GERMANTOWN, Md., March 2, 2015 /PRNewswire/ -- Intrexon Corporation (NYSE: XON), a leader in synthetic biology, today announced its fourth quarter and full year results for 2014.
Business Highlights and Recent Developments:
- Acquired ActoGeniX, a European clinical stage biopharmaceutical company forging a new frontier in cellular therapeutics and other innovative products. Its proprietary TopAct platform enables the molecular engineering of food-grade microbes (Lactococcus lactis) to generate biologically-contained ActoBiotics for in situ expression and secretion of proteins, peptides and metabolites in the gastrointestinal tract of humans and other animals.
- Announced exclusive licensing agreement with The University of Texas MD Anderson Cancer Center for chimeric antigen receptor (CAR), T Cell Receptor (TCR) and natural killer (NK) cell programs and associated technologies for the development of non-viral adoptive cellular therapies in conjunction with ZIOPHARM Oncology. The collaboration will implement next-generation therapies based on designer cytokines and CARs under control of RheoSwitch® technology targeting both hematologic and solid tumor malignancies. The combined technology synergies are expected to accelerate a promising synthetic immunology pipeline in 2015 and beyond.
- Acquired the remaining stake in Exemplar Genetics, a company committed to enabling the study of life-threatening human diseases, which has developed a broad pipeline of transgenic swine models for research and development of heart disease, cancer, cystic fibrosis, cardiac arrhythmia, neuromuscular and neurodegenerative disorders.
- Announced the execution of a definitive agreement to acquire Okanagan Specialty Fruits (OSF), the pioneering agricultural company behind the Arctic® apple. Expected to close in the first half of 2015, the acquisition will expand Intrexon's food programs to include trees yielding fruit that is more appetizing and convenient for consumers while providing economic benefit throughout the tree fruit supply chain.
- Launched platform in bovine genetics to accelerate efficiency in food and protein production through acquisition of Trans Ova Genetics, L.C. ("Trans Ova"), an industry-leading provider of bovine reproductive technologies and the largest producer and supplier of bovine embryos in North America.
- Expanded Exclusive Channel Collaborations (ECCs) in the Health Sector, including ECCs with Amneal Pharmaceuticals LLC and Sanofi Chimie to develop consistent, scalable, and cost-effective production processes for targeted active pharmaceutical ingredients utilizing Intrexon's novel microbial-based expression platforms, and with Histogenics for the generation of allogeneic chondrocyte cell therapeutics to repair damaged articular hyaline cartilage in humans.
- In collaboration with Fibrocell Science, announced plans to file an investigational new drug application with the U.S. Food and Drug Administration in the first half of 2015 for GM-HDF-COL7 (genetically-modified human dermal fibroblast expressing collagen VII), the drug candidate for the treatment of recessive dystrophic epidermolysis bullosa, a debilitating skin disorder.
- In collaboration with ZIOPHARM Oncology, presented clinical results from the Ad-RTS-hIL-12 + veledimex studies in patients with advanced breast cancer and melanoma demonstrating local and systemic IL-12-mediated anti-cancer activity, as well as safety through control of both immune- and IL-12-mediated toxicity with use of the RheoSwitch Therapeutic System® gene switch.
- Established first partnered endeavor in the Energy Sector with Intrexon Energy Partners, a joint venture established to optimize and scale-up Intrexon's proprietary gas-to-liquid bioconversion platform utilizing natural gas as its feedstock for the production of higher value fuels and lubricants. The platform's first commercial target is isobutanol for gasoline blending, and it also achieved bioconversion of methane to farnesene during the year.
- Expanded operations in Europe with the acquisition of state-of-the-art laboratory operations and a seasoned scientific team in Budapest, Hungary, increasing Intrexon's bioproduction capabilities and capacity, as well as strengthening Intrexon's ability to service the European and Asian markets.
Fourth Quarter Financial Highlights:
- Total revenues of $31.1 million, an increase of over 335% over the fourth quarter of 2013;
- Net income of $18.8 million attributable to Intrexon, or $0.19 per basic share;
- Adjusted EBITDA of $(5.5) million, or $(0.06) per basic share; and
- Cash consideration received for research and development services covered 53% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries).
