Q4 2016 Real-Time Call Brief

Highlights

On the production front, we achieved our first commercial harvest of Arctic apples and planted approximately 70,000 more Arctic trees.

We completed construction of our first large mosquito facility with the capacity to create 3 billion Friendly mosquitoes annually and AquaBounty added a plant in Canada to a system scaling production capacity.

To put the size of the Indian market into perspective, consider that dengue alone, not including Zika or the recent outbreak to chikungunya, in fact an estimated 5.8 million people in India annually will cost exceeding $1 billion a year.

The positive results are exemplified by the overwhelming support of 92% of the community in recent polls and are also increasingly being recognized across the country through additional region.

We believe this business going to eventually reach $1 billion per year in revenue with attractive margins and return on investment.

We have 300,000 trees under contract to be planted this year and over 500,000 more for 2018.

With respect to agriculture, up to 16% of global food production is lost to crop damage annually due to insects and the ongoing increase in pest resistance exacerbates this problem, creating a major need for new crop protection technologies.

The first real contribution to the $150 billion aquaculture industry from advanced biotechnology is AquaBounty's platform which Geno covered earlier.

Our foundational work has led to a substantial increase in tilapia at 53%, and of 27% versus conventional farmed tilapia.

Despite advances in genetic gain in capital through existing fertility approaches such as IVF and embryo transfer, cattle continues to lag all other high protein food sources for the feed conversion ratio of 8:1. This compares to porcine at 3:1 and chicken at 2:1.

From a numbers perspective every 1% of the gasoline makes equals roughly $8 billion in potential isobutanol sales.

We estimate isobutanol could represent as much as 10% to 15% of the gasoline mix, without any change to existing infrastructure including cost.

Today, we reported fourth quarter and full-year revenues of $46 million and $191 million respectively, increases of 11% and 10% over the same period last year.

The full-year revenue increase was driven by a 25% increase in collaboration and licensing revenue and these revenues grew by 31% in the fourth quarter.

Product revenues declined by 17% in the fourth quarter and by 12% for the full-year as our trends over subsidiary continue to feel the impact of the fresh beef and dairy commodity pricing.

Deferred revenues which will be recognized in future periods as we perform under our ECC and JV agreements were $310 million at year-end versus $198 million at the start of the year.

For the fourth quarter and full-year, adjusted EBITDA was a loss of $5.8 million and $26.6 million compared with prior year losses of $12.9 million and $20.7 million.

As a management team, we evaluate our use of capital by combining adjusted EBITDA with the change in deferred revenues. This metric for 2016 was a positive $89.9 million versus $53.4 million in 2015.

In 2016, we received total consideration equal to 129% of our consolidated cash operating expenses.

We ended 2016 with a consolidated cash position of $243 million and we also hold equity securities and preferred stock in our ECC partners valued on a combined basis at approximately $153 million.

Notably, we recently invested $25 million in AquaBounty and believe that AquaBounty is now well-positioned to capitalize on its own business opportunities with subsequently distributed a portion of our AquaBounty shares to Intrexon's shareholders while maintaining majority ownership success.