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Fly News Breaks for February 17, 2016
XON
Feb 17, 2016 | 08:39 EDT
Wunderlich analyst Rob Breza views the Zika virus and isobutanol as two large, near-term opportunities for Intrexon. Brazil is the key country fighting the Zika virus, spending around $450M on mosquito control per year, Breza points out. The company is working with Brazil to create a production facility to combat the Aedes Aegypti mosquito and should get "labeling approval" in the near future, the analyst tells investors in a research note. He believes such news would represent a "significant catalyst" and estimates Zika as a $500M annual opportunity for Intrexon. Further, Intrexon is the first company to engineer the biology of methanotroph to produce fuels, including isobutanol, from natural gas, Breza writes. Congress has mandated renewable fuel standards that require 36B gallons of renewable fuel to be blended into the gasoline supply by 2022, the analyst notes. He estimates the gas substitution market will reach $80B and believes Intrexon could capture up to 5% of it. Breza views isobutanol as a $2.8B annual revenue opportunity for the company. He has a Buy rating on Intrexon with a $50 price target. The synthetic biology company closed yesterday at $30.60.
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