by Jim Lane

COVID-19 has changed the way we do things…like drink more alcohol, wash our hands more, wear a mask, limit our gatherings and trips, but positive things have come about too. More time to connect with friends and family via online tools, a new respect for healthcare, agriculture and other essential workers, breathing cleaner air, and finding new ways to connect, entertain and innovate. Even in the bioeconomy, companies are doing the “pandemic pivot” and creating innovations to improve our future.

We’ve covered how the ethanol industry jumped in to save the day with hand sanitizer production, but today we look at how bioinnovator, Amyris (AMRS), is taking a different approach to fighting COVID-19.

In today’s Digest, how Amyris reminds us of David Bowie’s “Changes” song and how they are ‘turning to face the strange’ with their sugarcane-derived squalene vaccine adjuvant, how their business is not only surviving but thriving in today’s changing world, and more.

Fighting back with vaccines

First, let’s start with the big news from Amyris that they signed a binding term sheet for a planned COVID-19 RNA (ribonucleic acid) vaccine technology program with The Infectious Disease Research Institute (IDRI).

The program combines IDRI’s expertise in combating infectious diseases with Amyris’ fermentation platform technology, with the goal to create semi-synthetic squalene-based adjuvants at scale. IDRI’s RNA vaccine platform is expected to offer significant differentiated advantages over other RNA vaccines currently in development and will be further enhanced by a scalable Amyris adjuvant.

The Critical Role of Adjuvants in Vaccines

Adjuvants are added to vaccines as an excipient to enhance their effectiveness and are typically sourced from shark-based squalene, a non-sustainable and non-scalable resource. Amyris’ fermentation technology, which replaces shark-derived squalene with lower cost sugarcane-derived squalene, is capable of delivering greater availability facilitating access to adjuvants by large parts of the population. Amyris’ squalene is targeted to be functionally identical to shark-based squalene and will be certified as such as one of the last steps to commercialization.

“The combination of IDRI’s leading RNA vaccine platform technology combined with Amyris’ sustainably-derived adjuvant has the potential to lead on efficacy for a COVID-19 vaccine solution and potentially play a major role in other vaccine solutions to help mitigate potential future pandemics,” said IDRI’s CEO Dr. Corey Casper. “Without adjuvants, vaccines are not maximally effective, and a shortage of existing shark-based adjuvant supply could prove devastating in the future, underlining the importance of this anticipated partnership.”

“We are pleased to partner with IDRI to combat COVID-19 and deliver a significant breakthrough for vaccine technology into the future,” said John Melo, Amyris President and CEO. “We believe synthetic biology can play a significant role in scaling vaccines and therapies that meet the needs of global health crises. Making the world’s rarest chemistry available and affordable has been Amyris’ purpose since its founding in 2003. Soon after its founding Amyris partnered with the Bill and Melinda Gates Foundation and created an alternative supply source through fermentation for artemisinin, a first-line treatment for malaria that is still recommended by the World Health Organization today. Many organizations are working toward a COVID-19 vaccine solution, with uncertain outcomes. IDRI’s expertise in vaccines combined with our leading synthetic biology platform presents a real opportunity to deliver the most scalable and highest efficacy vaccine for COVID-19. We are focused on a second-generation solution that is better performing and can deliver a sustainable platform for vaccines to address future pandemics. We expect first commercial supply of our leading vaccine adjuvant by the end of this year and, assuming successful trials, could have a successful vaccine platform next year.”

Amyris and IDRI anticipate executing a comprehensive agreement after which additional details of the proposed program will be disclosed. In the interim, work on advancing the vaccine is continuing to ensure accelerated time to market.

Not just surviving but thriving

And while many biofuel, biomaterial, biochemical and other bio-related companies are struggling, Amyris has had a solid first half of 2020. They just announced their second quarter 2020 results demonstrating a record quarter for consumer brands with 3X revenue growth, the lowest cash operating expenses in five quarters, and $200 million private placement that significantly reduced debt and debt servicing expense.

