GERMANTOWN, Md., Aug. 9, 2016 /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 second quarter and first
half financial results for 2016.
Business Highlights and Recent Developments:
- The U.S. Food and Drug Administration (FDA) published final
finding of no significant impact and final environmental assessment
on Oxitec's OX513A self-limiting mosquito concluding that a field
trial of the Friendly™ Aedes in Key Haven, Florida, will not result in a significant
impact on the environment;
- Expanded Oxitec's 'Friendly™ Aedes aegypti Project' in
Piracicaba, Brazil to an area in
the city's center covering 60,000 residents. Releases of Friendly™
Aedes, the mosquito that fights the primary vector of
dengue, Zika and chikungunya, began in July;
- Oxitec reported results from Piracicaba's Epidemiologic
Surveillance service which showed a 91% reduction of dengue fever
cases registered in the 2015/2016 dengue-year as compared to the
2014/2015 period in the CECAP/Eldorado district, an area of 5,000 residents
and the initial site of the 'Friendly™ Aedes aegypti
Project';
- Announced Grand Cayman will
use Oxitec's Friendly™ Aedes to suppress wild Aedes
aegypti in an effort to help eliminate diseases transmitted by
this mosquito. Releases of Friendly™ Aedes began in
July;
- Announced the formation of Intrexon Crop Protection (ICP), a
wholly-owned subsidiary dedicated to bio-based control of
agricultural pests and diseases through the utilization of Oxitec's
diverse self-limiting gene platform for species-specific insect
control, as well as the ActoBiotics® system for the
expression of targeted biologicals for pest and disease management
programs;
- Introduced Florian™ technology, an "on-off" regulation switch
system which exhibits the capability to regulate the timing of
flowering, as well as selectively activate specific plant genes,
through topical application of an activator. This technology
demonstrates potential for enabling a variety of commercial
applications in agriculture, and the Company will focus its initial
efforts on near-to-market opportunities in turf, floral, and forage
industries;
- Announced amendments to Exclusive Channel Collaborations (ECCs)
with ZIOPHARM Oncology, Inc. (Nasdaq: ZIOP) in the fields of
oncology and graft-versus-host-disease to improve alignment.
Operating profit rates payable to Intrexon from ZIOPHARM on
products developed under these ECCs decrease from 50% to 20%,
excluding the companies' existing collaboration with Merck Serono,
the biopharmaceutical division of Merck KGaA. Economics from any
future sublicensing arrangements with third party collaborators
will be split evenly. Intrexon received $120
million in ZIOPHARM preferred stock along with a monthly
dividend of 1% payable in additional preferred shares;
- Collaborator ZIOPHARM announced plans for a Phase I clinical
trial utilizing autologous T cells transduced with lentivirus to
express a CD33-specific chimeric antigen receptor (CAR) in patients
with relapsed or refractory acute myeloid leukemia. This will be
second trial initiated at The University of
Texas MD Anderson Cancer Center under the research and
development agreement among ZIOPHARM, Intrexon, and MD Anderson to
expeditiously move promising treatments from bench to clinic;
- Entered into an ECC with AD Skincare, Inc., backed by the
Harvest Intrexon Enterprise Fund, sponsored by Harvest Capital
Strategies, LLC, which will focus on developing an advanced
delivery system for anti-aging active ingredients to be used in
cosmetic formulations that are designed to reduce the appearance of
certain signs of aging on human facial skin;
- Collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) initiated
adult patient recruitment in its Phase I/II clinical trial of
FCX-007 in June and during July reported the first two adult
subjects had been enrolled. Fibrocell expects to commence dosing
this year;
- Two Intrexon collaborators' gene therapy programs received
Orphan Drug designation from the FDA: Fibrocell's FCX-013 for the
treatment of linear scleroderma and Agilis Biotherapeutics' AGIL-FA
for the treatment of Friedreich's ataxia;
- Exemplar Genetics announced the FDA exercised enforcement
discretion in regard to its ExeGen® low-density
lipoprotein receptor miniswine, clearing this animal that enables
superior translational research and better predictive efficacy for
commercial use as a research model;
- Intrexon's subsidiary AquaBounty Technologies, Inc. (AIM: ABTU;
OTC: AQBT) received approval from Health Canada for commercial sale
of AquAdvantage® Salmon (AAS) in Canada;
- Appointed Geno Germano, a
pharmaceutical executive with over 30 years of experience, to the
new role of President, helping lead Intrexon's management team and
commercialization efforts;
- Appointed Andrew J. Last, Ph.D.,
a seasoned executive with 30 years of experience spanning life
sciences, including biotechnology, genomics, clinical diagnostics,
pharmaceuticals and agrochemicals, as Chief Operating Officer, to
oversee Intrexon's multiple technology divisions and operating
subsidiaries; and
- Appointed distinguished life sciences executive Fred Hassan to Intrexon's Board of
Directors.
