GERMANTOWN, Md., May 10, 2017 /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 first quarter financial
results for 2017.
Business Highlights and Recent Developments:
- Intrexon's proprietary methanotroph bioconversion platform has
achieved yields necessary for site selection on two molecules,
isbobutyraldehyde and 2,3 butanediol (2,3 BDO), each of which
represent a multi-billion dollar revenue opportunity for the
Company. Yields for 2,3 BDO, a precursor to butadiene,
increased by greater than 30% during the first quarter of
2017. This yield level produces a positive "in the money"
gross margin based on current natural gas and product prices. While
additional yield improvements and scaling milestones must be met,
the current yields and business implications have led the Company
to retain Moelis & Company to advise it on strategic and
financial options with respect to its bioconversion platform and
specific products;
- Announced formation of Precigen, Inc., a wholly owned
subsidiary of the Company, to accelerate strategic evaluation of
structural alternatives for consolidation of Intrexon's
health-related assets to enhance shareholder value and maximize the
potential of the Company's programs in health;
- Provided update on development of next-generation chimeric
antigen receptor T cell (CAR-T) therapy for cancer in strategic
collaboration with ZIOPHARM Oncology, Inc.
(NASDAQ: ZIOP) and biopharmaceutical division of Merck KGaA,
Darmstadt, Germany, announcing the
approach for the previously chosen two targets will focus on use of
the proprietary RheoSwitch Therapeutic System®
(RTS®) platform to regulate expression of membrane-bound
interleukin-15 (mbIL15) co-expressed with CARs and Sleeping
Beauty non-viral gene integration;
- Entered into a definitive agreement to acquire GenVec, Inc. (NASDAQ: GNVC) and announced
plans to develop a next generation adenoviral (AdV) platform with
significantly higher payload capacity compared to current systems
by combining GenVec's expertise in AdV vectors and cGMP drug
product manufacturing with Intrexon's proficiency in viral and
non-viral gene transfer;
- Signed a Cooperative Research and Development Agreement (CRADA)
with the National Cancer Institute (NCI) in collaboration with
ZIOPHARM for the development of adoptive cell transfer-based
immunotherapies using autologous peripheral blood lymphocytes
genetically modified using the Sleeping Beauty system to
express T-cell receptors for the treatment of solid tumors in
patients with advanced cancers;
- Collaborator ZIOPHARM announced U.S. Food and Drug
Administration (FDA) acceptance of investigator-initiated
Investigational New Drug (IND) application for a Phase 1 trial
infusing the Company's CD33-specific CAR+ T therapy, which
incorporates a kill switch, for relapsed or refractory acute
myeloid leukemia (AML), with the first patient to be enrolled in
the study expected to begin treatment in the third quarter of
2017;
- Collaborator ZIOPHARM reported successful end-of-phase 2
meeting with the FDA for Ad-RTS-hIL-12 + veledimex in recurrent
glioblastoma and is assessing protocol design options for a pivotal
Phase 3 trial in conjunction with its investigators and
regulators;
- Collaborator ZIOPHARM announced improved production times in
its ongoing Phase I trial of 2nd generation Sleeping Beauty
CD19+ CAR-T cells and progress toward its "Point-of-Care" approach.
One patient with multiple-relapsed acute lymphoblastic leukemia
achieved a complete response and a patient with triple-hit
non-Hodgkin lymphoma was treated with T cells manufactured in 2
weeks;
- Collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) received fast
track designation from the FDA for FCX-007 for treatment of
recessive dystrophic epidermolysis bullosa (RDEB) and announced
dosing of first patient in Phase I portion of Phase I/II clinical
trial of FCX-007 gene therapy;
- Exemplar Genetics, a wholly-owned subsidiary of Intrexon, was
awarded a subcontract to create genetically engineered miniswine
models of sickle cell disease as part of a national resource that
could lead to new treatments for the disorder;
- Oxitec, a wholly owned subsidiary of Intrexon, and the
Municipality of Santiago de Cali,
Colombia announced a memorandum of understanding to deploy
Friendly™ Aedes in the Comuna 16 region, an area of over 104,000
residents, to control populations of the Aedes aegypti
mosquito, the primary vector for dengue, chikungunya, Zika, and
yellow fever;
- In collaboration with Gangabishan Bhikulal Investment and
Trading Limited, Oxitec initiated outdoor caged trials in
India to demonstrate the efficacy
of Oxitec's Friendly™ mosquitoes;
- Oxitec reported its Friendly™ Aedes achieved greater than 80%
suppression of wild Aedes aegypti in CECAP/Eldorado in Piracicaba, Brazil, in the second year of the project, as
well as 78% reduction in the São Judas neighborhood of Piracicaba
only six months after initial releases;
- AquaBounty Technologies, Inc. (NASDAQ:
AQB; AIM: ABTU), majority-owned subsidiary of Intrexon,
completed the listing of its common shares on the NASDAQ Stock
Market and finalized an equity subscription from Intrexon. In
conjunction with the listing, Intrexon distributed a special stock
dividend of shares of AquaBounty common stock it owned to its
shareholders while maintaining majority ownership of AquaBounty's
outstanding common stock;
- Announced appointment of Andy
Bass as Senior Vice President, Consumer Sector, which will
henceforth do business as BioPop, to lead the design and
commercialization of new biologically-based products and
applications across the consumer market; and
- Appointed leading pharma executive Vinita Gupta to Intrexon's Board of
Directors.
