Robbins Arroyo LLP: Intrexon Corporation (XON) Misled Shareholders According to a Recently Filed Class Action
May 4, 2016 (San Diego, CA & Germantown, MD) – Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against Intrexon Corporation (NYSE: XON) in the U.S. District Court for the Northern District of California. The plaintiff brings the complaint on behalf of all purchasers of Intrexon securities between May 12, 2015 and April 20, 2016, for alleged violations of the Securities Exchange Act of 1934 by Intrexon’s officers and directors. Intrexon operates in the synthetic biology field in the United States.
Intrexon Accused of Overstating Its Revenue
According to the complaint, during 2015 and 2016, Intrexon filed multiple quarterly reports and an annual report with the U.S. Securities and Exchange Commission, attesting to the accuracy and effectiveness of the company’s internal controls over financial reporting. However, the complaint alleges that these statements were misleading because Intrexon was overstating its revenue. On April 21, 2016, analyst firm Spotlight Research (“Spotlight”) issued a report asserting that Intrexon’s revenues were overstated by 50% through transactions with related parties. On this news, Intrexon stock fell $9.73 per share, or approximately 26%, to close at $27.10 per share on April 21, 2016.
Then, on April 27, 2016, Spotlight elaborated on Intrexon’s transactions with related parties, alleging that Intrexon gives cash to an Exclusive Channel Collaboration partner that gives it back to Intrexon in exchange for “services” rendered. Spotlight notes that although no meaningful products are being commercialized, Intrexon is able to recognize substantial revenue growth through moving their own cash via these transactions. The report further stated that collaboration revenues represent 50% of Intrexon’s revenue, so its revenue is overstated by a factor of two. Additionally, when Intrexon’s financial statements were compared to its customers’ financial statements, large discrepancies were found between the revenue that Intrexon reported and the payments that its customers claimed to have made to Intrexon. For example, in its 2015 10-K, Intrexon claimed that Ziopharm paid them $14.6 million and $19.3 million in 2014 and 2015, respectively, while Ziopharm’s 2015 10-K showed they paid Intrexon $12 million and $16.3 million in 2014 and 2015, respectively, or 16% less than the amount claimed by Intrexon.
Intrexon Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.