10-K: Precigen's 2024 10-K Filing: Strategic Shift to PRGN-2012 and Financial Outlook

Sentiment:

Annual Report 19 March 2025 8:30 PM

Precigen's 2024 10-K filing highlights a strategic shift towards PRGN-2012, financial uncertainties, and ongoing research and development efforts.

Capital raiseThe company may decide, or be required to raise additional capital.This additional capital could be raised through a combination of non-dilutive financings (including debt financings, collaborations, strategic alliances, monetization of assets, marketing, distribution or licensing arrangements), and/or dilutive financings (including equity and/or debt financings with an equity component).

Worse than expectedThe company has conditions that raise substantial doubt about its ability to continue as a going concern.The company has incurred net losses since its inception, with an accumulated deficit of $2.1 billion as of December 31, 2024.

Summary

Precigen's 10-K filing for the year ended December 31, 2024, outlines the company's business, financial performance, and future outlook.
A key strategic decision was made to prioritize the development of PRGN-2012, an AdenoVerse gene therapy, leading to a minimization of UltraCAR-T spending and a pause in enrollment for PRGN-3005 and PRGN-3007 clinical trials.
The company has completed the submission of a BLA for PRGN-2012, with the FDA granting priority review and setting a PDUFA target action date for August 27, 2025.
Financially, Precigen faces uncertainties, with conditions that raise substantial doubt about its ability to continue as a going concern.
The company's ability to fund operations depends on FDA approval and successful commercialization of PRGN-2012, as well as potential additional capital raises.
Precigen incurred net losses since inception, with an accumulated deficit of $2.1 billion as of December 31, 2024.
The company anticipates substantial future capital requirements for preclinical and clinical development, commercialization, and potential strategic acquisitions.
As of December 31, 2024, Precigen had cash, cash equivalents, and short-term investments of $97.9 million.
The company is authorized to issue 400,000,000 shares of common stock, with 294,042,973 shares issued and outstanding as of February 15, 2025.
Research and development expenses for continuing operations were $53.1 million in 2024, $48.6 million in 2023, and $47.2 million in 2022.
The company's reportable segments are Biopharmaceuticals and Exemplar, with Segment Adjusted EBITDA used as the primary measure of segment performance.
The company has net operating loss carryforwards of approximately $969.9 million for United States federal income tax purposes as of December 31, 2024.
The company is involved in various legal proceedings, but does not believe that any such matters will have a material adverse effect on its business, financial condition, results of operations, or cash flows.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive aspects such as the FDA priority review for PRGN-2012, the overall tone is cautious due to the company's financial uncertainties and going concern warning. The strategic shift and potential for partnerships offer some optimism, but the risks and challenges outweigh the positives.

Positives

FDA granted priority review for PRGN-2012's BLA, setting a PDUFA target action date for August 27, 2025.
The company is strategically prioritizing PRGN-2012, which could lead to a successful product and increased revenue.
The company has net operating loss carryforwards of approximately $969.9 million for United States federal income tax purposes as of December 31, 2024.

Negatives

The company faces financial uncertainties and has conditions that raise substantial doubt about its ability to continue as a going concern.
The company has incurred net losses since inception, with an accumulated deficit of $2.1 billion as of December 31, 2024.
The company has paused enrollment in PRGN-3005 and PRGN-3007 clinical trials.

Risks

The company's ability to fund operations depends on FDA approval and successful commercialization of PRGN-2012, as well as potential additional capital raises.
The company may not be able to raise sufficient additional funds on terms that are favorable to it, if at all.
The company's stock price is volatile, and purchasers of its common stock could incur substantial losses.
The company may fail to meet all applicable continued listing requirements of the Nasdaq Global Select Market, which could result in a delisting of its common stock.

Future Outlook

Precigen's future success hinges on the FDA's approval and successful commercialization of PRGN-2012, as well as its ability to secure additional funding and strategic partnerships.

Industry Context

The announcement reflects the challenges and strategic shifts common in the biopharmaceutical industry, particularly for companies developing novel therapies. The focus on a lead program and seeking partnerships is a typical response to resource constraints and the need to validate technology platforms.

Comparison to Industry Standards

INOVIO Pharmaceuticals is a key competitor in the RRP and HPV-associated cancers space, developing immunotherapies such as INO-3107 and VGX-3100.
BioNTech SE is developing BNT113, an investigational HPV16 E6/7 mRNA vaccine.
PDS Biotechnology is developing Versamune HPV (previously PDS0101), an investigational HPV16 peptide vaccine for various HPV-associated cancers.
Hookipa is developing Eseba-vec (HB-200), which is in a clinical trial for HPV16+ head and neck cancers.
Kite, Amgen, Cellectis S.A., Autolus and Allogene Therapeutics are also using CAR-T technology to develop product candidates for the treatment of AML.
Lyell Immunopharma, and Oncternal Therapeutics are developing ROR1 CAR-T cells for treatment of ROR1-positive cancers.

Legal Proceedings

The company is involved in litigation and legal matters, including governmental investigations.
A derivative shareholder action, captioned Edward D. Wright, derivatively on behalf of Precigen, Inc. F/K/A Intrexon Corp. v. Alvarez et al , was filed in the Circuit Court for Fairfax County in Virginia on behalf of Precigen, Inc.
An individual shareholder filed a lawsuit in the Circuit Court for Henrico County styled Kent v. Precigen , Inc., Case CL21-6349.

