Intrexon Corporation (NASDAQ:XON) and Next Green Wave Holdings Inc. entered into a strategic licensing agreement to utilize Intrexon's Botticelli next-generation plant propagation platform. The companies entered into this agreement to ensure fast production of Next Green Wave's proprietary cannabis cultivars for the California market.
The collaboration between the companies will be two-staged. The first is the optimization phase, in which Intrexon will calibrate Intrexon's Botticelli technology to Next Green Wave's specific cannabis cultivars. The second phase will be the production phase, in which Next Green Wave may utilize the technology in the production of cannabis plantlets for its downstream products and the sale of plantlets to third party producers in California.
Intrexon's Botticelliplatform is an advanced tissue culture technology designed to enable efficient propagation of plants while maintaining genetic purity and product performance. The Botticelli technology offers a more economic solution compared with the conventional clones. The platform will be instrumental in providing high-quality cannabis products for California consumers.
Next Green Wave initially will deploy the Botticelli platform within its Coalinga facility for the California market and will be responsible for maintaining appropriate licensure at the facility.
Share price of Intrexon has declined 42.2% in the past year against the industry’s growth of 18.9%.
We note that, currently, the market for cannabis products pertaining to medical as well as recreational use is in the early stages of expansion. In December 2018, Tilray Inc. (NASDAQ:TLRY) announced that its subsidiary, Tilray Canada Ltd. entered into a global framework agreement with the generic arm of Novartis (NYSE:NVS) — Sandoz AG — expanding their current collaboration.
Under the new agreement, Tilray will collaborate with Sandoz to increase the availability of high-quality medical cannabis products across the world. Also, Sandoz will support the commercialization and supply of Tilray’s cannabis non-smokable/non-combustible products for medical use globally.
Both the companies already had collaboration for supply of medical cannabis products in Canada, signed earlier in March 2018.
Zacks Rank and Stock to Consider
Intrexon currently carries a Zacks Rank #3 (Hold).
A better-ranked stock worth considering is Eli Lilly and Co. (NYSE:LLY) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilly’s earnings per share estimates have increased from $5.47 to $5.58 for 2018 and from $5.78 to $5.91 for 2019 over the past 90 days. The company delivered a positive earnings surprise in all the trailing four quarters, with average of 10.03%.
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