Intrexon Announces Second Quarter Financial Results PR Newswire GERMANTOWN, Md., Sept. 19, 2013 GERMANTOWN, Md., Sept. 19, 2013 /PRNewswire/ -- Intrexon Corporation (NYSE: XON), a leader in synthetic biology, today announced financial results for the second quarter of 2013. (Logo: http://photos.prnewswire.com/prnh/20130919/NY83283LOGO ) Second Quarter Highlights Highlights for the second quarter of 2013 include: oNet loss decreased $10 million, or 60%, to $6.5 million for the quarter ended June 30, 2013 from $16.5 million for the quarter ended June 30, 2012; oExecution of a collaboration with Soligenix, Inc., to develop and commercialize human monoclonal antibody therapies for the treatment of melioidosis; oClosing of a Series F Preferred Stock investment round which, together with the previous sale of Series F Preferred Stock in March 2013, resulted in receipt of aggregate proceeds of $150 million before expenses; oExpansion of the collaboration with Fibrocell Science, Inc., incorporating additional potential treatments based on engineered autologous fibroblast cells for the localized treatment of autoimmune and inflammatory disorders including morphea (localized scleroderma), cutaneous eosinophilias and moderate to severe psoriasis; oDemonstration of in vitro ability to regulate/control the expression of micro-RNA (miRNA) under control of the Company's RheoSwitch Therapeutic System^®; oDemonstration of gene programs for the expression of traits that enhance the growth of plants exposed to experimental drought or temperature stress. Recent Developments On August 13, 2013, Intrexon completed an initial public offering which, after taking into effect the exercise of the underwriter's over-allotment option, resulted in aggregate proceeds to the company of approximately $168.3 million, net of underwriting discounts and commissions and estimated offering expenses. Second Quarter 2013 Financial Results Compared to Prior Year Period Total revenues were $6.8 million for the three months ended June 30, 2013 compared to $2.7 million for the three months ended June 30, 2012, an increase of $4.1 million, or 148.8%. The $4.0 million increase in collaboration revenue resulted primarily from the recognition of deferred revenue for upfront payments received from four collaborations signed by the Company between July 1, 2012 and June 30, 2013, as well as one milestone payment received in October 2012. Revenues also increased as a result of research and development services the Company performed under these new agreements. Finally, during the second quarter of 2013, the Company immediately recognized $1.5 million in previously deferred revenue related to an upfront payment the Company received pursuant to a collaboration where both the Company and the counterparty agreed to terminate the agreement. Research and development expenses were $13.6 million for the three months ended June 30, 2013 compared to $17.6 million for the three months ended June 30, 2012, a decrease of $4.0 million or 23%. The decrease is primarily the result of decreases in personnel expenses of $2.5 million and lab supplies of $1.4 million because of the elimination of certain positions due to improvements in production processes and also the Company's centralization of certain research and development functions to eliminate redundancies. General and administrative expenses increased $1.1 million, or 17%, to $7.4 million for the three months ended June 30, 2013 compared to $6.3 million for the three months ended June 30, 2012 primarily due to increases in personnel expenses for new employees as the Company prepared to become a public company. The Company also incurred $0.3 million of personnel expenses related to AquaBounty Technologies, Inc. ("AquaBounty"), an investment the Company was required to consolidate effective March 15, 2013. Total other income, net, is primarily comprised of unrealized appreciation in fair value of equity securities which the Company holds in certain of its collaborators which was $7.7 million for the three months ended June 30, 2013 compared to $4.8 million for the three months ended June 30, 2012, an increase of $2.9 million, or 60%. About Intrexon Corporation Intrexon Corporation (NYSE: XON) is a leader in synthetic biology focused on collaborating with companies in Health, Food, Energy and the Environment to create biologically-based products that improve the quality of life and the health of the planet. Through the company's proprietary UltraVector^® platform, Intrexon provides its partners with industrial-scale design and development of complex biological systems. The UltraVector^® platform delivers unprecedented control over the quality, function, and performance of living cells. We call our synthetic biology approach and integrated technologies 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 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 our consolidated financial statements presented in accordance with GAAP, and is intended to enhance an overall understanding of our current financial performance. Trademarks Intrexon, UltraVector, RheoSwitch Therapeutic System, mAbLogix, 