GERMANTOWN, Md., Nov. 13, 2014 /PRNewswire/ -- Intrexon Corporation (NYSE: XON), a leader in synthetic biology, today announced its third quarter results for 2014.
Business Highlights and Recent Developments:
- Closed the 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. The combined tools and expertise of Intrexon and Trans Ova should enable the companies to accelerate efficiency in related food and protein production.
- Established an Exclusive Channel Collaboration with Sanofi Chimie, a wholly owned subsidiary of Sanofi, to develop an enhanced production process for a specific family of marketed Active Pharmaceutical Ingredients leveraging Intrexon’s proprietary technology suite plus Sanofi’s expertise and innovation in yeast metabolism and industrial chemistry to increase overall yield.
- Expanded relationship with Amneal Pharmaceuticals LLC, a large U.S. generic drug manufacturer, with a second product collaboration utilizing Intrexon’s novel microbial-based expression system to develop a consistent, scalable, and cost-effective production process for a targeted Active Pharmaceutical Ingredient.
- Established an Exclusive Channel Collaboration with Histogenics, a regenerative medicine company focused on developing and commercializing products in the musculoskeletal space, 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 (RDEB), a debilitating skin disorder.
- Trans Ova’s wholly owned subsidiary, Viagen Inc., and its business partner, Wuhan Chopper Biology Co., Ltd., received approval to operate a domestic business within China utilizing its toolkit to improve genetics in the porcine and bovine markets.
Third Quarter Financial Highlights:
- Total revenues of $21.2 million, an increase of over 250% over the third quarter of 2013;
- Net loss of $52.7 million, including noncash charges of $44.8 million, attributable to Intrexon, or $(0.53) per share;
- Adjusted EBITDA of $1.6 million, or $0.02 per share; and
- Cash consideration received for research and development services covered 59% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries).
Year-to-Date Financial Highlights:
- Total revenues of $40.8 million, an increase of 146% over the nine months ended September 30, 2013;
- Net loss of $100.7 million, including noncash charges of $71.9 million, attributable to Intrexon, or $(1.02) per share;
- Adjusted EBITDA of $8.8 million, or $0.09 per share; and
- Total consideration received for technology access fees and reimbursement of research and development expenses covered 125% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries).
“We continue the successful execution of our plan to earn a vast array of significant economic stakes in many products that we expect to see commercialized by our ECC collaborators across diverse industries, while balancing currently our financial inputs and outputs,” commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon. “Encouragingly, we see the benefits of our capital efficiency, an increasing awareness on the part of significant multinational players of our superior technology platform and the timeliness of bioindustrial engineering as key to solving many critical needs across all of our active sectors Health, Food, Energy, Consumer and Environment all coalescing to propel us toward the realization of our vision to lead the enablement of the second generation of biotechnology.”
Mr. Kirk continued, “Looking forward, considering the significant transactions upon which we currently are engaged, the programmatic progress being made under our existing collaborations and our team’s steady performance improvements, we are optimistic and confident that we have the opportunity of making all involved with Intrexon proud of their association with the company. No one at Intrexon takes this opportunity lightly so we are committed to execute commensurately.”
Third Quarter 2014 Financial Results Compared to Prior Year Period
Total revenues were $21.2 million for the quarter ended September 30, 2014 compared to $6.0 million for the quarter ended September 30, 2013, an increase of $15.2 million, or 253%. Total revenues include $8.4 million of Trans Ova product and service revenues since August 8, 2014, the date of the acquisition. Collaboration revenues increased $6.6 million due to (i) the recognition of deferred revenue for upfront payments received from 11 collaborations or expansions thereof signed by us between October 1, 2013 and September 30, 2014, (ii) 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 October 1, 2013 as a result of the progression of current programs and the initiation of new programs with these collaborators.
Total operating expenses were $36.2 million for the quarter ended September 30, 2014 compared to $18.1 million for the quarter ended September 30, 2013, an increase of $18.1 million, or 100%. Total operating expenses for the quarter ended September 30, 2014 include $6.4 million of Trans Ova costs of products and services revenues since the date of the acquisition. Research and development expenses were $14.9 million for the quarter ended September 30, 2014 compared to $10.7 million for the quarter ended September 30, 2013, an increase of $4.2 million, or 39%. Salaries, benefits and other personnel costs increased $2.5 million due to (i) increases in research and development headcount to support the new collaborations discussed above and (ii) stock-based compensation expenses for stock option grants we made to research and development employees in March 2014. Lab supplies and consultants expenses increased $1.1 million as a result of the increased level of research and development services provided to our collaborators. Selling, general and administrative expenses were $14.9 million for the quarter ended September 30, 2014 compared to $7.4 million for the quarter ended September 30, 2013, an increase of $7.5 million, or 101%. Salaries, benefits and other personnel costs increased $4.5 million due to (i) our hiring of additional employees needed to operate as a public company, (ii) the inclusion of Trans Ova employees since the date of acquisition and (iii) stock-based compensation expenses for stock option grants we made to general and administrative employees in March 2014. Legal and professional expenses increased $1.7 million primarily due to costs associated with merger and acquisition activity and legal costs associated with AquaBounty’s stock listing in the United States.
Total other income (expense), net is primarily composed of unrealized appreciation (depreciation) in the fair value of equity securities which was $(37.1) million for the quarter ended September 30, 2014 compared to $27.3 million for the quarter ended September 30, 2013. The unrealized appreciation (depreciation) results from changes in the value of equity securities we hold in certain collaborators.
Year-to-Date 2014 Financial Results Compared to Prior Year Period
Total revenues were $40.8 million for the nine months ended September 30, 2014 compared to $16.6 million for the nine months ended September 30, 2013, an increase of $24.2 million, or 146%. Total revenues include $8.4 million of Trans Ova product and service revenues since the date of the acquisition. Collaboration revenues increased $15.7 million due to (i) the recognition of deferred revenue for upfront payments received from 11 collaborations or expansions thereof signed by us between October 1, 2013 and September 30, 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 October 1, 2013 as a result of the progression of current programs and the initiation of new programs with these collaborators.
Total operating expenses were $91.8 million for the nine months ended September 30, 2014 compared to $56.9 million for the nine months ended September 30, 2013, an increase of $34.9 million, or 61%. Total operating expenses for the nine months ended September 30, 2014 include $6.4 million of Trans Ova costs of products and services revenues since the date of the acquisition. Research and development expenses were $41.3 million for the nine months ended September 30, 2014 compared to $35.6 million for the nine months ended September 30, 2013, an increase of $5.8 million, or 16%. Salaries, benefits and other personnel costs increased $3.8 million due to (i) increases in research and development headcount to support the new collaborations discussed above, (ii) stock-based compensation expenses for stock option grants we made to research and development employees in March 2014 and (iii) the inclusion of nine months of costs for AquaBounty employees in 2014 compared to approximately six and a half months in 2013. Lab supplies and consultants expenses increased $2.6 million as a result of the increased level of research and development services provided to our collaborators. These increases were partially offset by a $1.1 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 $43.9 million for the nine months ended September 30, 2014 compared to $21.3 million for the nine months ended September 30, 2013, an increase of $22.6 million. Salaries, benefits and other personnel costs increased $13.4 million due to (i) our hiring of 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 option grants we made to general and administrative employees in March 2014 and (iv) the inclusion of nine months of costs for AquaBounty employees in 2014 compared to approximately six and a half months in 2013. We also incurred stock-based compensation expense for options granted to our non-employee directors which increased $1.9 million due to changes in our director compensation plan which we adopted in conjunction with our transition to a public company.
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