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Item 7. Management’s Discussion and Analysis

2026-03-25 compared with 2025-03-19 · 168 added, 167 removed, 149 unchanged (69% of the section changed)

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Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results of operations for the fiscal year 2024 compared to fiscal year 2023.

We are a dedicated discovery and clinical-stage biopharmaceutical company advancing the next generation of gene and cell therapies with the overall goal of improving outcomes for patients with significant unmet medical needs.

We are a biopharmaceutical company specializing in the advancement of innovative precision medicines to address difficult-to-treat diseases with high unmet patient need.

Precigen is dedicated to advancing scientific breakthroughs from proof-of-concept through commercialization.

We are leveraging our proprietary technology platforms to develop product candidates designed to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases.

We have developed an extensive pipeline of therapies across multiple indications.

We believe that our array of technology platforms uniquely positions us among other biotechnology companies to advance precision medicine.

Precision medicine is the practice of therapeutic product development that takes into account specific genetic variations within populations impacted by a disease to design targeted therapies to improve outcomes for a disease or patient population.

Our proprietary and complementary technology platforms provide a strong foundation to realize the core promise of precision medicine by supporting our efforts to construct powerful gene programs to drive efficacy, deliver these programs through viral, non-viral, and microbe-based approaches to drive lower costs, and control gene expression to drive safety.

Our therapeutic platforms, including UltraCAR-T, AdenoVerse immunotherapy, and ActoBiotics, are designed to allow us to precisely control the level and physiological location of gene expression and modify biological molecules to control the function and output of living cells to treat underlying disease conditions.

Our therapeutic platforms, including AdenoVerse immunotherapy, UltraCAR-T, and ActoBiotics, are designed to allow us to precisely control the level and physiological location of gene expression and modify biological molecules to control the function and output of living cells to treat underlying disease conditions.

We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies.

UltraPorator has received FDA clearance for manufacturing UltraCAR-T cells in clinical trials, and we have been dosing patients with UltraCAR-T cells manufactured with UltraPorator in our clinical trials.

Our clinical pipeline includes PRGN-2012 and PRGN-2009, which are based on our AdenoVerse immunotherapy platform;

Our commercial product, Papzimeos (zopapogene imadenovec-drba, PRGN-2012), is the first and only US Food and Drug Administration (“FDA”) approved therapy for the treatment of adults with recurrent respiratory papillomatosis (“RRP”).

Papzimeos is a non-replicating adenoviral vector-based immunotherapy designed to express a fusion antigen comprising selected regions of human papillomavirus (HPV) types 6 and 11 proteins.

Papzimeos is designed to generate an immune response directed against HPV 6 and HPV 11 proteins in patients with RRP.

Discovered and designed in Precigen's labs using Precigen's proprietary AdenoVerse therapeutic platform, Papzimeos represents a new therapeutic paradigm for RRP.

Our clinical pipeline includes PRGN-2009, which are based on our AdenoVerse immunotherapy platform;

and PRGN-3005, PRGN-3006 and PRGN-3007, which are built on our UltraCAR-T platform.

We have completed enrollment in the Phase 1b clinical trial of PRGN-3006.

As part of the strategic prioritization of our pipeline, we have paused enrollment in the PRGN-3005 and PRGN-3007 clinical trials.

In addition, we have completed a Phase 1b/2a study of AG019, which is built on our ActoBiotics platform, which we have completed the shut-down of, as discussed below under our Biopharmaceuticals segment (Precigen ActoBio, Inc.).

We have reduced our focus on preclinical programs, while continuing select projects that we believe could provide further near-term validation of our technology platforms.

As part of the strategic prioritization of our pipeline announced in August 2024, we paused enrollment in the PRGN-3005 and PRGN-3007 clinical trials, minimized UltraCAR-T spending and plan to focus on strategic

partnerships to further advance UltraCAR-T programs.

In addition, we previously announced plans to continue PRGN-2009 Phase 2 clinical trials under a cooperative research and development agreement ("CRADA") with the National Cancer Institute ("NCI") in recurrent/metastatic cervical cancer and in newly diagnosed HPV-associated oropharyngeal cancer.

Fiscal Year 2025 Business Update

In August 2024, we announced strategic prioritization of our pipeline to focus on development of our lead program, PRGN-2012.

We plan to minimize UltraCAR-T spend and focus on strategic partnerships to further advance UltraCAR-T programs.

As part of this restructuring, we have paused enrollment in PRGN-3005 and PRGN-3007 UltraCAR-T clinical trials.

In addition, we are continuing PRGN-2009 Phase 2 clinical trials under a cooperative research and development agreement ("CRADA") with the National Cancer Institute ("NCI") in recurrent/metastatic cervical cancer and in newly diagnosed HPV-associated oropharyngeal cancer.

We have reduced our focus on preclinical programs, while continuing select projects that we believe could provide further near-term validation of our technology platforms.

We have completed the shutdown of our ActoBio subsidiary operations, including the elimination of all ActoBio personnel.

In conjunction with this shutdown, ActoBio's portfolio of intellectual property is available for prospective transactions.

These strategic changes are designed to enable us to focus on pre-commercialization efforts on PRGN-2012, including supporting regulatory approval, conducting the confirmatory clinical trial, and manufacturing of commercial product.

Additionally, we will continue acceleration of commercial readiness efforts for a potential launch.

In December 2024, we announced the completion of the rolling submission for a BLA to the FDA for PRGN-2012 for the treatment of adults with RRP.

The FDA has accepted the BLA and granted priority review, with a PDUFA target action date set for August 27, 2025.

In August 2025, the U.S.

Food and Drug Administration ("FDA") granted full approval of Papzimeos for the treatment of adults with RRP.

RRP is a rare, debilitating, and potentially life-threatening disease caused by chronic human papillomavirus ("HPV") 6 or HPV 11 infection, which results in recurrent benign tumors in the respiratory tract.

