Calyxt reports financial results for third quarter and first nine months of 2017
Nov. 14, 2017
- Harvested sufficient soybean seeds for commercial launch in 2018
- Customer discussions initiated and positive
- Breeding program advancing and increasing the number of varieties
- Advanced herbicide tolerant wheat and improved oil composition canola
- Calyxt’s powdery mildew-resistant wheat validated fungal resistance
- Completed IPO with $64M in gross proceeds
- Sale-lease back agreement adds adtl. $7M to balance sheet
Calyxt, Inc., a consumer-centric, food- and agriculture-focused company, today announced its results for the three-month period ended September 30, 2017 and for the nine-month period ended September 30, 2017.
“So much progress has been made in 2017 to date,” mentioned Federico Tripodi, CEO Calyxt. “On the high oleic soybean program, we have received positive feedback from potential customers and successfully harvested enough soybean seeds for our commercial launch in 2018. On the development side, we have advanced improved oil composition canola and herbicide tolerant wheat into Phase 1 development. This marks a total of over 19 products in the pipeline since the company’s inception seven years ago. Our powdery mildew-resistant wheat – a farmer trait designed to reduce the amount of fungicides sprayed in the wheat crop – has been harvested in the field, producing in excess of 300 Lbs. It is hard to believe we became a publicly traded company only four months ago.”
On Track for the Commercialization of High Oleic Soybeans and Positive Feedback from Potential Customers
Calyxt has produced sufficient quantities of 80% high oleic oil to be used for pre-commercial product development activities. Early discussions have started with potential customers expressing interest in value-added solutions.
The Company completed harvest and produced more high-quality seeds than needed to meet its 2018 launch plans.
Calyxt continues to make accelerated progress on second generation products. Years ago, we started a small breeding program for high oleic soybean varieties. Calyxt’s class of 2021 high oleic soybean varieties are being advanced to winter nurseries. Additionally, Calyxt has accessed 60 non-GMO crop varieties currently under screening for accelerated conversion to high oleic, using our gene-editing technologies.
Improved Oil Composition Canola and Herbicide-Tolerant Wheat Product Candidates advance to Phase 1
The Company’s herbicide-tolerant wheat, its third wheat product candidate, and improved oil composition canola, its first canola product candidate, have advanced to Phase 1. The development of this first canola product expands the Company’s improved oils franchise, in direct line with its mission to create healthier specialty ingredients and become a preferred partner of the food industry. This latest milestone is reflective of Calyxt’s rapidly advancing product pipeline, powered by the Company’s proprietary gene-editing technology TALEN®, as well as its deep expertise and innovation in the gene-editing space.
Calyxt’s Powdery Mildew-Resistant Wheat Validated Fungal Resistance
The Company has completed the inaugural harvest of its powdery mildew-resistant wheat variety, its first wheat crop, producing in excess of 300 Lbs. The powdery mildew-resistant wheat is an advantageous farmer trait designed to reduce the amount of fungicides sprayed in the wheat crop. This latest milestone is an important step in the Phase 2 process of the wheat variety, as Calyxt has confirmed powdery mildew-resistance under controlled fungal infestation conditions for two wheat varieties already created: one spring and one winter. Calyxt will now confirm field-level tolerance and test against additional powdery mildew biotypes.
Regulatory Environment for Gene-edited Crops
The USDA has recently designated Calyxt’s alfalfa product, developed in collaboration with S&W Seed Company (NASDAQ:SANW), as a non-regulated article under “Am I Regulated?” Process by Biotechnology Regulatory Services of the Animal and Plant Health Inspection Service (APHIS), an agency of the USDA. This underlines the trend by the USDA to declare gene-edited crops non-regulated. With this designation by the USDA, the improved quality alfalfa is the sixth Calyxt product candidate, developed using Calyxt’s proprietary gene-editing technology TALEN®, to be confirmed as a non-regulated article by the USDA, alongside our high oleic soybean, high oleic / low linolenic soybean, powdery mildew-resistant wheat, cold storable potatoes and reduced browning potatoes. We continue to see a positive trend towards regulatory bodies in the U.S. and globally. We also received approval in Chile and Argentina for our first soybean submissions.
Calyxt Executes Sale-Leaseback Agreement, Adding $7m to its Balance Sheet and Breaks Ground on New Concept-to-Fork Facility in Roseville, Minn.
Calyxt consummated a sale-leaseback transaction concerning its new headquarters in Roseville, Minn, for a term of 20 years, with options to extend the term. Pursuant to the previously disclosed purchase agreement, the Company has received approximately $7 million in connection with the sale of the Property.
The 11-acre site will house Calyxt’s nearly 40,000-square-foot Company headquarters, state-of-the-art research labs and test kitchen. The new construction will be adjacent to the recently completed 11,000+square-foot greenhouses and the existing outdoor demonstration plots.
Calyxt Closes Initial Public Offering with Full Exercise of Over-Allotment Option
In July 2017, Calyxt closed its initial public offering of 8,050,000 shares of its common stock at $8.00 per share, including the exercise in full of the underwriters’ option to purchase 1,050,000 additional shares. Calyxt received $64.4 million in gross proceeds from the offering.
Cash and cash equivalents were $62.5M on September 30, 2017. The IPO that netted $58M after underwriter discounts and fees of approximately $6.4M. Cellectis remains our majority shareholder with 79.8% of the shares. We entered into a sale-leaseback whereby we sold the land and warehouse to a developer who in turn is building the custom facility for us. This arrangement netted us approximately $7M in cash.
In the third quarter, we had an operating cash spend of 1.9M. The R&D spend for the third quarter, increased $5.2M year-over-year as we added people to our R&D team and advanced key products in the portfolio, as described above. With the completion of the IPO, we also recorded a non-cash expense of $4.8M for stock option expenses related to grants in 2014 to 2017.
Sales, General & Administration spend for the third quarter increased $5.2M year-over-year as we built out our management team and incurred a significant non-cash expense year-to-date of $4.5M related to stock options granted since 2014. In total for the third quarter, $9.3M was recorded as a non-cash stock option expense.
We expect cash burn to increase as we hire scientists and built our commercial capabilities. In addition, we are actively looking at in-licensing IP, engaging in regulatory activities, supplementing our knowledge of the food industry and improving our understanding of customer needs. We expect our current cash position to be sufficient to fund operations through mid-2019.