Good afternoon, and welcome to the Intrexon Third Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instruction] Please note this event is being recorded. I would now like to turn the conference over to Christopher Basta. Please go ahead.

Good afternoon. I am Chris Basta, Vice President of Investor Relations for Intrexon Corporation. Welcome to our third quarter 2016 earnings conference call. Joining me on the call today are Mr. Randal Kirk, Chairman and Chief Executive Officer; Mr. Geno Germano, President; and Mr. Joel Liffmann, Senior Vice President, Finance. Slides that will be presented on the call today can be accessed on the Events/Conferences page under the Investors section of our website, dna.com. During this conference call, we will make various forward-looking statements within the meaning of the Safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements, with respect to revenues, earnings, performance, strategies, prospects and other aspects of Intrexon’s business are based on current expectations and are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Please read the Safe Harbor statement contained in the earnings press release, which was released earlier today and is also available on our website under the Investors link, as well as Intrexon’s most recent SEC filings for a more complete description. The press release references and our discussion this afternoon may reference certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA per share. Reconciliations to GAAP measures are contained in the earnings press release as well as on the Investors section on our website. Now, I would like to turn the call over to Geno Germano, Intrexon’s President. Geno, floor is yours.

Thanks very much, Chris, and good afternoon, everyone, and thank you joining our third quarter 2016 earnings call. We certainly appreciate your support and interest in the company. Earlier today we issued a press release with our third quarter earnings and we filed our 10-Q with the SEC. I hope you had the chance to review the reported financial results. During the quarter, our team of over 900 skilled and dedicated employees continued to deliver solid progress across our 30-plus collaborations, initiated two new exclusive channel collaborations, furthered the commercial activities of our subsidiaries, and advanced several of our marketable products. And I’ll begin with an update of our subsidiaries and marketable products portfolio, and then move on to a discussion of the collaborations, before I hand the call over to Joel to discuss financials. So let’s start with Oxitec. We recently opened our large-scale mosquito production facility in Brazil with capacity to produce 60 million Friendly Aedes mosquitoes per week. A portion of this production capacity will support our ongoing deployment program in Piracicaba, Brazil, while the remaining capacity will be available to support additional territories as they come onboard. As you know we’re also deploying a vector control program in the Cayman Islands. Our monitoring both programs is showing very positive results. And we anticipate that these results will contribute additional evidence of the effectiveness of our product. Notably, in public support for our genetically engineered solution in these areas has been a very favorable, and it tends to grow as residents realize the benefits of the product. Recent survey shows 69% of residents of Grand Cayman, support the Friendly mosquito and in Piracicaba where Oxitec solution has been deployed the longest, 88% of citizens support its use. We’re pleased that the residents of Monroe County, Florida yesterday…

Thank you, Geno. Third quarter and nine-month financial results reflect the progress across the company that Geno just discussed. And I’d like the briefly call out several items. Today, we reported third quarter revenues of $49 million, a decrease of 5% [ph] sequentially and 8% from the same period last year. The sequential top line decline was driven mostly by a drop in our product and service revenues from our Trans Ova subsidiary. From a year-on-year perspective, majority of the revenue decline is attributable to recognition in last year’s third quarter, of previously deferred revenue related to collaboration agreements, which we satisfied our obligations or mutually terminated. So while we had a tough comparison with the year-ago quarter, deferred revenues have increased meaningfully this year, and now exceed $320 million. As Geno commented, we are making substantial investments in Trans Ova, as well as Oxitec, AquaBounty, Intrexon Crop Protection, and Okanagan, all of these investments are expected to generate increased revenues in future periods. We also continue to invest in our technology platforms and other capabilities. In our earnings release, we report adjusted EBITDA as previously defined. This measure will no longer be reported as such, however, we will continue to provide supplemental information regarding deferred revenues that will allow you to reconstruct this metric. Going forward, we will be reporting adjusted EBITDA as redefined, which for the third quarter was a loss of $3.7 million and for the nine months was a loss of $20.8 million. As previously defined, adjusted EBITDA was $5.6 million loss for the quarter and positive $107 million on a year-to-date basis. I’d also like to point out that we continue to execute very well on our capital efficient model. We measure our capital efficiency as the ratio of technology access fees plus cost recovery, and product and service revenues, divided by our cash operating costs. For the third quarter, this measure was 80% of cash operating expenses and for the nine months we’ve received total consideration equal to 150% of our consolidated cash operating expenses. We ended the quarter with a strong cash position of $281 million, and we also hold preferred stock in our ECC - I’m sorry, we also hold equity securities and preferred stock in our ECC partners worth approximately a $163 million. A great deal of more detail can be found in the 10-Q filed today. And I’d like to wrap up with the observation that we are very pleased with our operating progress, our financial performance and the financial strength afforded by our business model. I’ll now turn it back to Geno.

