Arcadia Biosciences Announces Fourth-Quarter and Full-Year 2016 Financial Results and Business Highlights
DAVIS, Calif.--(BUSINESS WIRE)-- Arcadia Biosciences, Inc. (Nasdaq: RKDA), an agricultural technology company that creates value for farmers while benefitting the environment and enhancing human health, today released its financial and business results for the fourth quarter and full year of 2016.
The company’s loss from operations was $5.5 million in the fourth quarter and $18.6 million for the full year of 2016 compared to $4.1 million in the fourth quarter and $15.6 million for 2015. Net loss attributable to common stockholders in the fourth quarter and full year of 2016 was $5.7 million and $19.6 million, compared to $3.9 million and $20.7 million for the comparable periods in 2015.
Cash on hand and investments at the end of the fourth quarter totaled $53.1 million.
“2016 was a year of transition for Arcadia, as we focused on high value yield and nutrition traits that we believe will deliver near-term revenue,” said Raj Ketkar, president and CEO. “After a comprehensive strategic review, in Q4 we realigned the organization and operations to conserve cash, and we expect to see the benefits of these changes in 2017.
“We will continue to work with our partners to advance our rich pipeline of abiotic stress traits, such as nitrogen use efficiency, water use efficiency and salinity tolerance,” he added.
Business and Technology Highlights
Arcadia made the following business and technical achievements in the fourth quarter of 2016:
- SONOVA® GLA safflower oil use in pet food. Arcadia is awaiting approval from the FDA on its regulatory submission for GLA safflower oil use in pet food, which is expected to open a new market for its highly concentrated SONOVA GLA product.
- Regulatory submittal for HB4 soybeans in China. Through its Verdeca joint venture with Bioceres, Arcadia submitted a regulatory dossier in China for import approval of HB4 stress tolerant soybeans. The trait has received regulatory approval in Argentina, with additional approvals pending in Uruguay and the U.S.
- Kevin Comcowich joined board of directors. Experienced business and financial executive Kevin Comcowich joined Arcadia’s board of directors on October 30, 2016. Comcowich most recently served as the CEO and portfolio manager of HTX Energy Fund in Houston, Texas and has extensive experience in investment management and global capital market strategies. He will serve as an independent director and member of the audit committee.
- Organizational changes. Following a comprehensive strategic review of all technology programs, partner progress and market conditions, Arcadia realigned its organization to support near-term product commercialization and preserve cash. This included a reduction in workforce, management changes and consolidation of facilities to reduce operating expenses by 15-20 percent
Since the close of the fourth quarter, Arcadia has announced the following:
- Arcadia Biosciences Obtains U.S. FDA GRAS Status for SONOVA® GLA Safflower Oil. Arcadia followed FDA-proposed procedures to establish its SONOVA® GLA safflower oil as GRAS under the intended conditions of use. This process included convening an expert panel to review the necessary product safety data and then submitting a notification to the FDA.
- Study Shows Arcadia’s Nitrogen Use Efficiency Trait Increases Yield in NERICA Rice. In field evaluations over three growing seasons and in both upland and lowland rice production systems, rice lines with Arcadia’s NUE trait showed substantial yield increases under different nitrogen application rates. The leading NUE rice line showed a 34 percent increase over controls.
- Origin, Arcadia Announce China Biotechnology Collaboration in Corn. Arcadia announced a collaboration with Origin Agritech to deregulate insect resistance/ herbicide tolerance traits in corn. The project involves the first-ever export of a key corn biotechnology product developed in China to the U.S., and Arcadia will assist Origin in developing information for submission to regulatory authorities in the U.S., China and other countries.
