Intrexon IPO Filing: Better DNA for Health Care, Food, Energy, Environment

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Intrexon Corp. has filed its paperwork with the Securities and Exchange Commission to allow the company to come public in an initial public offering. No formal financial terms have been set for the initial public offering, but the initial filing is for up to $125 million in common stock in a deal that includes J.P. Morgan and Barclays as the lead underwriters. The company plans to list under the stock symbol XON on the New York Stock Exchange.

Intrexon is a biotechnology company that is collaborating with companies in health, food, energy and the environment “to create biologically based products that improve the quality of life and health of the planet.”

Its prospectus says:

[W]e design, build and regulate gene programs, or sequences of DNA that control cellular function, and cellular systems, or activities that take place within a cell and the interaction of those systems in the greater cellular environment, to enable the development of new and improved products and manufacturing processes across a variety of end markets, including healthcare, food, energy and environmental sciences… Our business model is to commercialize our technologies through exclusive channel collaborations, or ECCs, with collaborators that have industry expertise, development resources and sales and marketing capabilities to bring new and improved products and processes to market.

The company’s filing shows that it began entering its exclusive channel collaborations in 2011 and are currently in nine agreements. It is developing products in the fields of healthcare and food as follows, as well as other areas:

  • Health care — oncology, anti-infectives, antibiotics and tissue repair
  • Food — working to increase the productivity and nutritional value of salmon and other fish
  • Other — working to establish ECCs in the areas of energy and environmental sciences

Intrexon is generating some revenues from collaboration for about 97% of its total sales. Revenue grew to $3.976 million in the first quarter of 2013 versus $1.618 million for the same period in 2012. Its total sales in 2012 were $13.925 million, up from $8.171 million for all of 2011.

The company owns equity interests in several of its collaborators, which gives it exposure to the volatility and liquidity of the partners’ stocks. Several of its collaborators are private companies or public corporations with limited capital, so the company allows them to pay an access fee in stock. It says:

As of March 31, 2013 and December 31, 2012, the aggregate original cost basis of these securities was $94.5 million and $92.1 million, respectively, and the market value was $56.1 million and $83.1 million, respectively.

The company’s filing says:

We believe that we are a leader in synthetic biology. We do not believe that we have any direct competitors who provide similar technologies which fully enable the commercialization of products developed using synthetic biology across a broad spectrum of biologically based industries.

Key ECCs, some of which Intrexon outlines specific equity stakes in and/or license fees or royalty payments due, are listed as follows:

  • ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP), to develop and commercialize therapeutics in the field of cancer treatment in humans;
  • Elanco, the animal health division of Eli Lilly and Company (NYSE: LLY); targeting certain chronic diseases associated with aging in companion animals as well as the prevention of certain infectious diseases in pigs;
  • Fibrocell Science, Inc. (OTCBB: FCSC), in the research phase for the treatment of recessive dystrophic epidermolysis bullosa, a rare and genetically based blistering disorder.
  • Oragenics, Inc. (OTCBB: OGEN), in the research phase to develop and commercialize lantibiotics;
  • Synthetic Biologics, Inc. (NYSE: SYN), or Synthetic Biologics. The lead therapeutic program of this ECC is currently in preclinical development;
  • AquaBounty Technologies, Inc. (AIM: ABTX), for a new strain of fish called the AquAdvantage Salmon reaching marketable size in around half the time of conventional salmon;
  • AmpliPhi BioSciences Corp. (OTCBB: APHB), to develop and commercialize new bacteriophage-based therapies to target specific antibiotic resistant infections;
  • Soligenix, Inc. (OTCQB: SNGX), to develop and commercialize human monoclonal antibody therapies for the treatment of melioidosis;
  • and BioLife Cell Bank, Inc., or BioLife, in an option to produce new treatments for spinal muscular atrophy.

In some aspects Intrexon is a holding company. In other aspects it is a technology licensing company. Either way, the company will be one to watch. With the stakes owned it is possible that some of these could have huge payoffs for it in the future.

FULL SEC FILING

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