Precigen Inc.

11/13/2025 | Press release | Distributed by Public on 11/13/2025 15:21

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q, or Quarterly Report, and our Annual Report on Form 10-K for the year ended December 31, 2024, or Annual Report.
The following discussion contains forward-looking statements that reflect our plans, estimates, expectations, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements and you are cautioned not to place undue reliance on forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, particularly in "Special Note Regarding Forward-Looking Statements" and "Risk Factors." The forward-looking statements included in this Quarterly Report are made only as of the date hereof.
Overview
We are a biopharmaceutical company specializing in the advancement of innovative precision medicines to address difficult-to-treat diseases with high unmet patient need. Precigen is dedicated to advancing scientific breakthroughs from proof-of-concept through commercialization. We are leveraging our proprietary technology platforms to develop product candidates designed to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases.
We believe that our array of technology platforms uniquely positions us among other biotechnology companies to advance precision medicine. Our proprietary and complementary technology platforms provide a strong foundation to realize the core promise of precision medicine by supporting our efforts to construct powerful gene programs to drive efficacy, deliver these programs through viral, non-viral, and microbe-based approaches to drive lower costs, and control gene expression to drive safety. Our therapeutic platforms, including AdenoVerse immunotherapy, UltraCAR-T, and ActoBiotics, are designed to allow us to precisely control the level and physiological location of gene expression and modify biological molecules to control the function and output of living cells to treat underlying disease conditions. We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies.
Our commercial product, Papzimeos™ (zopapogene imadenovec-drba, PRGN-2012), is the first and only US Food and Drug Administration ("FDA") approved therapy for the treatment of adults with recurrent respiratory papillomatosis ("RRP"). Papzimeos is a non-replicating adenoviral vector-based immunotherapy designed to express a fusion antigen comprising selected regions of human papillomavirus (HPV) types 6 and 11 proteins. Papzimeos is designed to generate an immune response directed against HPV 6 and HPV 11 proteins in patients with recurrent respiratory papillomatosis ("RRP"). Discovered and designed in Precigen's labs using Precigen's proprietary AdenoVerse therapeutic platform, Papzimeos represents a new therapeutic paradigm for RRP.
Our clinical pipeline includes PRGN-2009, which are based on our AdenoVerse immunotherapy platform; and PRGN-3005, PRGN-3006 and PRGN-3007, which are built on our UltraCAR-T platform. We have completed enrollment in the Phase 1b clinical trial of PRGN-3006. As part of the strategic prioritization of our pipeline announced in August 2024, we paused enrollment in the PRGN-3005 and PRGN-3007 clinical trials, minimized UltraCAR-T spending and plan to focus on strategic partnerships to further advance UltraCAR-T programs. In addition, we previously announced plans to continue PRGN-2009 Phase 2 clinical trials under a cooperative research and development agreement ("CRADA") with the National Cancer Institute ("NCI") in recurrent/metastatic cervical cancer and in newly diagnosed HPV-associated oropharyngeal cancer. We have reduced our focus on preclinical programs, while continuing select projects that we believe could provide further near-term validation of our technology platforms.
Precigen
We are developing therapies built on our "off-the-shelf" AdenoVerse immunotherapy platform and our UltraCAR-T therapeutics platform. Our AdenoVerse immunotherapy platform utilizes a library of proprietary adenovectors for the efficient gene delivery of therapeutic effectors, immunomodulators, and vaccine antigens. We have established proprietary manufacturing cell lines and production methodologies from our AdenoVerse immunotherapy platform, which we believe are scalable for commercial supply. We believe that our proprietary gorilla adenovectors, part of the AdenoVerse technology, have superior performance characteristics as compared to current competition, including standard human adenovirus serotype 5, rare human adenovirus types and other non-human primate adenovirus types.
In August 2025, the FDA granted full approval of Papzimeos for the treatment of adults with RRP. RRP is a rare, debilitating,
and potentially life-threatening disease caused by chronic HPV 6 or HPV 11 infection, which results in recurrent benign tumors in the respiratory tract. RRP can lead to severe voice disturbance, a compromised airway, and recurrent post-obstructive pneumonias. Management of RRP has primarily consisted of repeated surgeries, which do not address the root cause of the disease and can be associated with significant morbidity as well as significant patient and health system burden. The approval of Papzimeos marks a historic milestone for the RRP patient community as the first and only FDA-approved therapy for the treatment of adults with RRP. As a result of Papzimeos receiving full FDA approval, a confirmatory clinical trial is no longer required.