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 our current expectations and projections about future events and generally relate to our plans, objectives and expectations for the development of our 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) our current and future ECCs; (ii) developments concerning our collaborators; (iii) our ability to successfully enter new markets or develop additional products, whether with our collaborators or independently; (iv) competition from existing technologies and products or new technologies and products that may emerge; (v) actual or anticipated variations in our operating results; (vi) actual or anticipated fluctuations in our competitors' or our collaborators' operating results or changes in their respective growth rates; (vii) our cash position; (viii) market conditions in our industry; (ix) our ability, and the ability of our collaborators, to protect our intellectual property and other proprietary rights and technologies; (x) our ability, and the ability of our collaborators, to adapt to changes in laws or regulations and policies; (xi) the ability of our collaborators to secure any necessary regulatory approvals to commercialize any products developed under the ECCs; (xii) the rate and degree of market acceptance of any products developed by a collaborator under an ECC; (xiii) our ability to retain and recruit key personnel; (xiv) our expectations related to the use of proceeds from our initial public offering; (xv) our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and (xvi) our expectations relating to AquaBounty. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the section entitled "Risk Factors" in our Quarterly Report on Form 10-Q, as well as discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and we undertake no duty to update this information unless required by law. Intrexon Corporation and Subsidiaries Consolidated Balance Sheets (Unaudited) (Amounts in thousands, except share and per June 30, 2013 December 31, 2012 share data) Assets Current assets Cash and cash equivalents $ 34,461 $ 10,403 Short-term investments 95,454 260 Receivables Trade 258 141 Related parties 820 531 Other 227 35 Prepaid expenses and other 3,098 2,163 Total current assets 134,318 13,533 Equity securities 65,213 83,116 Property, plant and equipment, net 18,410 18,687 Intangible assets, net 42,972 29,506 Goodwill 13,846 — Investment in affiliate — 5,726 Other assets 8,692 1,078 Total assets $ 283,451 $ 151,646 Liabilities, Redeemable Convertible Preferred Stock and Total Deficit Current liabilities Accounts payable $ 1,486 $ 632 Accrued compensation and benefits 3,324 3,766 Other accrued liabilities 4,166 2,208 Deferred revenue 8,270 9,963 Capital lease obligations, current 32 49 Current portion of long term debt 223 — Related party payables 10 99 Total current liabilities 17,511 16,717 Capital lease obligations, net of current 25 42 portion Long term debt, net of current portion 2,074 — Deferred revenue 56,409 48,673 Other long term liabilities 1,098 1,108 Total liabilities 77,117 66,540 Commitments and contingencies Redeemable convertible preferred stock 567,858 406,659 Total deficit Common stock — — Additional paid-in capital — — Accumulated deficit (376,163) (321,553) Accumulated other comprehensive income 14 – Total Intrexon shareholders' deficit (376,149) (321,553) Noncontrolling interest 14,625 — Total deficit (361,524) (321,553) Total liabilities, redeemable convertible $ 283,451 $ 151,646 preferred stock and total deficit Intrexon Corporation and Subsidiaries Consolidated Statements of Operations (Unaudited) (Amounts in thousands, Three months ended Six months ended except share and June 30, June 30, per share data) 2013 2012 2013 2012 Revenues Collaboration revenues $ 6,674 $ 2,705 $ 10,538 $ 4,259 Other revenues 107 21 219 85 Total revenues 6,781 2,726 10,757 4,344 Operating Expenses Research and 13,602 17,641 25,104 36,620 development General and 7,433 6,333 13,913 14,093 administrative Total operating 21,035 23,974 39,017 50,713 expenses Operating loss (14,254) (21,248) (28,260) (46,369) Other Income (Expense) Unrealized appreciation (depreciation) in fair 7,734 4,756 (21,635) 15,971 value of equity securities Gain on previously held — — 7,415 — equity investment Interest expense (11) (18) (25) (25) Investment income 66 1 71 2 Other expense (54) (26) (57) (26) Total other income 7,735 4,713 (14,231) 15,922 (expense) Equity in net loss of — — (390) — affiliate Net loss $ (6,519) $ (16,535) $ (42,881) $ (30,447) Net loss attributable to the noncontrolling 507 — 558 — interest Net loss attributable $ (6,012) $ (16,535) $ (42,323) $ (30,447) to Intrexon Accretion of dividends on redeemable (7,942) (5,362) (14,347) (10,822) convertible preferred stock, not declared Net loss attributable $ (13,954) $ (21,897) $ (56,670) $ (41,269) to common shareholders Net loss attributable to common shareholders $ (2.46) $ (3.99) $ (10.00) $ (7.54) per share, basic and diluted Weighted average shares outstanding, basic and 5,667,557 5,484,572 5,664,665 5,470,415 diluted Intrexon Corporation and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Adjusted EBITDA. To supplement our financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we present Adjusted EBITDA. A reconciliation of Adjusted EBITDA to our net income or loss under GAAP appears below. Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income or loss adjusted for income tax expense or benefit, interest expense, depreciation and amortization, stock-based compensation, contribution of services by shareholder, unrealized appreciation or depreciation in the fair value of equity securities, gain on previously held equity investment, equity in net loss of affiliate and the change in deferred revenue related to upfront and milestone payments. Adjusted EBITDA is a key metric for our management and Board of Directors for evaluating our 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 is useful to understand the long-term performance of our core business and facilitates comparisons of our operating results over multiple reporting periods. We are providing this information to investors and others to assist them in understanding and evaluating our operating results in the same manner as our management and board of directors. While we believe that this non-GAAP financial measure is useful in evaluating our 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, this non-GAAP financial measure may not be the same as non-GAAP financial measures presented by other companies. Adjusted EBITDA is not a measure of financial performance under GAAP, and is not intended to represent cash flows from operations 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. We compensate for the limitations of Adjusted EBITDA by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business. Adjusted EBITDA has its limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. In addition to the reasons stated above, which are generally applicable to each of the items we exclude from our non-GAAP financial measure, we believe it is appropriate to exclude certain items for the following reasons: oInterest expense may be subject to changes in interest rates which are beyond our control; oDepreciation of our property and equipment and amortization of acquired identifiable intangibles can be affected by the timing and magnitude of business combinations and capital asset purchases; oStock-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; oContribution of services by shareholder is a noncash expense which we exclude in evaluating our financial and operating performance; oUnrealized appreciation or depreciation in the fair value of securities which we hold in our collaborators may be significantly impacted by market volatility and other factors which are outside of our control in the short term and we intend to hold these securities over the long term; oEquity in net loss of affiliate and the gain on such equity investment occurred as a result of our initial investment in AquaBounty in the fourth quarter of 2012 and the subsequent additional investment in the first quarter of 2013 which resulted in a controlling interest by us and the consolidation of the investment. We believe excluding the impact of such losses or gains on these types of strategic investments from our operating results is important to facilitate comparisons between periods; and oGAAP requires us to account for our collaborations as multiple-element arrangements. As a result, we defer certain collaboration revenues because certain of our performance obligations cannot be separated and must be accounted for as one unit of accounting. The collaboration revenues that we so defer arise from upfront and milestone payments received from our collaborators, which we recognize over the future performance period even though our right to such consideration is neither contingent on the results of our future performance nor refundable in the event of nonperformance. In order to evaluate our operating performance, our 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. We believe that adjusting for the impact of the change in deferred revenue in this manner is important since it permits us to make quarterly and annual comparisons of our ability to consummate new collaborations or to achieve significant milestones with existing collaborators. Further, we believe it is useful when evaluating our financial and operating performance, generating future operating plans and making strategic decisions about the allocation of capital. Pro forma adjusted EBITDA per share. Our calculations for pro forma adjusted EBITDA per share, basic and diluted, assumes, as of the end of the respective period, the conversion of all outstanding shares of our redeemable convertible preferred stock plus all cumulative dividends payable thereon into shares of common stock as if such conversion had occurred as of the later of (i) the beginning of the period or (ii) the issuance date of those shares. Because all of our shares of redeemable convertible preferred stock and all accrued and cumulative dividends thereon automatically converted into common shares upon the closing of our initial public offering on August 13, 2013, we