Hey, thanks, Joel. So in summary, having covered several of the initiatives with our marketable product and several platforms in development, let me just summarize by saying that with over 30 collaborations, a portfolio of operating subsidiaries with, in our opinion, outstanding management teams and business prospects, we exited the third quarter of 2016 in a solid position to execute our strategies for the remainder of 2016 and beyond. Thank you.

Thank you, operator, we’ll now take questions.

[Operator Instructions] The first question comes from Tom Shrader at Stifel.

Good afternoon. Thanks for taking the question. So you commented in the energy program that you’re still on track for yearend targets, is that still a stronger statement as a go/no-go decision or what are the yearend targets. Can you give us a little sense of what you think you can do by yearend? It’s honestly the most common question I get.

Yes. Well, we’ve established our own internal targets for advancement of the program that reflect a challenging and aggressive progression of the technology. And we are making progress towards the targets that we set for the end of the year that will trigger the next step in the planning process for commercialization of the ultimate product. We’re not disclosing the actual yield numbers that we’re using internally to measure our progress, only confirming that we are on track with those targets.

Okay. In the November 19, there is a meeting in the - of the Florida Keys Mosquito Control Board. Do you expect that’s the meeting that will actually decide whether you have the right to go or is that still unclear?

Hi, Tom, RJ here. As you would expect, we are in communication with the mosquito control board there. They were our partners in the INET [ph] that was filed. So we enjoyed very discursive relation, a very courteous and very cooperative relationship. We’ve been speaking with them as recently as today. So stay tuned. But I can tell you that for our part, we are looking forward to moving this program into the field in the United States. And we’re really excited about this opportunity.

Okay. Thanks for the color.

The next question is from Jason Butler of JMP Securities.

Thanks for taking the questions. The first is on the crop protection programs. Could you maybe lay out for us a little bit what we could expect to hear from the collaborations you have ongoing and the progress you might see over the next twelve months? And then my second question is a broader question on the impact of the election and now with the republicans holding all three branches of government. How you expect the political sentiment to either change or not change in terms of both genetically-modified mosquitoes or foods? Thanks.

Sure. With regard to ICP, that we just mentioned it. We have never disclosed the identities of the two partners. But there will be a very wholesome disclosure that which was required by the SEC, when we filed our Form 10 in connection with ICP. So stay tuned for that. That’s upcoming. With respect to your second question, politics, I don’t know, if it’s really appropriate for us to comment on that today. I’ll tell you the most - the election - the portion of the election that I was most excited about yesterday, of course, was that our mosquitoes was green-lighted in Monroe County, Florida. I will - let me just observe, I mean, I will give you this much. We’ve talked with most members of the congress over the last year. We’ve had extensive discussions with most members of the House of Representatives, most United States senators, many governors, many agency heads, many of the scientists in several federal agencies and so forth. And in general, we have seen that these relationships have been very, very positive. We see a lot of support for our technology. And frankly, I think, what you are really getting at is, are we likely to see a lot of more rapid progress of engineered biology. I think the answer to that is, yes. You will see more rapid progress, but the reason I want to just preface that by mentioning the task we’ve been having for a long while is because I think we were going to see rapid progress anyway.

