GERMANTOWN, Md., March 1, 2017 /PRNewswire/ -- Intrexon
Corporation (NYSE: XON), a leader in the engineering and
industrialization of biology to improve the quality of life and
health of the planet, today announced its fourth quarter and full
year financial results for 2016.
Business Highlights and Recent Developments:
- Oxitec, a wholly-owned subsidiary of Intrexon, opened its large
scale mosquito production facility in Brazil with the capacity to produce 60 million
Friendly™ Aedes per week. Given ongoing discussions in
Brazil management expects the
factory's egg capacity will be committed within 2017;
- Oxitec expanded its Friendly™ Aedes project in Piracicaba,
Brazil with the initiation of
releases of self-limiting Aedes aegypti mosquitoes in ten
additional neighborhoods in the city's center covering an
additional 60,000 people;
- The Cayman Islands Mosquito Research and Control Unit commenced
operational roll-out of Oxitec's Friendly™ technology in West Bay,
Grand Cayman, in July 2016 as the first phase of an anticipated
island-wide deployment, and recent results indicate the program is
on track;
- Okanagan Specialty Fruits (OSF) achieved the first commercial
harvest of its non-browning Arctic® Golden apple variety
and plans commercial launch of fresh sliced apples in select
markets across North America in
the fall of 2017;
- Together with collaborator ZIOPHARM Oncology, Inc. (NASDAQ:
ZIOP) announced signing of a Cooperative Research and Development
Agreement (CRADA) with the National Cancer Institute (NCI) for the
development of adoptive cell transfer-based immunotherapies using
autologous peripheral blood lymphocytes genetically modified using
the Sleeping Beauty system to express T-cell receptors for
the treatment of solid tumors in patients with advanced
cancers;
- Collaborator ZIOPHARM announced end-of-phase 2 meeting with the
FDA for Ad-RTS-hIL-12 + veledimex in recurrent glioblastoma and
expects to announce the outcome of this meeting in the first
quarter with the goal of initiating a pivotal clinical trial in
2017;
- Collaborator ZIOPHARM announced improved production times in
its ongoing Phase I trial of 2nd generation Sleeping
Beauty CD19+ CAR-T cells and progress toward its
"Point-of-Care" approach. One patient with multiple-relapsed acute
lymphoblastic leukemia achieved a complete response and a patient
with triple-hit non-Hodgkin lymphoma was treated with T cells
manufactured in 2 weeks;
- Collaborator ZIOPHARM presented promising pre-clinical data at
the 58th American Society of Hematology Annual Meeting
that a single, low-dose of 3rd gen Sleeping Beauty CAR+
T cells co-expressing a CD19-specific CAR and membrane-bound IL15
produced in <2 days resulted in sustained in vivo
persistence, potent anti-tumor effects and superior leukemia-free
survival;
- Collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) announced
dosing of first patient in Phase I portion of Phase I/II clinical
trial of FCX-007 gene therapy for treatment of recessive dystrophic
epidermolysis bullosa (RDEB);
- Established joint ventures in the Health and Food sectors:
Intrexon T1D Partners, LLC to develop ActoBiotics® based
antigen-specific immunotherapy to treat type 1 diabetes in humans,
and EnviroFlight, a joint venture with Darling Ingredients, Inc.
