Thursday, June 28, 2018

Calyxt Going Boldly Forward With A Different Bio-Ag Model

With Syngenta and Monsanto off the market, investors don’t have a lot of great pure-play investment options for bio-ag, even though this remains a very large and vibrant area of R&D activity. This brings me to Calyxt (CLXT), a company custom-built to apply gene editing tools to the development of new crop varieties. Although there is little comparison between what Calyxt is now and what Syngenta and Monsanto were in the years leading up to their acquisitions, I nevertheless believe this is an interesting speculative option in the bio-ag space.

Modeling a pre-revenue company like Calyxt involves considerable guesswork, and that guesswork is made all the more difficult by Calyxt’s decision to pursue an uncommon (and in my opinion, risky) commercialization strategy with its initial products that will see the company take a much more direct role in selling semi-finished products (ingredients) to food companies, rather than the proven model of selling seeds (and technically licensing traits) to farmers. While absolutely acknowledging the elevated modeling risk and uncertainty, I believe Calyxt shares have some appeal at this level if you accept the premise that the company good reach $500 million in revenue in six years, over $1 billion in nine years, and $2 billion in 15 years.

Read the full article here:
Calyxt Going Boldly Forward With A Different Bio-Ag Model

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