Precision BioSciences, Inc. Unaudited Pro Forma Condensed Consolidated Financial Statements
Exhibit 99.1
Precision BioSciences, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On August 15, 2023, Precision BioSciences, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Imugene Limited, an Australian corporation (“Imugene Limited”), and its wholly owned subsidiary Imugene (USA) Inc. (“Imugene US”), a Nevada corporation (collectively, “Imugene”). Pursuant to and simultaneously with the execution of the Purchase Agreement, on August 15, 2023 (the “Closing Date”), Imugene US acquired the manufacturing infrastructure to the Company’s CAR T program that uses azer-cel for the potential treatment of relapsed or refractory non-Hodgkin lymphoma, which includes the Company’s MCAT facility, certain contracts of the Company with respect to the MCAT facility and the Company’s azer-cel program, including the lease to the MCAT facility, and related equipment, supplies, azer-cel clinical trial inventory and other assets related to the Company’s CAR T cell therapy platform (the “Acquisition").
In consideration for the Acquisition, Imugene US assumed certain liabilities of the Company, paid the Company $8 million in cash, and issued to the Company convertible notes in an aggregate principal amount of $13 million (the "Convertible Notes"). The Convertible Notes are non-interest bearing and mature on the first anniversary of the Closing Date. On the maturity date, the Convertible Notes generally must be redeemed with cash, converted into ordinary shares of Imugene Limited at a conversion price based on the volume weighted average price of Imugene Limited’s ordinary shares prior to the date of conversion, or partially redeemed with cash and partially converted into shares.
In connection with the Purchase Agreement, on the Closing Date, the Company and Imugene US entered into a License Agreement (the “License Agreement”), pursuant to which the Company granted Imugene US certain exclusive and non-exclusive license rights to develop, manufacture, and commercialize oncological applications of the Company’s allogeneic CAR T therapy azer-cel and up to three additional research product candidates directed to targets that Imugene US may nominate prior to the fifth anniversary of the effective date of the License Agreement, pursuant to the terms of the License Agreement.
In connection with the Purchase Agreement and the License Agreement, the Company and Imugene entered into other related agreements and documents, including a registration rights agreement, a transition services agreement, a sublease for laboratory space at the Company’s headquarters and a parent company guaranty from Imugene Limited.
The following unaudited pro forma condensed consolidated financial statements are based on the Company’s historical consolidated financial statements and are presented to illustrate:
The unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read in conjunction with:
The “Precision BioSciences as Reported” column in the unaudited pro forma condensed consolidated financial statements reflects the Company’s historical financial statements for the periods presented and does not reflect any adjustments related to the Acquisition.
The information in the “Discontinued Operations” column in the unaudited pro forma condensed consolidated balance sheet was derived from the Company’s consolidated financial statements and the related accounting records as of June 30, 2023, adjusted to include certain assets and liabilities that have been transferred to Imugene US pursuant to the Purchase Agreement.
The Company believes that the adjustments included within the “Discontinued Operations” column are consistent with the guidance for discontinued operations under accounting principles generally accepted in the United States. The Company’s current estimates on a discontinued operations basis are preliminary and could change as it finalizes discontinued operations accounting to be reported in the Quarterly Report on Form 10-Q for the nine months ending September 30, 2023.
The unaudited pro forma condensed consolidated financial statements have been prepared by management in accordance with Article 11, Pro Forma Financial Information, under Regulation S-X and are for illustrative and informational purposes only. The pro forma financial statements are based on various adjustments and assumptions and are not necessarily indicative of what the Company’s consolidated financial statements actually would have been or will be for any future periods had the Acquisition been completed as of the dates indicated. These estimates and assumptions are based on information currently available to management and do not reflect the final determinations by management of the impact of the Acquisition on the Company’s consolidated financial statements.
The pro forma condensed consolidated financial statements do not purport to project the future financial position or operating results of the Company following the completion of the Acquisition. The pro forma condensed consolidated financial statements do not include adjustments to reflect any potential synergies or dis-synergies that may result from the Acquisition. The actual effects of the Acquisition will differ from the pro forma adjustments.
Precision BioSciences, Inc.
