BEIJING, Jan. 15, 2016 /PRNewswire/ -- Origin Agritech Limited (NASDAQ: SEED) (“Origin” or the “Company”), a technology-focused supplier of crop seeds in China, today announced unaudited financial results for the fiscal year ended September 30, 2015. These unaudited year end results reflect the Company’s consolidated financial statements during the period from October 1, 2014 to September 30, 2015. Origin prepares its consolidated financial statements in accordance with generally accepted accounting principles (GAAP) of the United States.
FY2015 Highlights
Financial Highlights
- Operating income for the fiscal year 2015 was RMB1.3 million (US$0.2 million), a significant turnaround from the operating loss of RMB24.5 million in fiscal year 2014.
- Net cash provided by operating activities was RMB52.2 million (US$8.2 million) in FY2015, representing a significant turnaround from the negative cash flow from operating activities of RMB85.6 million and RMB146.1 million in FY2014 and FY2013, respectively.
Seed Biotech Advances
- After several years of testing, our biotech corn seeds with stacked transgenic traits of Bt and glyphosate tolerance genes have shown promising results in both our northern testing site (for summer testing) and southern testing site (for winter testing and with heavy natural insect pressure). We believe that we are now ready to proceed to the production test in 2016.
- Backcrossing of glyphosate tolerance traits into corn seed lines from major multinational seed companies has been completed successfully. We are now ready to proceed to the backcrossing activities of our stacked traits of Bt and glyphosate genes. We believe that we also are ready to enter commercial licenses with these multinational companies for our seed biotechnologies.
Corporate Strategies
- As the Company has successfully developed several biotech traits that could be valuable in the global seed market, we have announced our strategies to operate the company under two business lines: Biotech & Product Development under State Harvest and Seed Production & Distribution under Beijing Origin. Under the new strategies, we plan to enter the U.S. market in 2016 and introduce our seed biotechnologies to the global seed market.
Operating Activities and Results
Corporate Strategies Origin started as a hybrid corn seed company in 1997 as the first private seed company in China. With the success in and strong cash flow from the hybrid corn seed business, Origin started its seed biotechnology research in early 2000’s and established Origin Life Science Center in 2005. The Company has since focused on the seed biotech product development and funded the biotech R&D with its free cash flow from the traditional hybrid seed business.
After more than 10 years of seed biotech development, the Company is now essentially becoming a biotech company focused on its GMO (Genetically Modified Organism) technologies and has developed biotech corn seed products that are waiting to be commercialized. At the same time, the Company has already built up state-of-the-art seed production bases and solid distribution channels in China and continues to generate cash flow from the hybrid seed business.
With the success in biotech product development, especially the successful field trials of the stacked traits of insect resistance Bt genes and glyphosate tolerance genes, the Company announced in June, 2015 its strategies going forward. Under the announced strategy, the Company plans to reorganize into two business units: Biotech & Product Development under State Harvest and Seed Production & Distribution under Beijing Origin.
Under the new corporate structure, the Company plans to enter the seeds and traits market in North America with its GMO product pipelines under State Harvest represented by its first generation phytase transgenic corn, second generation glyphosate tolerance corn seed, and its new technology of stacked traits of Bt and glyphosate tolerance genes. While waiting for the approval for commercial planting in China, State Harvest plans to introduce these agri-biotech products into the United States seed market. In addition, State Harvest has also built a solid capacity for breeding technologies, including marker-assisted breeding and doubled haploids technologies, which along with its germplasm resources, will allow State Harvest to become a global seed technology company.
Beijing Origin, the current operating entity in China, will focus on the seed production and distribution business in China.
Biotechnology Progress While we continue to advance our GMO product pipelines with phytase traits and glyphosate tolerance (GT) technologies, the most significant progress made in the last several years is in the new biotech pipelines of stack traits of insect resistance (Bacillus Thuringiensis, or Bt) and herbicide tolerance. 2015 marks the fourth year that our double stacked products of Bt and glyphosate tolerance genes were tested in the field against the technologies currently used in the global market. Additionally, we have started to introduce triple stacked and quadruple stacked traits of Bt and herbicide tolerance genes.
For the double stacked Bt and GT genes, our repeated field testing in both our northern testing site (for summer testing) and southern testing site (for winter testing and with heavy natural insect pressure) has shown very positive and stable insect resistance results. We believe the Bt gene (Cry1Ah) used in our double stacked traits could be highly valuable in the North American corn seed market, a major reason we plan to enter the U.S. corn seeds and traits market. We plan to start the production test for the double-stacked trait in the 2016 season.
Based on our successful development in biotech seed products, we have continued to take steps to secure our biotechnologies intellectual property protections. During 2015, we filed four additional patent applications relating to our double stacked traits of Bt and GT genes.
To read full press release, please click here.