RRP can lead to severe voice disturbance, a compromised airway, and recurrent post-obstructive pneumonias.

Management of RRP has primarily consisted of repeated surgeries, which do not address the root cause of the disease and can be associated with significant morbidity as well as significant patient and health system burden.

The approval of Papzimeos marks a historic milestone for the RRP patient community as the first and only FDA-approved therapy for the treatment of adults with RRP.

As a result of Papzimeos receiving full FDA approval, a confirmatory clinical trial is not required.

Papzimeos is a non-replicating adenoviral vector-based immunotherapy designed to express a fusion antigen comprising selected regions of HPV types 6 and 11 proteins—the root cause of RRP.

Papzimeos is delivered via four subcutaneous injections over a 12-week interval.

Papzimeos approval is supported by safety and efficacy data from the pivotal Phase 1/2 clinical trial published in the Lancet Respiratory Medicine.

The pivotal study successfully met its primary safety and pre-specified primary efficacy endpoints.

Papzimeos was well-tolerated with no dose-limiting toxicities and no treatment-related adverse events greater than Grade 2.

Of the patients in our study, 51% (18 out of 35) achieved complete response, requiring no surgeries in the 12 months after treatment with Papzimeos.

These complete responses have been durable after Papzimeos treatment with median follow-up of 36 months as of a September 19, 2025 data cutoff.

See further discussion of 2025 financing transactions below under the Liquidity and capital resources section of Item 7.

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Sources of revenue

Currently, our primary revenues arise from Exemplar, which generates product and service revenues through the development and sale of genetically engineered miniature swine models.

Exemplar generates product and service revenues through the development and sale of genetically engineered miniature swine models.

We recognize revenue when control of the promised product or service is transferred to the customer.

In future periods, our revenues will primarily depend on our ability to advance and create our own programs and the extent to which we bring products enabled by our technologies to market.

Other than for collaboration revenues recognized upon cancellation or modification of an existing collaboration or for revenues generated pursuant to future strategic transactions for any of our existing platforms or programs, we expect our collaboration revenues will continue to be minimal or zero in the near term, although if any new collaboration agreements or strategic transactions are entered into, revenue could be positively impacted.

Our revenues will also depend upon our ability to maintain or improve the volume and pricing of Exemplar's current product and service offerings.

We anticipate that our expenses will increase substantially if, and as, we continue to advance the preclinical and clinical development of our existing product candidates and our research programs.

We expect some period of time, and in most cases a significant period of time, could pass before commercialization of our various product candidates or before the achievement of contractual milestones and the realization of royalties on product candidates commercialized under our collaborations.

In 2025, revenues generated by Exemplar became less significant to the Company, and we expect this significance to greatly diminish into the future.

During the fourth quarter of 2025, we began generating revenue from commercial sales of Papzimeos, our FDA‑approved immunotherapy for RRP.

While revenues from Papzimeos were limited in the year due to the timing of our commercial launch, we anticipate our future revenue to primarily be generated from Papzimeos product sales.

As we transition to a commercial‑stage company, our future revenues will increasingly depend on our ability to successfully commercialize Papzimeos, advance our proprietary programs, and bring additional products enabled by our technology platforms to market.

We anticipate that collaboration revenue will remain minimal in the near term, except in cases of future strategic transactions involving our platforms or programs.

Should new collaboration agreements or strategic transactions be executed, revenue could be positively impacted.

Accordingly, there can be no assurance as to the timing, magnitude, and predictability of revenues, if any, to which we might be entitled.

We do not expect any revenues that we may generate in the near term to be significant enough to fund our operations.

Cost of products and services

Cost of products and services, all which are related to our Exemplar reporting segment, includes primarily labor and related costs, drugs and supplies, feed used in production, and facility charges, including rent and depreciation.

Fluctuations in the price of livestock and feed have not had a significant impact on our operating margins and no derivative financial instruments are used to mitigate the price risk.

Cost of products and services and gross margin

Cost of products and services consists of manufacturing costs, transportation and freight-in, and indirect overhead costs (including salary and benefits related and stock-based compensation expenses) associated with the commercial manufacturing and distribution of Papzimeos, and costs related to our Exemplar business, which includes primarily labor, supplies, feed used in production, and facility charges.

Approximately $4.4 million of our cost of products and services in 2025 relates to our Exemplar business.

For the year ended December 31, 2025, the cost of products and services includes the costs of Papzimeos sales.

Prior to August 14, 2025, regulatory approval and subsequent commercialization of Papzimeos and thus the possibility of future economic benefits from Papzimeos sales were not considered probable and inventory-related costs were expensed as incurred.

As such, the inventory recognized on the Consolidated Balance Sheet at December 31, 2025 does not include any costs incurred prior to August 14, 2025, which is referred to as pre-launch inventory.

In addition, the cost of products related to Papzimeos on the Consolidated Statement of Operations for the year ended December 31, 2025 is comprised of the sale of pre-launch inventory, which only includes costs incurred subsequent to August 14, 2025, including period costs that were not absorbed into inventory.

As of December 31, 2025, the amount of future estimated net revenues represented by existing physical pre-launch inventories is a pproximately $85 million based on our current pricing assumptions and projected demand for our recently approved commercial product.

Due to the fact that commercialization began in late 2025, these estimates are inherently subject to significant uncertainty.

The Company expects that it will finish selling all of the pre-launch inventories in 2026.

Projected sales derived from pre-launch inventories depend on several factors that could materially impact actual realized results, including the timing and scale of product adoption within our target patient population, and payer coverage.

As a result, the cost of products sold related to Papzimeos will initially reflect a lower average per unit cost of materials (excluding period costs that are expensed as incurred), as pre-launch inventory is utilized for commercial production and sold to customers.

As pre-launch inventory continues to absorb costs through the manufacturing process, we expect the current gross margins (exclusive of period costs expensed as incurred) will gradually decrease as pre-launch inventory is sold and will stabilize between high 80 percentages and low 90 percentages when pre-launch inventories are expected to be completely sold based on current forecasts, which include significant risks given that Papzimeos is the first therapy available to patients with RRP.