Related Party Transactions

As of February 15, 2025, Randal J. Kirk and shareholders affiliated with him beneficially owned approximately 40 percent of our voting stock, and our executive officers and directors, as a group, owned approximately 42 percent of our voting common stock.
We have engaged in a variety of transactions, including collaborations and our sale of our non-healthcare assets to TS Biotechnology, with companies in which Mr. Kirk and affiliates of Mr. Kirk have a direct or indirect interest.

Stakeholder Impact

Shareholders may experience dilution if the company raises additional capital through equity offerings.
Employees may be affected by workforce reductions and restructuring activities.
Patients may benefit from the development and commercialization of new therapies, particularly PRGN-2012.
Suppliers and creditors may be impacted by the company's financial uncertainties and potential changes in operations.

Next Steps

Continue pre-commercialization efforts on PRGN-2012, including supporting regulatory approval, conducting the confirmatory clinical trial, and manufacturing of commercial product.
Continue acceleration of commercial readiness efforts for a potential launch.
Focus on strategic partnership opportunities to further advance UltraCAR-T programs.
Enroll patients in the PRGN-2009 clinical trials only at NCI under a CRADA.

Key Dates

Date	Description
1995	Reference to the Private Securities Litigation Reform Act of 1995.
1996	Reference to the Health Insurance Portability and Accountability Act of 1996, or HIPAA.
1997	Reference to the United States Foreign Corrupt Practices Act of 1977, as amended, or FCPA.
1984	Reference to the Drug Price Competition and Patent Term Restoration Act of 1984, also referred to as the Hatch-Waxman Amendments.
1986	Reference to Section 382 of the Internal Revenue Code of 1986, as amended.
1987	Reference to the Prescription Drug Marketing Act of 1987, as amended from time to time, together with any rules, regulations and requirements promulgated thereunder and in effect from time to time.
2010	Reference to the federal Biologics Price Competition and Innovation Act, or BPCIA, was enacted.
2010	Reference to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the Affordable Care Act.
2011	Reference to the Budget Control Act of 2011, as amended.
2011	Reference to the United States Leahy-Smith America Invents Act, enacted in September 2011.
2017	The FDA first approved a gene therapy for use in humans in 2017.
2017	Reference to the Tax Cuts and Jobs Act, or Tax Act, enacted in December 2017.
2018	Reference to the Bipartisan Budget Act of 2018.
January 1, 2019	The Tax Act eliminated the tax-based payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended, commonly referred to as the individual mandate.
January 1, 2019	The Bipartisan Budget Act of 2018, among other things, amended the Medicare statute to reduce the coverage gap in most Medicare drug plans, commonly known as the donut hole, by raising the required manufacturer point-of-sale discount from 50 percent to 70 percent off the negotiated price effective as of January 1, 2019.
June 12, 2019	Effective date of the 2019 Incentive Plan of the Company for Non-Employee Service Providers.
January 1, 2021	The United Kingdom has transposed the GDPR into domestic law with a United Kingdom version of the GDPR, or the U.K. GDPR, which took effect in January 2021.
January 1, 2021	The MFN model would have ultimately based payment for each of the fifty drugs on the lowest-available, gross domestic product (GDP)-adjusted drug price available in any Organization for Economic Co-operation and Development country that meets minimum GDP requirements for seven years, beginning January 1, 2021.
April 1, 2021	The Budget Control Act of 2011, as amended, among other things led to aggregate reductions in Medicare payments for all items and services, including prescription drugs and biologics, to service providers of, on average, 2 percent per fiscal year beginning April 1, 2013, and, due to subsequent legislation, continuing until 2030 (with the exception of a temporary suspension from May 1, 2020, through March 31, 2021) unless Congress takes additional action.
December 29, 2021	CMS published a final rule that rescinded the IFR, effective February 28, 2022, to address the procedural issues acknowledged in the preliminary injunction.
January 2024	PRGN-2012 Orphan drug designation in the European Union (EU) was granted by the European Commission in January 2024 based on a positive opinion issued by the European Medicines Agency (EMA) adopted by the Committee for Orphan Medicinal Products (COMP).
August 16, 2022	The Inflation Reduction Act of 2022, was signed into law.
August 18, 2022	Precigen completed the sale of 100% of the issued and outstanding membership interests in its wholly-owned subsidiary, Trans Ova Genetics, L.C.
August 29, 2023	The Department of Health and Human Services announced the list of the first ten drugs that will be subject to price negotiations.
December 2023	The Biden administration released a proposed framework that for the first time proposed that a drug's price can be a factor in determining that the drug is not accessible to the public and, therefore, that the government could exercise march-in rights and license it to a third party to manufacture.
December 27, 2024	Precigen announced that it had entered into a Securities Purchase Agreement dated December 27, 2024 with investors for the sale of its 8.00% Series A Convertible Perpetual Preferred Stock and warrants to purchase 52,666,669 shares of its common stock.
December 30, 2024	The offering of Series A Preferred Stock and warrants closed on December 30, 2024.
December 31, 2024	As of December 31, 2024, Randal J. Kirk controlled approximately 40 percent of our common stock.
February 15, 2025	As of February 15, 2025, 294,042,973 shares of common stock, no par value per share, were issued and outstanding.
August 27, 2025	The PDUFA target action date is set for August 27, 2025.

Keywords

PRGN-2012, AdenoVerse, UltraCAR-T, RRP, clinical trials, FDA, financials, going concern, biopharmaceutical, Precigen

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