Orgenesis First Quarter 2019 Revenue Increases 177% to a Record $7.3 Million

Company Expands Point of Care Platform; Benefits from Growing Cell and Gene Therapy Market

GERMANTOWN, MD May 9, 2019 Orgenesis Inc. (NASDAQ: ORGS) (“Orgenesis” or the “Company”), a developer, manufacturer and service provider of advanced cell therapies, today reported financial results and provided a business update for the fiscal first quarter ended March 31, 2019. As a result of the Company’s change in its fiscal year end from November 30 to December 31, the Company is reporting a December 2018 fiscal month transition period and is comparing the results for the three months ended March 31, 2019, to the three months ended February 28, 2018.

Fiscal Q1 2019 financial highlights include:

Vered Caplan, CEO of Orgenesis, commented, “Our financial performance is indicative of the rapid growth in the cell and gene therapy market. The revenue increase we are experiencing at Orgenesis is a direct result of the expanding capacity of our Contract Development and Manufacturing Organization (“CDMO”) business to meet the growing demand by providing high quality services to our client base.”

“We have made significant strides with respect to our Point of Care (“POCare”) platform,” said Ms. Caplan. “We have aligned ourselves with key regional partners in order to establish a network of leading healthcare facilities to enable our autologous cell therapy platform. This division is driving further value for Orgenesis shareholders through collaboration and out licensing agreements. We believe this additional value will become increasingly visible in our future financial performance.”

“We achieved strong year-over-year revenue growth of 177%, with revenue increasing to a record $7.3 million for the first quarter of 2019. In order to meet the growing demand for our CDMO services, we are establishing a new, state-of-the-art production site within the Gosselies Biopark in Belgium, which will expand our CDMO capacity with the goal of serving the needs of commercial-stage customers. We are also establishing a new 30,000 square foot manufacturing facility in Houston, Texas, to dramatically expand our presence within North America,” said Caplan.

Through its POCare platform, Orgenesis continues to align with regional partners in order to establish a network of leading healthcare facilities to develop autologous cell and gene therapies. Orgenesis recently entered into an out licensing and collaboration agreement with HekaBio K.K. for Japan. Orgenesis entered into an agreement with TheraCell for the clinical development and commercialization of cell and gene therapies in certain European countries and recently announced an agreement with Columbia University to develop a cellular vaccination product platform for pancreatic, hepatic and cholangiocarcinoma cancers. Orgenesis also partnered with ExcellaBio for exosome related technologies, as well as Digilab to develop industrial 3D printing capability for cellular structures and tissues for clinical use.


About Orgenesis

Orgenesis is a biotechnology company specializing in the development, manufacturing and provision of technologies and services in the cell and gene therapy industry. The Company operates through two platforms: (i) a POCare cell therapy platform (“PT”) and (ii) a CDMO platform conducted through its subsidiary, Masthercell Global. Through its PT business, the Company’s aim is to further the development of Advanced Therapy Medicinal Products (“ATMPs”) through collaborations and in-licensing with other pre-clinical and clinical-stage biopharmaceutical companies and research and healthcare institutes to bring such ATMPs to patients. The Company out-licenses these ATMPs through regional partners to whom it also provides regulatory, pre-clinical and training services to support their activity in order to reach patients in a point-of-care hospital setting. Through the Company’s CDMO platform, it is focused on providing contract manufacturing and development services for biopharmaceutical companies. The CDMO platform operates through Masthercell Global, which currently consists of MaSTherCell in Belgium, Atvio in Israel and subsidiaries in South Korea and in the United States, each having unique know-how and expertise for manufacturing in a multitude of cell types. Additional information is available at: 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, the success of our reorganized CDMO operations, the success of our partnership with Great Point Partners, our ability to achieve and maintain overall profitability, the sufficiency of working capital to realize our business plans, the development of our transdifferentiation technology as therapeutic treatment for diabetes which could, if successful, be a cure for Type 1 Diabetes; our technology not functioning as expected; our ability to retain key employees; our ability to satisfy the rigorous regulatory requirements for new procedures; our competitors developing better or cheaper alternatives to our products 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 November 30, 2018, 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.

Contact for Orgenesis:
David Waldman
Crescendo Communications, LLC
Tel: 212-671-1021
ORGS@crescendo-ir.com

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CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in Thousands)
(Unaudited)

          As of        
March 31, December 31, November 30,
    2019     2018     2018  
Assets                  
                   
CURRENT ASSETS:                  
   Cash and cash equivalents $  14,361   $  14,612   $  16,064  
   Restricted cash   401     387     392  
   Accounts receivable, net   5,975     3,226     4,151  
   Prepaid expenses and other receivables   986     1,132     913  
   GPP receivable, see note 5   -     6,600     6,600  
   Grants receivable   217     441     441  
   Inventory   1,992     1,660     1,736  
Total current assets   23,932     28,058     30,297  
                   