Here are some more of their Q2 2020 highlights:

• Completed $200 million private placement during Q2; largest raise in the history of the company.
• Reduced debt by $121 million or 40% since start of 2020. Improves H2 2020 debt servicing cash costs by $30 million.
• Q2 Recurring Revenue for Consumer & Ingredients of $26 million more than doubled YOY. Record quarter for Consumer brands with revenue tripling YOY from strong online sales. Ingredients Revenue grew in excess of 50% year-over-year.
• Cash Operating Expenses of $43 million were the lowest in the five sequential quarters and down 6% versus prior year. Lower G&A and R&D expense was partly reinvested in consumer brands.
• Signed commercial partnership for Purecane in commercial baking applications with AB Mauri.
• Signed term sheet for a scientific partnership with Infectious Disease Research Institute (IDRI) to create RNA vaccine platform.

Reaction from the stakeholders

“Our business and our people have shown strong resilience during these unprecedented times. Keeping everyone safe has been our number one priority while continuing to grow revenue and improve operations. COVID has certainly had an impact in how we operate the business. For example, COVID has impacted progress with third party manufacturing,” said John Melo, President and Chief Executive Officer. “Lower consumer revenue from store closures was mitigated by consumers transitioning online. Our consumer brands saw record revenue in the quarter and, for the first time, was equal in size to our ingredients portfolio. We expect second half consumer revenue to more than double that of the first half of this year. This shift in our portfolio will continue with significantly larger sustainable and predictable product revenue relative to collaboration programs.”

Continued Melo, “We have executed on commercial and scientific strategic partnerships such as Purecane in commercial baking applications with AB Mauri and to create an RNA vaccine platform with IDRI. Our focus on improvement of operational economics as it relates to scale-up of both new ingredients and our young brands continues, and we made significant progress on improving our capital structure. During Q2, we raised $200 million from a private placement with high-quality investors of which 70% were new and 90% with a health care, biotechnology and/or long orientation.”

Strategic Priorities

The strategic priorities Amyris set out at the start of 2020 support their goals for growth, sustained cash generation, and profitability.

Full Year 2020 Outlook

When looking to the future, no one can predict what it holds but Amyris notes “Based on current estimates, the full year Sales Revenue target indicates approximately 44% growth versus 2019 GAAP sales revenue of $153 million, and approximately 80% versus 2019 recurring sales of $104 million. Based on expected sales mix, Gross Margin is expected to be between 55-60% of revenue. Adjusted EBITDA is expected to turn positive during Q4 of this year. COVID continues to present significant uncertainties to which we do not have full visibility.”

Bottom Line

While most companies in the bioeconomy are throwing out the crystal ball completely, it doesn’t mean companies are just giving up on predicting what might happen and preparing for all sorts of scenarios. And that’s what sets successful companies apart from others – the savviness to work with the current situation and make the best of it, going outside the box or comfort zone to come up with creative ways to survive the current time, and the vision to consider possible future challenges, creating scenarios and action items for each of them and being prepared yet adaptable and flexible for whatever may come.

So whether you prefer the classic David Bowie “Ch-ch-changes, Turn and face the strange, Ch-ch-changes” song or the more modern Sigma version “This ain’t what I signed up too, This ain’t right, it’s no good, No good, oh, Everything is changing”, remember that while there are lots of changes going on, some of them are good.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

The post Amyris’ Sugarcane-derived Vaccine Adjuvant appeared first on Alternative Energy Stocks.

by Jim Lane

In California comes the news that synthetic biology leader Amyris (AMRS) is stepping out to help fight COVID-19. Amyris may be more well known for its sustainable ingredients for the Health & Wellness, Clean Beauty and Flavors & Fragrances markets, but as you all know, things have changed a lot over the last few months and Amyris is now launching a hand sanitizer to help address the high demand triggered by COVID-19. Additionally, the company has completed initial testing of a leading vaccine adjuvant.

Amyris is leveraging its existing capabilities to fast track the availability of a safe and clean No Compromise Pipette Baby branded hand sanitizer that can be used by everyone. This product is focused on high performance cleaning while being healthy for your hands. Consistent with its core values, Amyris will not price its hand sanitizer at a premium, and plans to donate part of the supply to front-line health staffers and medical personnel.

In partnership with the Infectious Diseases Research Institute (IDRI), Amyris has completed initial testing of its fermentation-derived squalene as a vaccine adjuvant. The company is in active discussion with a leader in the pharmaceutical industry to target broad application of Amyris squalene in flu and potential COVID-19 vaccines.