(NYSE: DAR), to employ black soldier fly in the development of
sustainable high quality nutrients for the aquaculture and
livestock industries;
- Entered into Exclusive Channel Collaborations with Genten
Therapeutics, Inc., CRS Bio, Inc., Relieve Genetics, Inc., Exotech
Bio, Inc., and AD Skincare, Inc., startups backed by the Harvest
Intrexon Enterprise Fund. The collaborations are focused on
biologically based delivery of therapeutic molecules to target
human health conditions including celiac disease, chronic
rhinosinusitis, neuropathic pain, cancer, and aging facial skin,
respectively;
- Intrexon's collaboration with a leading global agricultural
company utilizing ActoBiotics™ technology advanced to
its next phase of development for biological crop protection
solutions following initial studies validating the efficacy of
dsRNA for insect control applications;
- Exemplar Genetics, a wholly-owned subsidiary of Intrexon, was
awarded a subcontract with Leidos Biomedical Research, Inc., prime
contractor for the Frederick National Laboratory for Cancer
Research, sponsored by the National Cancer Institute, to support
the NIH's National Center for Advancing Translational Sciences in
creating genetically engineered miniswine models of sickle cell
disease that could potentially lead to new treatments for the
disorder;
- Two of Intrexon's subsidiaries achieved additional regulatory
approvals: OSF's non-browning Arctic® Fuji apple was
granted deregulated status by the U.S. Department of Agriculture's
Animal and Plant Health Inspection Service and Health Canada
approved AquaBounty Technologies, Inc. (NASDAQ: AQB, AIM: ABTU)
AquAdvantage® Salmon for commercial sale in Canada;
- Oxitec announced that the Board of the Florida Keys Mosquito
Control District voted to approve the investigational agreement for
use of self-limiting Friendly™ mosquitoes in an effectiveness trial
following an approval vote by residents in Monroe County;
- Oxitec announced plans to move forward with open field trials
of its self-limiting Mediterranean fruit fly (medfly) in
Australia after a series of
successful studies across multiple countries demonstrated the
self-limiting medfly's ability to mate with wild medfly and
subsequently suppress the pest population;
- Oxitec and Gangabishan Bhikulal Investment and Trading Limited
announced initiation of outdoor caged trials in India to demonstrate the efficacy of Oxitec's
Friendly™ mosquitoes in suppressing the local population of
Aedes aegypti, the primary vector for many dangerous viruses
including dengue, Zika, and chikungunya. Recently published work
estimates dengue alone infects almost 5.8 million people in
India annually and the total
financial cost of dengue exceeds $1
billion per year;
- Four of Intrexon collaborators' gene therapy programs attained
development achievements with the U.S. Food and Drug
Administration: Fast Track designation to Fibrocell for FCX-007 for
the treatment of RDEB, Fast Track designation to Oragenics, Inc.
(NYSE MKT: OGEN) for ActoBiotics® AG013 for the
treatment of oral mucositis, Orphan Drug designation to Agilis
Biotherapeutics' AGIL-FA for the treatment of Friedreich's ataxia,
and Orphan Drug designation to Fibrocell for FCX-013 for the
treatment of linear scleroderma;
- AquaBounty completed the listing of its common shares on the
NASDAQ Stock Market and completed an equity subscription from
Intrexon. In conjunction with the listing on NASDAQ, Intrexon
distributed a special stock dividend of shares of AquaBounty common
stock it owned to its shareholders while maintaining majority
ownership of AquaBounty's outstanding common stock; and
- Entered into a definitive agreement to acquire GenVec, Inc.
(NASDAQ: GNVC), a clinical-stage company and pioneer in the
development of AdenoVerse™ gene delivery technology, with the goal
of integrating and expanding upon GenVec's expertise in adenoviral
(AdV) vectors and cGMP drug product manufacturing to enhance
Intrexon's broad gene transfer capabilities that encompass multiple
viral and non-viral platforms and develop a next generation AdV
platform with significantly higher payload capacity compared to
current systems.
Fourth Quarter Financial Highlights:
- Total revenues of $46.0 million,
an increase of 11% over the fourth quarter of 2015;
- Net loss of $44.1 million
attributable to Intrexon, or $(0.37)
per basic share, including non-cash charges of $38.9 million;
- Adjusted EBITDA of $(5.8)
million, or $(0.05) per basic
share;
- The net change in deferred revenue related to upfront and
milestone payments, which represents the cash and stock received
from collaborators less the amount of revenue recognized during the
period, was a decrease of $11.3
million compared to a net increase of $22.3 million in the fourth quarter of 2015;
- Cash consideration received for reimbursement of research and
development services covered 54% of cash operating expenses
(exclusive of operating expenses of consolidated
subsidiaries);
- Total consideration received for technology access fees,
reimbursement of research and development services and products and
services revenues covered 61% of consolidated cash operating
expenses; and
- Cash, cash equivalents, and short-term and long-term
investments totaled $243.2 million,
the value of investment in preferred stock totaled $129.5 million, and the value of equity
securities totaled $23.5 million at
December 31, 2016.
Full Year Financial Highlights:
- Total revenues of $190.9 million,
an increase of 10% over the full year ended December 31, 2015;
- Net loss of $186.6 million
attributable to Intrexon, or $(1.58)
per basic share, including non-cash charges of $159.0 million;
- Adjusted EBITDA of $(26.6)
million, or $(0.23) per basic
share;
- The net increase in deferred revenue related to upfront and
milestone payments was $116.5 million
compared to $74.1 million in the full
year ended December 31, 2015;
- Cash consideration received for reimbursement of research and
development services covered 57% of cash operating expenses
(exclusive of operating expenses of consolidated subsidiaries);
and
- Total consideration received for technology access fees,
reimbursement of research and development services and products and
services revenues covered 129% of consolidated cash operating
expenses.