Second Quarter Financial Highlights:
- Total revenues of $52.5 million,
an increase of 17% over the second quarter of 2015;
- Net loss of $49.1 million
attributable to Intrexon, or $(0.42)
per basic share, including non-cash charges of $44.0 million;
- Adjusted EBITDA of $110.7
million, or $0.94 per basic
share;
- Cash consideration received for reimbursement of research and
development services covered 59% 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 279% of consolidated cash operating
expenses; and
- Cash, cash equivalents, and short-term and long-term
investments totaled $321.2 million,
the value of investment in preferred stock totaled $120.0 million, and the value of marketable
equity securities totaled $39.0
million at June 30, 2016.
First Half Financial Highlights:
- Total revenues of $95.9 million,
an increase of 22% over the first half of 2015;
- Net loss of $113.5 million
attributable to Intrexon, or $(0.97)
per basic share, including non-cash charges of $94.6 million;
- Adjusted EBITDA of $112.5
million, or $0.96 per basic
share;
- 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 184% of consolidated cash operating
expenses.
"We began the year with great anticipation that 2016 will be a
period in which we should demonstrate significant progress on
several dimensions," commented Randal J.
Kirk, Chairman and Chief Executive Officer of Intrexon, "and
so far are tracking very well against our objectives. While
continuing our trajectory of growing financial performance and
capital efficiency, we have advanced many of our programs,
achieving key scientific, developmental and regulatory
milestones. In addition, our production and marketing plans
around three mature yet game-changing assets – the Friendly™
Aedes mosquito, the Arctic® apple and the
AquAdvantage® salmon – are being managed aggressively,
and we look forward to the world enjoying the benefits of each of
these unique, sustainable and environmentally responsible solutions
to major problems."
Mr. Kirk concluded, "Considering the poignant moment in history
that we occupy, one in which there is increasing recognition of the
need for the engineering of biology to be responsibly practiced in
order to solve an enormous number of world problems in areas such
as healthcare, food, energy and the environment, our greatest need
in order for Intrexon to play a leading role on this industrial and
social vector, is the recruitment and development of great talent
at every level of our organization – on our board, within our
executive management team and in our labs that today span
North America and Europe. In
this regard, I am honored every day to work in partnership with our
President, Geno Germano, the rest of
our executive team and with so many brilliant and dedicated
scientists and professionals throughout our organization. I
believe that the world should expect great things from such
a team, and I believe that they will deliver on these expectations.
"
Second Quarter 2016 Financial Results Compared to Prior Year
Period
Total revenues were $52.5
million for the quarter ended June
30, 2016 compared to $44.9
million for the quarter ended June
30, 2015, an increase of $7.6
million, or 17%. Collaboration and licensing revenues
increased $10.3 million over the
quarter ended June 30, 2015 due to
(i) the recognition of deferred revenue for upfront payments
received from the Company's license and collaboration agreement
with the biopharmaceutical business of Merck KGaA, which became
effective in May 2015, and from other
collaborations signed by Intrexon between July 1, 2015 and June 30,
2016; and (ii) increased research and development services
for these collaborations and for the progression of programs or the
addition of new programs with previously existing collaborators.
Product revenues were $10.9 million
for the quarter ended June 30, 2016
compared to $14.3 million for the
quarter ended June 30, 2015, a
decrease of $3.4 million, or 24%. The
decrease in product revenues and gross margin thereon 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. The decreases were partially
offset by an increase in the quantity of weaned calves sold due to
higher customer demand. Service revenues were $13.9 million for the quarter ended June 30, 2016 compared to $13.3 million for the quarter ended June 30, 2015, an increase of $0.6 million, or 5%. The increase relates to an
increase in the number of in vitro fertilization cycles
performed due to higher customer demand.
