On March 5, 2020 Cryoport, Inc. (NASDAQ: CYRX) (NASDAQ: CYRXW) ("Cryoport"), a global leader in life sciences solutions, reported financial results for the three and twelve-month periods ended December 31, 2019 (Press release, Cryoport, MAR 5, 2020, View Source [SID1234555244]).
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"We reported revenue of $33.9 million for fiscal year 2019, an increase of 73% from fiscal year 2018," said Jerrell Shelton, Chief Executive Officer of Cryoport. "This record revenue was driven partly by our commercial agreements supporting Gilead’s YESCARTA and Novartis’ KYMRIAH, which contributed $8.3 million in the twelve-month period, an increase of 295% or $6.2 million, compared with the prior year. Revenue from our commercial agreements is expected to continue to grow throughout 2020 as the rollouts of these lifesaving therapies accelerate. We also expect to start generating revenue from the commercial launch of bluebird bio’s ZYNTEGLO, commencing in the first quarter of 2020.
"Global Bioservices contributed $3.0 million in revenue for fiscal year 2019 as a result of the Cryogene acquisition in May 2019. We have made meaningful progress in leveraging cross-selling opportunities and onboarded several Cryoport clients to the Cryogene platform during the second half of 2019. We expect revenue from existing clients and cross-selling opportunities to continue to drive revenue growth throughout 2020.
Mr. Shelton continued, "As we deepen and broaden our Compliance Unified Ecosystem of global strategic alliances to better serve our life sciences markets we are also investing in infrastructure, adding new talent to our teams, and developing new, innovative solutions. This includes the build out of a larger Global Supply Chain Center in Morris Plains, New Jersey and a new Global Supply Chain Center in Houston, Texas to provide global logistics and bioservices solutions to meet the growing demands for our services and to ensure we have the scale to serve an expanded client base. Both centers are expected to be completed during the fourth quarter of 2020."
"In 2019 the global regenerative medicine market experienced significant growth, resulting in an expanding pipeline of therapies. According to the Alliance for Regenerative Medicine, there are currently a total of 1,066 clinical trials in the Regenerative Medicine market, globally, with 381 trials in Phase I, 591 in Phase II, and 94 in Phase III. A record total of five Cryoport supported Marketing Authorization Applications (MAA’s) or Biologics Licensing Applications (BLA’s) were filed during the fourth quarter of 2019. We expect this momentum to accelerate, with approximately 10 additional Cryoport-supported MAA’s and BLA’s filed in 2020, based on internal information and forecasts from the Alliance for Regenerative Medicine. These filings are anticipated to be primary revenue drivers for Cryoport in the future as each of them requires comprehensive temperature-controlled solutions support at scale.
"During the Fourth Quarter, we added a net total of 11 clinical trials, bringing the grand total of regenerative therapy clinical trials supported by Cryoport to a record 436, of which 56 are currently in Phase III. We anticipate the continued expansion of the Regenerative Medicine market, together with growth in Cryoport’s market share, to drive an ongoing and significant increase in the number of clinical trials we support," continued Mr. Shelton.
"The Reproductive Medicine market is solid and growing, with 2019 revenue growing 34% year over year driven by increased adoption of our specialized solutions in domestic and international markets. The Prelude Network, which is the largest network of fertility centers in the U.S., will accelerate our growth in the Reproductive Medicine market as it rolls out our platform of temperature-controlled solutions to its entire clinical network and its strong pipeline of prospects.
"Revenue from the Animal Health market increased 2% year over year and is expected to accelerate in 2020 due to expansion of services to our existing base and the development of new clients in this area. We are confident in our strategies to grow our presence in both the Reproductive Medicine and Animal Health markets in 2020."
"In Fiscal 2019 we secured several new client agreements and top-tier partnerships and invested in new infrastructure build. As a result, we have entered 2020 with a strong foundation, supported by approximately $94 million in cash and short-term investments, to further drive infrastructure build out, organic growth and acquisitions. We will continue to advance our strategy to build out our Compliance Unified Ecosystem ("CUE") within the life sciences industry by expanding both our global network and platform solutions. We believe the Regenerative Medicine market will continue to accelerate as new life changing therapies enter clinical trials and reach commercial approval. This is a pivotal time in Cryoport’s evolution, and we are laser-focused on seizing this unique opportunity to build value for our shareholders and bring life changing therapies to market," Mr. Shelton concluded.
Market Highlights:
Global Logistics Solutions
Biopharma
Biopharma revenue increased by 64% in the twelve months ended December 31, 2019 compared to the same period in 2018; for the quarter ended December 31, 2019, biopharma revenue increased 42% compared to the same period in 2018.
Commercial revenue increased $6.2 million or 295% to $8.3 million for year ended December 31, 2019, as compared to $2.1 million for the same period in 2018; for the quarter ended December 31, 2019, commercial revenue increased $1.6 million or 200% to $2.4 million, as compared to $0.8 million for the same period in 2018.
Cryoport is now supporting a net total of 436 clinical trials as of December 31, 2019 compared with 357 as of December 31, 2018. The number of trials in Phase III grew to 56, compared with 47 as of December 31, 2018. Of the 436 total trials Cryoport supports, 361 are in the Americas, 61 in EMEA (Europe, the Middle East and Africa) and 14 in APAC (Asia Pacific). This compares to 317 in the Americas and 40 in EMEA as of December 31, 2018.
