Calyxt Reports Financial Results for Second Quarter and Half-Year 2018
As of June 30th, successfully contracted over 17,000 high-oleic / no trans-fat soybean acres with 78 growers.
~20 small to large food company customers engaged across food services and food ingredient applications
Calyxt’s high-fiber wheat & improved quality alfalfa transitioned to phase II
Advanced two product candidates from ‘discovery’ to ‘phase 1’ development
Completed move to new concept-to-fork facility in Roseville, Minn.
Successful follow-on offering increases cash position to over $105M
Minneapolis-St. Paul, Minn., August 1, 2018 – Calyxt, Inc. (NASDAQ: CLXT), a consumer-centric, food- and agriculture-focused company, today announced its results for the three-month period and the first half period ended June 30, 2018.
The first half of 2018 saw significant growth of the Company’s lead product candidate, a non-GMO, high-oleic soybean variety, designed to yield soybean oil with over 80% oleic oil content that is completely trans fat free. With over 17,000 acres planted, Calyxt surpassed its initial goal of 12,000 acres, with over 90% of existing farmers re-planting. With the commercial launch of this product in the US later this year, Calyxt is well positioned within the industry, following the FDA ban on all trans fats in the U.S. going into effect in 2018. Calyxt also welcomes the recently unveiled World Health Organization’s plan to remove all trans fats worldwide from the food chain by 2023.
The recent move into its new state-of-the-art, farm-to-kitchen facility enables Calyxt to accelerate and expand its product pipeline, with a continued focus on a variety of pressing health- and agronomic needs.
High-Oleic Soybean Update:
- We successfully completed planting over 17,000 acres with 78 growers. In spite of a wet spring this year, some farmers were still able to plant early. Certain growing regions in our grower network have seen more than average rainfall this year.
- Over 90% of existing farmers signed up to re-plant Calyxt high-oleic soybeans this year. Furthermore, on average, repeat farmers doubled their Calyxt acres year over year.
- Our field agronomists are providing in-season technical support to farmers growing Calyxt high-oleic soybean variety so that growers have a positive experience and optimize their farming operations for Calyxt variety.
- Overall crop quality looks good to excellent.
- ~20 small to large food company customers engaged across food services and food ingredient applications which includes frying (such as chips and French fries), frying meats, both salty and healthy snacks, baking, nut butter and meat replacement products.
- Calyxt’s high-fiber wheat and improved quality alfalfa product candidates have advanced to phase II, moving into field-testing.
- Calyxt has used its proprietary gene editing technology, TALEN®, to produce a small, precise deletion in the wheat genome, an outcome similar to what occurs in nature, to develop its high-fiber wheat product. Calyxt’s high-fiber white flour contains more than three times the amount of dietary fiber than in commodity white flour. A single serving of Calyxt’s high-fiber wheat flour could provide more than 100 percent of the recommended daily value.
- Calyxt’s improved quality alfalfa targets a reduction in the lignin content of the plant, thus potentially improving its digestibility for animal nutrition. This allows for improved fiber digestibility for the animal, resulting in better animal health, increased milk production and weight gain for beef cattle, as well as more sustainable animal farming
- Calyxt announced the successful transfer of improved quality alfalfa seed and plants developed by Calyxt at its research and development facility to S&W Seeds for field evaluation and testing. The collaboration between Calyxt and S&W is focused on providing enhanced traits in alfalfa that can drive improved productivity, while decreasing input costs to meet the growing global demand for improved quality alfalfa seeds.
Regulatory & IP:
- Bayer CropScience agreed to settle a lawsuit brought by Calyxt in the Delaware Chancery Court. Bayer will destroy any technology, related product and confidential information covered by a 2013 License Agreement, and will permanently abandon patent applications that are based on or include data related to the covered technology. This settlement confirms Bayer and its subsidiaries have no access to Calyxt technology or intellectual property.
- Calyxt’s high-fiber wheat and improved quality alfalfa products have been declared non-regulated articles in March 2018 and October 2017, respectively, under the Biotechnology Regulatory Services’ “Am I Regulated?” process of the Animal and Plant Health Inspection Service (APHIS), an agency of the U.S. Department of Agriculture (USDA). These products are two of a total of seven Calyxt products that have been deemed non-regulated by the USDA, including powdery mildew-resistant wheat, high-oleic soybeans, high-oleic / low-linolenic soybeans, cold storable potatoes and reduced browning potatoes.
Completion of New Facility:
- We completed our move to our new facility in June and decommissioning of our old facility was completed.
- Our new facility will provide a framework for automation and super-charging our capabilities to make products in the near future, as well as food company ingredient support capabilities as we launch our high-oleic soybean oil.
- On May 22, 2018, Calyxt completed an upsized follow-on offering of its common stock for $60.9M in gross proceeds.
- Calyxt sold 4,057,500 shares of common stock at $15.00 per share, including 457,500 shares pursuant to the exercise in full, of the underwriters’ option to purchase additional shares and 550,000 shares purchased by Cellectis at $15.00 per share.
- With a cash balance of $105.6 million at June 30, 2018, we anticipate to have sufficient cash to fund the business until late 2020.
Cash and cash equivalents were $105.6 million at June 30, 2018. We intend to continue to judiciously manage the use of cash and expect to have sufficient cash to fund the business until late 2020. Cellectis remains our majority shareholder with 70.24% of our common stock as of June 30, 2018.
Pursuant to the follow-on offering, in aggregate, the Company received net proceeds of approximately $57.0 million, after deducting underwriting discounts and commissions of $3.2 million and offering expenses totaling approximately $0.7 million. As part of the follow-on offering, Cellectis purchased 550,000 shares of common stock for a value of $8.3 million, the proceeds of which are included in the net proceeds of approximately $57.0 million.
For the three months ended June 30, 2018, we incurred losses from operations of $7.6 million and used net cash in operating activities of $2.3 million. For the six months ended June 30, 2018, we incurred losses from operations of $11.9 million and used net cash in operating activities of $8.8 million. The first semester cash spend includes spending on high-oleic soybean seed production to support our Spring 2018 planting of high-oleic soybeans.
Looking forward for the rest of 2018, we anticipate that our operating cash spend will be in the range of $2.0 to $2.2 million per month excluding working capital for grain purchases in the later part of 2018. Cash will be used to expand our R&D team to advance key products in the portfolio and continue to build our commercial capabilities.