Total operating expenses were $75.7
million for the quarter ended June
30, 2016 compared to $62.3
million for the quarter ended June
30, 2015, an increase of $13.4
million, or 22%. Research and development expenses increased
$8.0 million, or 39%, due primarily
to 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 $2.3 million due to (i) an increase in research
and development headcount to support new and expanded
collaborations and (ii) costs for research and development
employees assumed in the Company's acquisition of Oxitec Limited,
or Oxitec, in September 2015. Lab
supplies and consulting expenses increased $3.4 million as a result of (i) the progression
into the preclinical phase with certain of Intrexon's
collaborators; (ii) the increased level of research and development
services provided to the Company's collaborators; and (iii) costs
incurred as a result of the Company's September 2015 acquisition of Oxitec.
Depreciation and amortization increased $1.9
million primarily as a result of (i) the inclusion of a full
quarter of depreciation and amortization on property and equipment
and intangible assets acquired in the Company's 2015 acquisitions,
and (ii) amortization related to AquaBounty's intangible assets
upon regulatory approval in November
2015. Selling, general and administrative (SG&A)
expenses increased $6.6 million, or
28%, over the second quarter of 2015. Legal and professional
expenses increased $5.8 million due
to (i) consulting expenses payable in shares of Intrexon's common
stock pursuant to the Company's services agreement with Third
Security, LLC, or Third Security, which the Company entered into 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
incurred to defend ongoing litigation; and (iv) incremental costs
incurred to support the ongoing operations of the Company's 2015
acquisitions and other business development activities. These
increases were partially offset by a decrease of $2.2 million for salaries, benefits and other
personnel costs. Salaries, benefits and other personnel costs for
SG&A employees decreased primarily due to a decrease in stock
compensation and other compensation expenses resulting primarily
from the departure of certain officers of the Company. These
decreases were partially offset by increased headcount, including a
new executive officer to support the Company's expanding operations
as well as the acquisition of Oxitec in September 2015.
First Half 2016 Financial Results Compared to Prior Year
Period
Total revenues were $95.9
million for the six months ended June
30, 2016 compared to $78.7
million for the six months ended June
30, 2015, an increase of $17.2
million, or 22%. Collaboration and licensing revenues
increased $19.6 million over the six
months ended June 30, 2015 due to (i)
the recognition of deferred revenue for upfront payments received
from the Company's license and collaboration agreement with the
biopharmaceutical business of Merck KGaA, which became effective in
May 2015, and from other
collaborations signed by Intrexon between July 1, 2015 and June 30,
2016; and (ii) increased research and development services
for these collaborations and for the progression of programs or the
addition of new programs with previously existing collaborators.
Product revenues were $19.4 million
for the six months ended June 30,
2016 compared to $23.2 million
for the six months ended June 30,
2015, a decrease of $3.8
million, or 16%. The decrease in product revenues and gross
margin thereon 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. The
decreases were partially offset by an increase in the quantity of
weaned calves sold due to higher customer demand. Service revenues
were $24.6 million for the six months
ended June 30, 2016 compared to
$23.2 million for the six months
ended June 30, 2015, an increase of
$1.4 million, or 6%. The increase
relates to an increase in the number of in vitro
fertilization cycles performed due to higher customer demand.
