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What's in Store for Intrexon (XON) This Earnings Season?

Intrexon Corporation XON is expected to report third-quarter 2017 results on Nov 6 after the market closes.

Last quarter, the company witnessed a positive earnings surprise of 27.27%. For the trailing four quarters, it missed expectations twice, surpassed once while met in the other, resulting in an average negative surprise of 0.57%.

Notably, Intrexon’s share price has decreased 32.4% year to date, against the industry’s gain of 6.1%.

Factors to Consider

Intrexon follows a business model under which it commercializes its technologies through exclusive channel collaborations (ECC), licensing agreements and joint ventures with collaborators that have market and product development expertise as well as sales and marketing capabilities, to bring new and improved products and processes to market. Such agreements provide Intrexon with funds in the form of technology access fees and milestones, besides other payments.

Meanwhile, the company is developing several candidates in partnership with other companies. Evidently, Intrexon in collaboration with Fibrocell Science, Inc. FCSC completed enrolment in a phase I/II study on FCX-007 for the treatment of recessive dystrophic epidermolysis bullosa (RDEB). A phase I/II trial with FCX-007 gene therapy for the ultra orphan indication of RDEB debilitating genetic disorder. In September 2017, the company reported interim resultsof FCX-007. Data from these patients showed that FCX-007 was well-tolerated through 12 weeks post-administration.

Also, the second gene therapy candidate, FCX-013, is being developed by Fibrocell for the treatment of linear scleroderma. Fibrocell expects to submit an investigational new drug (IND) application for FCX-013 later in 2017.

Notably, Intrexon has been quite active on the acquisition front. In June, the company completed the acquisition of GenVec, Inc., which is a clinical-stage biopharmaceutical company and pioneer in the development of AdenoVerse gene delivery technology platform.  

With the addition of GenVec's AdenoVerse technology Intrexon plans to create the next generation of adenoviral (AdV) delivery with significantly higher payload capacity that exceeds 30kb compared with current viral delivery methods ranging from 4.5kb to 9kb. Markedly, this will be done through a scalable manufacturing platform utilizing helper-dependent adenovirus.

 This is very general and not company specific. Therefore, we expect investor’s focus to remain on the company’s performance along with other developmental updates on the quarterly call.

What Our Model Indicates

Our proven model does not conclusively show an earnings beat for Intrexon this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass estimates. That is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +27.27%. This is because both the Most Accurate estimate is pegged at a loss of 16 cents and the Zacks Consensus Estimate stands at a loss of 22 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: However, Intrexon has a Zacks Rank #4 (Sell).

As it is we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

 

Stocks to Consider

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Clovis Oncology, Inc. CLVS is scheduled to release results on Nov 1, after market close. The company has an Earnings ESP of +2.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agenus Inc. AGEN has an Earnings ESP of +8.11% and a Zacks Rank #2. The company is scheduled to release results on Nov 7.

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Fibrocell Science Inc (FCSC): Free Stock Analysis Report
 
Agenus Inc. (AGEN): Free Stock Analysis Report
 
Clovis Oncology, Inc. (CLVS): Free Stock Analysis Report
 
Intrexon Corporation (XON): Free Stock Analysis Report
 
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