Yes, I would only comment that we are in the innovation business and everything that we do is really about moving the needle forward and creating products that can go beyond conventional solutions for such a wide variety of different problems or opportunities that exists in all the markets that were involved in across our five different sectors. So to the extent that we continue to do our job and bring forward products that make a difference and have value and meet needs in the marketplace will ultimately continue to be successful.

I mean, think about the data that Geno gave you, Jason, a few minutes ago pertaining to the public enthusiasm and the public support for OX513A, where it’s been deployed. There is a clear relationship between the length of time of deployment and we’re seeing this globally now, the length of time of the deployment and the amount of public support enjoyed. One number Geno left out, because it’s just a brand new number we got today is according to our latest data in Piracicaba approval actually is at or very, very near 100%. So that’s where we’ve been deploying for the longest time. I think the data that we talked about in Cayman, that was really a poll taken about shortly after we began releasing mosquitoes and that was 69%. If you contrast that to the approval that we received yesterday in Monroe County, Florida, which was 50% something - 58% or whatever it was; something like that. So we’re seeing really around the world increasing public acceptance for engineered biology that confers tangible advantage to society and to consumers. And that’s really what Geno was just saying, we are going to stay focused on that. And I think by staying focused on that we can expect more rapid developmental timeline.

Okay, great. Thanks for taking the questions.

[Operator Instructions] The next question is from Derik de Bruin at Bank of America Merrill Lynch.

Thanks for taking the question. This is actually Mike Ryskin on for Derik. Following up on something that, I think one of the first question, that was asked and something you obviously focused on a lot, the proposed field trial in Florida Keys. I know you’re still waiting following the vote results, just waiting for the mosquito control board result as you said. But could you just sort of paint us the two pictures in terms of your strategy based on the outcomes of that vote, and when you’d be able to start the treatments, what time points you’d be checking and sort of how you’re progressing, if it gets approved and also if it doesn’t get the passing vote, sort of what’s your backup plan there?

So I think the backup plan was pretty obvious, because as has been publically disclosed several other Florida communities have actually, well, I think first they went to the Department of Health and Human Services, and then directed them to us. In any event, several Florida communities that have asked us if they could stand in lieu of Monroe County in case the vote has not gone the way we hoped it would. And so now, we’re still in discussions with these other Florida communities, but they - I’d like to say in public domain, but I’m not sure which one is our public domain. So I don’t want to name them today, but anyway very significant, very well-known Florida communities. And we’re going to see to what extent we can accommodate them anyway, but obviously, we owe a duty of loyalty, I feel, to the Mosquito Control District in Monroe County. And so that’s going to be our top priority.

All right, thank you. And then a quick follow-up if I can, on the Okanagan apple, Arctic apple and the other apple varieties that been approved. You’ve mentioned that in early 2017 you’re planning to get some local market, test markets, with the fresh sliced apples. And then based on those results you’ll have further commercialization in 2017. Could you sort of talk about the strategy there, how significant the scale will be and how broad the ramp-up will be there?

Yes. I didn’t - we didn’t mean to imply that there is a binary test out there that we don’t know the answer to. People love this apple. I have not met a single individual who has tried this apple, who doesn’t absolutely rave over it. I was honored to be able to speak at the World Food Prize about a month or so ago. And I can tell you this apple was a huge hit. It was tweeted by Robert Fraley, who is the Chief Technology Officer of Monsanto and a very favorable commentary, because we arranged for him to try the apple and so forth. When you see this apple and you compare it to the apple that you know today. There is just no question in our minds that you are looking at the future. This should genuinely eclipse the existing apple. So it’s a huge opportunity. It’s going to grow geometrically. Now, what we alluded to, what Geno commented on, was our focus-group testing, market research and so forth. That’s really to determine pricing packaging, and issues related to the actual merchandising of the product.

Right and I can tell you that having just actually done a review with the team at Okanagan, that we’ve had more interest from retailers in participating in the test marketing than we have apples to distribute to them. So it’s a great sign of their enthusiasm for participating with this product and in adopting the product as we were able to produce more and more volume over time.