"Over the course of 2016, while nevertheless achieving its
overall financial goals, significantly advancing a great many of
its partnered programs, and meaningfully extending its technology
platforms, the Company faced political and regulatory headwinds in
our marketable products portfolio that we had not fully appreciated
at this time last year, causing us to underachieve commercially as
compared with our expectations," commented Randal J. Kirk, Chairman and Chief Executive
Officer of Intrexon.
"Operationally, however, we executed exceptionally well.
We essentially balanced cost recovery, deal money, and products and
services revenues to our cash operating expenses, thus maintaining
our desired capital efficiency, strengthened our leadership team,
moved many of our developmental programs forward in the lab, the
field or the clinic, and our more than 600 scientists extended our
leadership in the engineering of biology by providing several new
technology platforms that should enable many novel, valuable and
differentiated products. Several of these already have drawn
partnering interest, and others should add significant incremental
value to some of the Company's existing partnerships."
"In addition, we are evaluating structural alternatives
concerning our business in healthcare as we appreciate that, as
compared with the rest of our business, healthcare is unique as an
industry, having a discrete shareholder base, methods of
measurement and a vastly greater industrial maturity."
Mr. Kirk concluded, "We therefore view our prospects for 2017
with the highest expectations for performance. We more than
ever are confident that Intrexon can lead the greatest industrial
vector in history."
Fourth Quarter 2016 Financial Results Compared to Prior Year
Period
Total revenues increased $4.5
million, or 11%, over the quarter ended December 31, 2015. Collaboration and licensing
revenues increased $6.6 million from
the quarter ended December 31, 2015
due to (i) the recognition of deferred revenue for upfront payments
received from collaborations signed by the Company in 2016,
including the consideration received in June
2016 from ZIOPHARM to amend the collaborations between us;
and (ii) increased research and development services for these
collaborations and for the expansion of programs or the addition of
new programs with previously existing collaborators. Product
revenues decreased $1.5 million, or
17%, and gross margin decreased from the quarter ended December 31, 2015. The decrease in product
revenues and gross margin primarily relates to a decrease in the
quantities of pregnant cows, livestock previously used in
production and live calves sold due to lower customer demand for
these products and also due to a decline in average sales price of
livestock previously used in production. Service revenues and gross
margins were consistent quarter over quarter.
Research and development expenses increased $2.8 million, or 11%, due primarily to increases
in (i) salaries, benefits and other personnel costs for research
and development employees hired to support new or expanded
collaborations, (ii) lab supplies and consulting expenses incurred
as our collaborator programs progress towards the clinical phase,
and (iii) amortization of intangible assets which commenced upon
regulatory approvals received by our subsidiaries. While selling,
general and administrative (SG&A) expenses were generally flat
quarter over quarter, legal and professional expenses increased
$4.7 million due to (i) expenses
incurred to support domestic and international government affairs
for regulatory and other approvals necessary to commercialize the
Company's products and services; and (ii) increased legal fees to
defend ongoing litigation. Salaries, benefits and other personnel
costs for SG&A employees decreased $6.0
million primarily due to a decrease in performance-based
cash incentives for the Company's executive officers in 2016,
partially offset by the costs of increased headcount, including the
hiring of two new executive officers and additional business
development professionals.
Total other income (expense), net, decreased $12.4 million, or 336%, from the quarter ended
December 31, 2015. This decrease was
attributable to the $16.0 million
unrealized and realized losses recognized on the Company's equity
securities portfolio, partially offset by dividend income from the
Company's investment in preferred stock.
Full Year 2016 Financial Results Compared to Prior Year
Period
Total revenues increased $17.3
million, or 10%, over the year ended December 31, 2015. Collaboration and licensing
revenues increased $22.1 million over
the year ended December 31, 2015 due
to (i) the recognition of deferred revenue for upfront payments
received from collaborations signed by the Company in 2016,
including the consideration received in June
2016 from ZIOPHARM to amend the collaborations between us;
and (ii) increased research and development services for these
collaborations and for the expansion of programs or the addition of
new programs with previously existing collaborators. This increase
is partially offset by the recognition in 2015 of previously
deferred revenue related to collaboration agreements for which the
Company satisfied all of its obligations or which were terminated
during 2015. Product revenues decreased $4.9
million, or 12%, and gross margin decreased from the year
ended December 31, 2015. The decrease
in product revenues and gross margin primarily relates to a
decrease in the quantities of pregnant cows, livestock previously
used in production and live calves sold due to lower customer
demand for these products and also due to a decline in average
sales price of livestock previously used in production. Service
revenues and gross margin on services were consistent year over
year.
