Intrexon Corporation (XON): The New Kid on the Biotech Block

Intrexon Corporation (NYSE:XON) is engaged in the business of synthetic biology. Using the Company’s suite of complementary technologies, it design, build and regulate gene programs, or sequences of deoxyribonucleic acid (DNA) that control cellular function, and cellular systems.

The Company designs and produces modular DNA control systems and applications for human therapeutics, protein production, industrial products, agricultural biotechnology, and animal sciences. Its technologies include the UltraVector gene design and fabrication platform; Cell Systems Informatics; LEAP-cell identification and selection, and mAbLogix-antibody discovery.

Why Are We Looking at Intrexon Today

I started this week with coverage of stocks in the biotechnology sector and a relatively small biotech stock setting new highs is sure to interest me. Intrexon caught my attention earlier today when its stock climbed from an opening price of $40.15 to a new 52-week high of $40.60.

On digging deeper, I discovered that shares of Intrexon have been recording an impressively bullish run lately. For instance, the stock currently trades above its 50, 100 and 200-day moving averages. The stock has recorded 6 new highs in the last one month and it has gained more than 17.81% within the same period. In fact, the stock has gained more than 44% since the markets opened this year.

Hence, the impressive stock performance demands that we take a deeper look at XON options with a view to finding optionable entry points on the stock.

Optimistic Analysts’ Outlook

One of the reasons I am optimistic about the prospects of Intrexon is the optimistic analyst outlook on the stock. For instance, Zacks gave the company an industry rank of 47 from among 265 companies based on the ratings that analysts have given to similar companies. One brokerage firm considers the stock a “Strong Buy” and 2 other firms have “Buy” ratings on the stock.

However, we cannot base our trading decisions solely on analysts’ recommendations because their money is not always where their mouths are. Nonetheless, the fundamentals of the stock confirm the need for optimism as the next point shows.

Impressive Fundamentals

One of the impressive business fundamentals of Intrexon is the recent biopharmaceutical deal that the company announced in a partnership with Ziopharm and University of Texas MD Anderson Cancer Center for an immunotherapy platform based on CAR-T technology. I won’t bore you with details of the CAR-T technology but it might interest you to know that CAR-T technology is the new kid on the biotech block and Intrexon is strategically positioned at the forefront of the technology.

Secondly, Intrexon recently announced the signing of a definitive agreement to acquire ActoGeniX, a European clinical stage biopharmaceutical company that is forging a new frontier in cellular therapeutics. The ActoGeniX acquisition (valued at $60M) adds two more clinical stage assets to the Intrexon portfolio and it is expected that the acquisition will further assist Intrexon in developing innovative solutions in the biotech industry.

How to Trade XON Options

I am optimistic about the prospects of Intrexon and I recommend buying XON call options. For one, it is expected that the company’s revenue will increase by 181.90% this year and by another 114.00% next year. Analysts expect earnings to rise by 16.40% this year and by an additional 62.40% next year. I recommend buying the XON Apr 2015 25.000 call (XON150417C00025000) at an asking price of $15.10.

— Daily Option Alerts

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