UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
||
|
|
|
|
|
|
||||
|
||||
(Address of Principal Executive Offices) |
|
(Zip Code) |
||
Registrant’s Telephone Number, Including Area Code: ( |
N/A |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
|
|
Trading |
|
|
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On November 10, 2021, Progenity, Inc. issued a press release and earnings presentation announcing its financial results for the quarter ended September 30, 2021. The press release and earnings presentation are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibits 99.1 and 99.2 incorporated herein shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information or Exhibits 99.1 and 99.2 be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 |
|
|
|
|
|
99.2 |
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (embedded with the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
Progenity, Inc. |
|
|
|
|
Date: |
November 10, 2021 |
By: |
/s/ Eric d’Esparbes |
|
|
|
Eric d'Esparbes |
|
|
Exhibit 99.1 |
|
|
|
|
|
|
Progenity Provides Corporate Update and Reports
Third Quarter 2021 Financial Results
Added important patents further protecting the company’s therapeutic delivery technologies
Added strong biotherapeutics capabilities to management team and board of directors
Implemented cost-cutting measures expected to result in approximately $145 million in cost savings on an annual basis1
Management will host conference call and webcast today at 4:30 p.m. Eastern / 1:30 p.m. Pacific
SAN DIEGO, November 10, 2021 – Progenity, Inc. (Nasdaq: PROG), an innovative biotechnology company, today provided a corporate update and reported financial results for the third quarter ended September 30, 2021.
During the third quarter, Progenity added four patents related to its ingestible device and method technologies designed for delivery of therapeutics via the gastrointestinal (GI) tract, further strengthening one of the most robust patent portfolios of its kind.
Progenity also recently added key biotechnology and biotherapeutics leadership capabilities with proven financial leadership and extensive pharmaceutical industry experience by appointing Adi Mohanty as Chief Executive Officer and Jill Howe as a member of the Board of Directors and chair of the Audit Committee.
In the third quarter Progenity continued its strategic transformation directed at significantly reducing its cash-burn rate while accelerating its transition to an innovation-led biotherapeutics company focused on its oral delivery of biotherapeutics and its GI-targeted therapeutics platforms. As part of its strategic transformation, Progenity is in the process of implementing previously announced operating cost-cutting measures that are expected to result in cost savings of approximately $145 million on an annual run-rate basis1, and it plans to continue to optimize its capital allocation.
“Progenity is making great strides in its transformation into a biotherapeutics company. I’m looking forward to accelerating this process, and to helping the company efficiently advance its innovation pipeline, which has great potential to impact the diagnosis and treatment of serious diseases,” said Adi Mohanty, Chief Executive Officer of Progenity.
1 Compared to Q2 2021 cash expenses annual run rate
Third Quarter 2021 Results and Other Corporate Highlights
Third Quarter 2021 Financial Results
Comparison of Three Months Ended September 30, 2021 and June 30, 2021
The company generated $9.6 million in revenues during the third quarter, out of which $9.4 million came from discontinued operations. Operating expenses were $30.7 million for the three months ended September 30, 2021, compared to $36.1 million for the three months ended June 30, 2021.
Net loss was $43.7 million for the three months ended September 30, 2021 and net loss per share was $0.46, compared to net loss of $78.5 million and net loss per share of $1.23 for the three months ended June 30, 2021.
Net loss from discontinued operations was $6.9 million for the three months ended September 30, 2021 and net loss per share for discontinued operations was $0.07, compared to a net loss from discontinued operations of $37.1 million and net loss per share of $0.58 for the three months ended June 30, 2021.
Comparison of Three Months Ended September 30, 2021 and 2020
Operating expenses were $30.7 million for the three months ended September 30, 2021, compared to $30.7 million for the three months ended September 30, 2020.
Net loss was $43.7 million for the three months ended September 30, 2021 and net loss per share was $0.46, compared to net loss of $47.1 million and net loss per share of $1.01 for the three months ended September 30, 2020.