Research and development expenses decreased $35.3 million, or 24%, due primarily to the
inclusion in 2015 of a $59.6 million
payment in common stock for an exclusive license to certain
technologies owned by the University of
Texas MD Anderson Cancer Center. This decrease was partially
offset by increases in (i) salaries, benefits and other personnel
costs for research and development employees, (ii) lab supplies and
consulting expenses, and (iii) depreciation and amortization.
Salaries, benefits and other personnel costs increased $7.3 million due to (i) an increase in research
and development headcount to support new and expanded
collaborations and (ii) a full year of costs for research and
development employees assumed in 2015 acquisitions. Lab supplies
and consulting expenses increased $10.6
million as a result of (i) the progression into the
preclinical phase with certain collaborators; (ii) the increased
level of research and development services provided to
collaborators; and (iii) a full year of compensation costs incurred
for employees assumed in 2015 acquisitions. Depreciation and
amortization increased $5.7 million
primarily as a result of (i) the inclusion of a full year of
depreciation and amortization on property, equipment and intangible
assets assumed in 2015 acquisitions and (ii) a full year of
amortization of AquaBounty's intangible assets which commenced upon
regulatory approval in November 2015.
SG&A expenses increased $33.3
million, or 31%, over the year ended December 31, 2015. Salaries, benefits and other
personnel costs for SG&A employees increased $3.2 million due to (i) increased headcount,
including the hiring of two new executive officers and additional
business development professionals; (ii) a full year of non-cash
compensation paid to the Company's CEO pursuant to the compensation
agreement into which the Company entered in November 2015; and (iii) a full year of salaries,
benefits and other personnel costs for employees assumed in 2015
acquisitions. These increases were partially offset by a decrease
in performance-based cash incentives for our executive officers in
2016. Legal and professional expenses increased $18.6 million primarily due to (i) a full year of
non-cash consulting expenses pursuant to the Company's services
agreement with Third Security into which the Company entered in
November 2015; (ii) expenses incurred
to support domestic and international government affairs for
regulatory and other approvals necessary to commercialize the
Company's products and services; (iii) increased legal fees to
defend ongoing litigation; and (iv) incremental costs incurred to
support the 2015 acquisitions and other business development
activities. In 2016, the Company also recorded $4.3 million in litigation expenses arising from
the entrance of a court order in Trans Ova's trial with XY,
LLC.
Total other income (expense), net, decreased $116.7 million, or 170%, from the year ended
December 31, 2015. This decrease was
attributable to the $81.4 million
realized gain recognized upon the special stock dividend of all of
Intrexon's shares of ZIOPHARM to the Company's shareholders in
June 2015 and the decrease in fair
value of the Company's equity securities portfolio. These decreases
were partially offset by preferred stock dividend income received
from ZIOPHARM.
Conference Call and Webcast
The Company will host a conference call today Wednesday, March 1st, at 5:30 PM ET to discuss the fourth quarter and full
year 2016 financial results and provide a general business
update. The conference call may be accessed by dialing
1-888-317-6003 (Domestic US), 1-866-284-3684 (Canada), and 1-412-317-6061 (International)
and providing the number 2431343 to join the Intrexon Corporation
Call. Participants may also access the live webcast through
Intrexon's website in the Investors section at
http://investors.dna.com/events.
About Intrexon Corporation
Intrexon Corporation (NYSE: 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. Intrexon's integrated technology suite provides its
partners across diverse markets with 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.
Non-GAAP Financial Measures
This press release presents Adjusted EBITDA and Adjusted EBITDA
per share, which are non-GAAP financial measures within the meaning
of applicable rules and regulations of the Securities and Exchange
Commission (SEC). For a reconciliation of these measures to the
most directly comparable financial measure calculated in accordance
with generally accepted accounting principles and for a discussion
of the reasons why the company believes that these non-GAAP
financial measures provide information that is useful to investors
see the tables below under "Reconciliation of GAAP to Non-GAAP
Measures." Such information is provided as additional
information, not as an alternative to Intrexon's consolidated
financial statements presented in accordance with GAAP, and is
intended to enhance an overall understanding of the Intrexon's
current financial performance.
Trademarks
Intrexon, ActoBiotics, Powering the Bioindustrial Revolution
with Better DNA, and Better DNA are trademarks of Intrexon and/or
its affiliates. Other names may be trademarks of their respective
owners.
