Orgenesis Reports 42% Increase in Revenue for the First Quarter of Fiscal 2018
GERMANTOWN, Md., April 19, 2018 (GLOBE NEWSWIRE) -- Orgenesis Inc. (Nasdaq:ORGS), a manufacturer, service provider and developer of advanced cell therapies, today reported financial results and provided a business update for the fiscal first quarter ending February 28, 2018.
Fiscal Q1 2018 financial highlights include:
- Revenue increases 42% to $2.6 million versus $1.9 million for the same period last year;
- Generates positive gross profit of $1.0 million;
- Achieves gross margin of 38%;
- Ends quarter with $4.2 million of cash and over $19 million of shareholders’ equity.
Fiscal Q1 2018 operating highlights include:
- MaSTherCell S.A., our subsidiary, appointed by Zelluna Immunotherapy AS, a biotechnology company specializing in immunotherapies for solid tumors, as its contract development and manufacturing partner for its T-cell receptor adoptive cell therapy platform;
- Entered into an agreement to co-develop an automated culturing system for cost-efficient and automated manufacturing of autologous cell therapies;
- Implementing strategic organizational regrouping of the Company’s CDMO global manufacturing services offerings under the global MaSTherCell brand;
- Developing biological sensing technologies intended to enhance manufacturing processes to achieve higher yields, improve data capture, reduce costs and improve product quality; and
- Completed a joint development program with Pall Corporation supported by the Israel-U.S. BIRD Foundation to develop a commercially viable production process for a novel cell therapy for diabetes, designed to support submission of an IND application in the U.S.;
Vered Caplan, CEO of Orgenesis, commented, “Although the fiscal first quarter tends to be seasonally weak, we achieved a 42% increase in sales and generated gross profit of $1 million. We attribute this growth to both new customers, and expanded services among our existing customers, which include many of the world’s important pharmaceutical and biotech companies. Importantly, we are aggressively building out our CDMO capacity and capabilities in order to meet the growing customer demand, especially within the CAR T-cell therapy in immuno-oncology space. While we address a much broader segment of the market, according to Coherent Market Insights, the CAR T-cell therapy market alone, with players like Novartis, Kite Pharma and Juno Therapeutics, is estimated to be valued at $3 billion within the next decade with a projected double digit CAGR. We are dedicated to supporting the evolving manufacturing needs and clinical goals of our customers by leveraging our deep technical expertise and capabilities. Towards this end, we are in the process of expanding our flagship facility at MaSTherCell with a dedicated, late-stage clinical and commercial unit, anticipated to be operational by the end of 2018. Our new expanded facility will provide the most up-to-date commercial capabilities in Europe with five state-of-the-art advanced therapy manufacturing units and extended GMP-accredited quality control laboratories.”
“Our primary focus in 2018 is capturing market share as the cell therapy market is experiencing unprecedented growth. While there is a lack of sufficient GMP manufacturing capacities across the industry, we believe we are ideally positioned to support the cell manufacturing needs of cell therapy companies around the world, as they advance cutting edge therapies through the clinic and ultimately into commercialization. The combination of our advanced outsourced manufacturing capabilities, which reduce costs and time-to-market for our customers, as well as our international reach, uniquely position us as an emerging leader in this market.”
“We continue to make progress within our cell therapy division as well. Most notably, we completed the joint development program with Pall Corporation to develop a commercially viable production process for a novel cell therapy for diabetes, which in turn will be used to support the submission of our IND application in the U.S. Our goal is to transform a patient’s own liver cells into fully functional and physiologically glucose-responsive insulin-producing cells. The program was supported by the Israel-U.S. Binational Industrial Research and Development (“BIRD”) Foundation and illustrates our ability to leverage non-dilutive grant funding to support our therapeutic development efforts.”
Revenues for the three months ended February 28, 2018 increased 42.3% to $2.6 million, compared to $1.9 million for the three months ended February 28, 2017. Gross profit increased by $1.0 million to $1.0 million for the three months ended February 28, 2018, compared to a loss of $0.1 million for the same period last year. Operating loss declined by $208 thousand to $3.2 million for the three months ended February 28, 2018, compared to $3.4 million for the same period last year. Operating loss within the CDMO segment was $208 thousand, which includes $595 thousand in depreciation and amortization. Net loss for the three months ended February 28, 2018 was $5.6 million or $0.52 per share, compared to $6.1 million or $0.66 per share for the three months ended February 28, 2017.
As of February 28, 2018, the Company reported $4.2 million of cash and $19.5 million of shareholders’ equity. Complete financial results are available in the Company’s quarterly report on Form 10-Q for the quarter ended February 28, 2018, which was filed with the Securities and Exchange Commission on April 16, 2018 and which is available on the Company’s website at www.orgenesis.com or at www.sec.gov.
Orgenesis is a global and fully integrated bio-pharmaceutical company in the cell therapy development and manufacturing area. Orgenesis’s wholly-owned Belgian subsidiary, MaSTherCell SA, is a Contract Development and Manufacturing Organization (CDMO) that provides services for many of the world’s pharmaceutical and biotech companies, as well as research institutions and hospitals involved in cutting edge cell therapies. Orgenesis has leveraged the recognized expertise and experience in cell process development and manufacturing of MaSTherCell, and its international joint ventures, in Israel and Korea, to build a global and fully integrated network in the cell therapy development and manufacturing area. Its one-stop-shop service offering includes technology selection to business modeling, GMP manufacturing, process development, quality management and assay development. MaSTherCell Global's teams are committed to helping their clients reduce costs and time-to-market for advanced cell therapies. Through its Israeli subsidiary, Orgenesis Ltd., Orgenesis is developing technology designed to successfully reprogram human liver cells into glucose-responsive, fully functional, Insulin Producing Cells (IPCs). Orgenesis believes that converting the diabetic patient's own tissue into insulin-producing cells has the potential to overcome the significant issues of donor shortage, cost and exposure to chronic immunosuppressive therapy associated with islet cell transplantation. For more information, visit 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 ability to raise additional capital when needed, the sufficiency of working capital, a significant decline in customer demand for our cell production services, our ability to capture a significant portion of the CAR T-cell therapy market, our ability to maintain profitability over successive quarters, the development of our regeneration 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 1 of our Annual Report on Form 10-K for the fiscal year ended November 30, 2017, 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.
Edison Advisors (investors)
Source: Orgenesis Inc.
Released April 19, 2018