Yield10 Bioscience, Inc. (Nasdaq:YTEN) ("Yield10" or the "Company"), an agricultural bioscience company, reported financial results for the three and six months ended June 30, 2022.
″We are making solid progress operationalizing our commercial plan to launch Camelina as a platform crop to supply low-carbon feedstock oil for the biofuel market and to produce omega-3 nutritional oil and PHA bioplastic longer term,″ said Oliver Peoples, Ph.D., Chief Executive Officer of Yield10 Bioscience. ″Our market development efforts focused on the biofuel feedstock opportunity have positioned us to contract more than 1,000 acres of winter Camelina with growers in the U.S. and Canada. We expect planting to be completed by early October 2022 and harvest of Camelina grain for processing into oil and protein meal is anticipated in second quarter 2023. In addition, our ongoing and planned winter and contra-season Camelina seed production activities are ramping up with the goal of enabling the expansion of grower contracts in 2023 for oil production and off-take to the biofuel market. In the second half of 2022, we will continue our market development efforts building relationships with contract growers and biofuel supply chain participants.
"We have a significant effort underway to deploy novel performance traits as well as established herbicide tolerance and pest resistance traits into our Elite Camelina germplasm. Our spring 2022 field test program includes evaluating herbicide tolerance in more than 30 candidate Camelina lines. In these ongoing field tests, these plants have displayed excellent herbicide tolerance throughout the growing season. Following harvest, we will be evaluating a range of agronomic parameters as well as seed yield obtained in these lines. Based on positive preliminary results, we are planning contra-season seed scale up to accelerate the pace of development and commercialization of the best herbicide tolerant Camelina lines. We believe herbicide tolerant Camelina will be very attractive to growers and enable planting of the crop on large acreage.″
″As 2022 progresses, we continue to focus on market development and seed production activities to enable a significant ramp-up in contracted acres in 2023 and beyond. We will also continue to generate proof points supporting the agronomics and seed yield of our Elite Camelina varieties. We are currently completing the evaluation of seed yield data obtained across several geographies in our recent winter planting. Further, we expect to harvest our 2022 spring field test planting and in the months ahead conduct an evaluation of seed yield and oil content as well as herbicide tolerance and pest resistance to inform future trials and the selection of new Camelina lines for development,″ said Peoples.Recent Accomplishments
Ongoing market development activities: In the second quarter, Yield10 continued market development activities to build visibility for Camelina as a new annual crop targeting the biofuels market and to identify farmers interested in growing Camelina in the winter or spring season.
2022 seed scale up and field test program underway: Yield10 is evaluating candidate Camelina lines for herbicide tolerance to identify lead and back up lines for commercial development and regulatory approval. To date, these Camelina plants have displayed excellent tolerance to over-the-top application of a broadleaf herbicide in the field. Yield10 will be collecting a range of agronomic and seed yield data on these lines and selecting lines for seed multiplication. In addition, a prototype Camelina PHA line is being grown at acre-scale to produce PHA for process development and business development purposes. Yield10 is also evaluating traits C3007 and C3020 as well as identifying candidate Camelina lines resistant to downy mildew, a fungal pathogen.
2021/2022 winter season field testing and seed scale up complete: The harvest of seed from sites in the U.S. and Canada will soon be complete. Yield10 is analyzing seed yield data from the winter field tests.
Omega-3 patent published: Recently, a patent application was published describing significant improvements to the technology for using Camelina as a production platform to make the omega-3 fatty acid EPA for human use as a nutraceutical, pharmaceutical or food additive as well as for making the combination of EPA and DHA for animal feed. This patent application filed by Rothamsted Research in 2021 is expected to extend the patent protection for this technology through 2040. Yield10 is collaborating with Rothamsted on the development of Camelina to sustainably produce omega-3 oils and has an exclusive option to this technology.
Geopolitical Uncertainty and COVID-19 Impact on Operations
The Company has implemented business continuity plans to address the COVID-19 pandemic and minimize disruptions to ongoing operations. In addition, the conflict in Ukraine has resulted in significant uncertainty in the agriculture and commodities markets, and may have a significant impact on the Company’s business and operations. To date, despite the pandemic, Yield10 has been able to move forward with the operational steps required to execute its 2022 spring field trials in Canada and the United States. However, it is possible that any potential future closures of research facilities, should they continue for an extended time, or delays in receiving supplies and materials needed to conduct field trials and research, or economic repercussions of the pandemic or other geopolitical uncertainty, such as the ongoing conflict between Ukraine and Russia, could adversely impact the Company's anticipated time frames for evaluating and/or reporting data from our field trials and other work we plan to accomplish during 2022 and beyond.SECOND QUARTER 2022 FINANCIAL OVERVIEWCash Position
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.
Yield10 ended the second quarter of 2022 with $10.2 million in unrestricted cash and investments; a net decrease of $2.5 million from unrestricted cash and investments of $12.7 million reported as of March 31, 2022. Net cash used by operating activities during the second quarter of 2022 was $2.5 million compared to $2.1 million used in the second quarter of 2021. The Company continues to estimate total net cash usage for the full year ended December 31, 2022 in a range of $12.0 - $12.5 million as it continues its controlled growth to develop proprietary Camelina plant varieties and to support the commercial launch of its Camelina grain products.
Yield10's present capital resources are expected to fund its planned operations into the first quarter of 2023. The Company's ability to continue operations after its current cash resources are exhausted is dependent upon its ability to obtain additional financing, including public or private equity financing, secured or unsecured debt financing, receipt of additional government research grants, as well as licensing or other collaborative arrangements.Operating Results
Grant revenue for the second quarter of 2022 and the second quarter of 2021 were $0.1 million and $0.2 million, respectively. Research and development expenses increased by $0.4 million from $1.7 million during the second quarter of 2021 to $2.0 million in the second quarter of 2022. General and administrative expenses were $1.5 million and $1.6 million for the quarter ended June 30, 2022 and June 30, 2021, respectively, reflecting a decrease of $0.1 million.
Yield10 reported a net loss of $3.4 million for the quarter ended June 30, 2022, or $0.70 per share, as compared to a net loss of $3.1 million, or $0.64 per share, for the quarter ended June 30, 2021. The greater net loss is primarily due to the decrease in grant revenue and the Company's increased operating expenses resulting primarily from the addition of new staff and costs related to pre-commercial seed production.
For the six months ended June 30, 2022, the Company reported a net loss of $6.8 million, or $1.38 per share, compared to a net loss of $5.7 million, or $1.23 per share, during the six months ended June 30, 2021. Year to date grant revenue earned through June 30, 2022 and June 30, 2021 were $0.3 million and $0.4 million, respectively. Research and development expenses were $3.8 million and $3.0 million during the six months ended June 30, 2022 and June 30, 2021, respectively. During those same periods, general and administrative expenses were $3.2 million and $3.0 million.