Orgenesis Reports 78% Increase in Revenue for the Fourth Quarter of Fiscal 2017
Generates Positive Gross Profit of $1.5 Million with Gross Margin of 43.5%
GERMANTOWN, Md., March 05, 2018 (GLOBE NEWSWIRE) -- Orgenesis Inc. (OTCQB:ORGS), a leading manufacturer, service provider and developer of advanced cell therapies , today reported financial results and provided a business update for the fourth quarter and fiscal year ending November 30, 2017.
Vered Caplan, Chief Executive Officer, commented, “2017 was a transformational year for Orgenesis. First, we are experiencing rapid revenue growth, as illustrated by the fact our full year sales increased by 58% to over $10 million. For the fourth quarter alone, sales increased by 78%. We attribute this growth to the increase in our customer base, which includes many of the world’s leading pharmaceutical and biotech companies, such as Servier and CRISPR. As a leading CDMO in the cell therapy field, we offer a compelling value proposition for our customers through a scalable, highly-efficient, commercial manufacturing platform. This outsourced manufacturing capability reduces costs and time-to-market for our customers. At the same time, there is a lack of sufficient GMP manufacturing capacities across the industry. Our ability to support customers from early clinical trials to commercial manufacturing provides us excellent visibility into our future revenue growth through long-term collaboration agreements as our customers advance through clinical development and into commercialization.”
“We are also pleased to report we are now generating positive gross profit and achieved gross margins of 43.5% for the fourth quarter of 2017. This further illustrates the scalability of our business model and earnings potential as we continue to grow revenue. Overall, the cell therapy market is in a period of unprecedented growth and is expected reach $60 billion by 2020. Our CDMO, MaSTherCell, is uniquely positioned to support the global development and commercialization needs of these companies due to our advanced manufacturing capabilities and unmatched international reach.”
“Lastly, we continue to advance our proprietary and patented trans-differentiation platform technology, whereby an adult cell is converted into another type of cell with distinct phenotype and function. This technology does not use stem cells, but rather offers a much more targeted approach using fully mature, adult cells. This not only reduces the risk of cell mutation or malignancy, but also allows for the testing of cells ex-vivo before insertion. Initially, we remain focused on our first indication – development of Autologous Insulin Producing ('AIP') cells. By transforming the patient’s own liver cell into a fully-functional and physiologically glucose-responsive insulin-producing cell, we believe we can provide patients, such as those with insulin-dependent diabetes, with long-term insulin independence. However, it is important to note that our platform technology has potential across a number of other indications, and we look forward to providing further updates.”
Revenue for the three months ended November 30, 2017 increased 78.1% to $3.4 million, as compared to $1.9 million for the three months ended November 30, 2016. Gross profit increased by $2.0 million to $1.5 million for the three months ended November 30, 2017, as compared to a loss of $0.5 million for the same period last year. Operating loss declined by $1.0 million to $2.0 million for the three months ended November 30, 2017, as compared to $3.0 million for the same period last year. Net loss for the three months ended November 30, 2017 was $856 thousand, as compared to $3.4 million for the three months ended November 30, 2016.
Revenue for the twelve months ended November 30, 2017 increased 57.7% to $10.1 million, as compared to $6.4 million for the twelve months ended November 30, 2016. Gross profit increased by $4.5 million to $3.3 million for the twelve months ended November 30, 2017, as compared to a loss of $1.3 million for the same period last year. Operating loss for the twelve months ended November 30, 2017 was $11.2 million, as compared to $11.3 million for fiscal 2016. Net loss for the twelve months ended November 30, 2017 was $12.4 million, or $1.31 per diluted share, compared to $11.1 million, or $1.30 per diluted share, for the respective period in 2016.
As of November 30, 2017, the Company reported $3.5 million of cash and $14.1 million of shareholders’ equity. Complete financial results are available in the Company’s Form 10-K, which is available on the Company’s website at www.orgenesis.com or at www.sec.gov.
Orgenesis is a vertically-integrated biopharmaceutical company with expertise and unique experience in cell therapy development and manufacturing. Through its Israeli subsidiary, Orgenesis Ltd., Orgenesis is a pioneer in the development of 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. Through its Belgian subsidiary, MaSTherCell S.A., a global Contract Development and Manufacturing Organization (CDMO), Orgenesis is able to deliver optimized process industrialization capacities to cell therapy organizations and speed up the arrival of their therapies onto the market. From technology selection to business modeling, GMP manufacturing, process development, quality management and assay development, MaSTherCell’s teams are fully committed to helping their clients fulfill their objective of providing sustainable and affordable therapies to their patients. MaSTherCell operates in a validated and flexible facility located in the strategic center of Europe within the Walloon healthcare cluster, Biowin. This integrated approach supports the Company's business philosophy of bringing to market significant life-improving medical treatments. For more information, visit www.orgenesis.com.
Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve substantial uncertainties and risks. These forward-looking statements 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, successful development of our culturing technology, the risk that the culturing technology will not work as intended or will not be accepted in the marketplace, the sufficiency of working capital to realize our business plans, the realization of our development plans even if agreements are concluded, the development of our trans-differentiation technology as therapeutic treatment for diabetes which could, if successful, be a cure for insulin-dependent 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)
Released March 5, 2018