Total operating expenses were $159.7
million for the six months ended June
30, 2016 compared to $183.3
million for the six months ended June
30, 2015, a decrease of $23.6
million, or 13%. Research and development expenses declined
$45.5 million, or 46%, 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 $4.6 million due to (i) an
increase in research and development headcount to support new and
expanded collaborations and (ii) costs for research and development
employees assumed in the Company's acquisition of Oxitec in
September 2015. Lab supplies and
consulting expenses increased $6.2
million as a result of (i) the progression into the
preclinical phase with certain of Intrexon's collaborators; (ii)
the increased level of research and development services provided
to the Company's collaborators; and (iii) costs incurred as a
result of the Company's September
2015 acquisition of Oxitec. Depreciation and amortization
increased $3.8 million primarily as a
result of (i) the inclusion of a full period of depreciation and
amortization on property and equipment and intangible assets
acquired in the Company's 2015 acquisitions and (ii) amortization
related to AquaBounty's intangible assets upon regulatory approval
in November 2015. SG&A expenses
increased $21.8 million, or 43%, over
the six months of 2015. Salaries, benefits and other personnel
costs for SG&A employees increased $3.8
million due to (i) increased headcount, including a new
executive officer, to support the Company's expanding operations;
(ii) a full period of stock compensation expense for a company-wide
option grant to employees in March
2015; and (iii) salaries, benefits and other personnel costs
for employees assumed in the Company's acquisition of Oxitec in
September 2015. These increases were
partially offset by (i) a decrease in stock compensation and other
compensation expenses resulting primarily from the departure of
certain officers of the Company. Legal and professional expenses
increased $9.5 million primarily due
to (i) consulting expenses payable in shares of Intrexon's common
stock pursuant to the Company's services agreement with Third
Security which the Company entered into 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 incurred to defend ongoing
litigation; and (iv) incremental costs incurred to support the
ongoing operations of the Company's 2015 acquisitions and other
business development activities. In 2016, the Company also recorded
$4.2 million in litigation settlement
expenses arising from the entrance of a court order in Trans Ova
Genetics, L.C.'s trial with XY, LLC.
Total other income (expense), net, was $(43.8 million) for the six months ended
June 30, 2016 compared to
$94.7 million for the six months
ended June 30, 2015, a decrease of
$138.5 million, or 146%. 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.
Conference Call and Webcast
The Company will host a
conference call today Tuesday, August
9th, at 5:30 PM EDT
to discuss the second quarter and first half 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 7396635 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.
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
Bast
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)
|
|
June 30,
2016
|
|
|
December 31,
2015
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
155,081
|
|
|
$
|
135,782
|
Short-term
investments
|
|
|
115,667
|
|
|
|
102,528
|
Receivables
|
|
|
|
|
|
|
|
Trade, net
|
|
|
27,028
|
|
|
|
25,101
|
Related
parties
|
|
|
14,394
|
|
|
|
23,597
|
Note, net
|
|
|
—
|
|
|
|
601
|
Other
|
|
|
2,294
|
|
|
|
2,995
|
Inventory
|
|
|
24,492
|
|
|
|
26,563
|
Prepaid expenses and
other
|
|
|
6,701
|
|
|
|
6,634
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
345,657
|
|
|
|
323,801
|
Long-term
investments
|
|
|
50,463
|
|
|
|
105,447
|
Equity
securities
|
|
|
39,020
|
|
|
|
83,653
|
Investment in
preferred stock
|
|
|
120,000
|
|
|
|
—
|
Property, plant and
equipment, net
|
|
|
46,659
|
|
|
|
42,739
|
Intangible assets,
net
|
|
|
244,314
|
|
|
|
247,535
|
Goodwill
|
|
|
161,257
|
|
|
|
165,169
|
Investments in
affiliates
|
|
|
22,714
|
|
|
|
9,977
|
Other
assets
|
|
|
1,028
|
|
|
|
3,725
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
1,031,112
|
|
|
$
|
982,046
|
|
|
|
|
Liabilities and
Total Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,204
|
|
|
$
|
4,967
|
Accrued compensation
and benefits
|
|
|
9,474
|
|
|
|
19,050
|
Other accrued
liabilities
|
|
|
