XON Intrexon Corporation

On January 2, 2020, Intrexon Corporation (“Intrexon”) announced the appointment of Helen Sabzevari, Ph.D., as President and Chief Executive Officer (“CEO”), the execution of binding agreements to sell certain of its non-healthcare assets for $65.2 million, and entrance into an agreement to sell $35 million of its common stock (the stock sale together with the asset sales, the “Transactions”). Intrexon also announced that the Services Agreement, dated as of November 1, 2015, by and between Intrexon and Third Security, LLC (“Third Security”), as amended, pursuant to which Third Security provided support services to Intrexon and its previous CEO, was not extended and was allowed to expire on January 1, 2020. In addition, Intrexon announced that it is taking steps to change its name to Precigen, Inc.

On January 1, 2020, Intrexon and TS Biotechnology Holdings, LLC (“TS Biotechnology”), a Virginia limited liability company managed by Third Security, entered into a Stock and Asset Purchase Agreement (the “Stock and Asset Purchase Agreement”) pursuant to which Intrexon agreed to sell, on the terms and subject to the conditions specified therein, the majority of its bioengineering assets to TS Biotechnology. The assets included in the Stock and Asset Purchase Agreement include all of the equity interests held by Intrexon in (1) Blue Marble AgBio LLC, a Delaware limited liability company, (2) ILH Holdings, Inc., a Delaware corporation, (3) Intrexon Produce Holdings, Inc., a Delaware corporation, (4) Intrexon UK Holdings Inc., a Delaware corporation, (5) Oragenics, Inc., a Florida corporation and (6) SH Parent, Inc., a Delaware corporation, as well as Intrexon’s domain name, dna.com, for an aggregate purchase price of $53 million and certain contingent payment rights. The Stock and Asset Purchase Agreement contains a “go-shop” provision pursuant to which Intrexon has the right to initiate, solicit and encourage the making of Alternative Proposals (as defined in the Stock and Asset Purchase Agreement) and engage in, enter into and continue discussions or negotiations with respect to Alternative Proposals through January 31, 2020. 

Intrexon and TS Biotechnology have each made limited representations, warranties and covenants in the Stock and Asset Purchase Agreement.

Consummation of the transactions contemplated by the Stock and Asset Purchase Agreement is subject to certain customary closing conditions including, among others the completion of a corporate restructuring separating the transferred businesses and assets from Intrexon’s remaining businesses. Unless the agreement is terminated by Intrexon in favor of an Alternative Proposal, Intrexon currently expects to close the transactions contemplated by the Stock and Asset Purchase Agreement on January 31, 2020.

Also on January 1, 2020, Intrexon and TS Biotechnology entered into a subscription agreement (the “Subscription Agreement”), pursuant to which, upon the terms and subject to the conditions set forth therein, TS Biotechnology agreed to purchase, at a per share price equal to the volume weighted average price of Intrexon’s common stock for the five consecutive trading days immediately following the second business day after January 14, 2020, rounded to the nearest whole cent (the “Per Share Purchase Price”), a number of shares of Intrexon’s common stock, rounded to the nearest whole share, equal to (x) an amount equal to the lesser of (i) $35 million or (ii) if the Stock and Asset Purchase Agreement is terminated by Intrexon because Intrexon has entered into an Alternative Sale Agreement (as defined in the Stock and Asset Purchase Agreement), the difference between $88 million and the net cash proceeds that Intrexon or any of its subsidiaries is entitled to receive pursuant to such Alternative Sale Agreement; divided by (y) the Per Share Purchase Price (the “Shares”). Intrexon and TS Biotechnology have each made limited representations and warranties and customary covenants in the Subscription Agreement.

The closing under the Subscription Agreement will occur on the later of the closing under the Stock and Asset Purchase Agreement, the closing under an Alternative Sale Agreement (as defined in the Stock and Asset Purchase Agreement) and the second business day after the end of the purchase price calculation period described above. Intrexon currently expects to close the transactions contemplated by the Subscription Agreement on January 31, 2020.

Prior to the effectiveness of the Transactions, Randal J. Kirk and shareholders affiliated with him beneficially owned approximately 46% of Intrexon’s voting stock. Mr. Kirk is the former CEO of Intrexon and is currently the Executive Chairman and a member of Intrexon’s board of directors (the “Board”). Mr. Kirk also currently serves as the Senior Managing Director and Chief Executive Officer of Third Security and owns 100% of the equity interests of Third Security. Third Security directly owns shares of Intrexon common stock and is also the manager of certain entities that directly own shares of Intrexon common stock, and therefore may be deemed to beneficially own approximately 35% of Intrexon’s common stock prior to the effectiveness of the Transactions.

Each of the Stock and Asset Purchase Agreement and the Subscription Agreement was approved by the independent members of the Board, with the recommendation of an independent special committee of the Board.

The foregoing is a summary description of certain terms of the Stock and Asset Purchase Agreement and the Subscription Agreement. Copies of the Stock and Asset Purchase Agreement and the Subscription Agreement are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. Intrexon encourages all readers to read the entire text of the Stock and Asset Purchase Agreement and the Subscription Agreement.

Forward Looking Statements

Some of the statements made in this Current Report on Form 8-K are forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements made in this press release include, but are not limited to, statements regarding Intrexon’s cash position, the expected closing of the transactions with Third Security and the timing thereof, the possible sale of assets to higher bidders during the go-shop period, and the renaming of the company to Precigen. Although Intrexon currently expects to close the Transactions contemplated by the Stock and Asset Purchase Agreement and the Subscription Agreement, there can be no assurance that the sale will be consummated as the closing conditions included in one or both of the Stock and Asset Purchase Agreement and the Subscription Agreement may not be satisfied. Further, there can be no assurance, that Intrexon will receive or successfully negotiate any Alternative Proposals (as defined in the Stock and Asset Purchase Agreement). These forward-looking statements are based upon Intrexon’s current expectations and projections about future events and generally relate to Intrexon’s plans, objectives and expectations for the development of Intrexon’s business. Although management believes that the plans and objectives reflected in or suggested by these forward-looking statements are reasonable, all forward-looking statements involve risks and uncertainties and actual future results may be materially different from the plans, objectives, and expectations expressed in this press release. These risks and uncertainties include, but are not limited to, (i) the fulfillment of closing conditions, (ii) the distraction of management from business operations, (iii) the risks associated with separating businesses out from its ongoing operations, (iv) Intrexon’s strategy and overall approach to its business model, its efforts to realign its business, and its ability to exercise more control and ownership over the development process and commercialization path, (v) Intrexon’s ability to hold or generate significant operating capital, including through partnering, asset sales and operating cost reductions, (vi) actual or anticipated variations in Intrexon’s operating results, (vii) Intrexon’s cash position, (viii) market conditions in Intrexon’s industry, (ix) the volatility of Intrexon’s stock price, (x) the successful completion of certain anticipated transactions, and (xi) the challenges inherent in leadership transitions. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Intrexon’s actual results to differ from those contained in the forward-looking statements, see the section entitled “Risk Factors” in Intrexon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent reports filed with the Securities and Exchange Commission. All information in Current Report on Form 8-K is as of the date hereof, and Intrexon undertakes no duty to update this information unless required by law.