Reactions from the stakeholders

John Melo, President and CEO of Amyris, commented: “We are committed to No Compromise products, formulations and ingredients. Our hand sanitizer is a great example of swiftly applying our market-leading squalane moisturizer to an immediate need. We expect to produce an estimated 30,000 units in the first weeks and to expand production quickly. First shipments are expected as early as next week. The product will be available to the public on PipetteBaby.com.”

Continued Melo, “Building on our historical success with an antimalarial treatment, we are currently reviewing several of our fermentation-based molecules for potential efficacy in the treatment of COVID-19. We are quickly moving several of these into testing. In addition, we are currently ahead of expectations for our product shipments this quarter. During these unprecedented times, we are working hard at Amyris to keep our people safe and healthy while continuing to support the needs of consumers and making the world healthier.”

Bottom Line

Amyris isn’t the only one in the bioeconomy to jump in and change course to help the world fight against COVID-19. If you’ve not heard, NuGenTec is looking for Distillers to help supply Ethanol for Hand Sanitizers in California and said they have two automated bottling lines waiting for ethanol to produce 8oz and 16oz gel type hand sanitizers. And as we reported earlier this week as well, Aemetis is one of those companies jumping into the hand sanitizer market, even as transport fuel demand falls off, driving fuel ethanol prices into an all-time low range of around $0.70 per gallon.  Aemetis (AMTX) said its 65 million gallon per year ethanol plant near Modesto, California has begun shipments of 200 proof alcohol for use in the production of hand sanitizer. There are many others doing this out there too, and that gives us hope that the bioeconomy will do what it takes to survive challenging times while also being a proponent for good.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

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In late August 2018, sustainable ingredients developer Amyris (AMRS:  Nasdaq) staged a successful secondary offering by a selling stockholders, Foris Ventures and Vivo Capital Fund.  In conjunction with the offering the company raised $46.0 million in new capital through the exercise of warrants held by existing shareholders.  Last week the shares closed over 40% higher than the $6.25 deal price.  The chief executive officer lauded shareholders for their support and apparent endorsement of the company’s game plan to commercialize sustainable alternatives to petroleum-sourced materials used in fragrance, health and beauty products.

Amyris leadership should celebrate its loyal shareholders given how far the company drifted from its earliest promises to investors.  Amyris scientists had developed renewable farnesene from sugar cane using genetically modified yeasts and planned to make it the base chemical building block for a variety of products dependent upon petroleum-based inputs.   At inception in 2003, Amyris raised capital to develop a ‘drop-in’ synthetic transportation fuel based on its core expertise in converting plant sugars in to hydrocarbon molecules.  In 2010, the company’s prospectus for its initial public offering featured a smart diagram of its business model with shiny eighteen wheelers delivering jet fuel to large aircraft. That same business model illustration included a laundry list of renewable chemicals that could be parsed from the company’s chemicals knowhow.

One by one the markets have been discarded as uneconomic  –  at least for Amyris.  Transportation fuels was the first target be left by the roadside.  Despite partnering with Sao Martinho S.A., a Brazilian sugar cane grower and ethanol producer, to co-locate chemicals production next to its facilities, Amyris ‘capital light’ strategy proved too burdensome to turn a profit in the long-term.

By the time Amyris came to investors for its most recent transaction, target markets had been entirely revised to focus on the health, beauty, flavors and fragrances markets.  True enough many consumer products are dependent upon materials and ingredients sourced from petroleum. The company’s proprietary renewable farnesene molecule has broad application for skincare, cosmetics, fragrances and flavors.  Importantly, these appear to be among the few end-markets that afford high enough prices to return a profit on the commercial version of Amyris’ process.

In the three months ending June 2018, Amyris reported $23.2 million in at its topline.  Renewable products were only 28% of the mix at $6.6 million.  The cost of those products was a whopping 90% of sales.

Fortunately, royalties and licenses represented $6.9 million or 30% of total sales and grants and collaborations another $9.7 million or another 42%.  Contribution margins on these revenue sources are substantially higher, providing better coverage of operating expenses than the skimpy 10% delivered by renewable products.

Yet Amyris is still not profitable.  The company continues with an ambitious research and development program at a spending rate near $60 million per year. Sales, general and administrative expenses are also running about $80 million per year with current staffing and operational infrastructure.  Some of the investments in market penetration and business development may prove out in the future.  The company recently announced new deals and agreements that would take the company into health and nutrition products.  The company’s own Biossance brand of beauty products is also expanding into the popular Sephora cosmetics chain in its JC Penny sites.