First Quarter Financial Highlights:
- Total revenues of $53.7 million,
an increase of 24% over the first quarter of 2016;
- Net loss of $31.4 million
attributable to Intrexon, or $(0.26)
per basic share, including non-cash charges of $24.7 million;
- Adjusted EBITDA of $(7.1)
million, or $(0.06) per basic
share;
- The net change in deferred revenue related to upfront and
milestone payments, which represents the cash and stock received
from collaborators less the amount of revenue recognized during the
period, was a decrease of $10.2
million compared to a net increase of $13.5 million in the first quarter of 2016;
- Cash consideration received for reimbursement of research and
development services covered 54% 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 64% of consolidated cash operating
expenses; and
- Cash, cash equivalents, and short-term investments totaled
$205.2 million, the value of
investments in preferred stock totaled $134.7 million, and the value of equity
securities totaled $21.5 million at
March 31, 2017.
"Considering the company's progress in the first quarter and
year to date," commented Randal J.
Kirk, Chairman and Chief Executive Officer of Intrexon, "I
am gratified by the vision that underlies this company, by the
business plan that has made it possible to do so much relative to
such a modest expenditure of our shareholder's cash, by the
confidence of our shareholders, our board and our team in that
plan's ultimate feasibility and by the patience of all while our
brilliant team would mature the company's technical assets and
human capital into realizations that will make a great difference
in the world."
Mr. Kirk concluded, "We believe that we quite clearly have
before us a number of significant realizations – in health, in
energy, in food, in environment and in consumer industries – and we
are fully engaged upon them.\"
First Quarter 2017 Financial Results Compared to Prior Year
Period
Total revenues increased $10.3
million, or 24%, over the quarter ended March 31, 2016. Collaboration and licensing
revenues increased $9.0 million from
the quarter ended March 31, 2016 due
to (i) the recognition of deferred revenue for upfront payments
received from collaborations signed by the Company between
April 1, 2016 and March 31, 2017 and the recognition of the payment
received in June 2016 from ZIOPHARM
to amend the collaborations between us; 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 decreased
$0.4 million, or 5% primarily due to
a decrease in the quantities of pregnant cows sold due to lower
customer demand for these products. Gross margin on products was
consistent period over period. Service revenues increased
$1.4 million, or 13%, due to an
increase in the number of bovine in vitro fertilization cycles
performed due to higher customer demand. Gross margin on services
decreased slightly in the current period primarily due to an
increase in royalties and commissions due to vendors.
Research and development expenses increased $8.3 million, or 32%, 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 $2.6 million due to an increase in research and
development headcount to support new and expanded collaborations.
Lab supplies and consulting expenses increased $3.4 million as a result of (i) the progression
of certain programs into the preclinical and clinical phases with
certain of Intrexon's collaborators, and (ii) the increased level
of research and development services provided to Intrexon's
collaborators. Depreciation and amortization increased $1.3 million primarily as a result of
amortization of developed technology acquired from Oxitec Limited
which began in November 2016 upon the
completion of certain operational and regulatory events. Selling,
general and administrative (SG&A) expenses decreased
$7.7 million, or 18%. Salaries,
benefits and other personnel costs decreased $4.9 million primarily due to the reversal of
previously recognized stock-based compensation expense for stock
options granted to a former employee. In 2016, the Company recorded
$4.2 million in litigation expenses
arising from the entrance of a court order in the Company's trial
with XY, LLC. These SG&A decreases were offset by an increase
of $2.1 million of legal and
professional fees due to (i) expenses incurred to support domestic
and international government affairs for regulatory and other
approvals necessary to commercialize the Company's products and
services; and (ii) increased legal fees to defend ongoing
litigation.