Research and development expenses

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Our research and development expenses consist primarily of:

• salaries and benefits, including stock-based compensation expense, as well as severance costs related to personnel in research and development functions;

• salaries and benefits, including stock-based compensation expense, as well as severance costs related to personnel in research and development functions, if such costs exist;

• fees paid to consultants and contract research organizations who perform research on our behalf and under our direction;

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• facility-related expenses, which include direct depreciation costs and unallocated expenses for rent and maintenance of facilities and other operating costs;

Our research and development expenses are generally incurred by our reportable segments and primarily relate to either costs incurred to expand or otherwise improve our technologies, or the costs incurred to develop our own products and services.

Prior to August 2024, our Biopharmaceuticals segment was progressing preclinical and clinical programs that targeted urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases, including PRGN-3005, PRGN-3006, PRGN-3007, PRGN-2009, AG019 and PRGN-2012.

As discussed in "Notes to the Consolidated Financial Statements - Note 1 " appearing elsewhere in this Annual Report, in August 2024, we announced a strategic prioritization of our clinical portfolio and streamlining of resources, to focus on potential commercialization of the PRGN-2012 AdenoVerse ® gene therapy for the treatment of RRP.

Our Exemplar segment's research and development activities relate to new and improved pig research models.

The following table summarizes our research and development expenses on the consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022 incurred by reportable segment.

Year Ended December 31,

2024 2023 2022

(In thousands)

Biopharmaceuticals $ 52,971 $ 48,353 $ 46,850

Exemplar 99 261 320

Total consolidated research and development expenses

$ 53,070 $ 48,614 $ 47,170

In addition to the strategic prioritization, the amount of research and development expenses may be impacted by, among other things, the number and nature of our own proprietary programs.

• other manufacturing costs related to the manufacture of drug products that have not yet been approved by the FDA.

Our research and development expenses primarily relate to either costs incurred to expand or otherwise improve our technologies or the costs incurred to develop our own products and services.

Prior to August 2024, the Company was progressing preclinical and clinical programs that targeted urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases, including PRGN-3005, PRGN-3006, PRGN-3007, PRGN-2009, PRGN-2012 and AG019.

We also continue to advance PRGN-2009, and we have completed enrollment in the Phase 1b clinical trial of PRGN-3006.

Exemplar's research and development activities relate to new and improved pig research models.

Following the FDA approval of Papzimeos in August 2025, we no longer expect to record research and development expenses related to PRGN-2012 for adults.

Future costs associated with this product for adults are expected to be classified as costs of products or capitalized as inventory.

We currently track external research and development ("R&D") expenses by platform, although we do not accumulate or track R&D expenses by individual product candidate or program.

Preparing such information solely for external reporting would not

reflect management’s view of the business or how R&D activities are managed.

A significant portion of our R&D spending supports the development, optimization, and operation of our core therapeutic platforms and shared technologies rather than any single drug candidate.

Management evaluates R&D activities and makes resource allocation decisions based on the nature of the underlying expenses, which align with how our R&D operations are structured and managed.The table below presents R&D expenses by nature of cost for the periods presented.

External development expense:

AdenoVerse immunotherapy platform $ 11,550 $ 11,347

UltraCAR-T therapeutics platform 1,131 4,713

ActoBiotics Platform — 810

Other 2,207 3,079

Total Direct external research and development expense 14,888 19,949

R&D personnel expense 19,859 25,493

R&D facility and depreciation expense 5,888 7,254

Other R&D expense 698 374

Total research and development expense $ 41,333 $ 53,070

In addition to the strategic prioritization in 2024, the amount of research and development expenses may be impacted by, among other things, the number and nature of our own proprietary programs.

Research and development expenses may also increase as a result of in-licensing of technologies or ongoing research and development operations that we might assume through mergers and acquisitions.

Selling, general and administrative expenses

Selling, general and administrative, or SG&A, expenses consist primarily of salaries and related costs, including stock-based compensation expense and severance, for employees in executive, operational (including commercialization), finance, information technology, legal, and corporate communications functions.

Other significant SG&A expenses include rent and utilities, insurance, accounting, and legal services (including the cost of settling any claims and lawsuits), and expenses associated with obtaining and maintaining our intellectual property.

SG&A expenses may fluctuate in the future depending on the scaling of our corporate functions required to support our corporate initiatives, the strategic prioritization, the build-up of our commercialization efforts and the outcomes of legal claims and assessments against us.

Selling, general and administrative expenses consist of salaries and related costs, including stock-based compensation expense and severance benefits, for employees in executive, commercial (including sales), operational, finance, information technology, legal, and corporate communications functions.

Other significant SG&A expenses include rent and utilities, insurance, marketing and promotion activities, sales operations, accounting, and legal services (including the cost of settling any claims and lawsuits), and expenses associated with obtaining and maintaining our intellectual property.

SG&A expenses may fluctuate in the future depending on the scaling of our corporate functions required to support our corporate initiatives, the strategic prioritization of assets, the build-up of our commercialization efforts and the outcomes of legal claims and assessments against us.

Other income (expense), net

Other income consists of interest earned on our cash and cash equivalents and short-term and long-term investments (which may fluctuate based on amounts invested and current interest rates), gain on dispositions of intellectual and property rights (for 2024), and gain on convertible debt retirement (for 2023).

Other expense consists primarily of interest on our convertible notes, which were fully retired in the second quarter of 2023, and the reclassification of cumulative foreign translation losses due to closing the operations of ActoBio in the third quarter of 2024.

Other income and expense, net consists primarily of changes in the fair value of warrant liabilities (until the warrants were classified into equity in 2025), interest expense related to the term loans entered into in 2025 that mature in 2030, and interest earned on our cash and cash equivalents and short-term and long-term investments, which may fluctuate based on amounts invested and changing interest rates.