In the meantime, the numbers depict a company still searching for its footing.  At the end of June 2018, Amyris was capitalized with $171.4 million in debt, including $67.8 million owed to related party.  The company has also taken in $1.1 billion in equity capital, but is running a deficit of $255 million.  The $46 million that Amyris just took in improves the picture somewhat.  There is also something to be said for clearing up the number of outstanding warrants.  However, the deep deficit is troublesome after sixteen years in development.

What is even more worrisome is the continued steep cash requirement to keep operations going.  Amyris burned through $53 million in the first six months of 2018.  The company had $14.1 million in cash on its balance sheet at the end of June 2018 and just before the secondary offering by its venture capital supporters. With only about $60 million in the bank after the recent warrant exercise, shareholder goodwill may need to stretch across another capital raise before the end of the year.

Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries. Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

The post Can Amyris Find The Ingredients Of Success? appeared first on Alternative Energy Stocks.

by Jim Lane

The Top Line. In California, Amyris (AMRS) reported Q2 GAAP revenue for the second quarter of 2018 of $24.8 million, compared with $25.7 million for the second quarter of 2017. Grants and collaborations revenue was $11.4 million for the second quarter of 2018 compared with $10.3 million for the year-ago period. The company noted that Q2 revenue was $24.8 million compared with the same period in 2017 of $21.7 million when adjusted for the low margin product sales on contracts assigned to DSM (DSM.AS). This reflects 15% growth on an absolute basis. GAAP net loss for the first half was $89.1 million compared to $47.6 million in 2017. Non-GAAP net loss for the first half of fiscal year 2018, excluding the non-cash items mentioned, was $47.5 million compared to a non-GAAP net loss for the first half of 2017 of $68.7 million.

The Big Highlights. The company Announced plans to partner with BGI, one of the world’s largest genomics companies in a new joint venture to discover, develop and commercialize human microbiome-targeting health and nutrition products in Greater China. The company also signed its Universidade Católica Portuguesa Porto Campus and AICEP Portugal Global agreement valued up to $50 million including investment funding and incentives allotted across parties involved. The grant provides funding to explore utilization of waste streams from fermentation to develop new products and applications while also advancing Amyris’s artificial intelligence (AI) and Informatics platform. And the company successfully launched Biossance brand in Brazil with sales doubling expectations within first 6 weeks. CEO John Melo said that the company’s natural sweetener product opportunity gained significant traction during the second quarter and we have the customers in place to sell all of our supply over the next three years.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

The post Biofuels & Biobased Earnings Roundup: Amyris appeared first on Alternative Energy Stocks.

Synthetic fuel stocks are publicly traded companies creating transportation fuel from non-liquid feedstocks such as natural gas, coal, and municipal waste.  Drop-in biofuel stocks are publicly traded companies creating transportation fuel from organic feedstock that can be used, transported, and stored by conventional petrofuel infrastructure.  A synthetic fuel is a biofuel if it is made from organic feedstock.  It is a drop-in fuel if it is compatible with the existing infrastructure for petroleum based fuels.

This post was last updated on 7/20/2022.

Amyris (AMRS)
Archaea Energy, Inc. (LFG)
BioAmber (BIOA)
Codexis (CDXS)
Darling Ingredients (DAR)
Gevo (GEVO)
Global Bioenergies (ALGBE.NX)
Neste, Inc. (NEF.F, NESTE.HE, NTOIF, NTOIY)
N-Viro International Corp. (NVIC)
Sasol Ltd. (SSL)
Velocys, PLC (VLS.L)

If you know of any synthetic fuel or drop-in biofuel stock that is not listed here, but which should be, please let us know in the comments. Also for stocks in the list that you think should be removed.

The post List of Synthetic Fuel and Drop-in Biofuel Stocks appeared first on Alternative Energy Stocks.

by Jim Lane

Last month, Amyris (AMRS) and Chevron (CVX) announced that Novvi and Chevron have entered into an agreement to jointly develop and bring to market novel renewable base oil technologies. Novvi is Amyris’ JV with Cosan (CZZ) to produce targeted hydrocarbon molecules from plant sugar for automotive, industrial, marine, and construction applications at unbeatable economics. Think lubricants for engines and machines.