Safe Harbor Statement
Some of the statements made in this press release are
forward-looking statements that involve a number of risks and
uncertainties and are made pursuant to the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based upon Intrexon's current
expectations and projections about future events and generally
relate to Intrexon's plans, objectives and expectations for the
development of Intrexon's business. Although management
believes that the plans and objectives 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 in this press release. These
risks and uncertainties include, but are not limited to, (i)
Intrexon's current and future ECCs and joint ventures; (ii)
Intrexon's ability to successfully enter new markets or develop
additional products, whether with its collaborators or
independently; (iii) actual or anticipated variations in Intrexon's
operating results; (iv) actual or anticipated fluctuations in
Intrexon's competitors' or its collaborators' operating results or
changes in their respective growth rates; (v) Intrexon's cash
position; (vi) market conditions in Intrexon's industry; (vii) the
volatility of Intrexon's stock price; (viii) Intrexon's ability,
and the ability of its collaborators, to protect Intrexon's
intellectual property and other proprietary rights and
technologies; (ix) Intrexon's ability, and the ability of its
collaborators, to adapt to changes in laws or regulations and
policies; (x) the outcomes of pending or future litigation; (xi)
the rate and degree of market acceptance of any products developed
by a collaborator under an ECC or through a joint venture; (xii)
Intrexon's ability to retain and recruit key personnel; (xiii)
Intrexon's expectations related to the use of proceeds from its
public offerings and other financing efforts; (xiv) Intrexon's
estimates regarding expenses, future revenue, capital requirements
and needs for additional financing; and (xv) Intrexon's
expectations relating to its subsidiaries and other affiliates. For
a discussion of other risks and uncertainties, and other important
factors, any of which could cause Intrexon's actual results to
differ from those contained in the forward-looking statements, see
the section entitled "Risk Factors" in Intrexon's Annual Report on
Form 10-K, as well as discussions of potential risks,
uncertainties, and other important factors in Intrexon's subsequent
filings with the Securities and Exchange Commission. All
information in this press release is as of the date of the release,
and Intrexon undertakes no duty to update this information unless
required by law.
For more information regarding Intrexon Corporation,
contact:
Investor
Contact:
Christopher
Basta
Vice President,
Investor Relations
Tel: +1 (561)
410-7052
investors@intrexon.com
|
Corporate
Contact:
Marie Rossi,
Ph.D.
Senior Manager,
Technical Communications
Tel: +1 (301)
556-9850
publicrelations@intrexon.com
|
Intrexon
Corporation and Subsidiaries
Consolidated
Balance Sheets
(Unaudited)
|
|
(Amounts in
thousands)
|
|
December 31,
2016
|
|
|
December 31,
2015
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
62,607
|
|
|
$
|
135,782
|
Restricted
cash
|
|
|
6,987
|
|
|
|
—
|
Short-term
investments
|
|
|
174,602
|
|
|
|
102,528
|
Receivables
|
|
|
|
|
|
|
|
Trade, net
|
|
|
21,637
|
|
|
|
25,101
|
Related
parties
|
|
|
16,793
|
|
|
|
23,597
|
Notes, net
|
|
|
1,500
|
|
|
|
601
|
Other
|
|
|
2,555
|
|
|
|
2,995
|
Inventory
|
|
|
21,139
|
|
|
|
26,563
|
Prepaid expenses and
other
|
|
|
7,361
|
|
|
|
6,634
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
315,181
|
|
|
|
323,801
|
Long-term
investments
|
|
|
5,993
|
|
|
|
105,447
|
Equity
securities
|
|
|
23,522
|
|
|
|
83,653
|
Investment in
preferred stock
|
|
|
129,545
|
|
|
|
—
|
Property, plant and
equipment, net
|
|
|
64,672
|
|
|
|
42,739
|
Intangible assets,
