Nothing changed in the analysis other than increasing the discount of 2022 earnings from 25% to 35%. Slight 4 cent decrease in 2022 earnings expectation to $2.05 from $2.09. No big deal. Buy the weakness.
Oragenics and Intrexon Enter into a New
Oragenics has garnered the rights to the ActoBiotic™ AG013
for oral mucositis. This probiotic is based on a microbe,
Lactococcus lactis, that is used in the manufacture of a
variety of fermented foods, including cheeses, yogurt, and sour
cream. ActoGenix, which was acquired by Intrexon earlier this
year, created several therapies that utilize the bacteria as a
delivery vehicle for various biologically active molecules. AG013
expresses trefoil factor-1, which is involved in protecting the
mucosal lining of the gastrointestinal tract, facilitating wound
healing, and preventing inflammation. As such, it seems ideally
suited to combat localized inflammation and ulceration of the oral
mucosa that can accompany radiation and chemotherapy.
AG013 has already shown promise in the clinic. An initial
trial with healthy subjects found that the cell therapy, which is
formulated as a mouth rinse, delivers the genetically modified
bacteria to the buccal mucosa where secretion of trefoil factor-1
results in homogeneous exposure to the mucosal surface for up to
24 hours. A subsequent Phase 1b trial enrolled 25 cancer patients
who were at risk of developing oral mucositis to gain an insight
into its safety and efficacy. The results were impressive – AG013
prevented ulceration in about 30% of the treated patients, while
100% of those who received a placebo developed oral mucositis.
Moreover, ulcers in the treated group healed faster and required
less care in the emergency room.
Terms of the Exclusive Channel Collaboration are similar to
others that Intrexon has signed. Oragenics will pay Intrexon a
technology access fee and reimburse its partner for R&D costs.
In addition, the Company will pay regulatory and commercial
milestones, as well as a low double-digit royalty on net sales of
This is a good strategic collaboration for both parties, in our
view. Intrexon has no interest in developing end-user products,
so its intent from the very start of negotiations with ActoGenix was
to transfer development of AG013 to a suitable partner. Oragenics
is very good choice, given its interest in probiotics for oral health.
For Oragenics, AG013 is an attractive addition to complement
its antimicrobial program based on lantibiotics. Note that this
program is also being developed through an ECC with Intrexon.
Investors like the new ECC. Premarket indications point to a
substantial jump in the price of OGEN shares and we share
that sentiment. We will reinstate estimates and a price target
upon further assessment of the Company’s plans for its two R&D
programs. Based on the new ECC and the market’s view, we rate
OGEN shares a BUY.
most likely as Frost was replaced as chief science officer @ XON by Gregg Frost, who incidentally bought a boat load of stock yesterday, ponying up 4.5 million to exercise options. Probably wanted to capture the ZIOP dividend distribution.