Papzimeos is a non-replicating adenoviral vector-based immunotherapy designed to express a fusion antigen comprising selected regions of HPV types 6 and 11 proteins-the root cause of RRP. Papzimeos is delivered via four subcutaneous injections over a 12-week interval. Papzimeos approval is supported by safety and efficacy data from the pivotal Phase 1/2 clinical trial published in the Lancet Respiratory Medicine. The pivotal study successfully met its primary safety and pre-specified primary efficacy endpoints. Papzimeos was well-tolerated with no dose-limiting toxicities and no treatment-related adverse events greater than Grade 2. 51% (18 out of 35) of study patients achieved Complete Response, requiring no surgeries in the 12 months after treatment with Papzimeos. These Complete Responses remained durable for over 12 months. Complete responses have been durable after Papzimeos treatment with median follow-up of 36 months as of a September 19, 2025 data cutoff.
PRGN-2012 had been granted Breakthrough Therapy Designation and Orphan Drug designation for the treatment of RRP by the FDA. In addition, PRGN-2012 has received Orphan Drug Designation for the Treatment of RRP from the European Commission as well.
PRGN-2009 is an investigational AdenoVerse immunotherapy designed to activate the immune system to recognize and target human papillomavirus-positive, or HPV+, solid tumors. PRGN-2009 leverages our UltraVector and AdenoVerse platforms to optimize HPV type 16 ("HPV 16") and HPV type 18 ("HPV 18"), antigen designed for delivery via a proprietary gorilla adenovector with a large genetic payload capacity and the ability for repeat administrations. Guided by our bioinformatics analysis and in silico protein engineering, PRGN-2009 encodes for a novel, multi-epitope antigen design to target HPV16 and HPV18 infected cells and potentially differentiates from the competition. We have completed a Phase 1 clinical trial of PRGN-2009 as a monotherapy or in combination with bintrafusp alfa, or M7824, an investigational bifunctional fusion protein, for patients with HPV-associated cancers in collaboration with the NCI, pursuant to a CRADA. PRGN-2009 is being evaluated in two Phase 2 clinical trials in combination with anti-PD1 monoclonal antibody, pembrolizumab, for patients with HPV-associated cancers in collaboration with NCI pursuant to a CRADA. In addition, a Phase 2 randomized-controlled clinical trial of PRGN-2009 in combination with pembrolizumab to treat patients with recurrent or metastatic cervical cancer is ongoing pursuant to a CRADA. In August 2024, as part of the strategic prioritization of our pipeline, we announced plan to enroll patients in the PRGN-2009 clinical trials only at NCI under a CRADA.
Through our UltraCAR-T therapeutics platform, we are able to precision-engineer UltraCAR-T cells to produce a homogeneous cell product that simultaneously expresses antigen-specific chimeric antigen receptor, or CAR, kill switch, and our proprietary membrane-bound interleukin-15, or mbIL15, genes in any genetically modified UltraCAR-T cell. Our decentralized and rapid proprietary manufacturing process allows us to manufacture UltraCAR-T cells overnight at a medical center's current good manufacturing practices facility ("cGMP") and reinfuse the patient the following day after gene transfer. This process improves upon current approaches to CAR-T manufacturing, which require extensive ex vivoexpansion following viral vector transduction to achieve clinically relevant cell numbers that we believe can result in the exhaustion of CAR-T cells prior to their administration, limiting their potential for persistence in patients. We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies. The UltraPorator system includes proprietary hardware and software solutions and potentially represents a major advancement over current electroporation devices by significantly reducing the processing time and contamination risk. UltraPorator is intended to be a viable scale-up and commercialization solution for decentralized UltraCAR-T manufacturing.
PRGN-3006 is an investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to express a CAR to target CD33 (Siglec-3), mbIL15 and a kill switch gene. PRGN-3006 is in a Phase 1/1b clinical trial for the treatment of relapsed or refractory, or r/r, acute myeloid leukemia, or AML, and high-risk myelodysplastic syndromes, or MDS. PRGN-3006 has been granted Fast Track designation in patients with r/r AML by the FDA. Previously PRGN-3006 was granted Orphan Drug Designation in patients with AML by the FDA. We have completed the Phase 1 dose escalation trial. We have completed enrollment of the Phase 1b trial for PRGN-3006 in AML. We plan to focus on strategic partnership opportunities to advance PRGN-3006 UltraCAR-T program in AML.
PRGN-3005 is an investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to simultaneously express a CAR targeting the unshed portion of the Mucin 16 antigen, mbIL15, and kill switch genes. PRGN-3005 is in a Phase 1/1b clinical trial for the treatment of advanced, recurrent platinum-resistant ovarian, fallopian tube, or primary peritoneal cancer. We have completed the Phase 1 dose escalation portion of the PRGN-3005 Phase 1/1b study. As part of the strategic prioritization of our pipeline announced in August 2024, we have paused enrollment in the Phase 1b clinical trial of PRGN-3005.
