The next few articles will be exploring Intrexon (XON). Intrexon is a company which focuses primarily on synthetic biology, or in simpler terms engineering of DNA. For people unfamiliar with this space can think of DNA as software, and XON as a software engineering company.
The company currently has multiple divisions focusing on microbes, human cells, plants, and animals.
For understanding of Intrexon, one can look at it as three groups.
Healthcare (Actobio, Precigen, Xogenex)
Plants and Animals (Enviroflight, Okanagan Specialty Fruits, Aquabounty, Transova, Exemplar Genetics, Cytotherex, Oxitec, Botticelli & Florian platforms)
In this article I will examine the assets in the healthcare portfolio.
Intrexon's healthcare assets are backstopped by a variety of patents (some pending) protecting the science behind the therapeutics. Here is a brief list of some of the patents Intrexon fully or partly owns.
Vectors conditionally expressing therapeutic proteins, host cells comprising the vectors, and uses thereof
Intrexon currently owns or has filed 150+ patents and you can find a full list online. I wanted to preface the article with some of the patents owned by Intrexon to give readers an opportunity to attempt to value and understand the vast amount of intellectual property owned by the company.
First, we will explore Xogenex which is targeting cardiac disease with its phase 1 multi-genic drug INXN-4001. Heart disease is the leading cause of hospitalization in patients aged 65+ and represents an absolutely staggering market opportunity with 25 million patients worldwide.
The drug INXN-4001 used a triple effector plasmid for treating heart failure. This addresses multiple malfunctions of cardiomyocytes in patients with heart disease/failure and is differentiated by other therapies that only target one malfunction.
Currently the phase 1 program will have a total of 12 subjects that are followed for 12 months post treatment. The study centers include the University of Arizona and the Montefiore Hospital.
Xogenex has since released two snippets of data around the first patents that were dosed and the early indications are quite promising.
Within 3 months patients dosed with INXN-4001 have shown increased blood flow and improvement in overall heart function. In the February 28, 2019 Q4 results call data from a third patient that was dosed was also shown.
This snippet of data with early dosing shows that severe dysfunction in a patient has improved to only mild dysfunction within a 6 month time frame. If we are to assume dosing and scheduling optimization can further impact the results Xogenex may disrupt the current cardiac failure marketplace. I am keeping an eye out for more data as trials continue to progress.
Should results show safety in phase 1 trials and early indications of efficacy continue this therapeutic opportunity will be worth significantly more than Intrexon's market capitalization at the time of writing this article (~$700M).
Actobio is focused on development of their Actobiotics platform which is a unique food based delivery platform for therapeutics using the L.lactis bacteria as a drug delivery mechanism at disease sites including the intestine, mouth and nasopharynx.
Two key product candidates in the Actobio pipeline include AG013 (partnered with Oragenics) to treat oral mucositis and AG019 to treat Type 1 Diabetes.
AGO013 treats oral mucositis which impacts 850k+ patients who are undergoing chemotherapy treatment which leads to problems including pain, inability to eat, and increased risk of infection due to open sores in the mucosa. Some photos showing the condition are included below
In a phase 1B clinical trial in 25 cancer patients with OM, AG013 was safe and well tolerated. Data published in the journal Cancer showed a 35% reduction of the duration of ulcerative OM in the AG013-treated patients versus the placebo-treated patients. Furthermore, close to 30% of the patients treated with AG013 were full responders while all placebo-treated patients developed ulcerative OM (source: Oragenics.com).
AG013 was granted Fast Track designation with the US FDA and orphan drug status in Europe. Further in 2018, the FDA approved a phase 2 trial in which approximately 200 patients will be randomized to receive either AG013 or a placebo.
As per a 2018 article, the estimated size of the OM market is >$1 billion US annually. Thus representing another opportunity for an Intrexon healthcare asset that exceeds its current market capitalization.
The second opportunity that we will explore in the Actobio portfolio is around Type 1 Diabetes (T1D). As per the LA Children's Hospital, T1D accounts for over $14.9 billion in healthcare costs with the treatment market alone expected to expand to $13.6 billion by 2023.
Though there are currently ways to manage the disease there is no cure available for the underlying condition.