net
|
|
|
225,615
|
|
|
|
247,535
|
Goodwill
|
|
|
157,175
|
|
|
|
165,169
|
Investments in
affiliates
|
|
|
23,655
|
|
|
|
9,977
|
Other
assets
|
|
|
3,710
|
|
|
|
3,725
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
949,068
|
|
|
$
|
982,046
|
Liabilities and Total Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,478
|
|
|
$
|
4,967
|
Accrued compensation
and benefits
|
|
|
6,540
|
|
|
|
19,050
|
Other accrued
liabilities
|
|
|
15,776
|
|
|
|
7,949
|
Deferred
revenue
|
|
|
53,364
|
|
|
|
35,366
|
Lines of
credit
|
|
|
820
|
|
|
|
561
|
Current portion of
long term debt
|
|
|
386
|
|
|
|
930
|
Current portion of
deferred consideration
|
|
|
8,801
|
|
|
|
6,931
|
Related party
payables
|
|
|
440
|
|
|
|
150
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
94,605
|
|
|
|
75,904
|
Long term debt, net
of current portion
|
|
|
7,562
|
|
|
|
7,598
|
Deferred
consideration, net of current portion
|
|
|
—
|
|
|
|
8,698
|
Deferred revenue, net
of current portion
|
|
|
256,778
|
|
|
|
162,363
|
Deferred tax
liabilities
|
|
|
17,007
|
|
|
|
21,802
|
Other long term
liabilities
|
|
|
3,868
|
|
|
|
795
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
379,820
|
|
|
|
277,160
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Total
equity
|
|
|
|
|
|
|
|
Common
stock
|
|
|
—
|
|
|
|
—
|
Additional paid-in
capital
|
|
|
1,325,780
|
|
|
|
1,249,559
|
Accumulated
deficit
|
|
|
(729,341)
|
|
|
|
(542,729)
|
Accumulated other
comprehensive loss
|
|
|
(36,202)
|
|
|
|
(12,752)
|
|
|
|
|
|
|
|
|
Total Intrexon
shareholders' equity
|
|
|
560,237
|
|
|
|
694,078
|
Noncontrolling
interests
|
|
|
9,011
|
|
|
|
10,808
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
569,248
|
|
|
|
704,886
|
|
|
|
|
|
|
|
|
Total liabilities and
total equity
|
|
$
|
949,068
|
|
|
$
|
982,046
|
Intrexon
Corporation and Subsidiaries
Consolidated
Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Year
ended
|
(Amounts in
thousands, except share and per share data)
|
|
December
31,
|
|
|
December
31
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration and
licensing revenues
|
|
$
|
27,727
|
|
$
|
21,131
|
|
$
|
109,871
|
|
$
|
87,821
|
Product
revenues
|
|
|
7,692
|
|
|
9,234
|
|
|
36,958
|
|
|
41,879
|
Service
revenues
|
|
|
10,318
|
|
|
10,766
|
|
|
43,049
|
|
|
42,923
|
Other
revenues
|
|
|
265
|
|
|
367
|
|
|
1,048
|
|
|
982
|
Total
revenues
|
|
|
46,002
|
|
|
41,498
|
|
|
190,926
|
|
|
173,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
8,212
|
|
|
9,092
|
|
|
37,709
|
|
|
40,746
|
Cost of
services
|
|
|
5,998
|
|
|
5,867
|
|
|
23,930
|
|
|
23,183
|
Research and
development
|
|
|
29,020
|
|
|
26,197
|
|
|
112,135
|
|
|
147,483
|
Selling, general and
administrative
|
|
|
35,362
|
|
|
34,737
|
|
|
142,318
|
|
|
109,057
|
Total operating
expenses
|
|
|
78,592
|
|
|
75,893
|
|
|
316,092
|
|
|
320,469
|
Operating
loss
|
|
|
(32,590)
|
|
|
(34,395)
|
|
|
(125,166)
|
|
|
(146,864)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense), Net
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized and
realized appreciation
(depreciation) in fair value
of
equity securities and preferred
stock
|
|
|
(13,506)
|
|
|
2,484
|
|
|
(58,894)
|
|
|
66,876
|
Interest
expense
|
|
|
(102)
|
|
|
(232)
|
|
|
(861)
|
|
|
(1,244)
|
Interest and dividend
income
|
|
|
4,373
|
|
|
673
|
|
|
10,190
|
|
|
1,884
|
Other income
(expense), net
|
|
|
495
|
|
|
784
|
|
|
1,700
|
|
|
1,314
|
Total other income
(expense), net
|
|
|
(8,740)
|
|
|
3,709
|
|
|
(47,865)
|
|
|
68,830
|
Equity in net loss of
affiliates
|
|
|
(4,169)
|
|
|
(2,379)
|
|
|
(21,120)
|
|
|
(8,944)
|
Loss before income
taxes
|
|
|
(45,499)
|
|
|
(33,065)
|
|
|
(194,151)
|
|
|
(86,978)
|
Income tax benefit
(expense)
|
|
|
587
|
|
|
(210)
|
|
|
3,877
|
|
|
(1,016)
|
Net loss
|
|
$
|
(44,912)
|
|
$
|
(33,275)
|
|
$
|
(190,274)