13,295
|
|
|
|
7,949
|
Deferred
revenue
|
|
|
53,863
|
|
|
|
35,366
|
Lines of
credit
|
|
|
461
|
|
|
|
561
|
Current portion of
long term debt
|
|
|
491
|
|
|
|
930
|
Current portion of
deferred consideration
|
|
|
9,255
|
|
|
|
6,931
|
Related party
payables
|
|
|
456
|
|
|
|
150
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
95,499
|
|
|
|
75,904
|
Long term debt, net
of current portion
|
|
|
7,530
|
|
|
|
7,598
|
Deferred
consideration, net of current portion
|
|
|
6,689
|
|
|
|
8,698
|
Deferred revenue, net
of current portion
|
|
|
271,376
|
|
|
|
162,363
|
Deferred tax
liabilities
|
|
|
18,680
|
|
|
|
21,802
|
Other long term
liabilities
|
|
|
3,157
|
|
|
|
795
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
402,931
|
|
|
|
277,160
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Total
equity
|
|
|
|
|
|
|
|
Common
stock
|
|
|
—
|
|
|
|
—
|
Additional paid-in
capital
|
|
|
1,297,103
|
|
|
|
1,249,559
|
Accumulated
deficit
|
|
|
(656,222)
|
|
|
|
(542,729)
|
Accumulated other
comprehensive loss
|
|
|
(21,651)
|
|
|
|
(12,752)
|
|
|
|
|
|
|
|
|
Total Intrexon
shareholders' equity
|
|
|
619,230
|
|
|
|
694,078
|
Noncontrolling
interests
|
|
|
8,951
|
|
|
|
10,808
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
628,181
|
|
|
|
704,886
|
|
|
|
|
|
|
|
|
Total liabilities and
total equity
|
|
$
|
1,031,112
|
|
|
$
|
982,046
|
Intrexon
Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
(Amounts in
thousands, except
share and per share data)
|
|
June
30,
|
|
|
June
30
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration and
licensing revenues
|
|
$
|
27,481
|
|
$
|
17,181
|
|
$
|
51,554
|
|
$
|
31,964
|
Product
revenues
|
|
|
10,884
|
|
|
14,266
|
|
|
19,439
|
|
|
23,199
|
Service
revenues
|
|
|
13,927
|
|
|
13,255
|
|
|
24,592
|
|
|
23,212
|
Other
revenues
|
|
|
209
|
|
|
189
|
|
|
354
|
|
|
365
|
Total
revenues
|
|
|
52,501
|
|
|
44,891
|
|
|
95,939
|
|
|
78,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
10,753
|
|
|
11,764
|
|
|
20,315
|
|
|
20,439
|
Cost of
services
|
|
|
6,332
|
|
|
6,503
|
|
|
12,004
|
|
|
11,865
|
Research and
development
|
|
|
28,375
|
|
|
20,381
|
|
|
54,231
|
|
|
99,688
|
Selling, general and
administrative
|
|
|
30,263
|
|
|
23,673
|
|
|
73,144
|
|
|
51,301
|
Total operating
expenses
|
|
|
75,723
|
|
|
62,321
|
|
|
159,694
|
|
|
183,293
|
Operating
loss
|
|
|
(23,222)
|
|
|
(17,430)
|
|
|
(63,755)
|
|
|
(104,553)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense), Net
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized and
realized appreciation (depreciation) in fair value of equity
securities
|
|
|
(23,469)
|
|
|
(20,609)
|
|
|
(45,800)
|
|
|
94,845
|
Interest
expense
|
|
|
(267)
|
|
|
(359)
|
|
|
(532)
|
|
|
(702)
|
Interest
income
|
|
|
713
|
|
|
344
|
|
|
1,323
|
|
|
664
|
Other income
(expense), net
|
|
|
676
|
|
|
(326)
|
|
|
1,237
|
|
|
(59)
|
Total other income
(expense), net
|
|
|
(22,347)
|
|
|
(20,950)
|
|
|
(43,772)
|
|
|
94,728
|
Equity in net loss of
affiliates
|
|
|
(5,053)
|
|
|
(2,180)
|
|
|
(10,696)
|
|
|
(4,136)
|
Loss before income
taxes
|
|
|
(50,622)
|
|
|
(40,560)
|
|
|
(118,223)
|
|
|
(13,961)
|
Income tax benefit
(expense)
|
|
|
591
|
|
|
(934)
|
|
|
2,872
|
|
|
(1,729)
|
Net loss
|
|
$
|
(50,031)
|
|
$
|
(41,494)
|
|
$
|
(115,351)
|
|
$
|
(15,690)
|
Net loss attributable
to the noncontrolling interests
|
|
|
967
|
|
|
831
|
|
|
1,858
|
|
|
2,124
|
Net loss attributable
to Intrexon
|
|
$
|
(49,064)
|
|
$
|
(40,663)
|
|
$
|
(113,493)
|
|
$
|
(13,566)
|
Net loss per share,
basic and diluted
|
|
$
|
(0.42)
|
|
$
|
(0.37)
|
|
$
|
(0.97)
|
|
$
|
(0.13)
|
Weighted average
shares outstanding, basic and diluted
|
|
|
118,141,377
|
|
|
109,318,471
|
|
|
117,501,264
|
|
|
107,720,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 settlement
expenses, realized and unrealized appreciation or depreciation in
the fair value of equity securities, equity in net loss of
affiliates and the change in deferred revenue related to upfront
and milestone payments. 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 the same manner as its management and board of
directors. While Intrexon believes that these 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;
- Litigation settlement 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; and
- GAAP requires Intrexon to account for its collaborations as
multiple-element arrangements. As a result, the Company 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.