Total other income (expense), net, increased $24.8 million, or 116%, from the quarter ended
March 31, 2016. This increase was
primarily attributable to (i) a decline in unrealized depreciation
in the Company's equity securities portfolio of $20.3 million, and (ii) dividend income of
$3.9 million from the Company's
investments in preferred stock.
Conference Call and Webcast
The Company will host a conference call today Wednesday, May 10th, at 4:30 PM ET to discuss the first quarter 2017
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 0126057 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, on Facebook, and LinkedIn.
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, Friendly, RheoSwitch Therapeutic System, RTS, 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
Basta
Vice President,
Investor Relations
Tel: +1 (561)
410-7052
investors@intrexon.com
|
Corporate
Contact:
Marie Rossi,
Ph.D.
Director, Technical
Communications
Tel: +1 (301)
556-9850
publicrelations@intrexon.com
|
Intrexon
Corporation and Subsidiaries
|
Consolidated
Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
March 31,
2017
|
|
|
December 31,
2016
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
69,852
|
|
|
$
|
62,607
|
Restricted
cash
|
|
|
6,987
|
|
|
|
6,987
|
Short-term
investments
|
|
|
135,377
|
|
|
|
174,602
|
Receivables
|
|
|
|
|
|
|
|
Trade, net
|
|
|
19,698
|
|
|
|
21,637
|
Related
parties
|
|
|
21,787
|
|
|
|
16,793
|
Notes, net
|
|
|
—
|
|
|
|
1,500
|
Other
|
|
|
1,716
|
|
|
|
2,555
|
Inventory
|
|
|
19,083
|
|
|
|
21,139
|
Prepaid expenses and
other
|
|
|
7,170
|
|
|
|
7,361
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
281,670
|
|
|
|
315,181
|
Long-term
investments
|
|
|
—
|
|
|
|
5,993
|
Equity
securities
|
|
|
21,476
|
|
|
|
23,522
|
Investments in
preferred stock
|
|
|
134,661
|
|
|
|
129,545
|
Property, plant and
equipment, net
|
|
|
68,328
|
|
|
|
64,672
|
Intangible assets,
net
|
|
|
223,074
|
|
|
|
225,615
|
Goodwill
|
|
|
157,825
|
|
|
|
157,175
|
Investments in
affiliates
|
|
|
23,951
|
|
|
|
23,655
|
Other
assets
|
|
|
4,943
|
|
|
|
3,710
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
915,928
|
|
|
$
|
949,068
|
Liabilities and
Total Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
7,950
|
|
|
$
|
8,478
|
Accrued compensation
and benefits
|
|
|
7,480
|
|
|
|
6,540
|
Other accrued
liabilities
|
|
|
16,581
|
|
|
|
15,776
|
Deferred
revenue
|
|
|
50,333
|
|
|
|
53,364
|
Lines of
credit
|
|
|
410
|
|
|
|
820
|
Current portion of
long term debt
|
|
|
388
|
|
|
|
386
|
Deferred
consideration
|
|
|
6,887
|
|
|
|
8,801
|
Related party
payables
|
|
|
621
|
|
|
|
440
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
90,650
|
|
|
|
94,605
|
Long term debt, net
of current portion
|
|
|
7,608
|
|
|
|
7,562
|
Deferred revenue, net
of current portion
|
|
|
246,958
|
|
|
|
256,778
|
Deferred tax
liabilities
|
|
|
16,504
|
|
|
|
17,007
|
Other long term
liabilities
|
|
|
4,047
|
|
|
|
3,868
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
365,767
|
|
|
|
379,820
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Total
equity
|
|
|
|
|
|
|
|
Common
stock
|
|
|
—
|
|
|
|
—
|
Additional paid-in
capital
|
|
|
1,323,706
|
|
|
|
1,325,780
|
Accumulated
deficit
|
|
|
(762,201)
|
|
|
|
(729,341)
|
Accumulated other
comprehensive loss
|
|
|
(32,967)
|
|
|
|
(36,202)
|
|
|
|
|
|
|
|
|
Total Intrexon
shareholders' equity
|
|
|
528,538
|
|
|
|
560,237
|
Noncontrolling
interests
|
|
|
21,623
|
|
|
|
9,011
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
550,161
|
|
|
|
569,248
|
|
|
|
|
|
|
|
|
Total liabilities and
total equity
|
|
$
|
915,928
|
|
|
$
|
949,068
|
Intrexon
Corporation and Subsidiaries
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
(Amounts in
thousands, except share and per share data)
|
|
March
31,
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Collaboration and
licensing revenues
|
|
$
|
33,065
|
|
|
24,073
|
|
Product
revenues
|
|
|
8,130
|
|
|
8,555
|
|
Service
revenues
|
|
|
12,031
|
|
|
10,665
|
|
Other
revenues
|
|
|
521
|
|
|
145
|
|
Total
revenues
|
|
|
53,747
|
|
|
43,438
