Intrexon Corp (NASDAQ:XON) Q2 2019 Earnings Conference Call Transcript

Aug 08, 2019 • 05:30 pm ET

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Intrexon Corp (NASDAQ:XON) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

[Operator Instructions] The first question comes from Jason Butler with JMP. Please ago ahead.

Analyst
Jason Butler

Hi, thanks for taking the questions. I had two. Maybe, first, on the methanotroph platform. Given the agreement you just announced, can you maybe speak to more details on what ownership or rights that Intrexon will retain to the platform as well as what it's cost or expense, sort of, spend commitment that it has to the program going forward?

Executive
Randal J. Kirk

Yes, thanks for the question, Jason. So we'll be providing more details as we move forward, but in general, our object here -- and this was directed by our Board, was to secure for our shareholders as much upside as we possibly can have from this program while eliminating the need of Intrexon to fund this program any longer. We've been working on our methane bioconversion platform for over five years. We've spent a lot of money in it, actually more than that has been spent by other two partnerships we've created to fund certain targets from that platform.

So it's quite a bit of investment and I've been on these calls previously. I've said, this is very, very potentially, very likely in my opinion, will prove out to be the most valuable biotechnology ever created because -- and I make that statement based on the total addressable market, that should be available from this platform, and I still believe that. So it was very important to our Board that we secure upside advantage, but nevertheless, we've told all of you and we've made a commitment to our shareholders, and we have a commitment to ourselves and commitment to our Board that we're going to become a more focused company, and we want to marshal our assets toward those elements of our portfolio that we regard to be the most strategic, of which, I'll just cite here, Precigen is obviously Number 1.

So that being the case and we're calling that this company is first and foremost, a health care company. We began as a health care company. It was entirely health care company when I become CEO, and that is clearly what our public shareholders will value, we believe. And so, that's what we're doing. So the overall object here is to, and I would invite the way you should think about this is, all of our interest in our methane bioconversion platform, all of the facilities, all of the technologies that support their platform, will be transferred to a new entity, MBP, LLC, I believe, is its name. And so, we began with a super majority position, over 80%, I believe, equity ownership position, but we do not believe that will help.

In fact, the subscription agreement of Governor Dewhurst alone will, I think, that thing alone will take us down to, I think, something in the 60s and that's before anything else may happen. So I'm only guessing here. So if something in that neighborhood, maybe 70%, but the point is, over time, we