Unaudited Pro Forma Condensed Statement of Operations
Six Months Ended June 30, 2023
(in thousands, except per share data)
|
|
Precision BioSciences, Inc. |
|
|
Discontinued Operations (A) |
|
|
Subtotal |
|
|
Transaction Accounting Adjustments |
|
|
Notes |
|
Pro Forma |
|
|||||
Revenue |
|
$ |
28,569 |
|
|
|
— |
|
|
$ |
28,569 |
|
|
|
— |
|
|
|
|
$ |
28,569 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
||||
Research and development |
|
|
44,104 |
|
|
|
(15,012 |
) |
|
|
29,092 |
|
|
|
— |
|
|
|
|
|
29,092 |
|
General and administrative |
|
|
20,916 |
|
|
|
(137 |
) |
|
|
20,779 |
|
|
|
— |
|
|
|
|
|
20,779 |
|
Total operating expenses |
|
|
65,020 |
|
|
|
(15,149 |
) |
|
|
49,871 |
|
|
|
— |
|
|
|
|
|
49,871 |
|
Operating loss |
|
|
(36,451 |
) |
|
|
15,149 |
|
|
|
(21,302 |
) |
|
|
— |
|
|
|
|
|
(21,302 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss from equity method investment |
|
|
(2,710 |
) |
|
|
— |
|
|
|
(2,710 |
) |
|
|
— |
|
|
|
|
|
(2,710 |
) |
Changes in fair value |
|
|
(769 |
) |
|
|
— |
|
|
|
(769 |
) |
|
|
— |
|
|
|
|
|
(769 |
) |
Interest expense |
|
|
(1,075 |
) |
|
|
— |
|
|
|
(1,075 |
) |
|
|
— |
|
|
|
|
|
(1,075 |
) |
Interest income |
|
|
3,989 |
|
|
|
— |
|
|
|
3,989 |
|
|
|
— |
|
|
|
|
|
3,989 |
|
Gain on disposal of assets |
|
|
65 |
|
|
|
— |
|
|
|
65 |
|
|
|
— |
|
|
|
|
|
65 |
|
Total other expense |
|
|
(500 |
) |
|
|
- |
|
|
|
(500 |
) |
|
|
- |
|
|
|
|
|
(500 |
) |
Net loss |
|
$ |
(36,951 |
) |
|
$ |
15,149 |
|
|
$ |
(21,802 |
) |
|
$ |
- |
|
|
|
|
$ |
(21,802 |
) |
Net loss per share - basic and diluted |
|
|
(0.33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.19 |
) |
|||
Weighted-average number of common shares used in computing net loss per share - basic and diluted |
|
|
112,708,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,708,231 |
|
|||
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Precision BioSciences, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Twelve Months Ended December 31, 2022
(in thousands, except per share data)
|
|
Precision BioSciences, Inc. |
|
|
Discontinued Operations (A) |
|
|
Subtotal |
|
|
Transaction Accounting Adjustments |
|
|
Notes |
|
Pro Forma |
|
|||||
Revenue |
|
$ |
25,098 |
|
|
|
— |
|
|
$ |
25,098 |
|
|
|
— |
|
|
|
|
$ |
25,098 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Research and development |
|
|
83,939 |
|
|
|
(29,907 |
) |
|
|
54,032 |
|
|
|
— |
|
|
(B) |
|
|
54,032 |
|
General and administrative |
|
|
41,525 |
|
|
|
(376 |
) |
|
|
41,149 |
|
|
|
300 |
|
|
(C) |
|
|
41,449 |
|
Total operating expenses |
|
|
125,464 |
|
|
|
(30,283 |
) |
|
|
95,181 |
|
|
|
300 |
|
|
|
|
|
95,481 |
|
Operating loss |
|
|
(100,366 |
) |
|
|
30,283 |
|
|
|
(70,083 |
) |
|
|
(300 |
) |
|
|
|
|
(70,383 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impairment charges |
|
|
(11,438 |
) |
|
|
— |
|
|
|
(11,438 |
) |
|
|
— |
|
|
|
|
|
(11,438 |
) |
Loss on disposal of assets |
|
|
(106 |
) |
|
|
— |
|
|
|
(106 |
) |
|
|
— |
|
|
|
|
|
(106 |
) |
Changes in fair value |
|
|
(510 |
) |
|
|
— |
|
|
|
(510 |
) |
|
|
— |
|
|
|
|
|
(510 |
) |
Loss from equity method investment |
|
|
(1,579 |
) |
|
|
— |
|
|
|
(1,579 |
) |
|
|
— |
|
|
|
|
|
(1,579 |
) |
Interest expense |
|
|
(1,111 |
) |
|
|
— |
|
|
|
(1,111 |
) |
|
|
— |
|
|
|
|
|
(1,111 |
) |
Interest income |
|
|
3,473 |
|
|
|
— |
|
|
|
3,473 |
|
|
|
703 |
|
|
(D) |
|
|
4,176 |
|
Total other expense |
|
|
(11,271 |
) |
|
|
— |
|
|
|
(11,271 |
) |
|
|
703 |
|
|
|
|
|
(10,568 |
) |
Net loss |
|
$ |
(111,637 |
) |
|
$ |
30,283 |
|
|
$ |
(81,354 |
) |
|
$ |