See "Notes to the Consolidated Financial Statements - Notes 10 and 12 " appearing elsewhere in this Annual Report for further discussion.

Segment performance

We use Segment Adjusted EBITDA as our primary measure of segment performance.

We define Segment Adjusted EBITDA as net income (loss) before (i) interest expense and interest income, (ii) income tax expense or benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) loss on settlement agreements where noncash consideration is paid, (vi) adjustments for accrued bonuses paid in equity awards, (vii) gain or loss on disposals of assets, (viii) loss on impairment of goodwill and other noncurrent assets, (ix) equity in net income (loss) of affiliates, (x) reclassification of cumulative translation gain (loss), and (xi) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates, but includes proceeds from the sale of assets in the period sold.

See "Notes to the Consolidated Financial Statements - Note 16" appearing elsewhere in this Annual Report for further discussion of Segment Adjusted EBITDA.

Results of operations

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(In thousands)

Collaboration and licensing revenues $ — $ 75 $ (75) (100.0) %

Product revenues 422 840 (418) (49.8) %

Collaboration and licensing revenues $ 1,818 $ — $ 1,818 N/A

Product revenues, net 3,975 422 3,553 >200%

Service revenues 3,891 3,503 388 11.1 %

Other revenues 33 9 24 >200%

Total revenues 9,684 3,925 5,759 146.7 %

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Operating loss (110,507) (135,029) 24,522 (18.2) %

Total other income net

7,001 3,396 3,605 106.2 %

Total other income (expense), net (140,132) 7,001 (147,133) >(200)%

Loss before income taxes

(250,639) (128,028) (122,611) 95.8 %

Income tax benefit 1,793 458 1,335 >200%

$ (126,235) $ (95,904) $ (30,331) 31.6 %

Income tax benefit (expense) (3) 1,793 (1,796) (100.2) %

Net Loss (250,642) (126,235) (124,407) 98.6 %

Deemed dividend on preferred stock

(179,000) — (179,000) N/A

Net loss attributable to common shareholders $ (429,642) $ (126,235) $ (303,407) >200%

Net loss per share attributable to common shareholders, basic and diluted $ (1.37) $ (0.47) $ (0.90) 192 %

Collaboration and licensing revenues

Collaboration and licensing revenues decreased $0.1 million, or 100.0%, compared to the year ended December 31, 2023, primarily due to the termination of the License Agreement with Alaunos in 2024.

Product and services revenues, and cost of products and services

Product and service revenues decreased $2.2 million or 36.6%, compared to the year ended December 31, 2023.

This decrease is related to reductions in products sold and services performed at Exemplar.

Costs of products and services declined in the current year primarily for the same reason as the revenue declined.

Collaboration and licensing revenues increased by $1.8 million, compared to the year ended December 31, 2024.

In September 2025, the Company and PTC Therapeutics mutually agreed to terminate their existing exclusive channel collaboration ("ECC") agreement.

As a result, the Company recognized the remaining deferred revenue associated with the agreement, totaling $1.8 million.

There was no comparable revenue recognized in the prior year period.

Product and services revenues

Product and service revenues increased $3.9 million or 100.4%, compared to the year ended December 31, 2024.

The increase was primarily driven by the commencement of Papzimeos product revenue, which totaled $3.4 million in 2025 following its commercial launch, and no such revenue existed in 2024.

Exemplar service revenue increased by $0.5 million, reflecting growth in service activity.

Cost of products and services

Cost of products and services increased $0.6 million or 13.0%, compared to the year ended December 31, 2024.

The increase was primarily as a result of higher service revenues at our Exemplar subsidiary compared to the prior year and Papzimeos cost of products, which approximated $0.4 million, and was not present in the prior year.

Papzimeos cost of products recognized in the period relates to inventory manufactured prior to FDA approval and includes 2025 fourth quarter period costs that were not included in inventory

Research and development expenses

Research and development expenses increased $4.5 million, or 9.2%, compared to the year ended December 31, 2023.

This increase was primarily the result of $3.1 million of increased costs associated with the initiation of the PRGN-2012 confirmatory clinical trial, increased drug manufacturing material costs related to PRGN-2012 for potential commercial use, and professional fees incurred in conjunction with the Company’s completed BLA submission and commercial readiness planning as well as the design and implementation of our manufacturing facility.

Additionally, employee-related expenses rose by $3.0 million primarily due to severance charges incurred as a result of the Precigen workforce reduction in 2024 and the suspension of ActoBio's operations.These increases were partially offset by a $1.9 million reduction in depreciation and amortization expense as a result of the impairment of noncurrent assets related to the suspension of ActoBio’s operations during the second quarter of 2024, as well as a reduction in clinical study expenses associated with programs that were deprioritized during the third quarter of 2024.

Research and development expenses decreased by $11.7 million, or 22.1%, compared to the year ended December 31, 2024.

The decrease was primarily driven by a $5.4 million reduction in costs associated with ActoBio, including depreciation, amortization, personnel and other research and development costs after its operations were closed in 2024.

External services also declined by approximately $4.0 million, due to reduced activity for contract research organizations as a result of the strategic prioritization of our pipeline announced in the third quarter of 2024.

In addition, in August 2025, manufacturing related costs began to be classified as inventory with the FDA approval of Papzimeos.

These costs were classified as research research and development expenses prior to the FDA approval.

Selling, general and administrative expenses

SG&A expenses increased $0.9 million, or 2.2%, compared to the year ended December 31, 2023.

As a result of the Company's increased focus on PRG-2012, commercial readiness cost increased in the current quarter versus prior year period.

In addition, the second and third quarters of 2024 included higher severance cost associated with the suspension of ActoBio's operations and the 2024 Precigen workforce reduction.

These increases were partially offset by a decrease in stock compensation and insurance rates in 2024 compared to the same period in 2023.

SG&A expenses increased by $28.8 million, or 69.8%, compared to the year ended December 31, 2024.

