giofranchi Posted January 28, 2014 Share Posted January 28, 2014 Equity Position: Intrexon Corporation (“Intrexon”) We initially invested in Intrexon in 2011 in a private round and have continued to accumulate shares since its IPO in August 2013. We believe that Intrexon is an innovation leader in synthetic biology with a unique value proposition and proven leadership team. Most attractive to us is Intrexon’s potential to transform multiple industries, including the health, food, and energy markets. Synthetic biology is an emerging discipline that applies engineering design principles to biologic systems. Broadly speaking, synthetic biology is about the design, modification, and regulation of gene programs to produce a desired outcome, such as the production of a novel antibody from a cell culture, the optimization of a specific gene trait in crops, or the amplification of wild type natural gas metabolism into an industrially feasible process. Over the past 15 years, Intrexon has developed deep expertise in synthetic biology as well as the adjacent fields of process optimization and data analysis to create a unique technology platform that enables the iterative, directed improvement of experimental design. To leverage its technology with collaborators, Intrexon has developed a unique business model that centers on Exclusive Channel Collaborations (ECCs) with partners. In exchange for providing access to their technology, Intrexon receives cost reimbursement (thus mitigating the need to raise additional external funds) and significant downstream economics. Because Intrexon’s technology is scalable, its capacity to sign ECCs across multiple industries is limited only by the ambition of its partners. Indeed, to date, Intrexon has already signed over 15 ECCs including, notably, with Johnson & Johnson. Over the course of 2014 and beyond, we anticipate that Intrexon will sign multiple ECCs, creating a broad pipeline of projects and diversifying away from specific product risk. Intrexon is led by Chairman and CEO Randal J. Kirk, one of the most successful healthcare leaders of all time. Kirk founded and led New River Pharmaceuticals until its acquisition by Shire, and led Clinical Data through the successful development and approval of the anti-depressant Viibryd before selling the company to Forest. While his track record of value creation speaks for itself, we especially like that Kirk has personally invested significantly in Intrexon’s success through Third Security, which owns nearly 2/3 of Intrexon’s shares outstanding. While Intrexon’s business model may seem foreign to the healthcare industry, it reminds us of an undisputed technology leader: Qualcomm. Qualcomm out-licenses its CDMA technology and in return receives significant economics from its partners upon commercialization; the explosive growth of the global wireless communication market and its dominant position has driven Qualcomm to a $125 billion market cap. While we aren’t saying that Intrexon will become a $125 billion company overnight, we will note the following two points: (1) the manipulation of DNA and gene sequences to produce beneficial outcomes is a well-established paradigm; (2) the global health, food, and energy markets dwarf the wireless communication market in size. --Third Point Q4 2013 Letter Mr. Randal J. Kirk is 60 years old, and could stay at the helm of XON for the next two decades. XON is a $3 billion company with a lot of room to grow. In any market pull-back this one is on my buying list. :) PS I don't know what ECCs look like to you, but to me they look much like royalties! ;) Gio Link to comment Share on other sites More sharing options...
yadayada Posted January 28, 2014 Share Posted January 28, 2014 What was the reason for the recent 40% move? Iv been watching this because of the people behind it, but it probably falls outside my circle of competence. Link to comment Share on other sites More sharing options...
giofranchi Posted January 28, 2014 Author Share Posted January 28, 2014 Iv been watching this because of the people behind it, but it probably falls outside my circle of competence. Well, of course the purchase of this company cannot be justified by any P/E, P/S, or P/B multiple… Nonetheless, I think it still makes sense to invest small amounts of capital in enterprises with the potential for explosive growth… If it turns out right, you make 10 times your investment, if not, you lose it all… ;) Gio Link to comment Share on other sites More sharing options...
rpadebet Posted January 28, 2014 Share Posted January 28, 2014 Gio, I have been searching for an asset lite, royalty model in the Healthcare/Biotech industry too. While this looks interesting and very much like my other favorite Altius, I think there is one big difference. What prevents someone else from copying this model? It is technology after all and we know that changes. What if someone invents a better mousetrap and copies this business model? Isn't this company dead at that point? Link to comment Share on other sites More sharing options...
giofranchi Posted January 28, 2014 Author Share Posted January 28, 2014 Gio, I have been searching for an asset lite, royalty model in the Healthcare/Biotech industry too. While this looks interesting and very much like my other favorite Altius, I think there is one big difference. What prevents someone else from copying this model? It is technology after all and we know that changes. What if someone invents a better mousetrap and copies this business model? Isn't this company dead at that point? That’s why you want to partner with the best (or one among the best!) capital allocator in the field! If changes come, Mr. Randal will be among the very first to recognize them and stir the boat accordingly. Anyway, besides a sort of royalty business model, XON has very little in common with ALS… ALS imo is a balance sheet value play… XON cannot be justified by any value metrics… It simply is a company owned and operated by a very smart person, with the potential to be a 10x bagger (hey! Mr. Loeb spoke about $125 billion… which would translate into a 42x bagger!! ;D). But that’s all! The tastes of pure value guys clearly won’t be satisfied here! ;) Gio Link to comment Share on other sites More sharing options...