believe that the inclusion of such shares on an as-converted basis results in a useful metric for our investors, analysts and others when evaluating our results on a comparable basis with other periods. While our management and board of directors believe that this non-GAAP per share metric is useful in evaluating our past adjusted EBITDA results, and may be of use to investors, analysts and others, this information should be considered supplemental in nature and is not meant as a substitute for the per share information prepared in accordance with GAAP. In addition, this non-GAAP per share metric may not be the same as non-GAAP per share metrics presented by other companies. Pro forma adjusted EBITDA per share is not a measure of financial performance under GAAP, and is not intended to represent cash flows per share from operations under GAAP and should not be used as an alternative to net income or loss per share as an indicator of operating performance or to represent cash flows from operating, investing or financing activities as a measure of liquidity. We compensate for the limitations of pro forma adjusted EBITDA per share by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business. Pro forma adjusted EBITDA per share has its limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. The following table presents a reconciliation of net loss to EBITDA and also to adjusted EBITDA for each of the periods indicated: Threemonthsended Six months ended June 30, June 30, 2013 2012 2013 2012 (Inthousands) Net loss $ (6,519) $ (16,535) $ (42,881) $ (30,447) Interest expense 11 18 25 25 Depreciation and 1,823 2,021 3,694 3,912 amortization EBITDA $ (4,685) $ (14,496) $ (39,162) $ (25,510) Stock-based compensation 809 367 1,196 520 expense Contribution of services by 387 387 775 775 shareholder Unrealized (appreciation) depreciation in (7,734) (4,756) 21,635 (15,971) fair value of equity securities Gain on previously held — — (7,415) — equity investment Equity in net loss of — — 390 — affiliate Impact of change in deferred revenue related 6,193 6,193 10,455 5,844 to upfront and milestone payments Adjusted EBITDA $ (5,030) $ (12,305) $ (12,126) $ (35,342) The following table presents the calculation of pro forma adjusted EBITDA per share, basic and diluted, for each of the periods indicated: Threemonthsended Six months ended June 30, June 30, 2013 2012 2013 2012 Pro forma adjusted EBITDA per share: Numerator: Adjusted EBITDA $ (5,030) $ (12,305) $ (12,126) $ (35,342) (in thousands) Denominator (1) (2): Weighted average common shares outstanding, 5,667,557 5,484,572 5,664,665 5,470,415 basic and diluted Add: Common shares issued upon conversion 73,423,111 61,467,967 69,795,611 60,094,266 of all series preferred shares Add: Common shares issued upon conversion of cumulative 4,050,161 2,455,878 4,050,161 2,455,878 dividends on all series preferred shares Pro forma weighted average common shares used in computing pro 83,140,829 69,408,417 79,510,437 68,020,559 forma adjusted EBITDA per share, basic and diluted Pro forma adjusted EBITDA $ (0.06) $ (0.18) $ (0.15) $ (0.52) per share, basic and diluted (1) Pro forma adjusted EBITDA per share, basic and diluted have been calculated for the three and six month periods ended June 30, 2013 after giving effect to (i) the conversion of 112,906,464 shares of our preferred stock outstanding on January 1, 2013 into 64,517,977 shares of common stock upon the completion of our IPO; (ii) the issuance of 19,047,619 shares of Series F preferred stock issued between January 1, 2013 and April 30, 2013 and the conversion of those shares into 10,884,353 shares of our common stock upon the completion of our IPO; and (iii) upon the completion of our IPO the conversion of aggregate cumulative dividends on our preferred stock of $64.8 million into 4,050,161 shares of our common stock, assuming the IPO closed on June 30, 2013 at the IPO price of $16.00 per share. (2) Pro forma adjusted EBITDA per share, basic and diluted have been calculated for the three and six month periods ended June 30, 2012 after giving effect to (i) the conversion of 97,096,941 shares of our preferred stock outstanding on January 1, 2012 into 55,483,966 shares of our common stock upon the completion of our IPO; (ii) the issuance of 11,047,618 shares of Series E preferred stock issued between January 1, 2012 and April 12, 2012 and the conversion of those shares into 6,312,924 shares of our common stock upon the completion of our IPO; and (iii) upon completion of our IPO the conversion of aggregate cumulative dividends on our preferred stock of $39.3 million into 2,455,878 shares of our common stock, assuming the IPO closed on June 30, 2012 at the IPO price of $16.00 per share. SOURCE Intrexon Corporation Website: http://www.dna.com Contact: Corporate Contact, Peter McLaughlin, Vice President, Corporate Communications, Intrexon Corporation, Tel: +1 (323) 842-7779, firstname.lastname@example.org or Investor Contact, The Ruth Group, Nick Laudico, Tel: 646-536-7030, email@example.com
Intrexon Announces Second Quarter Financial Results
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