Molecular Biology Firm Intrexon Is Close To Generating 'Significant' Product Revenue

• In a report issued Monday, Stifel initiated coverage of Intrexon Corp XON with a Buy rating
• Analysts Thomas Shrader and Alex Schwartz set a price target of $69.00 for the stock.
• Shares of the mid-cap company are down more than 5 percent on Monday trading.

According to the research note, “At its core, Intrexon is a sophisticated molecular biology company that has spent over a decade working on the industrialization of control technologies for biological systems. This process – generally referred to as Synthetic Biology – is extremely powerful in principle, but often requires a great deal of tinkering in practice.”

Consequently, the analysts view Intrexon’s considerable experience in this area to be of great value– especially to partners in substantially competitive segments “where assembling the critical mass of gene-jockeys and industry experts would be very risky or impossible internally.”

The analysts continue to expound that the company’s business model mainly involves the “systematic dissection of industries with an eye toward identifying places where greater genetic control or pathway re-engineering can be transformative.” Examples of this include the browning of fruit and the conversion of methanol into more useful fuels, among many other projects the company undertakes.

Get Productive, Get Paid

Interexon started trading in the New York Stock Exchange in August of 2013. Now, roughly two years later, it looks like it is “relatively close to generating significant product revenues,” Stifel analysts assure.

What’s interesting is that most of the near-term opportunities lie outside of the healthcare segment, in areas like the production of bio fuels and lubricants, and agriculture. On the other hand, the development of APIs (for the pharma industry) and therapeutics seems to be further down the road.

Disclosure: Javier Hasse holds no stakes in any of the securities mentioned above.