Intrexon Can Make Hundreds Of Millions From Zika Virus Treatment

• Intrexon Corp XON shares have been volatile in recent months and are down 36 percent since August 17.
• Wunderlich’s Rob Breza maintained a Buy rating for the company, with a price target of $50.
• Intrexon’s efforts to set up a facility to combat the Zika virus and capture a share of the gas substitution market are expected to boost its stock valuation, Breza stated.

Analyst Rob Breza mentioned that the markets are currently not considering the impact of two near-term opportunities existing for Intrexon. The company’s efforts in Brazil for setting up a production facility to combat the Aedes Aegypti mosquito could prove to be a significant catalyst.

Breza expects this opportunity to be around $500 million annually, based on the current spread of the Zika virus across various countries. The opportunity may be even higher when considering the other viruses caused by the Aedes Aegypti mosquito.

“We believe Oxitec, an XON subsidiary could capture as much as $225M in revenue over the next few years to help eradicate the Aedes Aegypti mosquito,” the Wunderlich report stated.

Intrexon could capture 2-5 percent of the gas substitution market. The analyst wrote, “XON’s Isobutanol opportunity could be potentially 6x larger as the company has its pilot plant up and running, which should allow its partner Dominion to start commercial construction by the end of 2016.”

The company’s 4Q EPS is likely to be ahead of the Wunderlich estimate of ($0.13) based on the performance of its securities portfolio.