Calyxt Inc (NASDAQ:CLXT) posted first-quarter results on Thursday that saw revenue leap 1,414% year-over-year on the back of a favorable product mix driven by high oleic soybean products, including oil and meal.
For its first quarter ended March 31, 2020, the Roseville, Minnesota-based company posted revenue of $2.4 million, an increase of $2.2 million from the first quarter of 2019.
The spike in revenue was driven by volume growth and high oleic soybean meal which made up 87% of the income. And most oil revenue came from a world-class customer, said the company.
Calyxt had cash and equivalents including short term investments and restricted cash totaling $47.4 million as of March 31.
In a statement accompanying the numbers, Calyxt CEO Jim Blome said: “The first quarter was initially marked by increasing demand for our high oleic soybean products, offset in the latter part of the quarter by the beginning of the COVID-19 pandemic, which has temporarily disrupted the agricultural and food supply chains globally and depressed food industry demand for premium oil.
“These negative effects increased throughout the quarter and remain with us today. We have responded to ongoing disruptions by pausing our crush schedule to preserve cash, while continuing our seed distribution activities for 2020 plantings, and continuing to ship high oleic soybean oil to our recently announced world-class oil customer."
He added: “Looking forward at the macro-environment, we expect prices for both oil and meal to remain low, demand for oil to remain depressed and, depending on livestock herd sizes, meal demand may also be depressed. We also expect some of the oil and meal price pressure to be partially offset by lower grain purchase costs.”
However, the Calyxt boss emphasized that despite the “headwinds” the company continues to “geographically expand” its soybean meal customer base and sample and test with large consumer packaged goods companies.
“I am confident that when the macro-environment stabilizes, we will emerge stronger than before," Blome said.
Here are some financial highlights:
- Gross margins during the quarter was a negative $1.5 million, a decrease of $1.6 million from the first quarter of 2019, reflecting the higher costs experienced at this early stage of commercialization of high oleic soybean products
- R&D expenses amounted to $2.8 million in the first quarter, an increase of $568,000 from the same period a year earlier due to personnel costs
- Posted a net loss of $11.1 million in the first quarter, an increase of $3.7 million from the same period a year earlier due to changes in gross margin and operating expenses. Net loss per share was $(0.34) per basic and diluted share in the first quarter.
- Adjusted EBITDA loss, a non-GAAP measure, was $8.2 million in the first quarter, an increase of $2.6 million from the first quarter of 2019.
The group said that on the tech front, it improved its gene-editing technology suite. It licensed a new breakthrough technology from the University of Minnesota, invented in a lab run by Calyxt cofounder Dan Voytas, that will enable the company “to significantly reduce the time needed” to develop traits in certain crops.
“I am pleased with the four product candidate advancements in our development process in the quarter. Our technology and robust scientific team are what allows us to maintain a competitive edge in the gene-editing space," continued Blome.
"In the near-term, we expect to launch our first hemp product – improved plants to address key problems facing hemp growers – marking the launch of our second commercial product. We expect the velocity of our revenue opportunities to accelerate as we build up a robust portfolio of commercial products addressing several different markets.”
The company said it is working to ink collaboration agreements to provide the group with cash milestone payments to support liquidity and its vision as an “innovation platform company."
"In summary, despite increased headwinds and unprecedented global disruption, we continue to execute on our business initiatives, improve our gene editing platform, drive forward our R&D programs, and extend our cash runway," concluded Blome.
Calyxt is gearing up to sharing its story at the upcoming BMO Global Farm to Market Virtual Conference on May 13.
Most of the group’s lab workers remain onsite at its headquarters, while others who are able to work remotely have done so since the coronavirus lockdown. The company said protecting its “scientists and their projects” is critical, and it has handled the “transition without disruption.”
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