403 |
|
|
|
|
$ |
(80,951 |
) |
Net loss per share - basic and diluted |
|
|
(1.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.92 |
) |
|||
Weighted-average number of common shares used in computing net loss per share - basic and diluted |
|
|
87,898,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,898,498 |
|
|||
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Precision BioSciences, Inc
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Twelve Months Ended December 31, 2021
(in thousands, except per share data)
|
|
Precision BioSciences, Inc. |
|
|
Discontinued Operations (A) |
|
|
Pro Forma |
|
|||
Revenue |
|
$ |
115,529 |
|
|
|
(72,851 |
) |
|
$ |
42,678 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
|
115,238 |
|
|
|
(27,244 |
) |
|
|
87,994 |
|
General and administrative |
|
|
39,667 |
|
|
|
(21 |
) |
|
|
39,646 |
|
Total operating expenses |
|
|
154,905 |
|
|
|
(27,265 |
) |
|
|
127,640 |
|
Operating loss |
|
|
(39,376 |
) |
|
|
(45,586 |
) |
|
|
(84,962 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|||
Loss on disposal of assets |
|
|
(26 |
) |
|
|
— |
|
|
|
(26 |
) |
Changes in fair value |
|
|
2,555 |
|
|
|
— |
|
|
|
2,555 |
|
Gain on deconsolidation of subsidiary |
|
|
5,985 |
|
|
|
|
|
|
5,985 |
|
|
Income from equity method investment |
|
|
184 |
|
|
|
— |
|
|
|
184 |
|
Interest expense |
|
|
(132 |
) |
|
|
— |
|
|
|
(132 |
) |
Interest income |
|
|
208 |
|
|
|
— |
|
|
|
208 |
|
Total other income |
|
|
8,774 |
|
|
|
— |
|
|
|
8,774 |
|
Net loss |
|
$ |
(30,602 |
) |
|
$ |
(45,586 |
) |
|
$ |
(76,188 |
) |
Net loss per share - basic and diluted |
|
|
(0.52 |
) |
|
|
|
|
|
(1.30 |
) |
|
Weighted-average number of common shares used in computing net loss per share - basic and diluted |
|
|
58,688,102 |
|
|
|
|
|
|
58,688,102 |
|
|
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Precision BioSciences, Inc.
Unaudited Pro Forma Condensed Balance Sheet
As of June 30, 2023
(in thousands)
|
|
Precision BioSciences, Inc. |
|
|
Discontinued Operations (A) |
|
|
Subtotal |
|
|
Transaction Accounting Adjustments |
|
|
Notes |
|
Pro Forma |
|
|||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
137,794 |
|
|
|
— |
|
|
$ |
137,794 |
|
|
$ |
8,304 |
|
|
(E) |
|
$ |
146,098 |
|
Accounts receivable |
|
|
652 |
|
|
|
— |
|
|
|
652 |
|
|
|
— |
|
|
|
|
|
652 |
|
Prepaid expenses |
|
|
8,915 |
|
|
|
(569 |
) |
|
|
8,346 |
|
|
|
— |
|
|
|
|
|
8,346 |
|
Other current assets |
|
|
503 |
|
|
|
— |
|
|
|
503 |
|
|
|
— |
|
|
|
|
|
503 |
|
Total current assets |
|
|
147,864 |
|
|
|
(569 |
) |
|
|
147,295 |
|
|
|
8,304 |
|
|
|
|
|
155,599 |
|
Property, equipment, and software—net |
|
|
18,249 |
|
|
|
(11,750 |
) |
|
|
6,499 |
|
|
|
— |
|
|
|
|
|
6,499 |
|
Intangible assets—net |
|
|
1,552 |
|
|
|
(258 |
) |
|
|
1,294 |
|
|
|
— |
|
|
|
|
|
1,294 |
|
Right-of-use assets—net |
|
|
4,721 |
|
|
|
(3,341 |
) |
|
|
1,380 |
|
|
|
— |
|
|
|
|
|
1,380 |
|
Investments in equity securities |
|
|
1,807 |
|
|
|
— |
|
|
|
1,807 |
|
|
|
— |
|
|
|
|
|
1,807 |
|
Equity method investment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
Convertible note receivable |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,043 |
|
|
(F) |
|
|
12,043 |
|
Note receivable—net |
|
|
6,885 |
|
|
|
— |
|
|
|
6,885 |
|
|
|
— |
|
|
|
|
|
6,885 |
|
Other assets |
|
|
619 |
|
|
|
(304 |
) |
|
|
315 |
|
|
|
— |
|
|
|
|
|
315 |
|
Total assets |
|
$ |
181,697 |
|
|
$ |
(16,222 |
) |
|
$ |
165,475 |
|
|
$ |
20,347 |
|
|
|
|
$ |
185,822 |
|
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Precision BioSciences, Inc.
