Calyxt Reports 4th Quarter and Full Year 2018 Financial Results
FDA consultation completed for High Oleic Soybean, first-ever gene-edited food product marketed in U.S.
First sales of Calyxt High Oleic Soybean Oil, CalynoTM, and High Oleic Soybean Meal
Collaboration with Agtegra Cooperative to distribute Calyxt High Oleic Soybean
48,000 acres contracted for 2019 growing season, more than double 2018 acres
Product pipeline advancing with High Fiber Wheat in line for next commercialization as early as 2022
Strengthened management team and board with addition of world-class talent
Cash, cash equivalents and restricted cash of $95.3M as of December 31, 2018
Minneapolis-St. Paul, Minn., March 11, 2019 – Calyxt, Inc. (NASDAQ: CLXT), a healthy food ingredient company, today announced its results for the fourth quarter and full year ended December 31, 2018.
Investor Call Details
Calyxt will host an investor call on March 12, 2019 at 8:30 a.m. Eastern Time – 7:30 a.m. Central Time to discuss its financial results and provide a general business update.
The live dial-in information for the conference call is:
US & Canada only: 877-407-9747
A replay of the call will be available until May 14, 2019 by calling 877-660-6853 (Toll Free US & Canada); 201-612-7415 (Toll Free International).
Webcast URL (Archived for 6 months): http://bit.ly/2UhORvp
“2018 was a year of tremendous achievement for Calyxt. I am extremely proud to say that we received our first order for our premium High Oleic Soybean Oil, CalynoTM, with ~ 80% oleic acid content and zero grams of trans fat per serving. We believe this milestone welcomes a new era of food ingredients that are developed to help enhance the health profile of the consumer,” said Jim Blome, CEO of Calyxt. “Our strong relationships with our strategic partners are building the foundation of our farmer network and supply chain. Our recently announced alliance with Agtegra positions us for continued growth of our soybean franchise. Our growing customer base validates our innovative business model. Having more than doubled last year’s acres, we are on track for strong growth and we couldn’t be more excited about what the future holds for Calyxt.”
Calyxt completed a consultation with the Food and Drug Administration (FDA) for its High Oleic Soybean. After review, FDA had no further questions concerning human food ingredients or animal food derived from our High Oleic Soybean. CalynoTM oil is the first gene-edited food product to undergo such review and be commercialized in the U.S.
High Oleic Soybean
- First sale of Calyxt High Oleic Soybean Oil, CalynoTM
Successfully marketed High Oleic Soybean Oil as a premium food ingredient
CalynoTM oil contains approximately 80% oleic acid, and up to 20% less saturated fatty acids compared to commodity soybean oil as well as zero grams of trans fat per serving
CalynoTM oil has up to 3 times the fry life and an extended shelf life compared to commodity soybean oils
- First sale of High Oleic Soybean Meal as a premium feed ingredient for livestock.
- Agreement with Agtegra, the 8th largest ag retailer in the United States
Innovative farmer-owned grain and agronomy cooperative serving over 6,300 farmer members across North and South Dakota
Agtegra to distribute Calyxt High Oleic Soybean seeds to the cooperative’s farmer members in South Dakota
Agtegra to provide logistics and transportation services for grain shipments
Storage and handling of Calyxt High Oleic Soybean grain at Agtegra under the Calyxt Soybean Identity Preserved Program
Calyxt and Agtegra will work together to provide field services for proper placement and agronomic advice during the growing season
- 2019 acreage contracting kicked off to a strong start, as of March 11, we have contracted over 48,000 acres for the 2019 growing season, more than double our total contracted acreage in 2018. These contracts are with over 130 growers. Our grower retention rate is over 70 percent.
- Customer engagement continues with ongoing negotiations with multiple potential customers for spot purchase or annual supply agreements. One commercial negotiation in the foodservice channel concluded and resulted in our first purchase order.
Product Candidate Pipeline
- Completion of inaugural harvest of High Fiber Wheat product candidate. Our High Fiber Wheat product is the sixth Calyxt product that has been deemed non-regulated by the U.S. Department of Agriculture (USDA). It recently transitioned from Phase I to Phase II in our development process and is on track for commercialization as early as 2022.
- Additional varieties of our High Oleic Soybean are in Phase III of our development process. We expect these will expand our growing zones and be commercialized in 2020 and 2021.
- Appointment of new CFO, Bill Koschak. Mr. Koschak brings nearly 28 years of corporate, finance and accounting leadership to Calyxt, having spent most of the last ten years as an operating or corporate CFO. Most recently, Mr. Koschak was Vice President, Finance for the Brain Therapies business unit of Medtronic (NYSE: MDT). Prior to Medtronic, Mr. Koschak held executive positions at Young America Holdings, where he was CFO, General Mills (NYSE:GIS), and KPMG LLP. For the majority of his 10 years with General Mills, he was Vice President, Finance for the Convenience Stores & Foodservice segment and Vice President, Financial Reporting.
- Appointment of new General Counsel, Debra Frimerman. Ms. Frimerman brings agriculture and food industry legal expertise to Calyxt. Previously, Ms. Frimerman was Associate General Counsel for Syngenta North America, as well as acting general counsel for Syngenta Seeds, LLC. Through her seven years at Syngenta, she provided counsel for executive leadership teams and contributed to the closing of numerous global transactions; launching new products into new markets; and developing regulatory, compliance and corporate policies. Prior to her role at Syngenta, Ms. Frimerman practiced law at Stoel Rives LLP and Lindquist & Vennum PLLP (now Ballard Spahr LLP).
