Precigen(PGEN) - 2023 Q4 - Annual Results

Executive Summary & Business Outlook This section provides an overview of Precigen's biopharmaceutical focus and strategic outlook from its leadership Company Overview Precigen is a biopharmaceutical company developing innovative gene and cell therapies to improve patients' lives - Precigen is a biopharmaceutical company specializing in innovative gene and cell therapies to improve the lives of patients[2] CEO & CFO Statements Leadership highlights a transformative 2024 outlook, key program milestones, and prudent financial management - Precigen is on track to present pivotal Phase 2 data and submit a BLA for PRGN-2012 in 2024, with a potential commercial launch in 2025, bolstered by Breakthrough Therapy Designation[3] - UltraCAR-T programs offer a novel approach compared to traditional CAR-T therapies and have garnered significant interest from potential partners due to safety, preliminary efficacy, and manufacturing advantages[3] - The company is evaluating various financing opportunities to strengthen its balance sheet as it prepares PRGN-2012 for potential commercial launch in 2025[3] Key Program Highlights & Business Updates This section details advancements in the company's core therapeutic platforms, AdenoVerse and UltraCAR-T AdenoVerse Immunotherapies The AdenoVerse platform is advancing key programs for RRP and HPV-associated cancers through clinical development - The AdenoVerse immunotherapy platform uses a library of proprietary adenovectors for efficient gene delivery to modulate the immune system and generate high-level, durable antigen-specific T-cell immune responses[21] - PRGN-2012 for RRP is on track for Phase 2 data presentation in Q2 2024 and BLA submission in H2 2024, with commercial readiness underway for a 2025 launch[3][5][7] - PRGN-2009 for HPV-associated recurrent/metastatic cervical cancer received IND clearance for a randomized Phase 2 study, which is now active and recruiting patients[5][11] PRGN-2012 in RRP - PRGN-2012 received Breakthrough Therapy Designation and Orphan Drug Designation from the FDA and Orphan Drug Designation from the European Commission for the treatment of RRP[5][6][22] - The Phase 1 portion of the Phase 1/2 study demonstrated strong efficacy and a favorable safety profile, with 50% of patients (N=12) in durable and ongoing Complete Response more than two years after treatment[6] - Enrollment and dosing in the Phase 2 portion of the study are complete, with data presentation anticipated in Q2 2024, and a BLA submission under an accelerated approval pathway anticipated in H2 2024[6][7] PRGN-2009 in OPSCC and Cervical Cancer - The Phase 2 study of PRGN-2009 in combination with pembrolizumab in newly diagnosed patients with HPV-associated oropharyngeal squamous cell carcinoma (OPSCC) is enrolling patients[11][22] - A Phase 2 randomized, open-label study of PRGN-2009 in combination with pembrolizumab in patients with HPV-associated recurrent/metastatic cervical cancer is active and recruiting patients[11][22] AdenoVerse Immunotherapy Platform - Precigen's AdenoVerse immunotherapy platform utilizes a library of proprietary adenovectors, including gorilla adenovectors, for efficient gene delivery of therapeutic effectors, immunomodulators, and vaccine antigens[21] - AdenoVerse immunotherapies generate high-level and durable antigen-specific T-cell immune responses and have the ability to boost these responses via repeat administration[21] UltraCAR-T Cell Therapies The UltraCAR-T platform offers an innovative, rapid-manufacturing approach for autologous cell therapies - UltraCAR-T is a multigenic autologous CAR-T platform that uses Precigen's non-viral Sleeping Beauty system to simultaneously express an antigen-specific CAR, membrane-bound IL-15 (mbIL15) for enhanced expansion and persistence, and a kill switch for improved safety[16] - UltraCAR-T investigational therapies are manufactured via an overnight process using the proprietary UltraPorator electroporation system at the patient's medical center, allowing administration only one day following gene transfer[16] - The UltraCAR-T platform is currently under clinical investigation for hematological and solid tumors, including PRGN-3005 (ovarian cancer), PRGN-3006 (AML/MDS), and PRGN-3007 (ROR1+ advanced cancers)[17] PRGN-3006 in AML/MDS - Interim data from the ongoing Phase 1b study of PRGN-3006 UltraCAR-T in relapsed/refractory AML or higher-risk myelodysplastic syndromes (MDS) is anticipated in the second half of 2024[5][11] - First-in-human Phase 1 data showed PRGN-3006 was well-tolerated with no dose-limiting toxicities (DLTs) and a 27% objective response rate (ORR) in heavily pre-treated r/r AML patients[11] - PRGN-3006 has been granted Orphan Drug Designation in AML and Fast Track Designation in relapsed/refractory AML by the FDA[11][17] PRGN-3005 in Ovarian Cancer - The Phase 1b dose expansion portion of the Phase 1/1b study of PRGN-3005 UltraCAR-T in patients with advanced, recurrent platinum resistant ovarian, fallopian tube or primary peritoneal cancer is ongoing[11][17] PRGN-3007 in Advanced ROR1+ Cancers - Preliminary data from the Phase 1 study of PRGN-3007, a next-generation UltraCAR-T incorporating PD-1 checkpoint inhibition, in ROR1+ advanced cancers is anticipated in the second half of 2024[5][11] - PRGN-3007 targets ROR1-positive chronic lymphocytic leukemia (CLL), mantle cell lymphoma (MCL), acute lymphoblastic leukemia (ALL), diffuse large B-cell lymphoma (DLBCL), and triple negative breast cancer (TNBC)[11][17] UltraCAR-T Platform & Library Approach - The UltraCAR-T platform addresses the inhibitory tumor microenvironment by incorporating a novel mechanism for intrinsic checkpoint blockade without complex and expensive gene editing techniques[16] - Precigen's UltraCAR-T library approach aims to transform personalized cell therapy by enabling medical centers to deliver personalized, autologous UltraCAR-T treatment with overnight