All right. Thank you very much.

The next question is from Tycho Peterson at JPMorgan.

Hey, guys, just following up on the question on Okanagan. Can you share your perspectives on pricing relative to sort of regular Golden apples in the market today? I mean, what are you - what are the retailers think you and your conversations with them? Are they expecting sort of a discount while you drive adoption, and then eventually pair it to your premium pricing? Is that the way you’re thinking about it.

Yes, hi - not Tycho, right?

Yes, yes.

Yes. Pre-sliced apples already sell at a premium to whole apples, so we’re going to enjoy a premium, okay. But as we just mentioned a few moments ago, we’re going to be doing market research in order to determine the correct pricing well.

Got it, okay. And then…

Let me just mention though, our overall expectation is this should receive a premium to other pre-sliced apples. The question in our mind is what is the appropriate amount of that premium?

Got it. And is that also the right way to think about the GM salmon that you have the Canadian court approval?

No. I’m going to keep myself from self-promoting, but I recommend you go to YouTube actually did - we kind of let it out there about a month ago, right, at the World Food Prize thing. Search my name in YouTube, and you’ll see me talk about of how our commercialization plan a bit around this fish. We’re planning on spending the production - a portion of the production advantage that the AquAdvantage Salmon possesses in order to grow it close to markets, okay. So we can provide a superior product to - bear in mind, 95% of this salmon is consumed in the United States. It’s grown in sea cages principally in Norway and Chile. So these fish as, Geno just mentioned, these fish typically have a lot of antibiotics in them. They have a lot of marine pathogens, marine parasites. And we think that this is really an opportunity to establish the future of aquaculture as a terrestrial based system, which is how we produce our other food by the way, marine extraction. Marine extraction is obviously, by definition, the least sustainable food business on the planet. So we are going to spend a portion of the production advantage in order to produce a superior product, one that will be fresher, that will be consumer preferred that will be antibiotic free, that will be pathogen free, that will be free of sea lice and so forth. And again, we will submit this product at that time to market research to determine what the price will be.

Got it. And then, one final one here on Oxitec for me, at the Piracicaba facility, I think you said in the past that you have the maximum capacity there of 60 million mosquitoes per week. Where exactly are you today in terms of just the utilization of that facility and how are you conversions going with the Brazilian government in terms of using that facility as a central site from which you can supply perhaps to other towns nearby?

Yes, we have not - I don’t believe publically disclosed how much surplus capacity we have in our facility in Piracicaba. But we have indicated its nameplate, which is 3 billion mosquitoes per year. We are definitely in dialogue with numerous agencies, federal, provincial, and municipal throughout Brazil. And our expectation is that all of the capacity of this facility will be in use within a very reasonable period of time.

Yes, and I will just add that currently there would be substantial opportunity for utilization of excess capacity, capacity that were not utilized in Piracicaba it’s meaningful. And secondly, keep in mind that the eradication process involves a utilization of high concentration mosquitoes for a period of time to knock down the populations and then a maintenance-level that’s smaller. So when you go to a maintenance level, then you have more capacity at the plant to apply to other locations. So it’s not a simple answer, I guess, but there is certainly plenty of room for us to expand throughout Brazil. And we are in discussions with a number of different municipalities.

Got it. I appreciate the color, guys. Thanks.

The next question is from Ryan MacDonald of Wunderlich Securities.

Hello, everyone. Yes, so just a quick clarification in relation Oxitec with the panel meeting on November 19. Is that - or that meeting only to decide whether or not to approve a trial in Key Haven, or are they also exploring other areas of Monroe County as well given the fact that there was two referendums in the vote yesterday?

The latter.

The latter, okay, got it. And then moving to the products and services business, you mentioned in your commentary about that you’re working towards transforming the Trans Ova business from a services business to a proprietary products business. Can you talk about what the puts and takes are, and what sort of transformation, or what’s involved in that transformation, and is this something that will impact the business in terms of being a headwind to the business into 2017?

