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Secures up to $50 Million of Funding from Metalmark Capital Partners Expected to Accelerate Rollout of Point-of-Care Services
Reduces operating expenses by 49% to achieve nearly breakeven income from operation for the third quarter of 2022
Orgenesis to Host Conference Call on Friday, November 11, 2022 at 8:00 AM Eastern Time
GERMANTOWN, Md., Nov. 10, 2022 (GLOBE NEWSWIRE) -- Orgenesis Inc. (NASDAQ: ORGS) (“Orgenesis” or the “Company”), a global biotech company working to unlock the full potential of cell and gene therapies (CGT), today provided a business update for third quarter ending September 30, 2022.
Vered Caplan, CEO of Orgenesis, said, “We have made significant progress in advancing the rollout of our POCare platform. As recently announced, we secured up to $50 million in funding from Metalmark Capital Partners, a premier private equity firm, into a recently formed point of care services subsidiary, Morgenesis LLC. This transaction was highly strategic for the Company and we believe that it provides further validation of our business model. Notably, Metalmark valued this one subsidiary alone at a pre-money valuation of $125 million for its investment, which represents a significant premium to the market cap of our entire company. Moreover, this investment structure allowed us to fund the POCare services business, while minimizing dilution given the current state of the public markets.”
“We are highly encouraged by industry feedback related our POCare Platform. There is a shortage of production capacity in the cell and gene therapy space, and we believe that our process is far more scalable and cost-effective than the traditional centralized CDMO (Contract Development and Manufacturing Organization) model. Moreover, our POCare platform addresses many of the key challenges facing the industry, including capacity constraints and excessive costs. We believe our model is uniquely positioned to address these challenges through a highly innovative decentralized model, which lowers costs, streamlines logistics, and expands capacity.”
“While we are pleased to have achieved revenue of approximately $8.0 million for the third quarter, we were limited by capital constraints. With Metalmark’s support, we look forward to capitalizing on the broad demand and accelerating the deployment of our Orgenesis Mobile Processing Units and Labs (OMPULs) to potentially bring lifesaving treatments to patients across North America, Europe, Asia, and the Middle East.”
“It is important to note that separate from Morgenesis, we have a deep therapeutics pipeline in various stages of development. These programs span immuno-oncology, anti-viral, metabolic/auto-immune diseases, and tissue regeneration, and we have established co-development partnerships to help pay for their development. As these programs progress, we expect to increasingly benefit from revenue sharing and royalty agreements with our partners as we seek to advance the respective therapies through commercialization. Through these partnerships and prudent cash management, we have dramatically reduced our SG&A expenses by 49% and our net loss by 86%. As a result, we achieved nearly breakeven income from operations for the third quarter of 2022. Overall, we have built a scalable, high margin, recurring revenue business model.”
The complete financial results for the third quarter of 2022 are available on the Company’s website in the Company’s Form 10-Q, which has been filed with the Securities and Exchange Commission.
Conference Call
The Company will host a conference call on Friday, November 11, 2022 at 8:00 AM ET to discuss the company’s corporate progress and other developments.
The conference call will be available via telephone by dialing toll free 888-506-0062 for U.S. callers or +1 973-528-0011 for international callers and using entry code 849908. A webcast of the call may be accessed at https://www.webcaster4.com/Webcast/Page/2585/47112 or on the Company’s Investor Events section of the website here.
A webcast replay will be available on the Company’s Investor Events section of the website ( https://ir.orgenesis.com/events#/ ) through Saturday, November 11, 2023. A telephone replay of the call will be available approximately one hour following the call, through Friday, November 25, 2022 and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331for international callers and entering conference ID: 47112.
About Orgenesis
Orgenesis is a global biotech company working to unlock the full potential of cell and gene therapies (CGTs) in an affordable and accessible format at the point of care. The Orgenesis POCare Platform is comprised of three enabling components: a pipeline of licensed POCare Therapeutics that are processed and produced in closed, automated POCare Technology systems across a collaborative POCare Network. Orgenesis identifies promising new therapies and leverages its POCare Platform to provide a rapid, globally harmonized pathway for these therapies to reach and treat large numbers of patients at lowered costs through efficient, scalable, and decentralized production. The POCare Network brings together patients, doctors, industry partners, research institutes and hospitals worldwide to achieve harmonized, regulated clinical development and production of the therapies. www.orgenesis.com.
Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These forward-looking statements involve substantial uncertainties and risks and are based upon our current expectations, estimates and projections and reflect our beliefs and assumptions based upon information available to us at the date of this release. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including, but not limited to, our reliance on, and our ability to grow, our point-of-care cell therapy platform and OMPUL business, our ability to achieve and maintain overall profitability, our ability to manage our research and development programs that are based on novel technologies, our ability to control key elements relating to the development and commercialization of therapeutic product candidates with third parties, the timing of completion of clinical trials and studies, the availability of additional data, outcomes of clinical trials of our product candidates, the potential uses and benefits of our product candidates, our ability to manage potential disruptions as a result of the COVID-19 pandemic, the sufficiency of working capital to realize our business plans and our ability to raise additional capital, the development of our POCare strategy, our trans differentiation technology as therapeutic treatment for diabetes, the technology behind our in-licensed ATMPs not functioning as expected, our ability to further our CGT development projects, either directly or through our JV partner agreements, and to fulfill our obligations under such agreements, our license agreements with other institutions, our ability to retain key employees, our competitors developing better or cheaper alternatives to our products, risks relating to legal proceedings against us and the risks and uncertainties discussed under the heading "RISK FACTORS" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason.
IR contact for Orgenesis:
Crescendo Communications, LLC
Tel: 212-671-1021
Orgs@crescendo-ir.com
Communications contact for Orgenesis
IB Communications
Neil Hunter / Michelle Boxall
Tel +44 (0)20 8943 4685
neil@ibcomms.agency / michelle@ibcomms.agency
(tables follow)
ORGENESIS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
(Unaudited)
| As of | |||||||
| September 30, 2022 | December 31, 2021 | ||||||
| Assets | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 3,015 | $ | 5,473 | |||
| Restricted cash | 1,452 | 501 | |||||
| Accounts receivable, net * | 23,744 | 15,245 | |||||
| Prepaid expenses and other receivables | 899 | 1,188 | |||||
| Convertible loan receivable-related party | 2,651 | 3,064 | |||||
| Grants receivable | - | 169 | |||||
| Inventory | 95 | 118 | |||||
| Total current assets | 31,856 | 25,758 | |||||
| NON-CURRENT ASSETS: | |||||||
| Deposits | $ | 309 | $ | 363 | |||
| Investments and loans to associates | 1,739 | 584 | |||||
| Loans receivable | - | 821 | |||||
| Property, plant and equipment, net | 16,526 | 10,271 | |||||
| Intangible assets, net | 10,720 | 11,821 | |||||
| Operating lease right-of-use assets | 1,040 | 1,015 | |||||
| Goodwill | 7,764 | 8,403 | |||||
| Other assets | 736 | 805 | |||||
| Total non-current assets | 38,834 | 34,083 | |||||
| TOTAL ASSETS | $ | 70,690 | $ | 59,841 | |||
| *Including related party in the amount of $2,186 thousand and $1,972 thousand as of September 30, 2022 and as of December 31, 2021, respectively. | |||||||
ORGENESIS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Cont’d)
(U.S. Dollars in thousands)
(Unaudited)
| As of | |||||||
| September 30, 2022 | December 31, 2021 | ||||||
| Liabilities and Equity | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 4,538 | $ | 5,238 | |||
| Accrued expenses and other payables | 3,305 | 485 | |||||
| Income tax payable | 37 | 54 | |||||
| Employees and related payables | 1,835 | 1,907 | |||||
| Advance payments on account of grant | 1,392 | 1,238 | |||||
| Contract liabilities | 70 | 59 | |||||