Since launching its first commercial production in 2014, Novvi has been steadily increasing its base oil production to keep up with robust and growing demand for a variety of automotive, marine and industrial applications. Meanwhile, Chevron has one of the world’s largest base oil manufacturing platforms through its own refining network and its base oil technology licensing position. In 2016, Chevron announced an equity investment in Novvi.

It’s good news for Chevron, Amyris and Novvi — and great news for consumers — and it reminds us that just a few years back the market was expecting that Amyris’ great partners would be the likes of Chevron because of the chase on for renewable fuels. That the mutual advantage opportunities for this pair have dovetailed into base oils, that you hear more about DSM Nutrition than Total among Amyris’ backers, that the company has embarked on a major voyage into the health & beauty sector — these are all signs of Amyris’ great pivot. And lessons for all lie in what the company set out to do, what it finds itself doing, and how it sustains itself and its workforce now that its vision has changed so much and people who signed up to change the world find themselves working on facial formulations.

These days, for marketing purposes Amyris has trademarked the phrase No Compromise, but of course the entire company’s mission is a compromise and in fact it is the source of Amyris’ strength, it ability to adapt to changing conditions and find news ways to pioneer when the expected pathways to success turned out poorly for them.

Expect the Unexpected

The unexpected is not to be unexpected — in fact, we live in a new world where markets are disrupting just as fast as science is, making it difficult to bring new products forward, anticipate trends, plan for the future, count on policy support, or tame the flighty tendencies of a fickle public.

We live in a world of Facebook, Twitter, Tesla (TSLA), taxis with an app, drones above our head, and cars without the driver, we have meat without the cow, milk without the cow, leather without the cow. We live in strange world that is getting stranger. Fast is getting faster, information is beating down our doors, and for all the communication devices we carry around and use obsessively, half the world reports they are feeling more lonely.

How can companies become ready to meet the evolving markets that GenXers and Millennials have begun to dominate?  Absent a crystal ball, it certainly isn’t about the kind of corporate forecasting we used to see in the 1990s that didn’t anticipate Y2K, the dot com revolution, the dot com bust or 9/11. Or the kind of forecasting we had in the mid 2000s that didn’t anticipate the global financial crisis, the mortgage crash, the oil price crash, the rise of fracking, the Moore’s Law environment in genetics, or the advent of mobility as a service.

The Velocity of Change

How fast is fast becoming? To give an example, a company using a 300 baud modem in 1993 (and most companies back then couldn’t even have told you what a baud was, 300 was decent speed back then), could transmit a single color page over the internet in about 12 hours, if you could hold the connection that long, which you almost never could. Today, information travels up to 13 billion times faster via the internet.

And it cost a billion dollars to decode a genome just 20 years ago, and today we’re looking at a few dollars and not long from now it will be pennies. You can get more out of a call to 23andMe today than you could get from all the scientists of our national lab system a generation ago.

What can you really do in an economy that is changing this fast and that much? At the end of the day, values drive habits, habits drive actions, and actions change the world, so if you really want to change the world, it better start with values, rather than value. The value is a product of values, not the other way around.

In some ways, the company is probably going to have to think and organize itself the way that military organizations have begun to. The missions change, the tools, the team, the methods, the goals, the partners, the uniforms, the bases, the timelines. But Semper Fi goes on and on and on. The Marines are a philosophy in action, if you think about it, nothing else lasts and not much else matters except the who and the why. The what, the where and the how are ultimately the liquids of defense preparedness. The people and the values are the solids.

Values drive Habits, Habits drive Actions, Actions change the world

These days Amyris has put its values almost on the home page of its website — it’s just one click from the right location, found as you scroll down a bit on the page titled About Us — and there, the company says that it aims to “make good things, make good impact, make good choices, make good together and make good processes”, and these days they refer to embracing “intelligent risk” as a “learning organization”. Amyris has learned a lot, sometimes by not always taking intelligible risk, even if it was styled intelligent risk.

When the company was founded it was essentially focused on fuels, which made sense to many people at the time because fuels were (and remain) the giant app of the bioeconomy. And, if you could make fuels, you could make chemicals, because after all a fuel is simply a chemical that you burn instead of otherwise using in, say, green chemistry. A company that could make a good $3 fuel could do a lot for itself also selling $5 chemicals made from the same process, and fuels would give the company the base load to achieve meaningful commercial scale.