This increase was primarily driven by a $27.3 million increase in costs incurred related to Papzimeos commercial readiness, including sales force expansion, marketing and advertising as well as professional and other fees associated with the commercial launch of Papzimeos.

Impairment of goodwill and other noncurrent assets

In connection with the suspension of ActoBio’s operations, the Company recorded $34.5 million of impairment charges related to goodwill and long-lived assets in the second quarter of 2024.

Additionally, we recorded $5.8 million of impairment charges related to our Exemplar reporting segment, compared to a $10.8 million impairment loss recorded during the year ended December 31, 2023.

In connection with the suspension of ActoBio’s operations, we recorded $34.5 million of impairment charges related to goodwill and long-lived assets in the second quarter of 2024.

Additionally, in the second quarter of 2025, we recorded $3.9 million of impairment charge related to the Exemplar reporting unit, compared to $5.8 million of impairment charge related to the Exemplar reporting unit in the prior year.

See "Notes to the Consolidated Financial Statements - Note 9" appearing elsewhere in this Annual Report for further discussion of ActoBio long-lived assets and goodwill impairment and Exemplar goodwill impairment.

Total other income (expense), net

Total other income, net, increased $3.6 million, or 106% compared to the year ended December 31, 2023.

This increase was primarily derived from an $8.5 million gain on the sale of intellectual property rights and royalty rights related to FCX-007 in December 2024 as well as a $0.5 million reduction in interest expense due to the final retirement of our Convertible Notes in the second quarter of 2023.

This increase was partially offset by a reclassification of cumulative translation losses of $2.9 million, which resulted from the final closing of the ActoBio facilities in the third quarter of 2024, as well as a reduction of $1.8 million in interest income due to lower investment balances compared to the same period in 2023.

Total other income (expense) net, changed from income of $7.0 million to expense of $140.1 million, resulting in a decrease of $147.1 million, or >(200)% compared to the year ended December 31, 2024.

This decrease was primarily driven by a $139.5 million increase in the fair value of warrant liabilities prior to their reclassification into permanent equity in the third quarter of 2025.

Substantially all of the increase in the fair value of warrant liabilities was as a result of an increase in our common stock price at the valuation date compared to December 31, 2024.

In addition, the prior year included an $8.5 million gain on the sale of intellectual property and royalty rights related to FCX-007 in December 2024, which did not recur in the current year.

See "Notes to the Consolidated Financial Statements - Note 2" appearing elsewhere in this Annual Report for further discussion on gain on transfers of nonfinancial assets.

Segment performance

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the years ended December 31, 2024, and 2023, for each of our reportable segments.

December 31, Dollar

Change Percent

(In thousands)

Segment Adjusted EBITDA:

Biopharmaceuticals $ (82,287) $ (75,339) $ (6,948) (9.2) %

Exemplar (929) (726) (203) (28.0) %

For a reconciliation of Segment Adjusted EBITDA to net loss from continuing operations before income taxes, see "Notes to the Consolidated Financial Statements - Note 16" appearing elsewhere in this Annual Report.

The following table summarizes revenues from external customers for the years ended December 31, 2024, and 2023, for each of our reportable segments.

December 31, Dollar

Change Percent

(In thousands)

Biopharmaceuticals $ — $ 75 $ (75) (100.0) %

Exemplar 3,925 6,150 (2,225) (36.2) %

Biopharmaceuticals

The decline in revenues for Biopharmaceuticals was primarily due to the cancellation of the License Agreement with Alaunos in 2024.

See "Notes to the Consolidated Financial Statements - Note 5 " appearing elsewhere in this Annual Report for further detail.

The increase in Segment Adjusted EBITDA loss was driven by capital expenditures incurred related to the build out of our cGMP manufacturing capabilities for PRGN-2012 production, costs associated with our BLA submission, the confirmatory clinical trial for PRGN-2012, the conclusion of pivotal clinical trial activities for PRGN-2012 and an increase in severance expenses linked to the closure of ActoBio and restructuring expenses at Precigen.

There was also an increase in commercialization cost in preparation for PRGN-2012’s market readiness.

These increased costs were partially offset by the sale of intellectual property and royalty rights related to FCX-007 in December 2024.

Revenues for Exemplar decreased due to a decrease in services performed resulting from a lower demand from existing customers.

The decline in Segment Adjusted EBITDA was primarily due to the decreased revenues, offset by cost reduction initiatives implemented at Exemplar.

Deemed dividend on preferred stock

On September 15, 2025, all Series A Preferred Stockholders converted their 79,000 shares (stated value of $79.0 million) into 54,937,411 shares of common stock at the then-current conversion rate of 695.4103 shares per $1,000.

Because the conversion feature resulted in a variable number of common shares to be issued, the conversion was accounted for as a redemption under Accounting Standards Codification ("ASC") 260, resulting in the recording of a $179.0 million non-cash deemed dividend as a reduction to additional paid-in capital (and an increase in net loss attributable to common shareholders when computing net loss per share).

Net loss per share attributable to common shareholders

Net loss per share attributable to common shareholders (basic and diluted) increased to $1.37 for the year ended December 31, 2025 , compared to $0.47 for the year ended December 31, 2024.

The increase was primarily driven by the changes noted above (including the $139.5 million change in fair value of warrant liabilities, representing $0.45 per basic and diluted share) plus the deemed dividend, as discussed above (representing $0.57 per basic and diluted share), partially offset by a higher weighted-average number of shares outstanding, primarily due to the conversion of preferred shares into common shares during the third quarter of 2025.

Liquidity and capital resources

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In December 2024, we issued 79,000 shares of 8.00% Series A Convertible Perpetual Preferred Stock with an initial liquidation preference and stated value of $1,000 per share, together with warrants to purchase 52,666,669 shares of common stock for net proceeds of approximately $78.5 million, after deducting offering expenses, which expenses had not been paid as of December 31, 2025.

