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Intrexon (XON) Reports Wider Loss in Q2, Revenues Increase
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Intrexon Corporation reported a loss of 42 cents per share in second-quarter 2016, compared to the year-ago figure of 37 cents. Excluding unrealized and realized appreciation (depreciation) in fair value of equity securities, loss came in at 22 cents compared to the prior-year tally of 18 cents.
Total revenue came in at $52.5 million in the quarter, up 17% year over year. Reported revenues were, however, below the Zacks Consensus Estimate of $55.5 million.
Quarter in Detail
Intrexon’s revenues primarily consist of collaboration and licensing revenues as well as product revenues and service revenues.
Collaboration and licensing revenues surged 59.9% to $27.5 million. The increase was primarily attributable to the recognition of deferred revenue from upfront payments received under the May 2015 license and collaboration agreement with Merck KGaA (MKGAF - Free Report) and from other collaborations signed by Intrexon between Jul 1, 2015 and Jun 30, 2016.
The upside was also due to increased research and development (R&D) services for these collaborations, and the company’s progress on existing programs and addition of new ones with existing collaborators.
Product revenues came in at $10.9 million, down 23.7% from the year-ago period, primarily due to a decline in the quantity of livestock previously used in production and live calves sold due to lower demand from customers for these products.
Service revenues came in at $13.9 million, up 5.1% year over year, primarily due to an increase in the number of in vitro fertilization cycles performed on higher demand.
R&D expenses increased 39.2% to $28.4 million while selling, general and administrative expenses escalated 27.8% to $30.3 million due to an increase in salaries, benefits and other personnel costs.
Meanwhile, the company continued to enter into new exclusive channel collaborations (ECC) and expanded its existing partnerships. In the reported quarter, Intrexon announced amendments to its ECC with ZIOPHARM Oncology, Inc. in the fields of oncology and graft-versus-host-disease. The move was aimed to improve the alignment between the companies as ZIOPHARM broadens its pipeline and advances multiple therapeutic programs into the clinic.
Under the partnership with ZIOPHARM, a phase I study on autologous T cells transduced, along with lentivirus, will be initiated to express a CD33-specific chimeric antigen receptor (CAR) in patients with relapsed or refractory acute myeloid leukemia.
Intrexon is also developing several candidates in partnership with other companies.
Meanwhile, the company is currently working with both governmental and non-governmental organizations for the potential use of Oxitec's OX513A to reduce or eradicate populations of the Aedes aegypti mosquito, the primary vector for dengue, chikungunya and the Zika virus.
The FDA published final findings of a no significant impact and final environmental assessment on Oxitec's OX513A self-limiting mosquito, concluding that a field study of the Friendly Aedes will not result in a significant impact on the environment.
We expect investor focus to remain on further updates by the company.
Intrexon is a Zacks Rank #2 (Buy) stock. ANI Pharmaceuticals, Inc. (ANIP - Free Report) is another favorably placed stock in the health care sector, sporting a Zacks Rank #1 (Strong Buy).
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Intrexon (XON) Reports Wider Loss in Q2, Revenues Increase
Intrexon Corporation reported a loss of 42 cents per share in second-quarter 2016, compared to the year-ago figure of 37 cents. Excluding unrealized and realized appreciation (depreciation) in fair value of equity securities, loss came in at 22 cents compared to the prior-year tally of 18 cents.
Total revenue came in at $52.5 million in the quarter, up 17% year over year. Reported revenues were, however, below the Zacks Consensus Estimate of $55.5 million.
Quarter in Detail
Intrexon’s revenues primarily consist of collaboration and licensing revenues as well as product revenues and service revenues.
Collaboration and licensing revenues surged 59.9% to $27.5 million. The increase was primarily attributable to the recognition of deferred revenue from upfront payments received under the May 2015 license and collaboration agreement with Merck KGaA (MKGAF - Free Report) and from other collaborations signed by Intrexon between Jul 1, 2015 and Jun 30, 2016.
The upside was also due to increased research and development (R&D) services for these collaborations, and the company’s progress on existing programs and addition of new ones with existing collaborators.
Product revenues came in at $10.9 million, down 23.7% from the year-ago period, primarily due to a decline in the quantity of livestock previously used in production and live calves sold due to lower demand from customers for these products.
Service revenues came in at $13.9 million, up 5.1% year over year, primarily due to an increase in the number of in vitro fertilization cycles performed on higher demand.
R&D expenses increased 39.2% to $28.4 million while selling, general and administrative expenses escalated 27.8% to $30.3 million due to an increase in salaries, benefits and other personnel costs.
Meanwhile, the company continued to enter into new exclusive channel collaborations (ECC) and expanded its existing partnerships. In the reported quarter, Intrexon announced amendments to its ECC with ZIOPHARM Oncology, Inc. in the fields of oncology and graft-versus-host-disease. The move was aimed to improve the alignment between the companies as ZIOPHARM broadens its pipeline and advances multiple therapeutic programs into the clinic.
Under the partnership with ZIOPHARM, a phase I study on autologous T cells transduced, along with lentivirus, will be initiated to express a CD33-specific chimeric antigen receptor (CAR) in patients with relapsed or refractory acute myeloid leukemia.
Intrexon is also developing several candidates in partnership with other companies.
Meanwhile, the company is currently working with both governmental and non-governmental organizations for the potential use of Oxitec's OX513A to reduce or eradicate populations of the Aedes aegypti mosquito, the primary vector for dengue, chikungunya and the Zika virus.
The FDA published final findings of a no significant impact and final environmental assessment on Oxitec's OX513A self-limiting mosquito, concluding that a field study of the Friendly Aedes will not result in a significant impact on the environment.
INTREXON CORP Price
INTREXON CORP Price | INTREXON CORP Quote
We expect investor focus to remain on further updates by the company.
Intrexon is a Zacks Rank #2 (Buy) stock. ANI Pharmaceuticals, Inc. (ANIP - Free Report) is another favorably placed stock in the health care sector, sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>