| Arcadia Biosciences, Inc. | |||||||||||||||||||||||||
| Financial Snapshot | |||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| Three Months Ended December 31 | Year Ended December 31 | ||||||||||||||||||||||||
| 2016 | 2015 | % Favorable/ | 2016 | 2015 | % Favorable/ | ||||||||||||||||||||
| (Unfavorable) | (Unfavorable) | ||||||||||||||||||||||||
| Total Revenues | 540 | 1,346 | (60 | %) | 3,188 | 5,414 | (41 | %) | |||||||||||||||||
| Total Operating Expenses | 6,011 | 5,416 | (11 | %) | 21,808 | 20,977 | (4 | %) | |||||||||||||||||
| Loss From Operations | (5,471 | ) | (4,070 | ) | (34 | %) | (18,620 | ) | (15,563 | ) | (20 | %) | |||||||||||||
| Net Loss | (5,708 | ) | (3,857 | ) | (48 | %) | (19,624 | ) | (17,956 | ) | (9 | %) | |||||||||||||
| Net Loss Attributable to Common Stockholders | (5,708 | ) | (3,857 | ) | (48 | %) | (19,624 | ) | (20,727 | ) | 5 | % | |||||||||||||
Revenues
In the fourth quarter of 2016, revenues were $540,000, compared to revenues of $1.3 million in the fourth quarter of 2015. For annual 2016, overall revenues decreased to $3.2 million compared to $5.4 million during the same period of 2015. The quarter-over-quarter and annual results were primarily impacted by delays to the estimated commercialization dates within the portfolio of license agreements as well as the conclusion of certain contract research and government grant projects in 2015.
Operating Expenses
In the fourth quarter of 2016, operating expenses were $6.0 million, compared to $5.4 million in the fourth quarter of 2015. For annual 2016, operating expenses were $21.8 million, compared to $21.0 million during the same period in 2015. Research and development (R&D) spending decreased by $303,000 in 2016, as a result of reduced subcontract work, partially offset by increased costs associated with Arcadia’s program in corn trait development and commercialization initiated in early 2016. General and administrative (SG&A) expenses increased by $1.1 million during the same period, primarily due to severance costs associated with the reductions in force.
Net Loss
Net loss for the fourth quarter of 2016 was $5.7 million, compared to $3.9 million for the fourth quarter of 2015. Net loss for the year was $19.6 million, compared to $18.0 million for 2015. The net loss in the fourth quarter of 2015 included the effect of higher interest expense, and also was impacted by non-cash adjustments to the value of financing-related derivatives. Additionally, the fourth quarter of 2015 net loss included the effect of a reduction to the income tax provision.
Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders for the fourth quarter of 2016 was $5.7 million, compared to $3.9 million for the fourth quarter of 2015. Net loss attributable to common stockholders for the year was $19.6 million, compared to $20.7 million for 2015. The net loss attributable to stockholders for 2015 included adjustments associated with preferred share financing redemption rights and deemed dividends to a warrant holder.
Per share net loss attributable to common stockholders for the fourth quarter of 2016 was 13 cents, compared to 9 cents for the fourth quarter of 2015, and 44 cents for 2016, compared to 73 cents for 2015. The number of shares outstanding used to calculate the per-share losses attributable to common stockholders for each period is weighted and reflects the company’s change from a private to a public company in May 2015.
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) to discuss third-quarter and year-to-date results and key strategic achievements.
Interested participants can join the conference call using the following numbers:
| U.S. Toll-Free Dial-In: | +1-844-243-4690 | |
| International Dial-In: | +1-225-283-0138 | |
| Passcode: | 68547235 | |
A live webcast of the conference call will be available on the “Investors” section of the Arcadia’s website at www.arcadiabio.com. Following completion of the call, a recorded replay will be available on the company’s investor website.
Safe Harbor Statement
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release and the accompanying conference call contain forward-looking statements about the company and its products, including statements relating to components of the company’s long-term financial success and ongoing plans; the company’s traits, commercial products, and collaborations; and the company’s ability to manage the regulatory processes for its traits and commercial products. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: the company’s and its partners’ ability to develop commercial products incorporating its traits and to complete the regulatory review process for such products; the company’s compliance with laws and regulations that impact the company’s business, and changes to such laws and regulations; and the company’s future capital requirements and ability to satisfy its capital needs. Further information regarding these and other factors that could affect the company’s financial results is included in filings the company makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 and additional information that will be set forth in its Form 10-K for the year ended December 31, 2016. These documents are or will be available on the SEC Filings section of the Investor Relations pages of the company’s website at www.arcadiabio.com. All information provided in this release and in the attachments is as of the date hereof, and Arcadia Biosciences, Inc. undertakes no duty to update this information.
