Please ensure Javascript is enabled for purposes of website accessibility

Why Intrexon Stock Dropped 34% in March

By Demitri Kalogeropoulos – Updated Apr 8, 2019 at 3:07AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors weren't happy to learn about its worsening cash position.

What happened

Engineered biology specialist Intrexon (PGEN -7.21%) plunged 34% last month compared with a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

The drop left shares lower by nearly 70% in the past 12 months.

Two scientists performing biological research.

Image source: Getty Images.

So what

Intrexon announced fiscal fourth-quarter results on the last trading day of February in a report that included several unwelcome surprises for investors. For example, sales fell 44% to help spark an adjusted net loss for the period. Reported losses were much higher due to noncash charges of over $300 million.

Investors were far more concerned to see a financial warning indicating the company might not have sufficient operating cash flow to support the business over the next year. Its cash on hand totaled just $224 million at the end of 2018, while selling and administrative expenses alone were $140 million in the past year.

Now what

CEO Randal Kirk and his team believe their portfolio of intellectual property, especially the natural gas bioconversion platform, still has plenty of commercial value on the market. In early April, meanwhile, management stated that Intrexon should end 2019 with around $200 million in cash. Still, the serious questions around its ability to meet its ongoing financial obligations make this a stock only for investors with an appetite for high risk.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.