What happened
According to data from S&P Global Market Intelligence , Intrexon Corporation (XON 1.92%), a synthetic biology company, saw its shares dip by 7.72% last month. The company's shares struggled after a disappointing second-quarter earnings release early in the month (Aug. 9).
Long story short: Intrexon's highly diversified biotech platform -- that has significant assets in agriculture, healthcare, and even biofuels -- has failed to make the company a profitable enterprise so far. In fact, Intrexon's last stated cash position of $157.2 million is only enough to last about two more years, given the company's average net loss of roughly $19 million per quarter.
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So what
To address its financial woes, Intrexon is currently consolidating its biopharmaceutical assets into a wholly owned subsidiary called Precigen. With its growing platform of genetic engineering technologies that target hard-to-treat blood cancers and other high-value disease markets, Precigen may be able to stir up more interest among investors than its parent. Intrexon's value proposition is arguably somewhat difficult to decipher at the moment due to its shotgun approach to biotech: The company operates across a whopping five different commercial sectors.
Now what
When Precigen emerges, the newly formed company should get off to a quick start. Intrexon's forthcoming subsidiary, after all, sports a novel molecular switching technology, known as RheoSwitch Therapeutic System, that could help to solve some of the major side effects of adoptive cell therapies that have been holding this budding industry back for a while now.
Having said that, Intrexon and its adoptive cell therapy partners, ZIOPHARM Oncology and Merck KGaA, are lagging way behind the leaders in this field, and there are other companies developing potent molecular switches as well. So there's no guarantee that Precigen's formation will ultimately attract a larger, more stable investor base for either company. Thus, shares of Intrexon are probably going to remain on the volatile side for a while longer, making it a stock that's arguably only suitable for the most aggressive of investors.