About Arcadia Biosciences, Inc.
Based in Davis, Calif., Arcadia Biosciences (Nasdaq: RKDA) develops agricultural products that create added value for farmers while benefitting the environment and enhancing human health. Arcadia’s agronomic performance traits, including Nitrogen Use Efficiency, Water Use Efficiency, Salinity Tolerance, Heat Tolerance and Herbicide Tolerance, are all aimed at making agricultural production more economically efficient and environmentally sound. Arcadia’s nutrition traits and products are aimed at creating healthier ingredients and whole foods with lower production costs. For more information, visit www.arcadiabio.com.
| Arcadia Biosciences, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except share data) | ||||||||
| As of December 31, | ||||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,013 | $ | 23,973 | ||||
| Short-term investments | 48,547 | 26,270 | ||||||
| Accounts receivable | 349 | 706 | ||||||
| Unbilled revenue | 184 | 82 | ||||||
| Inventories — current | 252 | 294 | ||||||
| Prepaid expenses and other current assets | 877 | 692 | ||||||
| Total current assets | 52,222 | 52,017 | ||||||
| Property and equipment, net | 508 | 585 | ||||||
| Inventories — noncurrent | 1,327 | 1,867 | ||||||
| Long-term investments | 2,498 | 19,748 | ||||||
| Other noncurrent assets | 19 | 25 | ||||||
| Total assets | $ | 56,574 | $ | 74,242 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 2,359 | $ | 2,423 | ||||
| Amounts due to related parties | 30 | 19 | ||||||
| Unearned revenue — current | 740 | 1,008 | ||||||
| Total current liabilities | 3,129 | 3,450 | ||||||
| Notes payable | 25,127 | 24,930 | ||||||
| Unearned revenue — noncurrent | 3,120 | 2,637 | ||||||
| Other noncurrent liabilities | 3,000 | 3,000 | ||||||
| Total liabilities | 34,376 | 34,017 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock, $0.001 par value—400,000,000 shares authorized as of | ||||||||
| December 31, 2016 and December 31, 2015; 44,487,678 and 44,184,195 | ||||||||
| shares issued and outstanding as of December 31, 2016 and December | ||||||||
| 31, 2015, respectively | 44 | 44 | ||||||
| Additional paid-in capital | 173,723 | 172,222 | ||||||
| Accumulated deficit | (151,550 | ) | (131,926 | ) | ||||
| Accumulated other comprehensive loss | (19 | ) | (115 | ) | ||||
| Total stockholders’ equity | 22,198 | 40,225 | ||||||
| Total liabilities and stockholders’ equity | $ | 56,574 | $ | 74,242 | ||||
| Arcadia Biosciences, Inc. | ||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except share and per share data) | ||||||||
| Year Ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| Revenues: | ||||||||
| Product | $ | 669 | $ | 466 | ||||
| License | 144 | 1,216 | ||||||
| Contract research and government grants | 2,375 | 3,732 | ||||||
| Total revenues (which includes $0 and $91 | ||||||||
|
from related parties ) |
3,188 | 5,414 | ||||||
| Operating expenses: | ||||||||
| Cost of product revenues | 895 | 892 | ||||||
| Research and development | 8,663 | 8,966 | ||||||
| Selling, general and administrative | 12,250 | 11,119 | ||||||
| Total operating expenses | 21,808 | 20,977 | ||||||
| Loss from operations | (18,620 | ) | (15,563 | ) | ||||
| Interest expense | (1,319 | ) | (2,658 | ) | ||||
| Other income, net | 340 | 521 | ||||||
| Loss on extinguishment of debt | — | (230 | ) | |||||
| Net loss before income taxes | (19,599 | ) | (17,930 | ) | ||||
| Income tax provision | (25 | ) | (26 | ) | ||||
| Net loss | (19,624 | ) | (17,956 | ) | ||||
| Accretion of redeemable convertible preferred stock to | ||||||||
| redemption value | — | (2,574 | ) | |||||
| Deemed dividends to warrant holder | — | (197 | ) | |||||
| Net loss attributable to common stockholders | $ | (19,624 | ) | $ | (20,727 | ) | ||
| Net loss per share attributable to common stockholders: | ||||||||
| Basic and diluted | $ | (0.44 | ) | $ | (0.73 | ) | ||
| Weighted-average number of shares used in per share | ||||||||
