Orgenesis Inc (NASDAQ:ORGS), stock climbed Thursday after the developer of advanced cell therapies, posted a 139% expansion in gross profit to $7.8 million for fiscal year 2018, compared to $3.3 million for the previous financial year.
Revenues for the Germantown, Maryland-based company also increased 85% to $18.7 million in the 2018 financial year compared to $10.1 million for fiscal 2017. Meanwhile, gross margin increased to 42% from 32.5%.
The company also finished with cash and cash equivalents of $16.1 million as of November 30, 2018. It improved its working capital surplus substantially compared to a loss of $9.6 million in the same period a year ago.
Shares in Orgenesis climbed 2.02% to $4.97.
The company’s subsidiary, MaSTherCell Global is a global contract development and manufacturing organization, or CDMO. Orgenesis highlighted that the fast-growing CDMO segment achieved $4 million in operating profits.
"We are pleased to report strong growth, increased gross profit and solid gross margin improvement in fiscal 2018,” said Orgenesis CEO Vered Caplan in a statement. “Our CDMO segment, Masthercell Global generated $22.6 million in sales, and an operating profit of $4 million on a standalone basis. While we continue to grow Masthercell's backlog and customer base, one of our key challenges in fiscal 2018 was ramping up to meet the growing global demand.”
Caplan said that to address “capacity constraints” the company recently opened a new 6,458 square feet production wing at its Belgium site to provide Masthercell with five “additional late-stage and commercial-ready clean rooms.”
“In total, we have more than doubled our manufacturing capacity in 2018, which positions us for continued strong growth in 2019. In addition, we recently announced expansion plans into the US,” said Caplan.
READ: Orgenesis unveils new offices, labs at Accessia Pharma in Belgium to boost its point-of-care cellular therapy platform
MaSTherCell Global Inc is building a new 30,000 square feet manufacturing facility in Houston. With the US expansion, the company, which develops advanced cell therapies, will now have manufacturing facilities in three continents spanning North America, Europe and Asia
MaSTherCell is also backed by Great Point Partners LLC, a healthcare investment firm based in Greenwich, Connecticut.
Meanwhile, Orgenesis said that it is opening new offices and labs at Accessia Pharma in Liège, Belgium, for its Belgian subsidiary, Orgenesis SPRL, to support its point-of-care cellular therapy platform.
Caplan said the new laboratories in Belgium would “strengthen the roll-out” of the US company’s point-of-care strategy across Europe.
"In addition, we have partnered with local companies to expand our point-of-care activity to Japan and India. Importantly, we have already entered agreements that will begin generating revenue within this segment," said Caplan.
Orgenesis said its goal is to utilize its know-how and intellectual property to advance new autologous cell therapies to a clinical stage and enable point-of-care cell therapy development and services.
Two of the most common types of stem cell transplants are autologous and allogeneic transplants. Both kinds of stem cell transplantations are a common treatment option for cancers such as leukemia, lymphoma, and multiple myeloma.
An autologous transplant uses a person's own stem cells, while an allogeneic transplant uses stem cells from a donor whose human leukocyte antigens (HLA) are acceptable matches to the patient’s.
-- (Updates with CEO comments about point-of-care strategy and partnerships) --
Contact Uttara Choudhury at [email protected]