Net loss from discontinued operations was $6.9 million for the three months ended September 30, 2021 and net loss per share for discontinued operations was $0.07, compared to net loss from discontinued operations of $13.9 million and net loss per share of $0.30 for the three months ended September 30, 2020.
Webcast and Conference Call Information
Progenity will host a webcast and conference call to discuss the third quarter financial results and answer investment community questions today, Wednesday, November 10, 2021 at 4:30 p.m. Eastern / 1:30 p.m. Pacific. The live call may be accessed by dialing 833-519-1237 for domestic callers and 914-800-3810 for international callers and entering the conference code: 9763335. A live webcast and archive of the call will be available online from the investor relations section of the company website at www.progenity.com.
About Progenity
Progenity, Inc. is a biotechnology company innovating in the fields of women's health, gastrointestinal health and oral biotherapeutics. Progenity applies a multi-omics approach, combining genomics, epigenomics, proteomics, and metabolomics to its molecular testing products and to the development of a suite of investigational ingestible devices designed to provide precise diagnostic sampling and drug delivery solutions. Progenity’s vision is to transform healthcare to become more precise and personal by improving diagnoses of disease and improving patient outcomes through localized treatment with targeted therapies.
For more information, visit www.progenity.com or follow the company on LinkedIn or Twitter.
Safe Harbor Statement or Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements, other than statements of historical facts included in this press release, including statements concerning the progress and future expectations of our research and development efforts, the strength of our intellectual property portfolio, the anticipated timing for development of our drug discovery and delivery systems, expectations regarding future cash burn, expectations regarding cost savings resulting from cost-cutting measures, the potential for partnerships with the OBDS platform and the potential performance of OBDS and DDS programs in humans are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our plans, estimates, and expectations, as of the date of this press release. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the forward-looking statements expressed or implied in this press release. Such risks, uncertainties, and other factors include, among others, our ability to develop and commercialize our testing products, our ability to innovate in the field of precision medicine, our ability to obtain and maintain regulatory approval or clearance of our products on expected timelines or at all, our plans to research, develop, and commercialize new products, the unpredictable relationship between preclinical study results and clinical study results, our expectations regarding future test volumes and revenues, our expectations regarding our in network position, anticipated capacity for our tests, our ability to raise sufficient capital to achieve our business objectives, the ongoing COVID-19 pandemic, and those risks described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Progenity’s Annual Report on Form 10-K for the period ended December 31, 2020 filed with the SEC and other subsequent documents, including Quarterly Reports, that we file with the SEC.
Progenity expressly disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Investor Contact:
Robert Uhl
Managing Director, Westwicke ICR
ir@progenity.com
(619) 228-5886
Media Contact:
Kate Blom-Lowery
CG Life
media@progenity.com
(619) 743-6294
Progenity, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
|
|
Three Months Ended |
|
|||||
|
|
September 30, |
|
|
June 30, |
|
||
Revenues |
|
$ |
182 |
|
|
$ |
463 |
|
Cost of sales |
|
|
— |
|
|
|
— |
|
Gross profit |
|
|
182 |
|
|
|
463 |
|
Operating expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
12,226 |
|
|
|
13,401 |
|
Selling and marketing |
|
|
573 |
|
|
|
2,006 |
|
General and administrative |
|
|
17,944 |
|
|
|
20,709 |
|
Total operating expenses |
|
|
30,743 |
|
|
|
36,116 |
|
Loss from operations |
|
|
(30,561 |
) |
|
|
(35,653 |
) |
Interest expense |
|
|
(3,458 |
) |
|
|
(3,502 |
) |
Loss on warrant liability |
|
|
(3,322 |
) |
|
|
(5,146 |
) |
Interest and other income, net |
|
|
467 |
|
|
|
2,901 |
|
Loss from continuing operations |
|
|
(36,874 |
) |
|
|
(41,400 |
) |
Loss from discontinued operations |
|
|
(6,870 |
) |
|
|
(37,131 |
) |
Net loss |
|
$ |
(43,744 |
) |
|
$ |
(78,531 |
) |
Net loss per share from continuing operations, basic and diluted |
|
$ |
(0.38 |
) |
|
$ |
(0.65 |
) |
Net loss per share from discontinued operations, basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.58 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.46 |
) |
|
$ |
(1.23 |
) |
Weighted average shares outstanding, basic and diluted |
|
|
95,846,672 |
|
|
|
63,942,298 |
|
Progenity, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
|
|
Three Months Ended |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
|
|
|
|
|
(1) |
|
||
Revenues |
|
$ |
182 |
|
|
$ |
56 |
|
Cost of Sales |
|
|
— |
|
|
|
— |
|
Gross profit |
|
|
182 |
|
|
|
56 |
|
Operating Expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
12,226 |
|
|
|
13,043 |
|
Selling and marketing |
|
|
573 |
|
|
|
1,563 |
|
General and administrative |
|
|
17,944 |
|
|
|
16,116 |
|
Total operating expenses |
|
|
30,743 |
|
|
|
30,722 |
|
Loss from operations |
|
|
(30,561 |
) |
|
|
(30,666 |
) |
Interest expense |
|
|
(3,458 |
) |
|
|
(2,457 |
) |
Loss on warrant liability |
|
|
(3,322 |
) |
|
|
— |
|
Interest and other income (expense), net |
|
|
467 |
|
|
|
(19 |
) |
Loss from continuing operations |
|
|
(36,874 |
) |
|
|
(33,142 |
) |
Loss from discontinued operations |
|
|
(6,870 |
) |
|
|
(13,923 |
) |
Net loss |
|
$ |
(43,744 |
) |
|
$ |
(47,065 |
) |
Net loss per share from continuing operations, basic and diluted |
|
$ |
(0.38 |
) |
|
$ |
(0.71 |
) |
Net loss per share from discontinued operations, basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.30 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.46 |
) |
|
$ |
(1.01 |
) |
Weighted average shares outstanding, basic and diluted |
|
|
95,846,672 |
|
|
|
46,632,043 |
|
1. The condensed consolidated statement of operations for the three months ended September 30, 2020 has been adjusted to reflect discontinued operations.
Progenity, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
|
|
September 30, |
|
|
December 31, |
|
||
|
|
|
|
|
(1) |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
54,136 |
|
|
$ |
91,520 |
|
Accounts receivable, net |
|
|
1,917 |
|
|
|
6,634 |
|
Prepaid expenses and other current assets |
|
|
10,372 |
|
|
|
8,107 |
|
Current assets of disposal group held for sale |
|
|
26,545 |
|
|
|
20,077 |
|
Total current assets |
|
|
92,970 |
|
|
|
126,338 |
|
Property and equipment, net |
|
|
4,564 |
|
|
|
8,106 |
|
Other assets |
|
|
147 |
|
|
|
169 |
|
Long-term assets of disposal group held for sale |
|
|
— |
|
|
|
19,827 |
|
Total assets |
|
$ |
97,681 |
|
|
$ |
154,440 |
|
Liabilities and Stockholders' Deficit |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
7,989 |
|
|
$ |
12,657 |
|
Accrued expenses and other current liabilities |
|
|
40,850 |
|
|
|
51,206 |
|
Warrant liability |
|
|
42,402 |
|
|
|
— |
|
Current portion of mortgages payable and capital lease obligations |
|
|
110 |
|
|
|
338 |
|
Current liabilities of disposal group held for sale |
|
|
11,922 |
|
|
|
8,469 |
|
Total current liabilities |
|
|
103,273 |
|
|
|
72,670 |
|
Mortgages payable and capital lease obligations, net of current portion |
|
|
1,219 |
|
|
|
1,317 |
|
Convertible notes, net |
|
|
156,045 |
|
|
|
158,886 |
|
Embedded derivative liability |
|
|
— |
|
|
|
18,370 |
|
Other long-term liabilities |
|
|
14,110 |
|
|
|
8,239 |
|
Long-term liabilities of disposal group held for sale |
|
|
— |
|
|
|
1,952 |
|
