Yield10 Bioscience announces second quarter 2018 financial results

Yield10 Bioscience, Inc. (Nasdaq:YTEN), a Company developing new technologies to achieve step-change improvements in crop yield to enhance global food security, today reported financial results for the three and six months ended June 30, 2018.

“A key highlight of the second quarter is the completion of planting for our 2018 field tests of C3003,” said Oliver P. Peoples, Ph.D., President and Chief Executive Officer of Yield10 Bioscience. “The results of these field tests will allow us to set the direction and priorities for the next steps in the evaluation and development of C3003 as a potentially valuable new trait to increase seed yield in oilseed crops.”

“In the second quarter, we also made significant progress advancing and expanding our portfolio of novel yield traits in development for boosting oil content in Camelina, canola and specialty soybean crops. We recently began our first field test of CRISPR-Cas9 genome-edited Camelina containing our C3008a trait at a site in the U.S. In addition, we obtained a global research license to CRISPR-Cas9 technology and we executed a worldwide license with University of Missouri for exclusive rights to traits C3007 and C3010, both accessible through CRISPR editing. Our approach is to test new traits alone and in combinations to enable the development of novel CRISPR edited oilseed crops with yields significantly increased over the seed available to commercial growers today.”

“In recent publications and industry conferences, the Yield10 team described our extensive capabilities in the development of new yield traits. Our capabilities are distinguished by our Camelina platform as well as our metabolic engineering models for crops which we are using together in our “GRAIN” technology platform to identify, rapidly screen, and test novel yield traits with application to a broad range of crops.”

“Our focus in the second half of 2018 is to generate key proof points on our yield traits in development, continue to expand our intellectual property portfolio, and to execute on opportunities for licensing and collaboration,” said Dr. Peoples.

Recent Accomplishments

2018 Field Test Program in Progress. In second quarter, Yield10 announced the completion of planting at field test sites in Canada for the evaluation of the novel yield trait gene C3003. Yield10 is testing versions of C3003 in Camelina and canola, and will grow C3003 soybean lines primarily to bulk up seed for field tests planned for 2019. Yield10 is also conducting a study in the U.S. of Camelina lines that have been genome-edited to inactivate the C3008 gene as part of a new multi-gene trait approach to increase seed oil content and to potentially improve oil stability. Yield10 expects to harvest seed in third quarter, and to report results of the field tests beginning in the fourth quarter of 2018.

Signed Non-exclusive Research License to CRISPR-Cas9 Technology. Yield10 signed a non-exclusive research license agreement jointly with the Broad Institute and Pioneer, part of Corteva AgriscienceTM Agriculture Division of DowDuPont, for the use of CRISPR-Cas9 genome-editing technology for crops. The license covers intellectual property consisting of approximately 48 patents and patent applications on CRISPR-Cas9 technology.

Signed Exclusive Global License to C3007 and C3010. In second quarter, Yield10 exercised its option with University of Missouri (MU) to obtain an exclusive worldwide license to C3007 and C3010, two novel gene technologies to boost oil content in commercial oilseed crops. The technologies were developed by Professor of Biochemistry Jay Thelen, Ph.D. and his team at MU. In July, Yield10 appointed Dr. Thelen to its Scientific Advisory Board.

Submitted “Am I regulated?” Letter to USDA-APHIS Covering Genome-edited Camelina. Yield10 recently submitted an “Am I Regulated?” letter to USDA-APHIS describing a triple combination trait stack consisting of the traits C3008a, C3008b and C3009 in Camelina. This multi-trait approach to improve carbon flow in oil biosynthesis pathways is intended to result in increased seed oil content and potentially improved oil stability. If the trait stack is deemed non-regulated by the agency, field testing of the trait stack could begin in the U.S. in 2019.

Published and Presented Research Highlighting Technology Platform and Yield Traits. Yield10 published research describing the development of the Company’s Camelina Platform as a model crop for novel yield trait discovery and presented research at the Plant Biology 2018 conference highlighting two case studies describing the use of modeling carbon metabolism in crops to project crop yield gene targets and outcomes.

SECOND QUARTER 2018 FINANCIAL OVERVIEW

Yield10 Bioscience is managed with an emphasis on cash flow and deploys its financial resources in a disciplined manner to achieve its key strategic objectives. The Company ended the second quarter of 2018 with $9.7 million in unrestricted cash, cash equivalents and short-term investments. The Company’s net cash used in operating activities during both the second quarter of 2018 and the second quarter of 2017 was $1.9 million.

The Company anticipates net cash usage of approximately $9.0 million to $9.5 million during its fiscal year ending December 31, 2018, including final payments of $0.5 million made during the first half of 2018 related to its restructuring that was undertaken during 2016.

For the second quarter ending June 30, 2018, the Company reported a net loss of $2.4 million, or $0.24 per share. The Company reported a net loss of $2.7 million or $0.96 per share, for the second quarter of 2017.

Total government grant revenue for both the second quarter of 2018 and the second quarter of 2017 was $0.3 million. Grant revenue for the second quarter of 2018 was derived primarily from the Company's subcontract with Michigan State University. Approximately $0.1 million of the grant revenue was earned from the Company's grant with the U.S. Department of Energy that is in the process of winding down. Research and development expenses for the three months ending June 30, 2018 and June 30, 2017 were $1.3 million and $1.1 million, respectively. The variance is primarily the result of increased employee compensation and benefits expense, including the hiring of additional research personnel during 2018. General and administrative expenses for the three months ending June 30, 2018 and June 30, 2017 were $1.5 million and $1.9 million, respectively. The $0.4 million decrease is primarily the result of a one-time charge to recognize deferred equity offering costs of $0.6 million during the second quarter of 2017.

For the six months ending June 30, 2018, the Company reported a net loss of $4.7 million, or $0.48 per share, as compared to a net loss of $4.8 million, or $1.69 per share, for the six months ending June 30, 2017.

Total research grant revenue for the six months ending June 30, 2018 was $0.3 million, compared to $0.6 million for the six months ending June 30, 2017. Research and development expenses and general and administrative expenses were $2.3 million and $2.7 million, respectively, for the six months ending June 30, 2018 compared to $2.2 million and $3.1 million, respectively, for the six months ending June 30, 2017.