Here's What's Causing Intrexon to Tumble 20% Today
What happened
After the company reported disappointing first-quarter financial results, including worse-than-expected revenue performance, shares in Intrexon Corp. (NYSE: XON) were down by 20% at 3:15 p.m. EDT Friday.
So what
Intrexon Corp. is an engineered biology company that's generated a lot of buzz over the past few years.
It garnered a lot of attention in 2015 when Ziopharm (NASDAQ: ZIOP) announced it would use its "sleeping beauty" technology to improve upon chimeric antigen receptor T-cell therapies that it was developing. Then, its mosquitoes that are engineered so that they can't reproduce and spread disease won investor interest during the Zika virus outbreak in 2015 and 2016.
Despite the potential for various products to grab a foothold and contribute meaningfully to revenue, that hasn't happened so far, as evidenced by the company's tepid first-quarter 2018 results. In the quarter, Intrexon reported that overall revenue fell 18.4% year over year to $43.8 million due to a 27.2% decline in its collaborations and licensing revenue to $24.1 million. The company cited a decrease in R&D services for "certain collaborators" as the reason for the revenue drop-off.
Absent a pickup in sales, it's probably not surprising that Intrexon also reported a poor bottom-line performance for the quarter. Its net loss clocked in at $42 million, which was 29.6% lower than the same quarter in 2017. Contributing to the loss was a $3.1 million increase in R&D expense and a $1.5 million increase in salaries, benefits, and other personnel costs.
Now what
The company's working on everything from protein-rich salmon, to apples that don't go brown, to energy-producing bacteria, to medicine -- but despite the multiple shots on goal, the company's facing challenges in translating its promise into profit, and that's taken a toll on its share price.
Until the company begins to deliver significant revenue from product sales, or collaboration partners, including Ziopharm, prove that using its technology does indeed improve patient outcomes, this stock seems to be too risky for it to be worth buying on this drop by anyone other than the most aggressive investor.
10 stocks we like better than IntrexonWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Intrexon wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of May 8, 2018
Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.