Intrexon Deal Update Overshadows Q4 Loss at Fibrocell - Analyst Blog

Fibrocell Science, Inc.'s (FCSC) agreement with Intrexon Corporation XON for the discovery and development of therapies for rare collagen deficient conditions such as recessive dystrophic epidermolysis bullosa and autoimmune and inflammatory deficiencies such as morphea profunda / linear scleroderma, cutaneous eosinophilias and moderate-to-severe psoriasis holds great promise.

In Jan 2014, Fibrocell expanded its deal with Intrexon to develop a treatment for treating Ehlers-Danlos syndrome hypermobility type (EDS-HT). This refers to a rare genetic deficiency which results in weakening of the connective tissue.

During 2013, Fibrocell raised $47.1 million (net) primarily to advance its partnership with Intrexon. Fibrocell is also using the proceeds from the stock offering to fund its phase III studies for additional indications for its currently marketed product, LAVIV. We note that LAVIV, an autologous cellular product, is approved for use in adults for improvement of the appearance of moderate-to-severe nasolabial fold wrinkles.

The above updates were provided by Fibrocell while releasing its fourth quarter 2013 results.  Fibrocell's quarterly loss of 14 cents per share was narrower than the Zacks Consensus Estimate of a loss of 26 cents. The year-ago adjusted loss was approximately 54 cents per share. Lower expenses led to the narrower loss in the final quarter of 2013.

Research and development expenses in the reported quarter plummeted 76% to $1.8 million primarily due to the costs associated with the Intrexon supplemental stock issuance agreement in the year-ago quarter. Selling, general and administrative expenses declined 9% to $2.3 million due to a reduction in salaries and related expenses.

More than earnings reports, we expect investor focus to remain on Fibro cell's agreement with Intrexon.

Fibrocell carries a Zacks Rank #2 (Buy). Better-ranked stocks in the medical sector include Alexion Pharmaceuticals, Inc. ALXN and Alkermes ALKS. Both stocks carry a Zacks Rank #1 (Strong Buy).