During 2019, Cryoport expanded its Compliance Unified Ecosystem of global strategic alliances through previously announced relationships with Lonza, Vineti, and EVERSANA to further expand its leadership position in the markets.
Animal Health
Animal Health revenue increased by 2% in the twelve months ended December 31, 2019 compared to the same period in 2018; for the quarter ended December 31, 2019, Animal Health revenue increased 28% compared to the same period in 2018.
Cryoport is growing its revenue in the Animal Health market through new dedicated resources. It has a strong pipeline of potential clients, which is anticipated to drive revenue growth in 2020.
Reproductive Medicine
Reproductive Medicine revenue increased by 34% for the twelve months ended December 31, 2019 compared to the same period in 2018; for the quarter ended December 31, 2019 Reproductive Medicine revenue increased by 23%, growing both domestically as well as internationally. This growth can be attributed to increasing awareness of our CryostorkTM platform as well as maturing commercial relationships with large clinical networks.
Global Bioservices
Bioservices revenue was $1.3 million and $3.0 million for the three and twelve-month periods ended December 31, 2019 resulting from the acquisition of Cryogene consummated in May 2019.
Financial Highlights:
Revenue increased 73% to $33.9 million and 62% to $9.2 million for the twelve and three-month periods ended December 31, 2019, compared with the same periods in the prior year.
Excluding revenue from the Cryogene acquisition, consummated in May of 2019, for the three and twelve-month periods ended December 31, 2019, revenue grew 40% and 58%, compared with the same periods in the prior year.
Gross margin for the three and twelve-months ended December 31, 2019 was 53% and 51%, respectively, compared to 50% and 52% for the respective periods in the prior year.
The 2019 financial results include a one-time charge of $9.6 million in accelerated stock-based compensation expense (non-cash) of which $0.4 million and $9.2 million are included in cost of revenues and operating costs and expenses, respectively. The charge recorded in the third quarter of 2019 incorrectly included stock option grants to nonemployee directors which was reversed in the fourth quarter resulting in a reduction of $0.8 million of stock-based compensation expense in the fourth quarter of 2019.
Operating costs and expenses increased by $0.8 million, and $16.1 million, for the three and twelve-month periods ended December 31, 2019, respectively, compared to the same periods in the prior year, as a result of $9.6 million in one-time accelerated stock-based compensation expenses (non-cash) as well as continued investments in the build out of infrastructure to support the accelerating market demands.
Adjusted EBITDA for the three-month period ended December 31, 2019 was $0.8 million, compared with ($0.4 million) in the same three-month period in the prior year. Adjusted EBITDA for the twelve-month period ended December 31, 2019, was $2.0 million, compared with ($2.2 million) in the same twelve-month period in the prior year.
Net loss for the three-month period ended December 31, 2019 was $0.9 million, or $0.03 per share (Adjusted net loss was $1.7 million, or $0.05 per share, excluding the reversal of accelerated stock-based compensation expense for nonemployee directors described above), compared to a net loss of $2.3 million, or $0.08 per share in the same three-month period in 2018.
Net loss for the twelve-month period ended December 31, 2019 was $18.3 million, or $0.55 per share (Adjusted net loss was $8.8 million, or $0.26 per share, excluding the accelerated vesting stock-based compensation expense described above), compared with $9.6 million, or $0.34 per share, in the same twelve-month period in 2018.
Cryoport reported $94.3 million in cash, cash equivalents and short-term investments as of December 31, 2019, compared with $47.3 million as of December 31, 2018. This increase includes net proceeds of $68.8 million received from a public offering completed in June 2019.
Further information on Cryoport’s financial results is included on the attached condensed consolidated balance sheets and statements of operations, and additional explanations of Cryoport’s financial performance are provided in Cryoport’s annual report on Form 10-K for the twelve months ended December 31, 2019, which will be filed with the Securities and Exchange Commission ("SEC") on March 10, 2020. The full report will be available on the SEC Filings section of the Investor Relations section of Cryoport’s website at www.cryoport.com.
Earnings Conference Call Information
IMPORTANT INFORMATION: A document titled "Cryoport 2019 Year in Review", which will provide a review of Cryoport’s recent financial and operational performance and a general business update, will be issued by management at 4:05 pm ET on Thursday, March 5. The document is designed to be read by investors before the questions and answers conference call and can be accessed at http://ir.cryoport.com/events-and-presentations .
Cryoport management will host a conference call at 5:00 pm ET on March 5, 2020. The conference call will be in the format of a questions and answers session and will address any queries investors have regarding Cryoport’s reported results.
Conference Call Information
Date:
March 5, 2020
Time:
5:00 p.m. ET
Dial-in numbers:
+1 (855) 327-6837 (U.S.) or +1 (631) 891-4304 (International)
Confirmation code:
Request the "Cryoport Call"
Live webcast:
‘Investor Relations’ section at www.cryoport.com or at this link. Please allow 10 minutes prior to the call to visit this site to download and install any necessary audio software.
An archive of the question and answer webcast will be available approximately three hours after completion of the live event and will be accessible on the Investor Relations section of the Company’s website at www.cryoport.com for a limited time. To access the replay of the webcast, please follow this link. A dial-in replay of the call will also be available to those interested until March 12, 2020. To access the replay, dial +1 (844) 512-2921 (United States) or +1 (412) 317-6671 (International) and enter replay pin number: 10008682.