Total liabilities |
|
$ |
274,647 |
|
|
$ |
261,434 |
|
Stockholders' deficit: |
|
|
|
|
|
|
||
Common stock |
|
|
83 |
|
|
|
59 |
|
Additional paid-in capital |
|
|
537,548 |
|
|
|
452,992 |
|
Accumulated deficit |
|
|
(695,813 |
) |
|
|
(541,274 |
) |
Treasury stock |
|
|
(18,784 |
) |
|
|
(18,771 |
) |
Total stockholders' deficit |
|
|
(176,966 |
) |
|
|
(106,994 |
) |
Total liabilities and stockholders' deficit |
|
$ |
97,681 |
|
|
$ |
154,440 |
|
1. The condensed consolidated balance sheet data at December 31, 2020 has been derived from the audited consolidated financial statements, with adjustments to reflect the assets and liabilities held for sale.
THIRD QUARTER 2021 – FINANCIAL RESULTS November 2021 Exhibit 99.2
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements, other than statements of historical facts included in this presentation, including statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to product candidates, estimates of market size, estimates of market growth, business trends, expected testing supply and demand, the anticipated timing, design and conduct of our planned clinical trials, the development of our product candidates, including the timing and likelihood of regulatory filings and approvals for our product candidates, our ability to commercialize our product candidates, if approved, the pricing and reimbursement of our product candidates, if approved, the potential to develop future product candidates, the potential benefits of strategic collaborations and our intent to enter into any strategic arrangements, the timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the forward-looking statements expressed or implied in this presentation, including those described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and elsewhere in such filing and in other subsequent disclosure documents, including our Quarterly Reports on Form 10-Q, filed with the U.S. Securities and Exchange Commission (SEC). We cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. Forward-looking statements are not historical facts and reflect our current views with respect to future events. Given the significant uncertainties, you should evaluate all forward-looking statements made in this presentation in the context of these risks and uncertainties and not place undue reliance on these forward-looking statements as predictions of future events. All forward-looking statements in this presentation apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this presentation. We disclaim any intent to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by law. Industry and Market Data: We obtained the industry, market, and competitive position data used throughout this presentation from our own internal estimates and research, as well as from industry and general publications, and research, surveys, and studies conducted by third parties. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of the industry and market, which we believe to be reasonable. In addition, while we believe the industry, market, and competitive position data included in this prospectus is reliable and based on reasonable assumptions, we have not independently verified any third-party information, and all such data involve risks and uncertainties and are subject to change based on various factors. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
RECENT HIGHLIGHTS Submitted validation study data from Preecludia™ rule-out test for preeclampsia for publication in peer-reviewed journal Awarded patent for one of the key assays Engaged advisory firm and launched a managed process to license the test to potential commercial partners PREECLUDIA™ TEST Company transformation into focused biotherapeutics platform company progressing as planned Already achieved $110M reduction in annual operating expenses annual run rate; targeting total $145M reduction post transformation Maintaining Avero Diagnostics while pursuing divestiture STRATEGIC TRANSFORMATION Ongoing clinical study in ulcerative colitis patients using adalimumab delivered by enema as proxy for PGN-001 (variant of adalumimab) Designing first clinical study for PGN-600 (tofacitinib) Established IBD Clinical Advisory Board Obtained three patents related to therapeutic technologies DDS article published in Crohn’s & Colitis 360 GI-TARGETED THERAPEUTICS Initiated preclinical studies of PGN-OB1 (variant of adalumimab) and PGN-OB2 (GLP-1 agonist) Promising initial data with average bioavailability of approx. 