In order to evaluate Intrexon's operating performance, its
management adjusts for the impact of the change in deferred revenue
for these upfront and milestone payments in order to include them
as a part of adjusted EBITDA when the transaction is initially
recorded. The adjustment for 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. Intrexon believes that
adjusting for the impact of the change in deferred revenue in this
manner is important since it permits the Company to make quarterly
and annual comparisons of the Company's ability to consummate new
collaborations or to achieve significant milestones with existing
collaborators. Further, Intrexon believes it is useful when
evaluating its financial and operating performance, generating
future operating plans and making strategic decisions about the
allocation of capital.
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
|
|
Six months
ended
|
|
|
|
|
|
|
June
30,
|
|
|
|
|
|
June
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
(In
thousands)
|
Net loss attributable
to Intrexon
|
|
$
|
(49,064)
|
|
$
|
(40,663)
|
|
$
|
(113,493)
|
|
$
|
(13,566)
|
Interest
expense
|
|
|
217
|
|
|
341
|
|
|
456
|
|
|
668
|
Income tax expense
(benefit)
|
|
|
(591)
|
|
|
934
|
|
|
(2,872)
|
|
|
1,729
|
Depreciation and
amortization
|
|
|
5,905
|
|
|
3,781
|
|
|
11,434
|
|
|
7,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
(43,533)
|
|
$
|
(35,607)
|
|
$
|
(104,475)
|
|
$
|
(3,944)
|
Stock-based
compensation
|
|
|
6,631
|
|
|
7,855
|
|
|
19,797
|
|
|
18,011
|
Shares issued as
compensation for
services
|
|
|
2,606
|
|
|
—
|
|
|
5,689
|
|
|
480
|
Bad debt
expense
|
|
|
343
|
|
|
591
|
|
|
1,183
|
|
|
984
|
Research and
development license
with MD Anderson Cancer
Center
paid in stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,579
|
Litigation settlement
expense
|
|
|
—
|
|
|
—
|
|
|
4,228
|
|
|
—
|
Unrealized and
realized
(appreciation) depreciation in
fair
value of equity securities
|
|
|
23,469
|
|
|
20,609
|
|
|
45,800
|
|
|
(94,845)
|
Equity in net loss of
affiliates
|
|
|
5,053
|
|
|
2,180
|
|
|
10,696
|
|
|
4,136
|
Impact of change in
deferred
revenue related to upfront
and
milestone payments
|
|
|
116,088
|
|
|
58,797
|
|
|
129,606
|
|
|
55,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
110,657
|
|
$
|
54,425
|
|
$
|
112,524
|
|
$
|
40,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding, basic
|
|
|
118,141,377
|
|
|
109,318,471
|
|
|
117,501,264
|
|
|
107,720,040
|
Weighted average
shares
outstanding, diluted
|
|
|
119,246,955
|
|
|
111,717,458
|
|
|
118,922,905
|
|
|
109,851,535
|
Adjusted EBITDA per
share, basic
|
|
$
|
0.94
|
|
$
|
0.50
|
|
$
|
0.96
|
|
$
|
0.37
|
Adjusted EBITDA per
share, diluted
|
|
$
|
0.93
|
|
$
|
0.49
|
|
$
|
0.95
|
|
$
|
0.37
|
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SOURCE Intrexon Corporation