Unaudited Pro Forma Condensed Balance Sheet
As of June 30, 2023
(in thousands)
|
|
Precision BioSciences, Inc. |
|
|
Discontinued Operations (A) |
|
|
Subtotal |
|
|
Transaction Accounting Adjustments |
|
|
Notes |
|
Pro Forma |
|
|||||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable |
|
$ |
781 |
|
|
|
— |
|
|
$ |
781 |
|
|
|
— |
|
|
|
|
$ |
781 |
|
Accrued compensation |
|
|
3,500 |
|
|
|
(718 |
) |
|
|
2,782 |
|
|
|
— |
|
|
|
|
|
2,782 |
|
Accrued clinical and research and development expenses |
|
|
2,280 |
|
|
|
(1,434 |
) |
|
|
846 |
|
|
|
— |
|
|
|
|
|
846 |
|
Deferred revenue |
|
|
23,811 |
|
|
|
— |
|
|
|
23,811 |
|
|
|
— |
|
|
|
|
|
23,811 |
|
Lease liabilities |
|
|
2,499 |
|
|
|
(727 |
) |
|
|
1,772 |
|
|
|
— |
|
|
|
|
|
1,772 |
|
Loan payable—net |
|
|
22,317 |
|
|
|
— |
|
|
|
22,317 |
|
|
|
— |
|
|
|
|
|
22,317 |
|
Other current liabilities |
|
|
1,211 |
|
|
|
— |
|
|
|
1,211 |
|
|
|
— |
|
|
|
|
|
1,211 |
|
Total current liabilities |
|
|
56,399 |
|
|
|
(2,879 |
) |
|
|
53,520 |
|
|
|
— |
|
|
|
|
|
53,520 |
|
Deferred revenue |
|
|
78,084 |
|
|
|
— |
|
|
|
78,084 |
|
|
|
— |
|
|
|
|
|
78,084 |
|
Lease liabilities |
|
|
3,173 |
|
|
|
(3,026 |
) |
|
|
147 |
|
|
|
— |
|
|
|
|
|
147 |
|
Contract liabilities |
|
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
|
|
|
|
10,000 |
|
Total liabilities |
|
|
147,656 |
|
|
|
(5,905 |
) |
|
|
141,751 |
|
|
|
— |
|
|
|
|
|
141,751 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
||||
Preferred Stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
Common Stock |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
|
|
1 |
|
Additional paid-in capital |
|
|
500,255 |
|
|
|
— |
|
|
|
500,255 |
|
|
|
— |
|
|
|
|
|
500,255 |
|
Accumulated deficit |
|
|
(465,263 |
) |
|
|
(10,317 |
) |
|
|
(475,580 |
) |
|
|
20,347 |
|
|
(G) |
|
|
(455,233 |
) |
Treasury stock |
|
|
(952 |
) |
|
|
— |
|
|
|
(952 |
) |
|
|
— |
|
|
|
|
|
(952 |
) |
Total stockholders’ equity |
|
|
34,041 |
|
|
|
(10,317 |
) |
|
|
23,724 |
|
|
|
20,347 |
|
|
|
|
|
44,071 |
|
Total liabilities and stockholders’ equity |
|
$ |
181,697 |
|
|
$ |
(16,222 |
) |
|
$ |
165,475 |
|
|
$ |
20,347 |
|
|
|
|
$ |
185,822 |
|
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Precision BioSciences, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements