Calyxt Has The Pieces In Place, But Needs Contracts To Light The Fuse

Timing matters with stocks. While the “true believers” won’t ever want to hear it, there were, and still are, meaningful operational risks attached to the Calyxt (CLXT) story. I believe those risks, coupled with a general “risk-off” switch in market sentiment has had a lot to with the ongoing decline in the share price since my last update (today’s Goldman Sachs upgrade-inspired rally not withstanding).

I continue to believe that Calyxt has an intriguing IP position in gene-edited crops and that gene-edited crops may well be a “next wave” of bio-ag innovation that drives a host of improvements for both farmers and consumers. Still, the market’s willingness to accept foods containing gene-edited crop ingredients has yet to be tested, and Calyxt’s unconventional commercialization model creates execution risk. I believe today’s share price significantly overstates that risk, but the share price is likely to remain volatile given that operating profitability is likely four to six years away and the commercialization strategy is unproven.

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Calyxt Has The Pieces In Place, But Needs Contracts To Light The Fuse