PRGN-3007 is an investigational autologous CAR-T therapy that utilizes the next generation UltraCAR-T platform to express a CAR which targets ROR1, mbIL15, a kill switch, and a novel mechanism for the intrinsic blockade of the programmed death 1, or PD-1, gene expression. PRGN-3007 is in a Phase 1/1b clinical trial for patients with advanced receptor tyrosine kinase-like orphan receptor 1-positive, or ROR1+, hematological (Arm 1) and solid tumors (Arm 2). The target patient population for Arm 1 includes relapsed or refractory CLL, relapsed or refractory MCL, relapsed or refractory B-ALL, and relapsed or refractory DLBCL. The target patient population for Arm 2 includes locally advanced unresectable or metastatic histologically confirmed TNBC. As part of the strategic prioritization of our pipeline announced in August 2024, we have paused enrollment in the Phase 1 clinical trial of PRGN-3007.
Precigen ActoBio, Inc.
ActoBio has developed a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics. We refer to these microbe-based biopharmaceuticals as ActoBiotics. ActoBio's lead asset is AG019, a disease modifying antigen-specific, investigational immunotherapy for the prevention, delay, or reversal of type 1 diabetes mellitus, or T1D. We have completed a Phase 1b/2a clinical trial of AG019 for the treatment of early-onset T1D. As part of our strategic prioritization, we have completed the shutdown of our ActoBio subsidiary operations, including the elimination of all ActoBio personnel. In conjunction with this shutdown, ActoBio's portfolio of intellectual property is available for prospective transactions.
Precigen Exemplar
Exemplar is committed to enabling the study of life-threatening human diseases through the development of MiniSwine Yucatan miniature pig research models and services. Historically, researchers have lacked animal models that faithfully represent human diseases. As a result, a sizeable barrier has blocked progress in the discovery of human disease mechanisms; novel diagnostics, procedures, devices, prevention strategies and therapeutics; and the ability to predict in humans the efficacy of those next-generation procedures, devices, and therapeutics. Exemplar's MiniSwine models are genetically engineered to exhibit a wide variety of human disease states, which provides a more accurate platform to test the efficacy of new medications and devices.
Financial overview
We have incurred significant losses since our inception. We may continue to incur significant losses in the foreseeable future, and we may never achieve or maintain profitability. Our historical collaboration and licensing revenues were generated under a business model from which we have gradually transitioned, and we do not expect to expend significant resources servicing our historical collaborations in the future. We may enter into strategic transactions for individual platforms or programs in the future from which we may generate new collaboration and licensing revenues. We continue to generate product and service revenues through our Exemplar subsidiary. Papzimeos was approved by the FDA in August 2024, and we expect to begin recognizing revenue on that product in future periods. Products currently in our clinical pipeline will require regulatory approval and/or commercial scale-up before they may commence significant product sales and operating profits.
As we continue our efforts to focus our business and generate additional capital, we may be willing to enter into transactions involving our operating segment or one or more of our reporting units for which we have goodwill and intangible assets. These efforts could result in us identifying impairment indicators or recording impairment charges in future periods. In addition, market changes and changes in judgments, assumptions, and estimates that we have made in assessing the fair value of goodwill could cause us to consider some portion or all of certain assets to become impaired.
Sources of revenue
Currently, our primary revenues arise from Exemplar, which generates product and service revenues through the development and sale of genetically engineered miniature swine models. We recognize revenue when control of the promised product or service is transferred to the customer.
In future periods, our revenue profile is expected to evolve significantly with the commercialization of Papzimeos, our newly approved gene therapy for recurrent respiratory papillomatosis. As we transition to a commercial-stage company, our revenues will increasingly depend on our ability to successfully launch Papzimeos, advance our proprietary programs, and bring additional products enabled by our technology platforms to market. We currently have not generated any revenue from commercial product sales of Papzimeos.
We anticipate that collaboration revenue will remain minimal in the near term, except in cases where revenue is recognized upon cancellation or modification of existing agreements, or through future strategic transactions involving our platforms or programs. Should new collaboration agreements or strategic transactions be executed, revenue could be positively impacted.
Accordingly, there can be no assurance as to the timing, magnitude, and predictability of revenues, if any, to which we might be entitled.