| Current maturities of finance leases | 16 | 18 | |||||
| Current maturities of operating leases | 487 | 481 | |||||
| Current maturities of convertible loans | 22,488 | 5,885 | |||||
| Total current liabilities | 34,168 | 15,365 | |||||
| LONG-TERM LIABILITIES: | |||||||
| Non-current operating leases | $ | 522 | $ | 561 | |||
| Convertible loans | 5,162 | 4,854 | |||||
| Retirement benefits obligation | 123 | 101 | |||||
| Non-current finance leases | 24 | 41 | |||||
| Advance payments on account of grant | 201 | - | |||||
| Other long-term liabilities | 240 | 288 | |||||
| Total long-term liabilities | 6,272 | 5,845 | |||||
| TOTAL LIABILITIES | 40,440 | 21,210 | |||||
| EQUITY: | |||||||
| Common stock of $0.0001 par value: Authorized at September 30, 2022 and December 31, 2021: 145,833,334 shares; Issued at September 30, 2022 and December 31, 2021: 25,832,322 and 24,567,366 shares, respectively; Outstanding at September 30, 2022 and December 31, 2021: 25,545,799 and 24,280,799 shares, respectively | 3 | 3 | |||||
| Additional paid-in capital | 149,465 | 145,916 | |||||
| Receipts on account of shares and warrants to be allotted | - | - | |||||
| Accumulated other comprehensive income (loss) | (826 | ) | 207 | ||||
| Treasury stock 286,567 shares as of September 30, 2022 and December 31, 2021 | (1,266 | ) | (1,266 | ) | |||
| Accumulated deficit | (117,164 | ) | (106,372 | ) | |||
| Equity attributable to Orgenesis Inc. | 30,212 | 38,488 | |||||
| Non-controlling interest | 38 | 143 | |||||
| Total equity | 30,250 | 38,631 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 70,690 | $ | 59,841 | |||
ORGENESIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(U.S. Dollars in thousands, except share and loss per share amounts)
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||
| Revenues | $ | 7,841 | $ | 7,606 | $ | 21,117 | $ | 25,656 | |||||||
| Revenues from related party | 147 | 1,070 | 1,284 | 2,954 | |||||||||||
| Total revenues | 7,988 | 8,676 | 22,401 | 28,610 | |||||||||||
| Cost of revenues, development services and research and development expenses | 4,666 | 10,007 | 20,932 | 25,861 | |||||||||||
| Amortization of intangible assets | 225 | 236 | 686 | 713 | |||||||||||
| Selling, general and administrative expenses | 3,104 | 6,092 | 8,758 | 11,961 | |||||||||||
| Operating loss | 7 | 7,659 | 7,975 | 9,925 | |||||||||||
| Other (loss) income, net | 2 | (3 | ) | (6 | ) | (31 | ) | ||||||||
| Loss from extinguishment in connection with convertible loan | - | 1,865 | - | 1,865 | |||||||||||
| Financial expenses, net | 1,100 | 545 | 602 | 639 | |||||||||||
| Share in net loss of associated companies | 274 | 18 | 1,189 | 33 | |||||||||||
| Loss before income taxes | 1,383 | 10,084 | 10,860 | 12,976 | |||||||||||
| Tax expenses (income) | 25 | 67 | 37 | 65 | |||||||||||
| Net loss | 1,408 | 10,151 | 10,897 | 13,041 | |||||||||||
| Net loss attributable to non-controlling interests | (52 | ) | 8 | (105 | ) | (4 | ) | ||||||||
| Net loss attributable to Orgenesis Inc. | $ | 1,356 | $ | 10,159 | $ | 10,792 | $ | 13,037 | |||||||
| Loss per share: | |||||||||||||||
| Basic and diluted | $ | 0.05 | $ | 0.42 | $ | 0.43 | $ | 0.54 | |||||||
| Weighted average number of shares used in computation of Basic and Diluted loss per share: | |||||||||||||||
| Basic and diluted | 25,403,907 | 24,275,276 | 24,944,814 | 24,278,292 | |||||||||||
| Comprehensive loss: | |||||||||||||||
| Net loss | $ | 1,408 | $ | 10,151 | $ | 10,897 | $ | 13,041 | |||||||
| Other comprehensive loss (income) - translation adjustments | 556 | 229 | 1,033 | 458 | |||||||||||
| Comprehensive loss | 1,964 | 10,380 | 11,930 | 13,499 | |||||||||||
| Comprehensive loss attributed to non-controlling interests | (52 | ) | 8 | (105 | ) | (4 | ) | ||||||||
| Comprehensive loss attributed to Orgenesis Inc. | $ | 1,912 | $ | 10,388 | $ | 11,825 | $ | 13,495 | |||||||