Business Overview and History
Precigen, Inc. (PGEN) is a dedicated discovery and clinical-stage biopharmaceutical company advancing the next generation of gene and cell therapies with the overarching goal of improving outcomes for patients with significant unmet medical needs. The company's proprietary technology platforms provide a strong foundation to realize the core promise of precision medicine by supporting efforts to construct powerful gene programs, deliver these programs through diverse modalities, and control gene expression to drive safety and efficacy.
Precigen was founded in 2013 and is headquartered in Germantown, Maryland. The company has focused on leveraging its proprietary technology platforms to develop product candidates targeting urgent and intractable diseases in core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. In its early years, Precigen concentrated on building out its technology platforms, including the UltraCAR-T therapeutics platform and the AdenoVerse immunotherapy platform.
The company established proprietary manufacturing cell lines and production methodologies from its AdenoVerse immunotherapy platform, which it believes are scalable for commercial supply. Through its UltraCAR-T therapeutics platform, Precigen developed the ability to precision-engineer UltraCAR-T cells to produce a homogeneous cell product.
Throughout its history, Precigen has faced various challenges, including the need to raise additional capital to fund its research and development efforts. In 2018, the company completed a registered underwritten public offering of $200 million aggregate principal amount of convertible notes. However, the company later had to repurchase all remaining outstanding convertible notes at par plus accrued interest in 2023.
Precigen has also navigated legal matters, including several shareholder class action lawsuits filed in 2020 related to disclosures about one of its programs. The company ultimately resolved the claims asserted in the securities class action lawsuit in 2023, although navigating these legal issues required significant time and resources.
Precigen's core technology platforms include the UltraCAR-T platform for developing next-generation autologous CAR-T therapies, the AdenoVerse immunotherapy platform leveraging proprietary adenoviral vectors, and the ActoBiotics platform for microbe-based biopharmaceuticals.
Precigen's pipeline features several clinical-stage programs, including PRGN-2012, an off-the-shelf AdenoVerse immunotherapy for recurrent respiratory papillomatosis (RRP), and PRGN-3006, PRGN-3005, and PRGN-3007, which are investigational UltraCAR-T therapies targeting various hematological and solid tumor indications. The company's Exemplar subsidiary also develops Yucatan miniature swine models for preclinical research.
Financial Overview
Precigen's financial performance has been characterized by consistent net losses as the company has focused on advancing its pipeline of innovative therapies. For the full year 2023, the company reported total revenue of $6.22 million and a net loss of $95.90 million. The company's cash, cash equivalents, and short-term investments totaled $62.85 million as of December 31, 2023.
During the first half of 2024, Precigen reported total revenue of $2.73 million and a net loss of $106.51 million. As of June 30, 2024, the company had $28.63 million in cash, cash equivalents, and short-term investments. The decline in the company's cash position reflects the significant investments required to advance its pipeline, including the preparation for a potential biologics license application (BLA) submission for PRGN-2012.
In the third quarter of 2024, Precigen's revenue further decreased to $953,000, representing a 30.9% year-over-year decline. This decrease was primarily attributed to lower product and service revenues in the Exemplar segment. The company reported a quarterly net loss of $23.98 million for Q3 2024.
Liquidity
Precigen's financial ratios, such as the current ratio of 1.63 and the quick ratio of 1.63 as of June 30, 2024, indicate a solid liquidity position, although the company's high leverage, with a debt-to-equity ratio of 0.10, and ongoing losses raise concerns about its solvency and the need for additional capital to fund operations. The company's Exemplar subsidiary has a $5.0 million revolving line of credit that remained undrawn as of September 30, 2024, providing additional financial flexibility.
Key Developments and Milestones
In June 2024, Precigen announced groundbreaking pivotal study data for its PRGN-2012 gene therapy at the American Society of Clinical Oncology (ASCO) annual meeting. The data showed that more than 50% of RRP patients achieved a complete response, and more than 85% of patients had a decrease in surgical interventions in the year after PRGN-2012 treatment compared to the prior year.
Following this positive data, Precigen initiated a rolling BLA submission for PRGN-2012 under an accelerated approval pathway in the second half of 2024. The company also strengthened its commercial leadership by appointing Phil Tennant as Chief Commercial Officer to spearhead the potential launch of PRGN-2012, which could become the first FDA-approved therapy for the treatment of adults with RRP, a rare and devastating chronic disease.