Cost of products and services
Currently, cost of products and services, all which are currently related to our Exemplar business, includes primarily labor and related costs, drugs and supplies, feed used in production, and facility charges, including rent and depreciation. Fluctuations in the price of livestock and feed have not had a significant impact on our operating margins and no derivative financial instruments are used to mitigate the price risk.
In future periods, we expect our costs of products to be driven by the commercialization of Papzimeos. These costs will include manufacturing (including labor and other direct costs), packaging, quality assurance, and other production-related expenses, including labor and facility charges, such as rent and depreciation. As Papzimeos becomes our primary revenue-generating product, its associated cost structure will represent a significant portion of our overall cost of goods sold.
Research and development expenses
We recognize research and development expenses as they are incurred. Our research and development expenses consist primarily of:
•salaries and benefits, including stock-based compensation expense and severance benefits, for personnel in research and development functions;
•fees paid to consultants and contract research organizations who perform research on our behalf and under our direction;
•costs related to laboratory supplies used in our research and development efforts and acquiring, developing, and manufacturing preclinical study and clinical trial materials as well as potential commercial products;
•costs related to certain in-licensed technology rights or in-process research and development;
•amortization of patents and related technologies acquired in mergers and acquisitions;
•facility-related expenses, which include direct depreciation costs and expenses for rent and maintenance of facilities and other operating costs; and
•other manufacturing costs related to the manufacture of drug products that have not yet been approved by the FDA.
Our research and development expenses primarily relate to either costs incurred to expand or otherwise improve our technologies or the costs incurred to develop our own products and services. Prior to August 2024, the Company was progressing preclinical and clinical programs that targeted urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases, including PRGN-3005, PRGN-3006, PRGN-3007, PRGN-2009, PRGN-2012 and AG019. As discussed above in the Overview, in August 2024, we announced a strategic prioritization of our clinical portfolio and streamlining of resources, to focus on potential commercialization of the PRGN-2012 AdenoVerse®gene therapy for the treatment of RRP. Following the FDA approval of Papzimeos in August 2025, we no longer expect to record research and development expenses related to PRGN-2012 for adults. Future costs associated with this product for adults are expected to be classified as costs of products or capitalized as inventory.
In addition to the strategic prioritization announced in August 2024, the amount of research and development expenses may be impacted by, among other things, the number and nature of our own proprietary programs.
Selling, general and administrative expenses (SG&A)
Selling, general and administrative expenses consist of salaries and related costs, including stock-based compensation expense and severance benefits, for employees in executive, commercial (including sales), operational, finance, information technology,
legal, and corporate communications functions. Other significant SG&A expenses include rent and utilities, insurance, marketing and promotion activities, sales operations, accounting, and legal services (including the cost of settling any claims and lawsuits), and expenses associated with obtaining and maintaining our intellectual property.
SG&A expenses may fluctuate in the future depending on the scaling of our corporate functions required to support our corporate initiatives, the strategic prioritization of assets, the build-up of our commercialization efforts and the outcomes of legal claims and assessments against us.
Other income (expense), net
Other income and expense, net consists primarily of changes in the fair value of warrant liabilities, interest expense related to the term loans entered into in 2025 that mature in 2030, and interest earned on our cash and cash equivalents and short-term and long-term investments, which may fluctuate based on amounts invested and current interest rates.
Results of operations
Comparison of the three months ended September 30, 2025 and the three months ended September 30, 2024
The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024 (dollars in thousands):
Three Months Ended
September 30, 		Dollar
Change 		Percent
Change
2025 2024
Revenues
Collaboration and licensing revenues $ 1,818 $ - $ 1,818 N/A
Product revenues 162 66 96 145.5 %
Service revenues 942 886 56 6.3 %
Other revenues - 1 (1) (100.0) %
Total revenues 2,922 953 1,969 >200%
Operating expenses
Cost of product and services 1,035 1,009 26 2.6 %
Research and development 12,377 11,370 1,007 8.9 %
Selling, general and administrative 23,991 9,836 14,155 143.9 %
Total operating expenses 37,403 22,215 15,188 68.4 %
Operating loss (34,481) (21,262) (13,219) 62.2 %
Total other expense, net
(111,863) (2,704) (109,159) >200%
Loss before income taxes
(146,344) (23,966) (122,378) >200%
Income tax expense
- (12) 12 (100.0) %
Net Loss
$ (146,344) $ (23,978) $ (122,366) <200%
Deemed dividend on preferred stock
$ (179,000) $ - $ (179,000) - %
Net loss attributable to common shareholders
$ (325,344) $ (23,978) $ (301,366) <200%
Net loss per share attributable to common shareholders, basic and diluted
$ (1.06) $ (0.09) $ (0.97) <200%
Total revenues
Total revenues increased by $2.0 million, or >200% primarily driven by the increase in collaboration and licensing revenues. In September 2025, the Company and PTC Therapeutics mutually agreed to terminate their existing exclusive channel collaboration ("ECC") agreement. As a result, the Company recognized the remaining deferred revenue associated with the agreement, totaling $1.8 million. There was no comparable revenue recognized in the prior year period.