As per a 2018 news release "AG019 is formulated as an easy-to-take capsule consisting of engineered Lactococcus lactis specifically modified to deliver human proinsulin and the tolerance-enhancing cytokine human interleukin-10 to the mucosal lining of the gastro-intestinal tissues. The microbe-based platform offers several advantages over injectable biologics including a unique delivery method of a therapeutic agent capable of inducing oral immune tolerance to reverse T1D. Pre-clinical studies in mice have demonstrated that AG019, in association with a short-term treatment with systemic anti-CD3 monoclonal antibody, successfully induced reversion to normal blood sugar levels in 60% of diabetic mice, and effectively reversed the disease in 89% of mice treated at early stage." (source)
If successful, this opportunity represents another multi-billion dollar therapy in Intrexon's healthcare portfolio.
Another potential partnership solution for Actobio is to use their drug delivery platform for existing therapeutics in a partnership. Which leads us to discussing the numerous opportunities for the largest Intrexon healthcare asset, Precigen.
I have included an image of the current Precigen portfolio below.
Precigen technology platforms allow for it to construct, deliver and control various gene therapy programs.
First I will explore the UltraCar-T platform and the Adenoverse delivery solution. These drug delivery platforms and solutions are extremely important to our understanding of Precigen's pipeline. If we are to take an extremely bias approach to Precigen's gene constructs, the delivery solutions and platform alone carries immense value.
The UltraCar-T platform is a transformative technology with the ability to disrupt the current Car-T market. In 2017and 2018 two groundbreaking deals in the Car-T space were announced with Gilead acquiring Kite Pharma for $11.9 billion and Celgene acquiring Juno for $9 billion. In both of these deals the Car-T technology being used requires centralized manufacturing and wait times sometimes in excess of 3 months before a patient can be treated. Further, they are extremely expensive and even are being rejected by some geographies due to the cost of treatment.
Precigen's UltraCar-T can be manufactured in a decentralized fashion and takes only 2 days before a patient can be treated. Further, the method can incorporate a kill switch to turn off the gene therapy or Intrexon's proprietary Rheoswitch which can turn off and on the gene therapy being delivered.
On the February 28, 2019 earnings call an analyst asked if the two day processing of the UltraCar-T platform is achievable today or requires further technological developments and it was confirmed that it was "totally achievable today". If the rest of Precigen's portfolio doesn't pan out, the UltraCar-T technology would be a huge asset to existing players in the Car-T landscape.
The AdenoVerse Vaccine is also showing tremendous therapeutic benefit in initial results. In comparison to competitor vaccines and even using competitor products in the AdenoVerse delivery system showed significant improvements to existing technology.
Again, if Precigen's gene constructs do not work, there is value in the delivery platform for existing vaccines.
Exploring the portfolio further, Precigen released data of PRGN-5001 in direct comparison to an already approved Anti-PD1 checkpoint inhibitor and showed that the PRGN-5001 multifunctional therapeutic candidate has significantly better efficacy in T-Cell activation.
Assuming that the already approved inhibitor that was used in this study was Keytruda, Opdivo, or Libtayo, early results indicate that the Precigen technology is substantially better than all three of these drugs which accounts for multi-billion dollars in sales annually. The 2019 projections for Opdivo and Keytruda alone are upwards of $15 billion in annual sales.
Drugs recently approved for phase 1 trials also showed efficacy in both liquid and solid tumors in-vivo models. For me, the more interesting of the two is PRGN-3005 which targets solid tumors. These results are compared against traditional mbIL15 Car-T therapies which have little efficacy on tumor burden, the PRGN-3005 solution showed significant antitumor effects in early clinical research.
If this trial is proven successful for platinum resistant Ovarian Cancer tumors, Precigen should be able to target other solid tumors effectively, which would instantly turn it to the largest oncology company in the world.
PRGN-3006 also now entering phase 1 trials showed efficacy in liquid tumors in mice models in comparison to traditional CAR-T treatments as shown below.
Intrexon owns one of the leading healthcare pipelines in the world when it comes to address unmet medical needs. Coupled with industry leading patents and technology should Intrexon be successful in even a few of their current healthcare ventures the upside is tremendous in providing scalable solutions in multiple markets.
Intrexon will need to partner with a big pharma company or raise money (through partnerships, sale, or revenue) to continue to drive their healthcare assets forward in the clinic.
Recently the company disclosed going concern language in their latest conference call. Though executives stated that this was only there for language and they believe the future of the company is strong.
A criticism of Intrexon so far has been that they have great technology and intellectual property but need better execution with their existing assets.
I believe that the healthcare portfolio alone is worth more than Intrexon's current market cap and in my next article I will further examine Intrexon's Methane Bioconversion (Energy) platform. Ultimately assigning a sum of the parts value and price target for $XON.
Disclosure: I am/we are long XON. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.