Full Year Financial Highlights:
- Total revenues of $72.0 million, an increase of 203% over the year ended December 31, 2013;
- Net loss of $81.8 million, including noncash charges of $44.3 million, attributable to Intrexon, or $(0.83) per basic share;
- Adjusted EBITDA of $3.2 million, or $0.03 per basic share; and
- Total consideration received for technology access fees and reimbursement of research and development expenses covered 111% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries).
"Intrexon was designed to be a technology-based company with a management science discipline in order to provide the capital efficiency, growth and financial returns that will enable its progression into a top-tier company," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon. "Reviewing our performance over 2014, our first full year as a public company, we find plenty of reasons for satisfaction and encouragement. Our most important management objectives were achieved while we did a lot of spade work to prepare for higher growth ahead. Perhaps our most encouraging external experiences during the period, however, relate to the timeliness of our technologies and the acceleration of the appreciation around the world of the need for and promise of the engineering of biology to solve many of mankind's most significant challenges in the health, food, energy, environmental and consumer sectors."
Mr. Kirk continued, "Looking ahead, we are very excited about our near term prospects and have much higher goals for 2015. In Health, we expect to see new major alliances formed, while we believe that our existing ECC partners will be in the clinic with up to ten novel therapeutic candidates. In Food, we anticipate continued growth of our base business with projected product and service revenues exceeding $100M, while we sign new ECCs and execute on some attractive acquisitions. We expect that our program in Energy, which is based on our continuing work on the engineering of the methanotroph to provide for the upgrading of natural gas to higher value hydrocarbons, will show tangible progress both technically and otherwise. Finally, our relatively newer efforts in the Environment and Consumer Sectors should become contributors to our enterprise. At this stage in our growth, we fully appreciate the amplified effect of each additional level of achievement as well as the increasing synergies that exist among our platforms, teams and even among our partners. This realization inspires us to ever greater levels of performance on behalf of our shareholders."
Fourth Quarter 2014 Financial Results Compared to Prior Year Period
Total revenues were $31.1 million for the quarter ended December 31, 2014 compared to $7.1 million for the quarter ended December 31, 2013, an increase of $24.0 million, or 335%. Collaboration revenues increased $6.0 million due to (i) the recognition of deferred revenue for upfront payments related to collaborations or expansions thereof signed by us in 2014, (ii) the recognition of research and development services performed by us pursuant to these new collaborations, and (iii) increased research and development services performed by us for collaborations in effect prior to 2014 as a result of the progression of current programs and initiation of new programs with the collaborations. Product revenue includes $6.5 million from the sale of pregnant cows, live calves and the sale of livestock used in production by Trans Ova. Service revenue totaling $8.6 million relates to the provision of in vitro fertilization and embryo transfer services by Trans Ova.
Total operating expenses were $50.1 million for the quarter ended December 31, 2014 compared to $24.9 million for the quarter ended December 31, 2013, an increase of $25.2 million, or 101%. Total operating expenses for 2014 include $12.5 million of products and services costs which primarily consist of employee compensation costs, livestock, feed, drug supplies and facility charges related to the production of such products and services. Research and development expenses were $17.6 million for the quarter ended December 31, 2014 compared to $12.6 million for the quarter ended December 31, 2013, an increase of $5.0 million, or 40%. Salaries, benefits and other personnel costs increased $2.8 million due to (i) increases in research and development headcount to support new collaborations and (ii) stock-based compensation expenses for stock options granted to research and development employees in March 2014. Lab supplies and consultants increased $1.4 million as a result of the increased level of research and development services provided to our collaborators. Selling, general and administrative expenses were $19.8 million for the quarter ended December 31, 2014 compared to $12.3 million for the quarter ended December 31, 2013, an increase of $7.5 million, or 61%. Salaries, benefits and other personnel costs increased $6.5 million due to (i) our hiring of additional employees needed to operate as a public company, (ii) the inclusion of Trans Ova employees in 2014, and (iii) stock-based compensation expenses for stock options granted to general and administrative employees in March 2014.