Cost of product and services
Cost of product and services slightly increased, primarily as a result of higher product and service revenues at our Exemplar subsidiary.
Research and development expenses
Research and development expenses increased by $1.0 million, or 9%, compared to the three months ended September 30, 2024. The increase was primarily driven by increased manufacturing expenses and lab supplies related to commercial manufacturing costs of Papzimeos prior to its FDA approval, professional fees incurred in connection with regulatory filing procedures as well as increased employee-related expenses pertaining to the vesting of performance-based stock unit ("PSU") awards upon the FDA's approval of Papzimeos in the third quarter of 2025. These increases were offset by the capitalization of inventory related costs subsequent to the FDA's approval of Papzimeos.
Selling, general and administrative expenses
SG&A expenses increased by $14.2 million, or 144%, compared to the three months ended September 30, 2024. This increase was primarily due to $9.0 million increase in costs incurred related to Papzimeos commercial readiness, including sales and marketing efforts as well as professional and consulting fees to support our business growth and commercial leadership. In addition, other employee-related costs increased approximately $4.0 million, which includes increased costs associated with the vesting of certain PSU awards which was tied to the FDA's approval of Papzimeos, and professional and legal fees increased $1.0 million primarily due to costs incurred related to general corporate matters.
Total other income (expense), net
Total other (expense), net increased by $109.2 million compared to the three months ended September 30, 2024. This change was primarily due to a $111.5 million increase in the fair value of warrant liabilities prior to their reclassification into permanent equity in the third quarter of 2025. Substantially all of the increase in the fair value of warrant liabilities was as a result of an increase in the Company's common stock price at the valuation date compared to June 30, 2025. This increase was partially offset by a decrease of $3.0 million third quarter 2024 charge related to the reclassification of cumulative translation losses resulting from the final closing of the ActoBio facilities in the third quarter of 2024.
Deemed dividend on preferred stock
On September 15, 2025, all Series A Preferred Stockholders converted 79,000 shares (stated value of $79.0 million) into 54,937,411 shares of common stock at the then-current conversion rate of 695.4103 shares per $1,000. Because the conversion feature resulted in a variable number of common shares to be issued, the conversion was accounted for as a redemption under Accounting Standards Codification ("ASC") 260, resulting in the recording of a $179.0 million non-cash deemed dividend as a reduction to additional paid-in capital (and an increase in net loss attributable to common shareholders when computing net loss per share).
Net loss per share attributable to common shareholders
Net loss per share attributable to common shareholders (basic and diluted) increased to $1.06 for the three months ended September 30, 2025, compared to $0.09 for the three months ended September 30, 2024. The increase was primarily driven by the changes noted above (including the $111.5 million change in fair value of warrant liabilities, representing $0.36 per basic and diluted share) plus the deemed dividend, as discussed above (representing $0.58 per basic and diluted share), partially offset by a higher weighted-average number of shares outstanding, primarily due to the conversion of preferred shares into common shares during the third quarter of 2025.
Comparison of the nine months ended September 30, 2025 and the nine months ended September 30, 2024
The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (dollars in thousands):
Nine months ended
September 30, 		Dollar
Change 		Percent
Change
2025 2024
Revenues
Collaboration and licensing revenues $ 1,818 $ - $ 1,818 N/A
Product revenues 406 235 $ 171 72.8 %
Service revenues 2,838 2,478 360 14.5 %
Other revenues 57 22 35 159.1 %
Total revenues 5,119 2,735 2,384 87.2 %
Operating expenses
Cost of product and services 3,227 3,098 129 4.2 %
Research and development 34,343 41,312 (6,969) (16.9) %
Selling, general and administrative 52,483 30,293 22,190 73.3 %
Impairment of goodwill 3,907 1,630 2,277 139.7 %
Impairment of other noncurrent assets - 32,915 (32,915) (100.0) %
Total operating expenses 93,960 109,248 (15,288) (14.0) %
Operating loss (88,841) (106,513) 17,672 (16.6) %
Total other expense, net
(138,295) (1,701) (136,594) >200%
Loss before income taxes
(227,136) (108,214) (118,922) 109.9 %
Income tax (expense) benefit
(3) 1,706 (1,709) (100.2) %
Net loss
$ (227,139) $ (106,508) $ (120,631) 113.3 %
Deemed dividend on preferred stock
$ (179,000) $ - $ (179,000) - %
Net loss attributable to common shareholders
$ (406,139) $ (106,508) $ (299,631) >200%
Net loss per share attributable to common shareholders, basic and diluted
$ (1.36) $ (0.41) $ (0.95) <200%
Total revenues
Total revenues increased by $2.4 million, or 87% primarily driven by the increase in collaboration and licensing revenues. In September 2025, the Company and PTC Therapeutics mutually agreed to terminate their existing ECC agreement. As a result, the Company recognized the remaining deferred revenue associated with the agreement, totaling $1.8 million. There was no comparable revenue recognized in the prior year period. In addition, Product and Service revenues increased by $0.5 million, or 20%, compared to the nine months ended September 30, 2024. This increase was primarily related to increased volume of products sold and services rendered at our subsidiary, Exemplar.