In August 2024, Precigen announced a strategic reprioritization of its pipeline to focus on the advancement of PRGN-2012. This decision led to the suspension of enrollment in several of the company's UltraCAR-T programs, including PRGN-3005 and PRGN-3007, as well as the shutdown of its ActoBio subsidiary. These actions were aimed at streamlining the company's resources and extending its cash runway to support the commercialization efforts for PRGN-2012.
As part of this strategic shift, Precigen completed the shutdown of its ActoBio subsidiary operations, including the elimination of all ActoBio personnel. The company recorded non-cash impairment charges of $34.5 million related to the write-down of goodwill, property and equipment, and right-of-use assets of ActoBio. Additionally, charges related to employee severance and termination benefits totaled $2.1 million. Precigen is now exploring potential transactions for ActoBio's portfolio of intellectual property.
Biopharmaceuticals Segment
Precigen's Biopharmaceuticals segment is the core focus of the company's operations, leveraging its proprietary AdenoVerse immunotherapy and UltraCAR-T therapeutics platforms. The AdenoVerse platform utilizes a library of proprietary adenovectors for efficient gene delivery, while the UltraCAR-T platform enables the precision engineering of T cells with enhanced therapeutic potential.
PRGN-2012, the company's lead program for RRP, is built on the AdenoVerse platform and has shown promising results in clinical trials. Precigen plans to submit a BLA under an accelerated approval pathway in the fourth quarter of 2024. Another key program, PRGN-2009, targets HPV-positive solid tumors and is currently in Phase 2 clinical trials in collaboration with the National Cancer Institute.
In the third quarter of 2024, the Biopharmaceuticals segment recorded a Segment Adjusted EBITDA loss of $19.23 million, an increase from the prior year. This increase was primarily due to costs related to workforce reduction, executive departure, higher fees for the PRGN-2012 confirmatory clinical trial, and professional fees for the anticipated BLA submission. Capital expenditures also increased for the build-out of Precigen's manufacturing facility for PRGN-2012.
Exemplar Segment
Precigen's Exemplar segment, operated through its wholly-owned subsidiary Exemplar Genetics LLC, focuses on developing Yucatan MiniSwine research models and services for healthcare research applications. In the third quarter of 2024, the Exemplar segment generated $953,000 in revenue, a decrease from the prior year due to lower demand from existing customers. Segment Adjusted EBITDA for Exemplar was $159,000, also lower than the previous year, though partially offset by cost reduction initiatives.
Risks and Challenges
Precigen faces several risks and challenges common to the biopharmaceutical industry, including the inherent uncertainty of clinical development, regulatory approval processes, and commercialization of its product candidates. The company's heavy reliance on a limited number of pipeline programs, particularly PRGN-2012, also exposes it to significant execution risk.
Furthermore, Precigen's ongoing operating losses and the need for additional capital to fund its operations raise concerns about its long-term viability. The company's ability to successfully navigate these challenges and execute on its strategic priorities will be crucial in determining its future success.
Outlook and Conclusion
Precigen's focus on its lead program, PRGN-2012, and the potential for this therapy to become the first FDA-approved treatment for RRP, represents a significant opportunity for the company. The positive pivotal data and the company's alignment with the FDA on the BLA submission path are encouraging signs.
The company is intensifying its pre-commercialization efforts for PRGN-2012, including supporting the submission of a rolling BLA under an accelerated approval pathway anticipated in Q4 2024, conducting a confirmatory clinical trial, and manufacturing commercial product. Precigen is also accelerating commercial readiness efforts for a potential launch in 2025.
However, Precigen's reliance on a single pipeline asset, its ongoing financial challenges, and the inherent risks associated with clinical development and commercialization in the biopharmaceutical industry temper the optimism. The company's ability to successfully navigate these obstacles and execute on its strategic priorities will be critical in determining its long-term prospects.
The strategic reprioritization of Precigen's pipeline and the streamlining of its operations demonstrate a focused approach to resource allocation. While this may improve the company's chances of success with PRGN-2012, it also increases the importance of this program's success for the company's overall future.
As Precigen continues to advance its lead programs and prepare for potential commercialization, close monitoring of its financial position, clinical progress, and strategic execution will be essential in assessing its future prospects. The company's ability to capitalize on the potential of its innovative technology platforms and deliver meaningful improvements in patient outcomes will be key to its future success in the competitive and rapidly evolving field of gene and cell therapies.