In September 2025, the Company entered into a loan agreement with investment entities managed by Pharmakon Advisors, LP.

The Company received net proceeds of $92,818 after deducting fees and expenses of $7,182.

See "Notes to the Consolidated Financial Statements - Note 10" appearing elsewhere in this Annual Report for further discussion on this loan agreement.

The following table sets forth the significant sources and uses of cash for the periods set forth below (dollar amounts in thousands):

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In 2025, our net loss was $250.6 million, which includes the following significant noncash expenses and benefits totaling $156.2 million:

(i) $40.3 million impairment losses, (ii) $9.5 million of stock-based compensation expense, (iii) $4.5 million of depreciation and amortization expense, (iv) $2.9 million due to reclassification of cumulative translation losses, and (v) $0.6 million of shares issued as payment for services, partially offset by non-cash benefits of $1.8 million due to deferred income taxes and $0.9 million due to amortization of discounts on investments.

(i) $139.5 million of appreciation in the fair value of warrant liabilities prior to their reclassification to permanent equity in the third quarter of 2025, (ii) $3.9 million impairment losses, (iii) $10.9 million of stock-based compensation expense, (iii) $3.2 million of depreciation and amortization expense, (iv) $0.5 million of shares issued as payment for services, and (v) $0.4 million of accretion of debt discount and amortization of deferred financing costs, partially offset by non-cash benefits of $2.2 million due to amortization of discounts on investments.

In addition, changes in operating assets and liabilities provided $6.6 million of cash for operating activities.

In 2024, our net loss was $126.2 million, which includes the following significant noncash expenses and benefits totaling $55.1 million:

taxes and $0.9 million due to amortization of discounts on investments.

In addition, changes in operating assets and liabilities provided $2.7 million of cash for operating activities.

In 2023, our net loss was $95.9 million, which includes the following significant noncash expenses:

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In addition, changes in operating assets and liabilities increased cash from operating activities by $3.4 million.

In 2022, our net income was $28.3 million, which included a gain on sale of discontinued operations of $94.7 million which is presented as an adjustment to net income to net cash used in operating activities.

Additional adjustments to reconcile net income to net cash used in operating activities netted to approximately $24.0 million, from both continuing and discontinued operations, with the most significant adjustments including:

(i) $10.2 million of stock-based compensation expense, (ii) $10.8 million of depreciation and amortization expense, and (iii) $1.0 million accretion of debt discount and amortization of deferred financing costs.

In addition, changes in operating assets and liabilities reduced net income by $22.7 million, which the most significant change being a reduction in deferred revenue of $23.4 million.

Our 2024 cash used in operations increased by $1.2 million from the year ended December 31, 2023, primarily due to increase in cash outflows related to ActoBio during 2024 as we ceased operations and paid severance cost.

Our 2023 cash used in operations increased by $1.9 million from the year ended December 31, 2022, primarily due to decreased cash flow from operations provided by Trans Ova (which was sold in August 2022) and a decrease in cash flow from operations at Exemplar partially offset by a reduction in selling, general and administrative expenses, a decrease in interest paid in 2023 compared to 2022 due to the retirement in 2023 of our Convertible Notes, and cash paid to acquire Intrexon Energy Partners

and Intrexon Energy Partners II membership interest, which was recorded as a reduction in revenue in 2022 that did not occur in 2023.

Our 2025 cash used in operations increased by $19.7 million from the year ended December 31, 2024, primarily due to increased cash outflows associated with commercialization expenses for Papzimeos.

Cash flows from investing activities:

During 2024, we purchased $12.2 million of investments, net, and purchased $8.6 million of property plant and equipment, primarily related to the build-out of our cGMP manufacturing facility.

During 2025, we purchased $0.5 million of investments, net, and invested $2 million in property plant and equipment, primarily related to the completion of our cGMP manufacturing facility.

During 2024, we purchased $12.2 million of investments, net, and invested $8.6 million in property plant and equipment, primarily related to the build-out of our cGMP manufacturing facility.

During 2023, we purchased $185.0 million of investments, using both the proceeds received from the underwritten public offering discussed below under cash flows from financing activities, as well as reinvesting a portion of the proceeds received from the $183.4 million sales and maturities of investments.

We also purchased $1.5 million of property plant and equipment.

During 2022, we received $68.4 million proceeds during the year from the maturities and sales of investments and $162.3 million from the sale of Trans Ova.

The Company also purchased $1.5 million of property plant and equipment during 2023.

Cash flows from financing activities:

During 2025, we received $92.8 million under the term loan with entities managed by Pharmakon Advisors, LP, and $1.2 million from the exercises of stock options, and made the following financing activity payments:

$0.4 million for costs related to a prior year equity issuance, $0.5 million for costs related to the prior year preferred stock issuance, $1.8 million to taxing authorities related to vesting of equity awards, and $1.3 million for performance share units settled in cash.

During 2024, we received $31.2 million of proceeds, net of certain issuance costs, from the sale of our common stock in an underwritten public offering, $79.0 million of gross proceeds from the issuance of the Series A Preferred Stock and the Warrants and $0.3 million of proceeds from stock option exercises.

During 2023, we received $72.8 million of proceeds from the sale of our common stock in an underwritten public offering and retired $43.2 million of our Convertible Notes using restricted cash.

During 2022, we repurchased Convertible Notes for $155.3 million using restricted cash.

