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Intrexon Corp (NYSE:XON) Reduces Loss As Revenues Beat Estimates

Intrexon Corp (NYSE:XON) recently released its full year and Q4 results showing that total revenues increased year-over-year to hit a figure of $77 million. Adjusted loss per share came in at 17 cents against a consensus estimate of 31 cents. The consensus estimate for total revenues was $49 million.

Besides service and product revenues the sales of Intrexon consist of licensing and collaboration revenues. These licensing and collaboration revenues went up year-over-year by 102.7% to reach a figure of $56.2 million. This was largely due to previously deferred revenue amounting to $28.9 million and which was related to the firm’s collaboration activities with ZIOPHARM with regards to a treatment for the graft-versus-host disease. Last year in December this collaboration came to an end following a mutual agreement to terminate it.

Product and service revenues

Product revenues of Intrexon increased by 1.5% year-over-year to reach a figure of $7.8 million while service revenues went up by 23.3% year-over-year to hit a figure of $12.7 million.

The business model of Intrexon involves commercialization of technologies via licensing agreements, exclusive channel collaborations as well as joint ventures with firms which possess product and market development expertise. These partners also have to possess marketing and sales capabilities in order to ensure that new as well as improved processes and products are brought to market. Through such agreements Intrexon generates funds as technology access fees that are released with the achievement of various milestones.

Breakeven point

With a financial year loss amounting to $186.61 million as well as a trailing 12-month loss of $133.89 million, it is expected that Intrexon is closer to reaching breakeven. Per industry analysts it is expected that the firm will record its final loss next year and then generate a positive profit in 2020 reaching a figure of $51.54 million. This means that Intrexon has two more years before it breaks even. The management of the firm has however sounded more optimistic.

“We realize that it has been painful for many who have invested in Intrexon’s shares but we are determined that 2018 will be a year of vindication for those who have made this journey with us,” said the chief executive officer and chairman of Intrexon, Randal Kirk.

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