jouni1 Posted April 8, 2014 Share Posted April 8, 2014 http://www.insidermonkey.com/blog/two-healthcare-companies-that-insiders-have-bought-recently-318922/ Randal Kirk, CEO, started a position in the stock with 243,001 shares. He paid $25.72 per share and now owns more than $6.2 million in Intrexon’s stock. In addition, Ian Gregory Frost, Senior Vice President at the company’s Health Sector, acquired 100,000 shares between Feb. 28th and March 4th. Having paid prices ranging from $24.59 per share to $26.04 per share, he now holds more than $2.5 million in stock. When looking at Intrexon Corp (NYSE:XON)’s fundamentals only it's easy to see that the company boasts negative margins and returns, while its stock looks somewhat overvalued. However, its growth prospects and upside potential make of this company a much more interesting investment option. In fact, it is not only insiders that are betting on this stock. Major hedge funds including Dan Loeb’s Third Point and David Einhorn’s Greenlight Capital do not only hold millionaire stakes in the company, but also, have increased their positions over the last reported quarter. was just reading up on insider buys etc and saw intrexon and started thinking why it sounded familiar. it was written up here, by gio. i remember thinking i'd love to take a position but it's just not my style. i'm thinking about copying these insiders as well as loeb and einhorn. just a small weighing but i feel like there might be something here. buying something that's never made a profit just feels super weird so i'll keep the position sized so that it's part education, part investment. ;D also if this pans out, i'll seem super smart and healthcare savvy in 20 years. Link to comment Share on other sites More sharing options...
jouni1 Posted May 9, 2014 Share Posted May 9, 2014 intrexon q1 eps .04. http://investors.dna.com/phoenix.zhtml?c=249599&p=irol-newsArticle&ID=1928495&highlight= stock is -50% in 3 months. bought a tiny bit more. i don't know why. Link to comment Share on other sites More sharing options...
jouni1 Posted July 4, 2014 Share Posted July 4, 2014 bought a tiny bit more. i don't know why. well it's up 80% on no news now. normally i would sell but my experience with idenix (and this being a small position) made me wary of selling these too early. anyone else have any ideas on this? my wife had heard about the new beauty products coming out(in a few years i think?). it's just that it's so hard to know if they will actually make any money and the internet articles on the biotech partners make me even more confused :D Link to comment Share on other sites More sharing options...
karthikpm Posted July 5, 2014 Share Posted July 5, 2014 Synthetic biology may end up like genomics - lots of buzz little in outcomes. However, it seems like there is tremendous upside if Intrexon's strategy works. Their ECC's are a sort of royalty / annuity stream - I suspect all their collaborators would continue to use them if they are successful in their various projects. I am concerned with how broad their range of solutions are- solving world hunger to beauty products! .. Speculative but I too have been the beneficiary of their run up . Since it is a tiny portion of my portfolio, want to see how it plays out over the next couple of years. Link to comment Share on other sites More sharing options...
yadayada Posted July 5, 2014 Share Posted July 5, 2014 this is an even bigger black box then senomyx. at least there you have a vague idea what is going on. Here you are purely investing based on who is running it. Who says that some other company or group of scientists won't make a breakthrough before XON? You have to admit tho, the insider signals are crazy bullish here. It would be very informative if you could interview that Kirk guy. And there are people saying that the next 20-30 years will make the last 100 years pale in comparison when it comes to science. And if you think about it, it kinda makes sense. And tagging along with these things with a v small % of portfolio is kinda exciting. Link to comment Share on other sites More sharing options...
jouni1 Posted July 7, 2014 Share Posted July 7, 2014 I am concerned with how broad their range of solutions are- solving world hunger to beauty products! .. Speculative but I too have been the beneficiary of their run up . Since it is a tiny portion of my portfolio, want to see how it plays out over the next couple of years. yeah that's the problem. for me a small position is 5%, so after the run up this is getting to be close to a 10% position for me. might have to shave it down a bit because it's a lot to put into something you don't understand at all :D that said, i've sold all of my speculative loss-making companies way too early :( Link to comment Share on other sites More sharing options...
giofranchi Posted November 10, 2015 Author Share Posted November 10, 2015 Intrexon’s Billionaire CEO Is Betting on the Most Controversial GMOs http://www.wired.com/2015/11/meet-billionaire-ceo-behind-controversial-gmos/?mbid=social_twitter Cheers, Gio Link to comment Share on other sites More sharing options...
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