Future capital requirements

Our future capital requirements will depend on many factors, including:

• the successful commercialization of Papzimeos and the level of revenue generated from its sales;

• progress in our research and development programs, as well as the magnitude and speed of development of these programs;

• capital expenditures related to our manufacturing capabilities and preparing for commercial readiness;

• the timing of regulatory approval of our product candidates and those of our collaborations;

• capital expenditures to expand our manufacturing capabilities, including the potential manufacturing of other product candidates;

• the speed and scale of continuing to build our commercial operations;

• adequate third-party coverage and reimbursement for Papzimeos;

• selling and marketing activities undertaken in connection with the commercialization of Papzimeos, potential

commercialization of any future product candidates, if approved, and costs involved in creating and maintaining an effective sales and marketing organization;

• the timing of regulatory approval of our product candidates;

• the timing, receipt, and amount of any payments received in connection with strategic transactions;

• the timing, receipt, and amount of upfront, milestone, and other payments, if any, from present and future collaborators, if any;

• the timing, receipt, and amount of sales and royalties, if any, from our product candidates;

• the timing and capital requirements to scale up our various product candidates and service offerings and customer acceptance thereof;

• our ability to maintain and establish additional collaborative arrangements and/or new strategic initiatives;

• the timing of and amount of payments under our indemnification accrual;

• the resources, time, and cost required for the preparation, filing, prosecution, maintenance, and enforcement of our intellectual property portfolio;

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• the costs associated with legal activities, including litigation, arising in the course of our business activities and our ability to prevail in any such legal disputes.

Until such time, if ever, as we can regularly generate positive operating cash flows, we plan to finance our cash needs through a combination of equity offerings, debt and/or royalty financings, government, or other third-party funding, strategic alliances, sales of assets, and licensing arrangements.

Until such time, if ever, as we can regularly generate positive operating cash flows, we plan to finance our cash needs through a combination of collection of accounts receivables from the sale of Papzimeos, debt and/or royalty financings, equity offerings, government, or other third-party funding, strategic alliances, sales of assets, and licensing arrangements.

We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all.

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If we raise additional funds through strategic transactions, collaborations, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or to grant licenses on terms that may not be favorable to us.

We are subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of product candidates.

Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development, and clinical manufacturing of its product candidates.

Our success is dependent upon our ability to continue to raise additional capital in order to fund ongoing research and development, obtain regulatory approval of our products, successfully commercialize our products, generate revenue, meet our obligations, and, ultimately, attain profitable operations.

We are subject to a number of risks similar to those of other companies launching their first FDA approved drug, while conducting high-risk, early-stage research and development of product candidates.

Principal among these risks are market demand for Papzimeos, dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development, and clinical manufacturing of its product candidates.

Our success is dependent upon our ability to continue to generate and/or raise additional capital in order to fund ongoing research and development, obtain regulatory approval of our products, successfully commercialize our products, generate revenue, meet our obligations, and, ultimately, attain profitable operations.

Our consolidated financial statements as of and for the year ended December 31, 2025 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Based on current projections, management believes that its existing cash, cash equivalents and short-term investments, combined with anticipated potential revenue from the commercialization of PRGN-2012, which is outside of our direct control, will enable us to continue our operations for at least one year from the date of this filing.

These assumptions include the receipt of future payments that are dependent upon the successful FDA approval of the PRGN-2012 BLA, and therefore revenue from this product is uncertain at this time.

Based on this factor, we do not know when, or if, we will generate sufficient revenue from commercialization to offset our operating expenses.

We are subject to all of the risks inherent in the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

In addition, because our forecasted potential revenues are currently outside of our direct control, they have not been included in our going concern analysis.

These conditions raise substantial doubt about our ability to continue as a going concern for at least 12 months after the issuance of the accompanying consolidated financial statements.

Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our ability to continue as a going concern is dependent upon the successful execution of management’s plans, which include the successful commercialization of PRGN-2012.

In addition, we may decide, or be required to raise additional capital.

This additional capital could be raised through a combination of non-dilutive financings (including debt financings, collaborations, strategic alliances, monetization of non-core assets, marketing, distribution or licensing arrangements), dilutive financings (including equity and/or debt financings with an equity component) and, ultimately from revenue related to product sales, to the extent our product candidates receive marketing approval and can be commercialized.

There can be no assurance that new financings or other transactions will be available to us on commercially acceptable terms, or at all, and such financings may adversely affect the holdings or rights of our stockholders and may cause significant dilution to existing stockholders.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, which could have a material adverse effect on our financial condition.

Based on current projections, management believes that its existing cash, cash equivalents and short and long-term investments, combined with anticipated potential revenue from the commercialization of Papzimeos, will enable us to continue our operations for at least one year from the date of this filing.

We are subject to all of the risks inherent in the development of new products (including manufacturing and commercialization of Papzimeos), and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments from continuing operations as of December 31, 2024 and the effects such obligations are expected to have on our liquidity and cash flow in future periods:

The following table summarizes our significant contractual obligations and commitments from operations as of December 31, 2025 and the effects such obligations are expected to have on our liquidity and cash flow in future periods:

Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years

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Operating leases $ 6,512 $ 1,680 $ 2,891 $ 1,941 $ —

Cash interest payable on long term debt (*) 40,177 10,392 20,813 8,972 —

Long-term debt 100,000 — 12,500 87,500 —

Purchase Commitments 249 115 134 — —

Total $ 146,938 $ 12,187 $ 36,338 $ 98,413 $ —

(*) Interest is calculated using static annual rate of 10.25%, although our long-term debt carries a variable interest rate (see "Notes to the Consolidated Financial Statements - Note 10" appearing elsewhere in this Annual Report on Form 10-K).

In addition to the obligations in the table above, as of December 31, 2025, we are party to in-licensed research and development agreements with various academic and commercial institutions where we could be required to make future payments for annual maintenance fees as well as for milestones and royalties we might receive upon commercial sales of products that incorporate their technologies.

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As a result of our past stock issuances, as well as due to prior mergers and acquisitions, certain of our net operating losses have been subject to limitations pursuant to Section 382.

As of December 31, 2024, we had utilized all net operating losses subject to Section 382 limitations, other than those losses inherited via acquisitions.

As of December 31, 2024, approximately $35.8 million of domestic net operating losses were acquired via acquisition and are limited based on the value of the target at the time of the transaction.

Future changes in stock ownership may also trigger an ownership change and, consequently, a Section 382 limitation.

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Our net deferred tax assets, which primarily relate to these loss carryforwards, are offset by a valuation allowance due to our history of net losses.