Cost of product and services
Cost of product and service increased primarily as a result of higher revenues at Exemplar.
Research and development expenses
Research and development expenses decreased by $7.0 million, or 17%, compared to the nine months ended September 30, 2024. The decrease was primarily driven by a $5.4 million decrease in costs associated with ActoBio, including depreciation, amortization, personnel and other research and development costs after the Company closed its operations in late 2024. Additionally, external services declined by $3.5 million, primarily due to reduced activity for contract research organizations as a result of the strategic prioritization of our pipeline announced in the third quarter of 2024. These decreases were partially offset by increased manufacturing costs related to Papzimeos prior to its FDA approval and higher professional fees incurred in connection with regulatory filing procedures.
Selling, general and administrative expenses
SG&A expenses increased by $22.2 million, or 73%, compared to the nine months ended September 30, 2024. This increase was primarily due to an $18.0 million increase in costs incurred related to Papzimeos commercial readiness, including sales and marketing efforts as well as professional and consulting fees to support our business growth and commercial leadership. In addition, other employee-related costs increased by approximately $4.7 million, which includes increased costs associated with the vesting of certain PSU awards which was tied to the FDA's approval of Papzimeos.
Impairment of goodwill and other noncurrent assets
Impairment of goodwill and other noncurrent assets decreased by $30.6 million, or 89%, from the nine months ended September 30, 2024. In the second quarter of 2025, we recorded an impairment charge of $3.9 million related to our Exemplar reporting unit. In the second quarter of 2024, in conjunction with the suspension of ActoBio's operations, we recognized $34.5 million of goodwill and other noncurrent asset impairment charges.
Total other income (expense), net
Total other (expense), net increased by $136.6 million compared to the nine months ended September 30, 2024, primarily driven by a $139.5 million increase in the fair value of warrant liabilities prior to their reclassification into permanent equity in the third quarter of 2025. Substantially all of the increase in the fair value of warrant liabilities was as a result of an increase in our common stock price at the valuation date compared to December 31, 2024. This increase was partially offset by a $3.0 million 2024 charge related to the reclassification of cumulative translation losses resulting from the final closing of the ActoBio facilities in the third quarter of 2024.
Deemed dividend on preferred stock
On September 15, 2025, all Series A Preferred Stockholders converted 79,000 shares (stated value of $79.0 million) into 54,937,411 shares of common stock at the then-current conversion rate of 695.4103 shares per $1,000. Because the conversion feature resulted in a variable number of common shares to be issued, the conversion was accounted for as a redemption under ASC 260, resulting in the recording of a $179.0 million non-cash deemed dividend as a reduction to additional paid-in capital (and an increase in net loss attributable to common shareholders when computing net loss per share).
Net loss per share attributable to common shareholders
Net loss per share attributable to common shareholders increased to $1.36, compared to $0.41 for the nine months ended September 30, 2024. The increase was primarily driven by the changes noted above (including the $139.5 million change in fair value of warrant liabilities, representing $0.47 per basic and diluted share) plus the deemed dividend, as discussed above (representing $0.60 per basic and diluted share), partially offset by a higher weighted-average number of shares outstanding, primarily due to the conversion of preferred shares to common shares during the third quarter of 2025.
Liquidity and capital resources
Sources of liquidity
We have incurred losses from continuing operations since our inception, and as of September 30, 2025, we had an accumulated deficit of $2.3 billion. From our inception through September 30, 2025, we have funded our operations principally with proceeds received from private and public equity and debt offerings, cash received from our collaborators, cash received through sales of businesses, and through product and service sales made directly to customers. As of September 30, 2025, we had cash and cash equivalents of $14.3 million and investments of $109.3 million. Cash in excess of immediate requirements is typically invested primarily in money market funds, certificate of deposits and U.S. government debt securities in order to maintain liquidity and preserve capital.
