A Rough Summer Has Knocked Calyxt Down

So far, not so good for my late June high-risk/high-reward call on Calyxt (CLXT). The “high risk” part has certainly come through promptly, but shareholders have seen the shares sell off about 25% after a summer that certainly offered more bad news than good, highlighted by the surprising resignation of the CEO in late August only a couple of months after the equally-surprising resignation of the CFO, and a decision in Europe that puts the acceptance and development of gene-edited crops at risk.

Assessing these developments is not easy. Both executives may have had disagreements with the board of directors and/or Cellectis (CLLS), which still controls the company, and those disagreements may have included the unusual business model Calyxt is pursuing with its high-oleic soybeans and other consumer-oriented products. It is also possible that they saw fundamental issues with the technology and/or its path to commercial acceptance. Unfortunately there’s really no way to know at this point, and the one remedy I do have is to increase my discount rate to account for greater risk and uncertainty.

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A Rough Summer Has Knocked Calyxt Down

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.

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Calyxt Going Boldly Forward With A Different Bio-Ag Model

The Motley Fool: Is Pfizer Putting the Car-T Before the Horse?

Immuno-onocology is grabbing a large share of the headlines in oncology drug development these days and generating significant buzz for Big Pharma companies including Merck and Bristol-Myers Squibb (NYSE: BMY  ) . While Pfizer (NYSE: PFE  ) has not been seen as a leader in IO drug development, the company does have antibodies in development targeting IO targets like 4-1BB, OX-40, and PD-1. Now the company has added more shots on goal to its IO platform, striking a collaboration agreement with French biotech Cellectis to develop chimeric antigen receptor T-cell therapies, an unproven but high-potential emerging therapeutic class.

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Is Pfizer Putting the Car-T Before the Horse?