Griffin Sees Intrexon (XON) at Undervalued Amid Key Exec Hires, FDA Decision
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Griffin Securities affirms Intrexon (Nasdaq: XON) at Buy with a price target of $55, noting recent key hires and FDA decision.
Keith A. Markey said,
Since early May, two highly qualified executives have come aboard. The first was Gino Germano who accepted the role of President and is slated to become the CEO in two years. He spent more than 30 years in the industry working with Johnson & Johnson, Wyeth, and Pfizer. In his latest role as Pfizer's Global Innovative Pharma Business, he led a $14 billion business with drugs in most major therapeutic categories. More recently, Dr. Andrew Last accepted the position of COO. His 30 years of experience in multiple areas of life sciences and agriculture should serve him and Intrexon well. Having held the position of Exec VP and COO with Affymetrix, he comes with experience overseeing five operating areas, including R&D, manufacturing, and marketing.
The FDA finally accepts the obvious in issuing a finding of no significant impact on the human environment. The decision allows the Oxitec subsidiary to conduct a trial of its “Friendly Aedes” mosquitoes in southern Florida. But because the trial is the subject of a referendum to be decided in November, it won’t be conducted until next spring and summer, if then. Meanwhile, discussions are under way to secure contracts with more municipalities in Brazil and other countries. To prepare for the greater demand, Intrexon is investing in a central breeding facility for egg production and local hatcheries for its species-specific insecticide.
We believe Intrexon is undervalued, especially on a risk-adjusted basis. The Company has diversified portfolio of revenue sources that will soon include sales/service revenues from newly commercialized offerings. Yet the stock has not participated in the renewed interest in other large biotech stocks since early spring. As a result, we think the recent share price is an attractive entry point and opportunity to increase an existing position. Our BUY recommendation and $55 price target are affirmed, the analyst said.
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