Year-to-Date 2014 Financial Results Compared to Prior Year Period
Total revenues were $72.0 million for the year ended December 31, 2014 compared to $23.8 million for the year ended December 31, 2013, an increase of $48.2 million, or 203%. Collaboration revenues increased $21.7 million due to (i) the recognition of deferred revenue for upfront payments related to collaborations or expansions thereof signed by us in 2014, (ii) the recognition of research and development services performed by us pursuant to these new collaborations, and (iii) increased research and development services performed by us for collaborations in effect prior to 2014 as a result of the progression of current programs and initiation of new programs with the collaborations. Product revenue includes $10.3 million from the sale of pregnant cows, live calves and the sale of livestock used in production by Trans Ova. Service revenue totaling $11.7 million relates to the provision of in vitro fertilization and embryo transfer services by Trans Ova.
Total operating expenses were $141.9 million for the year ended December 31, 2014 compared to $81.8 million for the year ended December 31, 2013, an increase of $60.1 million, or 73%. Total operating expenses for 2014 include $18.9 million of products and services costs which primarily consist of employee compensation costs, livestock, feed, drug supplies and facility charges related to the production of such products and services. Research and development expenses were $59.0 million for the year ended December 31, 2014 compared to $48.1 million for the year ended December 31, 2013, an increase of $10.9 million, or 23%. Salaries, benefits and other personnel costs increased $6.5 million due to (i) increases in research and development headcount to support new collaborations, (ii) stock-based compensation expenses for stock options granted to research and development employees in March 2014, and (iii) the inclusion of a full year of compensation costs for AquaBounty employees in 2014 compared to approximately nine and one half months in 2013. Lab supplies and consultants increased $4.0 million as a result of the increased level of research and development services provided to our collaborators. Depreciation and amortization increased $1.1 million as a result of equipment purchased to support the increase in collaborations and the amortization of intangibles arising from the acquisition of Trans Ova. These increases were partially offset by a $1.2 million decrease in third party in-license fees due to the termination of an exclusive licensing agreement in May 2014. Selling, general and administrative expenses were $63.6 million for the year ended December 31, 2014 compared to $33.6 million for the year ended December 31, 2013, an increase of $30.0 million or 89%. Salaries, benefits and other personnel costs increased $20.0 million due to (i) our hiring additional employees needed to operate as a public company, (ii) the inclusion of Trans Ova employees since the date of acquisition, (iii) stock-based compensation expenses for stock options granted to general and administrative employees in March 2014, and (iv) the inclusion of a full year of costs for AquaBounty employees in 2014 compared to nine and one half months in 2013. Stock-based compensation expenses for options granted to our non-employee directors increased $1.9 million due to changes in our director compensation plan which we adopted in conjunction with our transition to a public company. Legal and professional expenses increased $4.4 million primarily due to costs associated with merger and acquisition and other business development activities, the formation of our joint venture with Intrexon Energy Partners, and legal costs incurred by AquaBounty and Trans Ova.
Conference Call and Webcast
The Company will host a conference call on March 2, 2015, at 5:30PM ET to discuss the fourth quarter and full year 2014 financial results and provide a general business update. The conference call may be accessed by dialing 1-888-346-3959 (Domestic US) and 1-412-902-4262 (International) and asking to join the "Intrexon Conference Call." Participants may also access the live webcast through Intrexon's website in the Investors section under Calendar of Events.
About Intrexon Corporation
Intrexon Corporation (NYSE: XON) is a leader in synthetic biology focused on collaborating with companies in Health, Food, Energy, Environment, and Consumer sectors to create biologically-based products that improve the quality of life and the health of the planet. Through the Company's proprietary UltraVector® platform and integrated technology suite, Intrexon provides its partners 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.
Non-GAAP Financial Measures
This press release presents Adjusted EBITDA and Pro Forma Adjusted EBITDA earnings 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 Adjusted EBITDA to net loss attributable to Intrexon 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 Company's current financial performance.
Trademarks
Intrexon, UltraVector, LEAP 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.
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