In August 2024, we closed a public offering of 39,878,939 shares of our common stock, resulting in net proceeds to us of $30.9 million, after deducting underwriting discounts, fees, and an estimate of other offering expenses.
In December 2024, we issued 79,000 shares of 8.00% Series A Convertible Perpetual Preferred Stock with an initial liquidation preference and stated value of $1,000 per share, together with warrants to purchase 52,666,669 shares of common stock for net proceeds of approximately $78.5 million, after deducting offering expenses. In September 2025, all of the holders of the Series A Convertible Perpetual Preferred Stock converted their 79,000 shares into 54,937,411 shares of our common stock.
In September 2025, the Company entered into a Loan Agreement with investment entities managed by Pharmakon Advisors,
LP. The Company received net proceeds of $92,818 after deducting underwriting discounts and offering expenses of $7,182.
Cash flows
The following table sets forth the significant sources and uses of cash for the periods set forth below:
Nine Months Ended
September 30,
2025 2024
(In thousands)
Net cash (used in) provided by:
Operating activities $ (64,371) $ (59,930)
Investing activities (41,401) 44,653
Financing activities 90,562 32,179
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 15 (25)
Net (decrease) increase in cash, cash equivalents, and restricted cash
$ (15,195) $ 16,877
Cash flows from operating activities:
During the nine months ended September 30, 2025, our net loss was $227.1 million, which includes the following significant noncash expenses and benefits totaling $153.3 million: (i) $139.5 million of appreciation in the fair value of warrant liabilities prior to their reclassification to permanent equity in the third quarter of 2025, (ii) $3.9 million impairment of goodwill, (iii) $8.7 million of stock-based compensation expense, (iv) $2.1 million of depreciation and amortization expense, (v) $0.5 million for shares issued as payment for services, and (vi) $0.1 million related to accretion of debt discount and amortization of financing cost, partially offset by non-cash benefits of $1.5 million due to amortization of discounts on investments. In addition, changes in operating assets and liabilities provided $9.5 million of cash for operating activities.
During the nine months ended September 30, 2024, our net loss was $106.5 million, which includes the following significant noncash expenses and benefits totaling $46.1 million: (i) $34.5 million of impairment losses, (ii) $6.6 million of stock-based compensation expense, (iii) $3.9 million of depreciation and amortization expense, (iv) $2.9 million due to reclassification of cumulative translation losses, and (v) $0.6 million of shares issued as payment for services, offset by non-cash benefits of $1.7 million due to deferred income taxes and $0.7 million due to amortization of discounts on investments. In addition, changes in operating assets and liabilities provided $0.5 million of cash for operating activities.
Cash flows from investing activities:
During the nine months ended September 30, 2025, we purchased $39.4 million of investments, net of sales and maturities, and purchased $2.0 million of property, plant and equipment, primarily related to the build-out of our manufacturing facility.
During the nine months ended September 30, 2024, we received $52.1 million from sales and maturities of investment, net of purchases, and purchased $7.6 million of property, plant and equipment, primarily related to the build-out of our manufacturing facility.
Cash flows from financing activities:
During the nine months ended September 30, 2025, we received $93.5 million under the Loan Agreement with entities managed by Pharmakon Advisors LP (see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 9" appearing elsewhere in this Quarterly Report) and $1.1 million from the exercise of stock options, and made the following financing activity payments: $0.4 million for costs related to a prior year equity issuance, $0.5 million for costs related to the prior year preferred stock issuance, $1.8 million to taxing authorities related to vesting of equity awards, and $1.3 million for performance share units settled in cash.
During the nine months ended September 30, 2024, we received $31.8 million of proceeds, net of certain issuance costs, from the sale of our common stock in an underwritten public offering and $0.3 million of proceeds from stock option exercises.