|
|
$
|
(87,994)
|
Net loss attributable
to the
noncontrolling interests
|
|
|
775
|
|
|
561
|
|
|
3,662
|
|
|
3,501
|
Net loss attributable
to Intrexon
|
|
$
|
(44,137)
|
|
$
|
(32,714)
|
|
$
|
(186,612)
|
|
$
|
(84,493)
|
Net loss per share,
basic and diluted
|
|
$
|
(0.37)
|
|
$
|
(0.28)
|
|
$
|
(1.58)
|
|
$
|
(0.76)
|
Weighted average
shares outstanding,
basic and diluted
|
|
|
118,575,544
|
|
|
116,472,080
|
|
|
117,983,836
|
|
|
111,066,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrexon Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Measures
(Unaudited)
Adjusted EBITDA and Adjusted EBITDA per share. To
supplement Intrexon's financial information presented in accordance
with U.S. generally accepted accounting principles ("GAAP"),
Intrexon presents Adjusted EBITDA and Adjusted EBITDA per share. A
reconciliation of Adjusted EBITDA to net income or loss
attributable to Intrexon under GAAP appears below. Adjusted EBITDA
is a non-GAAP financial measure that Intrexon calculates as net
income or loss attributable to Intrexon adjusted for income tax
expense or benefit, interest expense, depreciation and
amortization, stock-based compensation, shares issued as
compensation for services, bad debt expense, noncash research and
development expenses related to the acquisition of Intrexon's
license agreement with the University of
Texas MD Anderson Cancer Center, litigation expenses,
realized and unrealized appreciation or depreciation in the fair
value of equity securities and preferred stock, and equity in net
loss of affiliates. Adjusted EBITDA and Adjusted EBITDA per share
are key metrics for Intrexon's management and Board of Directors
for evaluating the Company's financial and operating performance,
generating future operating plans and making strategic decisions
about the allocation of capital. Management and the Board of
Directors believe that Adjusted EBITDA and Adjusted EBITDA per
share are useful to understand the long-term performance of
Intrexon's core business and facilitate comparisons of the
Company's operating results over multiple reporting periods.
Intrexon is providing this information to investors and others to
assist them in understanding and evaluating the Company's operating
results in a manner similar to how its management and Board of
Directors evaluate operating results (except for the impact of the
change in deferred revenue related to upfront and milestone
payments, which is adjusted in the measures evaluated by management
and the Board of Directors as discussed below). While Intrexon
believes that its non-GAAP financial measures are useful in
evaluating its business, and may be of use to investors, this
information should be considered as supplemental in nature and is
not meant as a substitute for the related financial information
prepared in accordance with GAAP. In addition, these non-GAAP
financial measures may not be the same as non-GAAP financial
measures presented by other companies. Adjusted EBITDA and Adjusted
EBITDA per share are not measures of financial performance under
GAAP, and are not intended to represent cash flows from operations
nor earnings per share under GAAP and should not be used as an
alternative to net income or loss as an indicator of operating
performance or to represent cash flows from operating, investing or
financing activities as a measure of liquidity. Intrexon
compensates for the limitations of Adjusted EBITDA and Adjusted
EBITDA per share by using them only to supplement the Company's
GAAP results to provide a more complete understanding of the
factors and trends affecting the Company's business. Adjusted
EBITDA and Adjusted EBITDA per share have limitations as an
analytical tool and you should not consider them in isolation or as
a substitute for analysis of Intrexon's results as reported under
GAAP.