15% of IV for PGN-OB1 following a single dose1 Signed third pharma partnership to test their molecule with the OBDS Obtained a patent related to OBDS device ORAL DELIVERY OF BIOTHERAPEUTICS In animals where significant drug was detected
INNOVATION PIPELINE UPDATE
THERAPEUTICS PROGRAMS For drugs that today must be injected, our ingestible capsule technology could enable needle-free, oral delivery and systemic uptake of large molecules. For people who suffer from gastrointestinal diseases, delivering therapeutics directly to the site of disease could enable safer and more effective drug therapies. ORAL DELIVERY OF BIOTHERAPEUTICS GI-TARGETED THERAPEUTICS ODBS Oral Biotherapeutics Delivery System DDS Drug Delivery System drug-device combinations
THERAPEUTICS PIPELINE discovery PGN-OB2 GLP-1 agonist + OBDS PGN-OB1 Adalimumab variant + OBDS Antisense Therapy + OBDS In partnership with IONIS PHARMACEUTICALS Undisclosed Drug + OBDS PGN-001 Adalimumab variant + DDS PGN-600 Tofacitinib + DDS preclinical early clinical late clinical Undisclosed Drug + OBDS In partnership with LARGE PHARMA 2 In partnership with LARGE PHARMA 1 ORAL DELIVERY OF BIOTHERAPEUTICS: OBDS GI-TARGETED THERAPEUTICS: DDS
THERAPEUTICS PROGRAMS ORAL DELIVERY OF BIOTHERAPEUTICS GI-TARGETED THERAPEUTICS ODBS Oral Biotherapeutics Delivery System DDS Drug Delivery System Program updates – Q3 In animals where significant drug was detected Initiated preclinical studies of PGN-OB1 (variant of adalumimab) and PGN-OB2 (GLP-1 agonist) Promising initial data with average bioavailability of approximately 15% of IV for PGN-OB1 following a single dose1 Signed third pharma partnership to test their molecule with the OBDS Obtained a patent related to OBDS device Ongoing clinical study in ulcerative colitis patients using adalimumab delivered by enema as proxy for PGN-001 (variant of adalumimab) Designing first clinical study for PGN-600 (tofacitinib) Established IBD Clinical Advisory Board Obtained three patents related to therapeutic technologies DDS article published in Crohn’s & Colitis 360
PREECLUDIA™ TEST Program updates – Q3 For patients with symptoms of possible preeclampsia, the Preecludia test is potentially the first blood test designed to assess risk by evaluating multiple pathophysiological pathways. RULE-OUT TEST FOR PREECLAMPSIA Submitted PRO-104 validation study manuscript publication in peer-reviewed journal; data is under embargo until publication Awarded patent for one of the key assays Engaged advisory firm and launched managed process to license the test to potential commercial partners
PREECLUDIA publication & ongoing licensing efforts H2 2022 DIAGNOSTICS ORAL BIOTHERAPEUTICS DDS topline clinical PK/PD for adalimumab in ulcerative colitis NEAR-TERM POTENTIAL CATALYSTS Q4 2021 Q1 2022 Q2 2022 GI-TARGETED THERAPEUTICS OBDS preclinical PK data generation DDS device function study in ulcerative colitis patients DDS clinical PK/PD data generation OBDS clinical study initiation
OPERATING EXPENSES
OPEX REDUCTIONS Secured $110 million in OPEX1 annual run rate reductions from Q2 2021 Expecting ~$145 million2 total OPEX annual run rate reduction post company transformation Confirming target range of $5 to $6 million monthly cash burn run-rate post transformation Raised ~$79 million during H2 2021, providing cash runway extending into Q3 2022. Focusing stage-gated capital allocation on innovation pipeline 2021 OPEX FORECAST (millions) 1 Operating expenses before stock-based compensation accruals 2 Assumes sale of Avero by end of 2021 Q3 Guidance