Future capital requirements
Our future capital requirements will depend on many factors, including:
•progress in our research and development programs, as well as the magnitude and speed of development of these programs;
•capital expenditures to expanding our manufacturing capabilities, including the potential manufacturing of other product candidates;
•the speed and scale of building our commercial operations as we prepare for commercial readiness;
•the sales price and availability of adequate third-party coverage and reimbursement for Papzimeos;
•selling and marketing activities undertaken in connection with the commercialization of Papzimeos, potential
commercialization of any future product candidates, if approved, and costs involved in the creation of an effective
sales and marketing organization;
•the timing of regulatory approval of our product candidates;
•the timing, receipt, and amount of any payments received in connection with strategic transactions;
•the timing, receipt, and amount of upfront, milestone, and other payments, if any, from present and future collaborators, if any;
•the timing, receipt, and amount of sales and royalties, if any, from our product candidates;
•the timing and capital requirements to scale up our various product candidates and service offerings and customer acceptance thereof;
•the timing of and amount of payments under our indemnification accruals;
•our ability to maintain and establish new collaborative arrangements and/or new strategic initiatives;
•the resources, time, and cost required for the preparation, filing, prosecution, maintenance, and enforcement of our intellectual property portfolio;
•strategic mergers and acquisitions, if any, including both the upfront acquisition cost as well as the cost to integrate, maintain, and expand the strategic target; and
•the costs associated with legal activities, including litigation, arising in the course of our business activities and our ability to prevail in any such legal disputes.
Until such time, if ever, as we can regularly generate positive operating cash flows, we plan to finance our cash needs through a combination of equity offerings, debt or royalty monetization financings, government, or other third-party funding, strategic alliances, sales of assets, and licensing arrangements. We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Our current stock price may make it more difficult to pursue equity financings and lead to substantial dilution if the price of our common stock does not increase. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through strategic transactions, collaborations, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or to grant licenses on terms that may not be favorable to us.
We are subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of product candidates, as well as launching a first commercial product. Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development, and clinical manufacturing of its product candidates. Our success is dependent upon our ability to continue to raise additional capital in order to fund ongoing research and development, obtain regulatory approval of our products, successfully commercialize our products, generate revenue, meet our obligations, and, ultimately, attain profitable operations.
Our consolidated financial statements as of September 30, 2025 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
Based on current projections, management believes that its existing cash, cash equivalents and short and long-term investments, combined with anticipated potential revenue from the commercialization of Papzimeos, will enable us to continue our operations for at least one year from the date of this filing. We are subject to all of the risks inherent in the development of new products (including commercialization of Papzimeos), and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
Our ability to continue as a going concern is dependent upon the successful execution of management's plans, which include the successful commercialization of Papzimeos. In addition, we 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 non-core assets, marketing, distribution or licensing arrangements), dilutive financings (including equity and/or debt financings with an equity component) and, ultimately from revenue related to product sales, to the extent our product candidates receive marketing approval and can be commercialized. There can be no assurance that new financings or other transactions will be available to us on commercially acceptable terms, or at all, and such financings may adversely affect the holdings or rights of our stockholders and may cause significant dilution to existing stockholders.
See the section entitled "Risk Factors" in our 2024 Annual Report for additional risks associated with our substantial capital requirements.
Contractual obligations and commitments
The following table summarizes our significant contractual obligations and commitments from continuing operations as of September 30, 2025 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:
Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years
(In thousands)
Operating leases $ 6,805 $ 1,689 $ 2,953 $ 2,163 $ -
Purchase commitments 278 115 163 - -
Cash interest payable on long-term debt (*)
43,666 10,582 21,253 11,831 -
Long-term debt
100,000 - - 100,000 -
Total $ 150,749 $ 12,386 $ 24,369 $ 113,994 $ -
(*) Interest is calculated using static annual rate of 10.67%, although our long-term debt carries a variable interest rate (see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 9" appearing elsewhere in this Quarterly Report).
In addition to the obligations in the table above, as of September 30, 2025, we are party to license agreements with various third parties that contain future milestones and royalty payment obligations related to development milestones and/or commercial sales of products that incorporate or use their technologies. Because these agreements are generally subject to termination by us or are dependent on certain condition precedents within our control, no amounts are included in the tables above. As of September 30, 2025, we also had research and development commitments with third parties totaling $6.4 million that had not yet been incurred.
Off-balance sheet arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under Security and Exchange Commission rules.
Critical accounting policies and estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which we have prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2024 Annual Report, except for the addition of inventory valuation. Beginning with the FDA's approval of Papzimeos in the third quarter of 2025, we began to capitalize inventory at Precigen related to Papzimeos. Inventory is stated at the lower of cost or net realizable value, and is determined using the first-in, first-out method. The Company evaluates inventory recoverability at each reporting period and adjusts net realizable value for excess, slow-moving, or obsolete inventory. If the net realizable value is lower than cost, the inventory is written down accordingly, and the resulting impairment charge is recognized as a component of cost of goods sold. Inventory used for clinical development purposes is expensed to research and development expense when consumed. Shipping and handling costs for product shipments to customers are recorded as incurred in cost of products sold.
Recent accounting pronouncements
For information with respect to recent accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 2" appearing elsewhere in this Quarterly Report.
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