| calculations: | — | |||||||
| Basic and diluted | 44,366,816 | 28,559,119 | ||||||
| Other comprehensive income (loss), net of tax | ||||||||
| Unrealized gains (losses) on available-for-sale securities | 96 | (115 | ) | |||||
| Other comprehensive income (loss) | 96 | (115 | ) | |||||
| Comprehensive loss attributable to common stockholders | $ | (19,528 | ) | $ | (20,842 | ) | ||
| Arcadia Biosciences, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| Year Ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (19,624 | ) | $ | (17,956 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation and amortization | 304 | 294 | ||||||
| Loss (gain) on disposal of equipment | 4 | (10 | ) | |||||
| Net amortization of investment premium | 140 | 85 | ||||||
| Payment of research and develop fees with cost investment | — | 500 | ||||||
| Stock-based compensation | 1,059 | 1,392 | ||||||
| Change in fair value of derivative liabilities related to | ||||||||
| convertible promissory notes | — | 9 | ||||||
| Gain on expiration of warrant and derivative liability related | ||||||||
| to notes payable upon IPO | — | (437 | ) | |||||
| Accretion of debt discount | 198 | 837 | ||||||
| Loss on extinguishment of debt | — | 230 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 357 | 336 | ||||||
| Unbilled revenue | (102 | ) | 298 | |||||
| Inventories | 582 | 412 | ||||||
| Prepaid expenses and other current assets | (185 | ) | (415 | ) | ||||
| Other noncurrent assets | 5 | 49 | ||||||
| Accounts payable and accrued expenses | (19 | ) | 125 | |||||
| Amounts due to related parties | 11 | (37 | ) | |||||
| Unearned revenue | 215 | (821 | ) | |||||
| Net cash used in operating activities | (17,055 | ) | (15,109 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from sale of property and equipment | — | 10 | ||||||
| Purchases of property and equipment | (231 | ) | (151 | ) | ||||
| Purchases of investments | (41,385 | ) | (48,719 | ) | ||||
| Proceeds from sales and maturities of investments | 36,315 | 2,500 | ||||||
| Net cash used in investing activities | (5,301 | ) | (46,360 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock upon IPO | — | 68,227 | ||||||
| Payments of IPO issuance costs | — | (8,205 | ) | |||||
| Proceeds from issuance of notes payable | — | 45,000 | ||||||
| Payments of debt issuance costs | (46 | ) | (396 | ) | ||||
| Payments of debt extinguishment costs | — | (1,319 | ) | |||||
| Proceeds from exercise of stock options and purchases through ESPP | 442 | 360 | ||||||
| Payments on notes payable to related party | — | (8,000 | ) | |||||
| Payments on notes payable and convertible promissory notes | — | (26,796 | ) | |||||
| Net cash provided by financing activities | 396 | 68,871 | ||||||
| Net (decrease) increase in cash and cash equivalents | (21,960 | ) | 7,402 | |||||
| Cash and cash equivalents — beginning of period | 23,973 | 16,571 | ||||||
| Cash and cash equivalents — end of period | $ | 2,013 | $ | 23,973 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | 1,033 | $ | 2,050 | ||||
| Cash paid for income taxes | $ | 29 | $ | 149 | ||||
| NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Accretion of redeemable convertible preferred stock | $ | — | $ | 2,574 | ||||
| Debt issuance costs included in accounts payable and accrued expenses | $ | — | $ | 46 | ||||
| Reclassification of deferred IPO costs to equity | $ | — | $ | 5,022 | ||||
| Deemed dividend to common stock warrant holder | $ | — | $ | 197 | ||||
| Issuance of warrants and derivatives in connection with notes payable issuance | $ | — | $ | 437 | ||||
| Stock option exercise cost included in accounts receivable | $ | — | $ | 1 | ||||
| Conversion of preferred stock to common stock upon IPO | $ | — | $ | 85,455 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170308006191/en/
Arcadia Biosciences, Inc.
Jeff Bergau
[email protected]
+1-312-217-0419
Source: Arcadia Biosciences, Inc.