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Intrexon: Biotech, Biofuels & Fish Farming

07/07/2017 2:56 am EST


John McCamant

Editor, Medical Technology Stock Letter

Intrexon (XON) has had a very busy few weeks as the company has delivered a slew of positive news, explains John McCamant, editor of The Medical Technology Stock Letter.

XON’s partner Fibrocell (FCSC) has completed dosing of first cohort in Phase I/II trial of FCX-007 gene therapy for treatment of recessive dystrophic epidermolysis bullosa (RDEB).

RDEB is the most severe form of dystrophic epidermolysis bullosa (DEB), a congenital, progressive, painful and debilitating genetic disorder that often leads to death.

RDEB is caused by a mutation of the COL7A1 gene, the gene which encodes for COL7, a protein that forms anchoring fibrils.

Anchoring fibrils hold together the layers of skin, and without them, skin layers separate causing severe blistering, open wounds and scarring in response to friction, including normal daily activities like rubbing or scratching.

Children who inherit the condition are often called “butterfly children” because their skin is as fragile as a butterfly’s wings. FCX-007 has been granted Orphan Drug, Rare Pediatric Disease and Fast Track Designations by the FDA.

The FDA has also granted Rare Pediatric Disease Designation to FCX-013, Fibrocell’s second gene therapy candidate with XON for the treatment of moderate to severe localized scleroderma — a chronic autoimmune disease characterized by thickening of the skin and connective tissue.

AquaBounty Technologies, a majority-owned subsidiary of XON has announced that it has entered into an agreement with Bell Fish Company to buy its fish-farming facility in Indiana, for $14 million in cash.

This will provide the company with a land-based, contained aquaculture system to grow AquAdvantage Salmon near major demand centers. The facility’s first harvest could come as soon as Q3 of 2019.

Once fully operational, the current facility will have an expected annual capacity of 1200 metric tons, which at current Atlantic salmon prices represents over $10 million a year in potential sales, with the possibility for future expansion.

Finally, Johnson Matthey (JMPLY) and XON announced they have entered into an exclusive collaboration focused on the development of microbial strains for fermentative production of peptide-based active pharmaceutical ingredients (APIs).

Overall, XON  has turned the corner after their management shakeup earlier this year with the recent slew of news providing evidence that the company is moving forward with all cylinders cranking.

The FDA’s positive designations for both the Fibrocell drug candidates both accelerates their path to market and can provide significant economics with the Pediatric vouchers which can be sold.

The fish farm acquisition leverages the AquaBounty technology with minimal risk as the FDA has already approved their salmon.

We are also fans of the Johnson Matthey deal as it also leverages and provides additional value from the technology platform without any time or cost to XON.

In 2017, XON is delivering the progress and positive news flow we expected when we recommended the company.

We also expect a biofuels partnership driven by Moelis & Company (MC) this year as the biofuels program has exceeded our expectations and has significant potential to serve as a major stock catalyst.

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