As a result of our past issuances of our common stock, as well as due to prior mergers and acquisitions, certain of our net operating losses have been subject to limitations pursuant to Section 382.

As of December 31, 2024, Precigen has utilized all net operating losses subject to Section 382 limitations, other than those losses inherited via acquisitions.

As of December 31, 2024, approximately $35.8 million of domestic net operating losses were inherited via acquisitions and are limited based on the value of the target at the time of the transaction.

Future changes in stock ownership may also trigger an ownership change and, consequently, a Section 382 limitation.

Critical accounting estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with U.S.

Critical accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods.

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We recognize revenue when our customer obtains control of the promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that are within the scope of ASC 606, we perform the following five steps:

To determine revenue recognition for arrangements that are within the scope of Accounting Standards Codification ("ASC") 606, we perform the following five steps:

(i) identify the contract(s) with a customer, (ii) identify the promises and distinct performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligations.

In 2022 and 2021, collaboration and licensing revenues were considered a critical accounting policy and estimate since the associated revenue or deferred revenue were significant.

Refer to Item 7:

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form

10-K for management’s discussion of this critical accounting policy and estimate.

In 2024, such accounting policy and estimate is not considered critical as the associated revenue and deferred revenue are not significant.

Product and service revenues

Our product and service revenues are generated primarily through Exemplar, it generates product and service revenues through the development and sale of genetically engineered miniature swine models.

We evaluate each promised product or service under our contracts and identify performance obligations for each distinct product or services.

We then allocate the transaction price of the contract to each performance obligation, recognizing the transaction price as revenue at a point in time when control of the promised product is transferred to the customer or over time when the promised service is rendered.

Product and service revenues are generated through both Papzimeos, our newly commercialized biopharmaceutical product (Papzimeos), and Exemplar, which provides genetically engineered miniature swine models and related services.

Although our underlying revenue recognition policies are described in Note 2 to the Consolidated Financial Statements appearing elsewhere in this Annual Report, the application of those policies requires management to make significant estimates and judgments as described below.

Papzimeos Commercial Product Revenue

We began commercial sales of Papzimeos in the fourth quarter of 2025 following FDA approval.

Revenue from Papzimeos is recognized when the performance obligation to provide units of Papzimeos is satisfied, which occurs upon delivery to the site of care or specialty pharmacy.

Because Papzimeos is in its first commercial year, revenue recognition involves significant estimation uncertainty, specifically relating to variable consideration, which includes:

◦ Chargebacks and contractual commitments requiring us to provide products at discounted prices compared with wholesale acquisition cost

◦ Government and payer rebates associated with Medicaid, Medicare, managed care programs, and commercial payers

◦ Product returns, which are estimated based on historical data, expected prescription demand, distribution channel inventory, and benchmarking for newly launched specialty products

These estimates require judgment due to limited historical experience, evolving payer and provider utilization, and the inherent uncertainty of a new product launch.

Changes in these assumptions could materially affect net revenue recognized in future periods.

Exemplar Product and Service Revenues

We recognize product and service revenue at a point in time when control of the promised product is transferred to the customer or over time when the promised service is rendered.

We typically recognize revenue using an out-based measure, generally time elapsed or days of service, to measure progress and transfer of the control of the performance obligation to the customer.

Payment terms are typically due within 30 days of invoicing, which occurs prior to or when revenue is recognized.

We recognized $3.9 million, $6.1 million, and $12.0 million of product and service revenues for the years ended December 31, 2024, 2023, and 2022, respectively.

Pre-Launch Inventory

Prior to an initial regulatory authorization for our drug product candidates, we expense costs relating to raw materials and inventory production as research and development expenses in our consolidated statements of operations in the period incurred.

We capitalize the costs of production as inventory when we believe regulatory authorization and subsequent commercialization is considered probable and we expect to realize future economic benefit from the sales of the drug product candidate.

We have not capitalized any inventory to date in our Biopharmaceuticals reporting segment.

When recognizing revenue, we utilize judgments in determining whether individual products and services in a contract are distinct, the appropriate measure of progress for services performed over time, and any adjustments for expected discounts or price concessions, when applicable.

Valuation of goodwill and long-lived assets

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If this is the case, the quantitative goodwill impairment test is required.

If the quantitative goodwill impairment test is required or elected to be performed, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill).

If the quantitative goodwill impairment test is

required or elected to be performed, first, the fair value of the reporting unit is compared with its carrying amount (including goodwill).

Impairment losses on goodwill are recognized based solely on a comparison of their fair value to carrying value, without consideration of any recoverability test.

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The historical clinical accrual estimates have not been materially different from the actual costs.

Warrant liabilities

The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying consolidated balance sheet.

The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the consolidated statement of operations.

Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

We determined the initial value of the Warrants using a combination of the Black-Scholes option pricing model and Monte Carlo model, which are considered Level 3 fair value measurements.

These models consider several variables and assumptions in estimating the fair value of financial instruments, including the per-share fair value of the underlying common stock, exercise price, expected term, risk-free interest rate, expected stock price volatility over the expected term, and expected annual dividend yield.

Certain inputs utilized in our Black-Scholes option pricing model may fluctuate in future periods based upon factors which are outside of the Company’s control.

A significant change in one or more of these inputs used in the calculation of the fair value may cause a significant change to the fair value of our warrant liability which could also result in material non-cash gain or loss being reported in our consolidated statement of operations.

See additional discussion in "Notes to the Consolidated Financial Statements - Note 7 and 12" appearing elsewhere in this Annual Report.

Recent accounting pronouncements

See "Notes to the Consolidated Financial Statements - Note 2" appearing elsewhere in this Annual Report for a description of recent accounting pronouncements applicable to our business, which is incorporated herein by reference.

See "Notes to the Consolidated Financial Statements - Note 2" appearing elsewhere in this Annual Report for a description of recent accounting pronouncements applicable to our business.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis