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Why Is Intrexon (XON) Up 18.8% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for Intrexon Corporation XON. Shares have added about 18.8% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is XON due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Intrexon Q4 Loss Narrower Than Expected, Revenues Beat

Intrexon reported adjusted loss of 17 cents per share in the fourth quarter of 2017, which was narrower than the Zacks Consensus Estimate of a loss of 31 cents.

Total revenues came in at $77 million, up 67.4% year over year. Reported revenues beat the Zacks Consensus Estimate of $49 million.

Quarter in Detail

Intrexon’s sales primarily consist of collaboration and licensing revenues as well as product and service revenues.

Collaboration and licensing revenues increased significantly by 102.7% to $56.2 million year over year. The increase was due to the recognition of previously deferred revenue totaling $28.9 million related to the company's collaboration with ZIOPHARM for the treatment of graft-versus-host disease. The collaboration was however mutually terminated in December 2017.

While product revenues came in at $7.8 million, up 1.5% from the year-ago period, service revenues amounted to $12.7 million, up 23.3% year over year.

Intrexon follows a business model under which it commercializes its technologies through exclusive channel collaborations (ECC), licensing agreements and joint ventures with collaborators that have market and product development expertise as well as sales and marketing capabilities to bring new and improved products and processes to market. Such agreements provide the company with funds in the form of technology access fees along with milestones and other payments.

Meanwhile, the company is developing several candidates in partnership with other companies.

Intrexon’s collaborator, ZIOPHARM, announced the dosing of first patient in a new phase I study of its gene therapy Ad-RTS-hIL-12 + veledimex for the treatment of pediatric brain tumors.

Furthermore, the company’s collaborator Fibrocell Science obtained allowance from the FDA to commence enrollment of pediatric patients in the phase II portion of its phase I/II study of FCX-007, its gene therapy candidate for the treatment of recessive dystrophic epidermolysis bullosa (RDEB). Fibrocell also submitted an Investigational New Drug Application (IND) with the FDA for FCX-013, its gene therapy candidate for the treatment of moderate to severe localized scleroderma.

Intrexon structured its principal healthcare assets into two separate wholly owned subsidiaries – Precigen, Inc., a gene and cell therapy company developing precision medicines, and ActoBio Therapeutics, Inc., a company focused, via its proprietary ActoBiotics platform, on therapeutic delivery of biologics to the site of disease.

2017 Results

Revenue in 2017 amounted to $231 million, up 21% year over year. Results beat the Zacks Consensus Estimate of $202.7 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

Intrexon Corporation Price and Consensus

Intrexon Corporation Price and Consensus | Intrexon Corporation Quote

VGM Scores

At this time, XON has a poor Growth Score of F, however its Momentum is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable soley for momentum based on our styles scores.

Outlook

XON has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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