manufacturing, selecting non-viral plasmids based on the patient's cancer and biomarker profile[18] UltraPorator System The UltraPorator system is a proprietary electroporation device enabling rapid, cGMP-compliant manufacturing of UltraCAR-T therapies - The UltraPorator system is an exclusive device and proprietary software solution for the scale-up of rapid and cost-effective manufacturing of UltraCAR-T therapies[19] - It is a high-throughput, semi-closed electroporation system for modifying T cells using Precigen's proprietary non-viral gene transfer technology, significantly reducing processing time and contamination risk[19][20] - UltraPorator is being utilized for clinical manufacturing of Precigen's investigational UltraCAR-T therapies in compliance with current good manufacturing practices[20] Full Year 2023 Financial Results This section presents the company's detailed financial performance and position for the fiscal year 2023 Financial Highlights Summary The company reported $62.9 million in cash and investments and achieved a 16% reduction in SG&A costs Key Financial Position and Cost Management | Metric | As of Dec 31, 2023 | | :------------------------------------------ | :----------------- | | Cash, cash equivalents, short-term & long-term investments | $62.9 million | | SG&A costs reduction (YoY) | 16% | Detailed Financial Performance FY2023 performance was marked by lower revenues and a goodwill impairment charge, offset by reduced SG&A expenses - Total revenues decreased significantly by 76.9% in FY2023, primarily driven by a 99.5% reduction in collaboration and licensing revenues[11][12] - SG&A expenses decreased by 15.8% due to reduced professional and legal fees, while R&D expenses increased by 3.1% due to higher personnel costs[9][10] - A $10.4 million goodwill impairment charge was recorded in the fourth quarter of 2023 related to its Exemplar subsidiary[14] Revenues Full Year Revenue Performance | Metric | FY2023 (in thousands) | FY2022 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Total Revenues | $6,225 | $26,909 | $(20,684) | (76.9%) | | Collaboration & Licensing | $75 | $14,661 | $(14,586) | (99.5%) | | Product & Services | $6,141 | $11,997 | $(5,856) | (48.8%) | Operating Expenses Full Year Operating Expenses | Metric | FY2023 (in thousands) | FY2022 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Research & Development | $48,614 | $47,170 | $1,444 | 3.1% | | Selling, General & Admin. | $40,415 | $48,006 | $(7,591) | (15.8%) | | Impairment of goodwill | $10,390 | $482 | $9,908 | 2055.6% | Other Income (Expense), Net Full Year Other Income (Expense), Net | Metric | FY2023 (in thousands) | FY2022 (in thousands) | Change ($) | | :-------------------------- | :-------------------- | :-------------------- | :--------- | | Total Other Income (Expense), Net | $3,396 | $(5,102) | $8,498 | | Interest Expense | $(468) | $(6,774) | $6,306 | | Interest Income | $3,237 | $133 | $3,104 | - The increase in total other income, net, was primarily due to $6.3 million in reduced interest expense associated with the full retirement of Convertible Notes in Q2 2023, and $3.1 million increased interest income due to higher interest rates on investments[13] Net Loss and EPS Full Year Net Loss and EPS | Metric | FY2023 | FY2022 | | :------------------------------------ | :------- | :------- | | Loss from continuing operations | $(95.9)M | $(79.8)M | | Loss per share (basic & diluted) | $(0.39) | $(0.40) | | Net loss | $(95.9)M | $28.3M | | Net loss per share (basic & diluted) | $(0.39) | $0.14 | Consolidated Balance Sheets Total assets decreased while total liabilities saw a significant reduction due to the retirement of long-term debt Consolidated Balance Sheet Highlights | Metric | Dec 31, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Total Assets | $151,043 | $215,977 | $(64,934) | (30.1%) | | Cash & Cash Equivalents | $7,578 | $4,858 | $2,720 | 56.0% | | Restricted Cash | $- | $43,339 | $(43,339) | (100.0%) | | Short-term Investments | $55,277 | $51,092 | $4,185 | 8.2% | | Total Current Liabilities | $22,985 | $78,645 | $(55,660) | (70.8%) | | Current portion of long-term debt | $- | $43,219 | $(43,219) | (100.0%) | | Settlement and Indemnification Accrual | $5,075 | $18,750 | $(13,675) | (72.9%) | | Total Liabilities | $32,545 | $89,718 | $(57,173) | (63.7%) | | Total Shareholders' Equity | $118,498 | $126,259 | $(7,761) | (6.1%) | Consolidated Statements of Operations The statement details decreased revenues and a goodwill impairment charge, leading to an increased loss from continuing operations - The full Consolidated Statements of Operations provide a detailed breakdown of revenues, operating expenses, other income/expense, and net loss for the years ended December 31, 2023, and 2022[29] Additional Information This section contains supplementary details including trademarks, forward-looking statements, and contact information Trademarks This section lists the trademarks owned by Precigen and its affiliates - Key trademarks include Precigen, UltraCAR-T, UltraPorator, AdenoVerse, UltraVector, and Advancing Medicine with Precision[23] Cautionary Statement Regarding Forward-Looking Statements This statement advises that the press release contains forward-looking statements involving risks and uncertainties - Forward-looking statements in the press release are based upon the Company's current expectations and projections about future events and involve risks and uncertainties, with actual future results potentially differing materially[24] - Readers are advised to refer to the 'Risk Factors' section in the Company's most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission for further information on potential risks and uncertainties[24] Investor & Media Contacts This section provides contact information for investor relations and media inquiries - Contact information for investor relations (Steven M. Harasym) and media inquiries (Donelle M. Gregory, Glenn Silver) is provided[25]