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Calyxt Wants to Change the Way You Eat

Written by Monica Savaglia
Posted July 18, 2017

There’s been a lot of focus recently on the food we eat and where it comes from.

When I’m at the grocery store, I can’t help but notice the influx of products labeled “organic,” “farm-raised,” or “all-natural.”

It’s become trendy to be health-conscious, but I think this “trend” comes from a good place and shouldn’t be written off.

Obesity has significantly increased over the past few decades, and there are a lot of factors at play. A big one is our food choices and how those choices affect our digestive health.

According to the Centers for Disease Control and Prevention (CDC) more than one-third (36.5%) of adults in the U.S. have obesity. Being overweight or obese puts you at a higher risk for other health conditions such as heart disease, stroke, type 2 diabetes, and certain types of cancers.

Not to mention, it has a significant cost — in 2008, the annual medical cost of obesity in the U.S. was $147 billion.

While obesity is a huge health concern in the U.S., there's a bigger issue that’s finally being addressed because of this newfound interest in what we eat and where it comes from.

Food affects your body and well-being. If you put food loaded with preservatives into your body, you're likely not getting the nutrition you need, or you'll need to intake a lot more just to get your daily dose of vitamins and minerals.

Unfortunately, a lot of Americans don’t have access to the freshest produce or food that isn’t full of preservatives, and that prevents them from getting the proper nutrition.

And that’s where one food and agriculture company comes into the scenario...

Midwest-based company Calyxt was founded in 2010 as a separate division within its parent company, Cellectis (NASDAQ: CLLS), a France-based gene editing company.

Calyxt wants to lead the way in delivering healthier food ingredients for consumers and also assisting farmers with their crop supplies.

Changing the Way You Think...

So, you might be asking how exactly Calyxt is creating new agricultural products. Maybe you caught the small detail earlier that its parent company, Cellectis, is focused on gene editing...

That’s right — Calyxt is genetically engineering agriculture to increase health benefits while also editing crop traits so those crops are more resilient to environmental factors from farming, such as increasing a crop’s herbicide tolerance.

The company has been working hard for the past seven years and has already created new versions of these agricultural products:

  • Gluten-reduced wheat
  • Reduced trans-fat soybean oil
  • Improved quality of the potato
  • Lower saturated fat canola oil

Calyxt's technology platform, TALENⓇ, makes modifying, rectifying, or implementing new traits (whether for physiological or economic interest) quick and easy.

With TALENⓇ, the company is able to develop products and have them ready for commercialization within three to six years... and at a fraction of the cost.

The company continues to have a strong track record with both its technologies and expertise in genetic engineering. Since Calyxt's inception, it has successfully edited more than 20 unique genes in six plant species.

Calyxt’s primary focus continues to be on the North American market, but eventually it would like to globalize its products. This could mean it would start exporting its products to international markets or establishing new supply chains in other attractive markets.

Either way, it's focused on growth and global expansion.

Genetically Engineering Your Food

Calyxt is currently developing high-fiber wheat traits that could produce white flour with up to three times more dietary fiber than the standard. This trait could be incorporated into a lot of food you eat today, from a bowl of pasta to the bread you use for a sandwich.

Research has shown that fiber plays a significant role in our health by maintaining digestive health, lowering cholesterol, stabilizing blood glucose levels, and controlling weight gain.

Since the emergence of this research, there has been an increased interest in high-fiber diets  so much so that 35% of grocery shoppers seek out high-fiber foods. 

People are becoming more aware that they need things like fiber in their diets, so if they could pick up some pasta with three times the amount of fiber, then they would be closer to the suggested daily value. 

Some of Calyxt’s other products include high oleic soybeans, powdery mildew-resistant wheat, cold storable potato, reduced browning potato, and herbicide tolerant wheat.

Calyxt’s IPO

Calyxt is expected to go public on Thursday, July 20, 2017, with an IPO price range of $15–$18. It will trade on the NASDAQ under the symbol CLXT.

The company is offering 6.1 million shares, and, depending on where it decides to set its IPO price, its valuation could range between $90.9 million and $104.8 million.

It will use $45 million of the proceeds to fund research and development and $10 million to build out commercial capabilities, such as building commercial relationships with supply chain and food companies, furnishing a demonstration kitchen, producing products for demonstrations, and funding promotional efforts to increase demand. 

An additional $20 million will go toward seed production, grain purchases, and meal and oil production. Any remaining amount will go to general corporate purposes.

It's always a good sign when a company plans to use the money raised in its IPO to help develop its business and brand.

Big banks like Citigroup, Credit Suisse, Jefferies, and Wells Fargo have signed on as underwriters for Calyxt's IPO.

So, what are the risk factors for this IPO? Well, this is a whole new market, which makes it really hard to gauge. 

Agricultural biotechnology product development is a highly speculative endeavor, and new laws could emerge to regulate genetically engineered products, which would significantly impact Calyxt and the market as a whole.

The hesitation people have toward genetically modified food could have a detrimental effect on any company focused on the industry... even if its intentions are good.

The public tends to have strong opinions on what's right and wrong, and a lot of people believe nature shouldn't be altered by science. 

Calyxt has the right intentions for its technology: It wants to make it easier for people to get the nutrition they need. However, the market for this technology is still nascent, and, more importantly, the public's perception of it remains skeptical.

Until next time,

Monica Savaglia
Wealth Daily

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