In addition to the reasons stated above, which are generally
applicable to each of the items Intrexon excludes from its non-GAAP
financial measure, Intrexon believes it is appropriate to exclude
certain items from the definition of Adjusted EBITDA for the
following reasons:
- Interest expense may be subject to changes in interest rates
which are beyond Intrexon's control;
- Depreciation of Intrexon's property and equipment and
amortization of acquired identifiable intangibles can be affected
by the timing and magnitude of business combinations and capital
asset purchases;
- Stock-based compensation expense is a noncash expense and may
vary significantly based on the timing, size and nature of awards
granted and also because the value is determined using formulas
which incorporate variables, such as market volatility;
- Shares issued as compensation for services and bad debt expense
are noncash expenses which Intrexon excludes in evaluating its
financial and operating performance;
- Unrealized and realized appreciation or depreciation in the
fair value of securities which Intrexon holds in its collaborators
may be significantly impacted by market volatility and other
factors which are outside of the Company's control in the short
term and Intrexon intends to hold these securities over the long
term except as provided above;
- Equity in net loss of affiliate reflects Intrexon's
proportionate share of the income or loss of entities over which
the Company has significant influence, but not control, and
accounts for using the equity method of accounting. The Company's
acquisition of the license agreement with the University of Texas MD Anderson Cancer Center was a
noncash expense Intrexon incurred to obtain access to specific
technologies, which are strategic to the Company. Intrexon
believes excluding the impact of such losses or gains on these
types of strategic investments from its operating results is
important to facilitate comparisons between periods; and
- Litigation expenses are an estimate of the net amount due,
including prejudgment interest, as a result of the final court
order from Intrexon's trial with XY, LLC. Intrexon believes
it has compelling grounds to overturn the adverse rulings of the
court order through appellate action and that, as a result, the
amount of the damages could be reduced or eliminated.
Furthermore, supplemental information about the impact of the
change in deferred revenue related to upfront and milestone
payments is provided below. GAAP requires Intrexon to account for
its collaborations as multiple-element arrangements. As a result,
the Company initially defers certain collaboration revenues because
certain of its performance obligations cannot be separated and must
be accounted for as one unit of accounting. The collaboration
revenues that Intrexon so defers arise from upfront and milestone
payments received from the Company's collaborators, which Intrexon
recognizes over the future performance period even though the
Company's right to such consideration is neither contingent on the
results of Intrexon's future performance nor refundable in the
event of nonperformance. The supplemental information about the
change in deferred revenue removes the noncash revenue recognized
during the period and includes the cash and stock received from
collaborators for upfront and milestone payments during the period.
Management and the Board of Directors consider this information in
evaluating Intrexon's operating performance as they believe it
permits the quarterly and annual comparisons of the Company's
ability to consummate new collaborations or to achieve significant
milestones with existing collaborators.
The following table presents a reconciliation of net income
(loss) attributable to Intrexon to EBITDA and also to Adjusted
EBITDA, as well as the calculation of Adjusted EBITDA per share,
for each of the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(In
thousands)
|
Net loss attributable
to Intrexon
|
|
$
|
(44,137)
|
|
$
|
(32,714)
|
|
$
|
(186,612)
|
|
$
|
(84,493)
|
Interest
expense
|
|
|
66
|
|
|
228
|
|
|
681
|
|
|
1,188
|
Income tax expense
(benefit)
|
|
|
(587)
|
|
|
210
|
|
|
(3,877)
|
|
|
1,016
|
Depreciation and
amortization
|
|
|
6,793
|
|
|
5,482
|
|
|
24,085
|
|
|
17,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
(37,865)
|
|
$
|
(26,794)
|
|
$
|
(165,723)
|
|
$
|
(64,767)
|
Stock-based
compensation
|
|
|
11,553
|
|
|
12,121
|
|
|
42,122
|
|
|
38,495
|
Shares issued as
compensation for services
|
|
|
2,493
|
|
|
1,689
|
|
|
10,777
|
|
|
2,169
|
Bad debt
expense
|
|
|
354
|
|
|
195
|
|
|
1,963
|
|
|
1,757
|
Research and
development license with MD Anderson
Cancer Center paid in stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,579
|
Litigation
expense
|
|
|
—
|
|
|
—
|
|
|
4,228
|
|
|
—
|
Unrealized and
realized (appreciation) depreciation in
fair value of equity securities and
preferred stock
|
|
|
13,506
|
|
|
(2,484)
|
|
|
58,894
|
|
|
(66,876)
|
Equity in net loss of
affiliates
|
|
|
4,169
|
|
|
2,379
|
|
|
21,120
|
|
|
8,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
(5,790)
|
|
$
|
(12,894)
|
|
$
|
(26,619)
|
|
$
|
(20,699)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic and diluted
|
|
|
118,575,544
|
|
|
116,472,080
|
|
|
117,983,836
|
|
|
111,066,352
|
Adjusted EBITDA per
share, basic and diluted
|
|
$
|
(0.05)
|
|
$
|
(0.11)
|
|
$
|
(0.23)
|
|
$
|
(0.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of change in
deferred revenue related to upfront
and milestone payments
|
|
$
|
(11,259)
|
|
$
|
22,262
|
|
$
|
116,536
|
|
$
|
74,103
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/intrexon-announces-fourth-quarter-and-full-year-2016-financial-results-300416439.html
SOURCE Intrexon Corporation