- Addition to the Board of Directors, Kim Nelson. Nelson is the Executive Vice President and Chief Financial Officer at SPS Commerce. In her current role, she has led SPS Commerce to a successful IPO, navigated the company’s growth through creation of its M&A program and continues to oversee their financial systems, controls and models to ensure that its financial position is flourishing. Prior thereto, Ms. Nelson was a Finance Director for Amazon.com in a number of practice areas such as Corporate Planning and Analysis, Investor Relations and Technology. Ms. Nelson joined Calyxt’s board of directors as of January 23, 2019.
Cash, cash equivalents and restricted cash were $95.3 million at December 31, 2018. We intend to continue to judiciously manage the use of cash and expect to have sufficient cash to fund the business into 2021.
For the three months ended December 31, 2018, we incurred losses from operations of $8.6 million and used net cash in operating activities of $6.7 million.
For the year ended December 31, 2018, we incurred losses from operations of $28.1 million and used net cash in operating activities of $20.3 million.
Our cash spend for 2019 will be focused in these areas:
- Supporting our product pipeline, including future trait development for soybeans and high fiber wheat, and continuing to build our strong intellectual property portfolio;
- Launching our High Oleic Soybean products including our CalynoTM oil and High Oleic Soybean meal, which includes spending for seed production, seed sales and agronomic support; grain procurement, storage, logistics, crushing, and refining; and commercial support; and
- Strengthening our general and administration support, including hiring talented personnel, strengthening our IT systems, maintaining public company reporting and compliance, refining internal controls and maintaining our intellectual property.
We anticipate that our operating cash spend will be approximately $3.0 million per month on average in 2019.
(In Thousands, Except Par Value and Share Amounts)
|Cash and cash equivalents||$ 93,794||$ 56,664|
|Due from related parties||46||167|
|Prepaid expenses and other current assets||1,301||626|
|Total current assets||95,522||57,457|
|Non-current restricted cash||1,113||–|
|Land, buildings, and equipment||21,850||14,353|
|Other non-current assets||306||357|
|Total assets||$ 118,791||$ 72,167|
|Liabilities and stockholders’ equity|
|Accounts payable||$ 818||$ 1,023|
|Accrued compensation and benefits||1,305||945|
|Due to related parties||1,905||1,350|
|Current portion of financing lease obligations||258||–|
|Other current liabilities||711||487|
|Total current liabilities||7,004||4,254|
|Financing lease obligations||18,227||10,148|
|Other non-current liabilities||163||289|
|Common stock, $0.0001 par value; 275,000,000 shares authorized; 32,664,429 shares issued and 32,648,893 shares outstanding as of December 31, 2018, and 27,718,780 shares issued and outstanding as of December 31, 2017||3||3|
|Additional paid-in capital||176,069||112,021|
|Common stock in treasury, at cost, shares of 15,536 as of December 31, 2018||(230)||–|
|Total stockholders’ equity||93,397||57,476|
|Total liabilities and stockholders’ equity||$ 118,791||$ 72,167|
STATEMENTS OF OPERATIONS
(In Thousands Except Shares and Per Share Amounts)
|Year Ended December 31,
|Revenue||$ 236||$ 508||$ 399|
|Cost of revenue||–||–||200|
|Research and development||9,846||11,556||5,638|
|Selling, general and administrative||18,505||14,741||6,670|
|Total operating expenses||28,351||26,297||12,508|
|Loss from operations||(28,115)||(25,789)||(12,109)|
|Foreign currency transaction (loss) gain||(46)||(190)||28|
|Loss before income taxes||(27,897)||(25,980)||(12,086 )|
|Net loss||$ (27,897)||$ (25,980)||$ (12,086)|
|Basic and diluted loss per share||$ (0.91)||$ (1.12)||$ (0.62)|
|Weighted average shares outstanding – basic and diluted||30,683,421||23,153,661||19,600,000|
STATEMENTS OF CASH FLOWS
|Year Ended December 31,
|Net loss||$ (27,897)||$ (25,980)||$ (12,086)|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Loss on disposal of land, buildings, and equipment||23||–||–|
|Unrealized foreign exchange gain (loss)||(12)||(34)||–|
|Changes in operating assets and liabilities:|
|Trade accounts receivable||–||110||107|
|Due to/from related parties||676||(448)||1,702|
|Prepaid expenses and other assets||(675)||(537)||(387)|
|Accrued compensation and benefits||360||613||88|
|Other accrued liabilities||442||97||(144)|
|Net cash used by operating activities||(20,252)||(12,785)||(9,237)|
|Purchases of land, buildings and equipment||(1,847)||(779)||(10,424)|
|Net cash used by investing activities||(1,797)||(779)||(10,424)|
|Proceeds from issuance of common stock||57,706||61,292||–|
|Costs incurred related to the issuance of common stock||(665)||(3,312)||–|
|Advances from Cellectis||–||3,000||–|
|Repayment of advances from Cellectis||–||(3,000)||–|
|Proceeds from the exercise of stock options||2,622||265||–|
|Purchases of common stock||(230)||–||–|
|Proceeds from sale and leaseback of land, buildings, and equipment||1,240||6,957||–|
|Net cash provided by financing activities||60,673||65,202||–|
|Net increase in cash, cash equivalents and restricted cash||38,624||51,638||(19,661)|
|Cash, cash equivalents and restricted cash – beginning of period||56,664||5,026||24,687|
|Cash, cash equivalents and restricted cash – end of period||$ 95,288||$ 56,664||$ 5,026|