NON-CURRENT ASSETS:                  
   Deposits   569     143     85  
   Loans to related party, see note 5   2,033     1,012     1,007  
   Property and equipment, net   12,783     12,458     11,901  
   Intangible assets, net   15,823     16,642     16,700  
   Operating lease right-of-use assets   14,354     -     -  
   Goodwill   15,002     15,266     15,165  
   Other assets   274     297     292  
Total non-current assets   60,838     45,818     45,150  
TOTAL ASSETS $  84,770   $  73,876   $  75,447  


CONDENSED CONSOLIDATED BALANCE SHEETS (Cont’d)
(U.S. Dollars in Thousands)
(Unaudited)

          As of        
          December        
    March 31,     31,     November 30,  
    2019     2018     2018  
Liabilities and Equity                  
                   
CURRENT LIABILITIES:                  
  Accounts payable $  5,522   $  4,583   $  3,804  
  Accrued expenses and other payables   1,525     1,499     2,060  
  Employees and related payables   3,034     3,052     3,006  
  Related parties   92     -     -  
  Advance payments on account of grant   1,510     1,603     1,724  
  Short-term loans and current maturities of
   long- term loans
  631     641     647  
  Contract liabilities   7,533     5,175     5,317  
  Current maturities of long-term finance leases   232     226     209  
  Current maturities of operating leases   1,291     -     -  
  Current maturities of convertible loans   382     382     378  
Total current liabilities   21,752     17,161     17,145  
                   
LONG-TERM LIABILITIES:                  
  Non-current operating leases   11,816     -     -  
  Loans payable   1,510     1,633     1,662  
  Convertible loans   1,242     1,214     1,038  
  Retirement benefits obligation   304     280     265  
  Deferred taxes   1,578     1,656     1,702  
  Long-term finance leases   641     661     638  
  Other long-term liabilities   293     297     195  
Total long-term liabilities   17,384     5,741     5,500  
TOTAL LIABILITIES   39,136     22,902     22,645  
                   
COMMITMENTS                  
REDEEMABLE NON-CONTROLLING INTEREST   24,233     24,224     24,153  
EQUITY:                  
Common stock of $0.0001 par value,
145,833,334 shares authorized, 16,102,000,
15,540,333 and 14,951,783 shares issued and
outstanding as of March 31, 2019, December
31, 2018 and November 30, 2018, respectively
 



2
   



2
   



1
 
  Additional paid-in capital   94,049     90,597     88,082  
  Receipts on account of shares to be allotted   -     -     2,253  
  Accumulated other comprehensive income   185     669     425  
  Accumulated deficit   (73,474 )   (65,163 )   (62,411 )
  Equity attributable to Orgenesis Inc.   20,762     26,105     28,350  
  Non-controlling interest   639     645     299  
Total equity   21,401     26,750     28,649  
TOTAL LIABILITIES AND EQUITY $  84,770   $  73,876   $  75,447  


ORGENESIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. Dollars in Thousands, Except Share and Loss Per Share Amounts)
(Unaudited)

                Transition  
                Period One-  
    Three Months Ended     Month  
                Ended  
          February     December  
    March 31,     28,     31,  
    2019     2018     2018  
                   
                   
REVENUES $  7,301   $  2,636   $  1,852  
                   
COST OF REVENUES   4,344     1,644     1,221  
                   
GROSS PROFIT   2,957     992     631  
                   
RESEARCH AND DEVELOPMENT EXPENSES, net   5,150     766     1,431  
AMORTIZATION OF INTANGIBLE ASSETS   517     436     179  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   5,600     3,344     1,984  
                   
OTHER INCOME, net   (37 )   (316 )   -  
                   
OPERATING LOSS   8,273     3,238     2,963  
                   
FINANCIAL EXPENSES, net   140     2,681     27  
SHARE IN NET INCOME OF ASSOCIATED COMPANY   -     (46 )   -  
                   
LOSS BEFORE INCOME TAXES   8,413     5,873     2,990  
                   
TAX (INCOME) EXPENSES   37     (396 )   (83 )
                   
NET LOSS   8,450     5,477     2,907  
NET INCOME (LOSS)                  
ATTRIBUTABLE TO NON-
CONTROLLING INTERESTS
(INCLUDING REDEEMABLE)
  (139 )   134     (163 )
NET LOSS ATTRIBUTABLE TO ORGENESIS INC.   8,311     5,611     2,744  
                   
LOSS PER SHARE:                  
Basic $ 0.55   $  0.52    $ 0.19  
Diluted $ 0.55   $  0.52   $ 0.19  
                   
WEIGHTED AVERAGE NUMBER
OF SHARES USED IN
COMPUTATION OF BASIC AND
DILUTED EARNINGS (LOSS) PER SHARE:
           
Basic   15,571,568     10,775,877     15,423,040  
Diluted   15,571,568     10,775,877     15,423,040  
                   
COMPREHENSIVE LOSS:                  
                   
 Net loss $  8,450   $  5,477   $  2,907  
 Other comprehensive (income) loss -
  translation adjustments
484 (707 ) (244 )
                   
Comprehensive loss   8,934     4,770     2,663  
Comprehensive (income) loss
attributed to non-controlling interests
(including redeemable)
(139 ) 134 (163 )
COMPREHENSIVE LOSS
ATTRIBUTED TO ORGENESIS INC.
$ 8,795 $ 4,904 $ 2,500