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
9,006
|
|
|
9,562
|
|
Cost of
services
|
|
|
6,804
|
|
|
5,672
|
|
Research and
development
|
|
|
34,180
|
|
|
25,856
|
|
Selling, general and
administrative
|
|
|
35,138
|
|
|
42,881
|
|
Total operating
expenses
|
|
|
85,128
|
|
|
83,971
|
|
Operating
loss
|
|
|
(31,381)
|
|
|
(40,533)
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense), Net
|
|
|
|
|
|
|
|
Unrealized
depreciation in fair value of equity securities and preferred
stock
|
|
|
(1,622)
|
|
|
(22,331)
|
|
Interest
expense
|
|
|
(179)
|
|
|
(265)
|
|
Interest and dividend
income
|
|
|
4,624
|
|
|
610
|
|
Other income,
net
|
|
|
595
|
|
|
561
|
|
Total other income
(expense), net
|
|
|
3,418
|
|
|
(21,425)
|
|
Equity in net loss of
affiliates
|
|
|
(4,947)
|
|
|
(5,643)
|
|
Loss before income
taxes
|
|
|
(32,910)
|
|
|
(67,601)
|
|
Income tax
benefit
|
|
|
533
|
|
|
2,281
|
|
Net loss
|
|
$
|
(32,377)
|
|
|
(65,320)
|
|
Net loss attributable
to the noncontrolling interests
|
|
|
978
|
|
|
891
|
|
Net loss attributable
to Intrexon
|
|
$
|
(31,399)
|
|
|
(64,429)
|
|
Net loss per share,
basic and diluted
|
|
$
|
(0.26)
|
|
|
(0.55)
|
|
Weighted average
shares outstanding, basic and diluted
|
|
|
118,956,780
|
|
|
116,861,151
|
|
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, litigation expenses,
realized and unrealized appreciation or depreciation in the fair
value of equity securities and preferred stock, and equity in net
loss of affiliates. 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 a manner similar to how its management and Board of
Directors evaluate operating results (except for the impact of the
change in deferred revenue related to upfront and milestone
payments, which is adjusted in the measures evaluated by management
and the Board of Directors as discussed below). While Intrexon
believes that its 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. 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; and
- Litigation 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.
Furthermore, supplemental information about the impact of the
change in deferred revenue related to upfront and milestone
payments is provided below. GAAP requires Intrexon to account for
its collaborations as multiple-element arrangements. As a result,
the Company initially 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. The supplemental information about 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.
Management and the Board of Directors consider this information in
evaluating Intrexon's operating performance as they believe it
permits the quarterly and annual comparisons of the Company's
ability to consummate new collaborations or to achieve significant
milestones with existing collaborators.
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
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In
thousands)
|
|
Net loss attributable
to Intrexon
|
|
$
|
(31,399)
|
|
$
|
(64,429)
|
|
Interest
expense
|
|
|
164
|
|
|
239
|
|
Income tax
benefit
|
|
|
(533)
|
|
|
(2,281)
|
|
Depreciation and
amortization
|
|
|
7,270
|
|
|
5,529
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
(24,498)
|
|
$
|
(60,942)
|
|
Stock-based
compensation
|
|
|
7,889
|
|
|
13,166
|
|
Shares issued as
payment for services
|
|
|
2,915
|
|
|
3,083
|
|
Bad debt
expense
|
|
|
9
|
|
|
840
|
|
Litigation
expense
|
|
|
—
|
|
|
4,228
|
|
Unrealized
depreciation in fair value of equity securities and
preferred stock
|
|
|
1,622
|
|
|
22,331
|
|
Equity in net loss of
affiliates
|
|
|
4,947
|
|
|
5,643
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
(7,116)
|
|
$
|
(11,651)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic and diluted
|
|
|
118,956,780
|
|
|
116,861,151
|
|
Adjusted EBITDA per
share, basic and diluted
|
|
$
|
(0.06)
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
|
|
|
Impact of change in
deferred revenue related to upfront
and milestone payments
|
|
$
|
(10,190)
|
|
$
|
13,518
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/intrexon-announces-first-quarter-2017-financial-results-300455486.html
SOURCE Intrexon Corporation