Precigen, Inc. (PGEN) Earnings

Management highlights

- Commercial Launch Performance of Pepsimius * Pepsimius is the first and only FDA-approved therapy for adults with RRP, with a broad label that does not require prior surgeries before treatment, enabling use across all disease severity levels rather than only severe cases. * The FDA granted 7 years of market exclusivity for adult RRP through August 2032, providing protection from future competition and supporting long-term commercial value. * Payer coverage now reaches approximately 315 million covered lives in the U.S. (nearly all potential covered lives), after adding 18 million covered lives in Q2, which is a strong performance relative to typical newly approved treatments. * The permanent J-code for Pepsimius, effective April 1, 2026, streamlined reimbursement processing, reduced uncertainty for providers, and enabled faster activation of new accounts, especially in community practices. * As of Q2 end, over 500 patients are registered in the Presagen patient support hub, with an additional meaningful share of treated patients coming through non-hub institutions as sites gain confidence in their own access processes. * Long-term durability data presented at ASCO shows 83% of treated patients maintained an ongoing complete response beyond 3 years, with many remaining surgery-free for over 4 years after completing Pepsimius treatment. - Pipeline and Platform Progress * Pepsimius redosing is currently being evaluated in an ongoing clinical trial, and a pediatric Pepsimius trial is on track to initiate in 2026. * The Pepsimius Marketing Authorization Application is under review by the EMA, and the drug has received orphan drug designation from the European Commission. * PRGN 2009, an investigational immunotherapy for HPV 16/18-related cancers (head and neck, cervical) built on the same adenovirus platform as Pepsimius, is advancing in multiple Phase II trials in combination with pembrolizumab. Updated data for the head and neck cancer trial will be presented by the end of 2026. * The commercial success of Pepsimius and clinical progress of PRGN 2009 confirms the proof of principle for Presagen's Adenoverse platform, which the company will continue advancing to maximize its strategic value across multiple indications. - Financial Milestone * Pepsimius Q2 revenue pushed Presagen to net profitability in the quarter, a rare achievement for a biotech company before the first anniversary of its first FDA approval.

Guidance

- Management reaffirms that current cash, cash equivalents, and investments, paired with expected collection of Q2-end trade accounts receivable, will fully fund operations through cash flow break-even by the end of 2026. * After remaining pre-launch inventory is fully sold off (expected in Q3 2026), Pepsimius gross margins will stabilize between the high 80% and low 90% range. * R&D expenses are expected to increase over the remainder of 2026 as the company advances its pipeline programs. * Management expects continued quarter-over-quarter growth of Pepsimius revenue, though the sequential percentage growth rate is expected to decline over time as the launch matures, consistent with typical new product launches. * The company expects to present updated clinical data for PRGN 2009 in head and neck cancer by the end of 2026.

Segment performance

Presagen has one core commercial product segment, Pepsimius (Paximius), which generated $53.1 million in revenue in Q2 2026, accounting for 96.5% of the company's total Q2 revenue of $55 million. Pepsimius revenue grew 146% quarter-over-quarter from $21.6 million in Q1 2026, bringing total launch-to-date revenue to over $78 million by the end of Q2. Total operating income for Q2 2026 was $22.6 million, with a net income of $20.1 million. Gross margin for Q2 2026 was 95% ($52.2 million gross profit), driven by pre-approval manufacturing costs that were previously expensed to R&D. R&D expenses for the quarter were $7.3 million, a decrease of $4.2 million year-over-year, and selling, general & administrative expenses were $22.2 million, an increase of $6.1 million year-over-year driven by commercial launch activities.

Risks & headwinds

No explicit risks or operational failures were discussed by management during the call. Management only noted in the standard forward-looking statement disclaimer that actual future results could differ from current expectations due to unspecified risks and uncertainties included in the company's SEC filings.

Analyst Q&A

• Q: What Q2 to Q3 growth trajectory should investors expect, and how many physicians/institutions have adopted Pepsimius so far? Are most patients from the Presagen hub or outside the hub? /

  A: Management confirmed that growth will continue, though the sequential percentage growth rate will likely moderate from the 145% Q1-Q2 growth, which is expected as a launch matures. A high proportion of targeted accounts (both academic/IDNs and community practices) are already using Pepsimius, with adoption continuing to grow. Over 500 patients are registered in the hub, but a significant share of treated patients come from outside the hub, and demand is strong across both channels. With 27,000 total RRP patients in the U.S. and growing adoption across all disease severities, the long-term growth trajectory remains very strong.

• Q: What portion of Q2 revenue comes from follow-up doses for patients that started treatment in Q1? How much of Q2 revenue is from prior period true-ups, and what is the steady-state gross margin after pre-approved inventory is consumed? /

  A: Some portion of Q2 revenue comes from carried-over doses for patients starting treatment in prior quarters, but the large majority of revenue for the next several quarters will come from new patient demand. Any true-up adjustments to prior period revenue reserves were immaterial. After pre-approval inventory is exhausted, steady-state gross margin will land between the high 80% and low 90%, meaning steady-state COGS will be roughly 10% of revenue.

• Q: How many of the 27,000 total U.S. RRP patients are currently identifiable and accessible, and how much pent-up demand exists among severe patients, how long will that demand last? /

  A: Several thousand severe RRP patients who undergo regular surgeries are already identifiable and actively managed by the healthcare system, and this patient pool represents an obvious starting point for adoption. With Pepsimius's broad label enabling treatment of early-stage less severe patients, there is a large, untapped patient pool beyond the severe pent-up demand. Physicians are increasingly willing to treat patients earlier to prevent disease progression, supported by Pepsimius's proven long-term efficacy and durability, so there is substantial runway for ongoing growth after the initial pent-up demand is satisfied.