, Inc. and SubsidiariesConsolidated 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 SubsidiariesConsolidated Statements of Operations(Unaudited)

Three months ended Nine months ended(Amounts in thousands, except share andper share data) 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 - (3,139) - 3,070 securities and preferred stock, net

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 (29,558) (49,057) (102,934) (134,284) income taxes

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 - (4,580) (26,056) (20,442) income taxes

Net loss $ (29,508) $ (53,634) $ (128,860) $ (154,701)

Net loss attributable to the noncontrolling - - - 1,592 interests

Net loss attributable to Precigen $ (29,508) $ (53,634) $ (128,860) $ (153,109)

Amounts Attributable to Precigen

Net loss from continuing operations $ (29,508) $ (49,054) $ (102,804) $ (132,667) attributable to Precigen

Net loss from discontinued operations - (4,580) (26,056) (20,442) attributable to Precigen

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, $ (0.18) $ (0.32) $ (0.63) $ (0.86) basic and diluted

Net loss from discontinued operations attributable to Precigen per share, - (0.03) (0.16) (0.14) basic and diluted

Net loss attributable to Precigen per $ (0.18) $ (0.35) $ (0.79) $ (1.00) share, basic and diluted

Weighted average shares outstanding, 165,527,024 154,596,257 163,318,375 153,770,785 basic and diluted

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SOURCE Precigen, Inc.