Where Billionaire-Led Intrexon (XON) Could Be in 10 Years
4/19/2017 6:45:16 AM
April 19, 2017
By Alex Keown, BioSpace.com Breaking News Staff
GERMANTOWN, Md. – Despite a recent downturn in company shares, are the best days ahead for Intrexon (XON) shareholders? That’s what analyst Maxx Chatsko thinks.
Writing in the Motley Fool, Chatsko said there are two key factors that make Intrexon an attractive stock–the acquisition-heavy strategy of its chief executive officer and the fact that most of the company’s pipeline products have yet to be commercialized. In his article, Chatsko looks at a long-term trajectory of the company. He said the most important signal of the company’s long-term financial viability is from product sales, including lead bovine embryo platform. However, Chatsko noted that sales of the platform have slipped over the past year – but that’s something he said is likely to change given its pipeline.
Chatsko said Intrexon has two technology platforms that will soon launch their first commercial products, Artic apple trees. Chatsko said it will take some time for the trees to generate a solid revenue stream, the product could “fundamentally change the industry.” Chatsko said at just a 5 percent market share Arctic apples could generate $40 million in revenue for the company. He said that’s not a far-fetched idea once growers and consumers learn more about the product.
Chatsko also touted Intrexon’s subsidiary Oxitec’s technology in controlling mosquito populations in Brazil without the need for insecticides. Revenue projections for the technology are about $8 to $10 per person covered by the platform–which means millions when looking at cities across Brazil. That technology is going to expand to the United States later this year in Florida. Data collected from those field trials will be used by the U.S. Food and Drug Administration to determine if the product can be marketed nationwide. While the FDA is making its decision, the product is likely to continue to expand in Brazil, Chatsko said. For the next five years, Chatsko seems to think the company’s revenue drivers are pretty solid.
In an even longer-term look, there are more risks, but also greater chances for rewards if things pan out, Chatsko said.
While the company has a number of technologies it’s pursuing, Chatsko took a look at its healthcare products. Earlier this year, CEO R.J. Kirk announced Intrexon was consolidating all “health-related assets” under the new subsidiary Precigen, Inc. Intrexon’s clinical pipeline for 2017 includes therapeutic candidates for advanced lymphoid malignancies, acute myeloid leukemia, pediatric brain tumors, solid tumors, oral mucositis, type 1 diabetes, wet age-related macular degeneration, Clostridium difficile infection, linear scleroderma, and cardiac disease. Although the rewards for investors are likely to be unknown for some time, Chatsko said.
In addition to being the umbrella for all of Intrexon’s health-related collaborations, Precigen will also include the company’s 75 percent stake in its Xogenex subsidiary. Xogenex is developing what is believed to be the world's first three gene approach to cardiac disease, Intrexon said. A New Investigational New Drug Application by the end of 2017.
Shares of Intrexon are trading at $20.17 this morning, up more than 4 percent. Shares though have not recovered from its high a year ago when the stock was trading at $36.83.
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