It’s not a headwind, it’s an opportunity. So let me just mention, we’ve talked about this on maybe every call, but at least most calls in the past. We acquired Trans Ova, because this is by far the number one team, the number one capability for the production of bovine embryos, which are delivered in frozen condition. It can be delivered anywhere in the world. So the short answer to the question, how can you export dairy industry to India, China, Middle East, and Africa, really superior genetics - with really superior genetics? The answer is FedEx. And the reason we know that answer is, because we do it every day out of Trans Ova. The acquisition was really to give us the team that has the greatest amount of domain expertise in this field. So that we can work with them really in two areas, one is to push out the boundaries of what is known in the field of bovine reproductive biology. And the second one is the application, which Intrexon is quite good, the application of high throughput systems, really industrial engineering around a biologic process. And the combination of these, we expect it’s going to significantly reduce - the target is to significantly reduce our COGS on frozen bovine embryos. We think that accomplishing that really gives us two scenarios. One is we have a very - we have a high degree of confidence in achieving and the other one is more aspirational I will say. The one we have a high degree of confidence in achieving is this is going to be a great business. And it’s going to be a great biotechnology business, because we think this can be the leading platform to transmit superior genetics in the bovine species anywhere in the world. The more aspirational goal if you think about it is that if we can get the COGS and we believe this is possible, we have not achieved this yet. If we can get the COGS on these embryos down to a certain point, then we could compete not only in the genetics business, but genuinely compete in the business of bovine reproduction i.e., compete for share with AI and other methods combine both, if I have you, other means of achieving bovine reproduction, which is very important. And bear in mind, the U.S. dairy, I mean, the worldwide dairy industry is around $180 billion, the worldwide bees industry is another $180 billion. If we can achieve a significant share, even modest share frankly of the bovine reproduction revenues, that would be definitely worth pursuing. So, again, we feel very confident of the first scenario. The second one is more aspirational. It’s going to take more work to really get the COGS down to that point, but we think that maybe achievable.

Got it. Thank you.

The next question is from Keith Markey at Griffin Securities.

Hi, Keith.

Hi, thank you for taking my question. I just had one. I was just wondering if you might be able to give us a little bit of an update about the salmon field testing that’s being done in South America and where it goes from the testing to actual [provincial application.] [ph]

I’m sorry. Are you talking about the ex-U.S., ex-Canada filings on the AquAdvantage Salmon?

Exactly, yes.

Yes, okay. Thank you, Keith. We’ve not really have liberty to discuss those. But it is true and thanks for mentioning them. It is true that obviously we believe this is a worldwide business opportunity, and we do have some additional filings that have gone in some other countries and with more on the way.

Okay. Thank you.

I would now like to turn the conference back over for closing remarks.

Okay. As usual, I have no idea what I’m about to say. I think that Geno and Joel have really covered everything that needs to be said today programmatically, and that we can disclose in reality. So let me just mention my favorite topic, which is I think apart that our investors really seldom get to see. And but, yes, it’s the point of my greatest pride associated with this company, then it is the quality of this team. We happened to be at location today, I rather not disclose it, but we’re in a location today which happens to be the very same location, in fact, I’m actually staying in the same suite in which I had discussed our big moment 7.5 years ago and decided to spend the rest of my business career focused on creating one of the coolest and most awesome companies on the planet, Intrexon. And so, I feel like it was just a moment of reflection to realize how far we’ve come and how close we are to really achieving that vision. So it’s thrilling to me to work with such a wonderful team. We continue to add such great talent. We’ve evolved, and ultimately look, as most of you know, I’m not a biologist and a country lawyer and had a little bit of look in some life-science company. So I’ll say ultimately every business and its success is mostly determined by how good is the team, how good is the people. And so if I could tell anything to my fellow shareholders it is about that. I will say on that metric, I’m very, very satisfied, very, very excited. We’ve made very significant appointments in executive level. Some of them are here in the room with me now. And almost every day,…

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.