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Intrexon: Breakthrough in Cannabis Manufacturing?

10/12/2018 5:00 am EST

Focus: HEALTHCARE

John McCamant

Editor, Medical Technology Stock Letter

Intrexon (XON) recently announced advances in the development of its microbial platform to produce cannabinoids for medical uses, explains biotech sector expert John McCamant, editor of The Medical Technology Stock Letter.

The company has engineered a yeast strain to produce low-cost, robust and consistent cannabinoid outputs via fermentation, a classic biotech manufacturing process that is tried and true. 

This process utilizing microbes has potential to provide greater supply-chain security, and avoids the resource-intensive isolation that often leads to quality and quantity variability in end products. 

The versatile strain was specifically designed to enable the production of cannabinoids that only are produced today in miniscule amounts in cannabis plants as well as novel cannabinoids. The company has scaled the process and achieved titers approaching commercially relevant targets with anticipated production of pure cannabinoids at COGS at $1,000/kg.

Cannabinoids are the naturally occurring chemicals in cannabis plants. The most common cannabinoids are tetrahydrocannabinol (THC), which is responsible for marijuana’s euphoric effects, and cannabidiol (CBD), which has been approved by the FDA to control seizures in epilepsy patients.

Importantly cannabinoids are small molecules enabling for relatively easy purification in yeast based microbial manufacturing. Progress in XON’s cannabinoid has positive read throughs for other XON synthetic biology programs.

We also expect this manufacturing breakthrough will be important for the company’s proprietary gene shuffling program to create specific novel and patentable cannabinoids.  This area is competitive as it represents a huge market opportunity.

In our view, XON is uniquely positioned to become a leader in cannabinoid manufacturing through its broad experience in synthetic biology in agriculture and ability to understand and harness the science of genetics.

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