So went the idea, anyway. The inherent problem was that the company’s primary value engine, converting cane sugar to farnesene via yeast fermentation, was based around a maximum theoretical yield of 28%, and required a second processing step from farnesene (an alkene) to farnesane (a good fuel hydrocarbon).

What was the problem in that? To make a $3.00 gallon of fuel, which weighs in the range of 7.5 pounds, you needed sugar to be available at below 10 cents a pound (which costs you around $2.67 in raw materials even if that’s all the cost there is, which it’s not, and even if you hit the 28% theoretical yield limit, which you never do). Well, sugar never did fall that low. Right now, it trades on the NYMEX futures board at between $0.126 and $0.144 depending on delivery month, and there’s no 10 cent cane sugar in sight.

So, Amyris ran into the NLACM problem we have written about here and here. That is, the Natural Law of Alternative Commodity Markets, which states that no one will use a commodity to make another commodity of lower value. In short, you might as well sell the sugar as sugar.

The hope, one supposes, was that fuel prices would go bananas and Amyris could make a $5 fuel, or that companies would pay a small premium to blend in sustainable fuels sold at a green premium. Then, oil prices crashed — and green premiums were as easy to find as Chinese take-out on Neptune, and Amyris began a furious pivot towards the businesses it is in today.

Amyris’ prospects

The company is projecting for 2018 that it will reach $185-$195 million in revenue and expects more than $10 million of positive EBITDA for 2018. That’s striking — in its slides, it refers to being self-funding in the next year.

Amyris’ current markets

As Amyris CEO John Melo noted, John Melo, “We have organized around three core markets — Performance Health and Wellness, Clean Skin-Care and Pure Flavor & Fragrance Ingredients. Each of these markets is delivering strong, profitable growth underpinned by the most advantaged technology in the sector. We are making good for humanity and our planet with No Compromise products.”

Last November we reported on Amyris’ No Compromise sweetener-market entry, and news that it has sold its 40 million liter capacity Brotas production plant to DSM for $96 million, while it focuses on completing its Brotas 2 plant, where it has not yet revealed the capacity.

Equity analyst Jeff Osborne added:

Amyris has alluded to discussions with “very large consumer companies” regarding the sweetener product, which at the analyst day was referred to by an attendee in the Q&A as “Stevia-like”. Management viewed its “Sweetener 1” product as the company’s largest opportunity though 2021. The company expects a strong ramp in product sales in 4Q, which we believe to be driven largely by health and nutrition.

The DSM-Amyris deal? As CEO John Melo was clear in announcing the sale, Amyris needs different production capacity to realize its current opportunities in higher-value, smaller-volume markets. Total consideration for Amyris Brasil Ltda (which owns and operates the Brotas 1 production facility), intellectual property related to farnesene and an additional value share arrangement over a 3-year period amounts to $96 million. In addition to the consideration upfront there is potential for a future value share in line with Amyris’ business model.

DSM will continue existing supply-agreements to Amyris and other parties. DSM will also supply Amyris with specialty compounds until it realizes its Brotas 2 specialties production facility. Amyris is accelerating the construction of its second facility dedicated to specialty products while maintaining the manufacturing process development and business support capability located in Campinas, Brazil.

Then, there’s the Vitamin A front. As we reported last September, Amyris announced that it has entered into a product development and production agreement for Vitamin A with Koninklijke DSM N.V.

New production bases? Last June we reported that  Amyris and the Government of Queensland announced the next step in their plans to develop a leading industrial biotechnology hub in Southeast Asia. Plans call for developing a new production plant with support from local partners to produce Amyris’s sugar cane-based ingredient called farnesene, which is used in products including cosmetic emollients, fragrances, nutraceuticals, polymers, and lubricants.

Let’s not overlook Biossance, its health & beauty platform. Latest news there is that Amyris successfully launched Biossance into SEPHORA Canada stores, with SEPHORA U.S. sales during the year overall contributing to a greater than 650% increase in total 2017 Biossance retail sales over 2016. The company introduced pharmaceutical grade Neossance Squalane USP through its Aprinnova joint venture opening new markets among FDA regulated products such as topical and dermal applications, including therapeutic skin creams and ointments.

For the long-term

Beyond its products and markets, Amyris is working on informatics and artificial intelligence, for one.

We reported in January that Amyris announced two grants that have been awarded, valued in aggregate at approximately $25 million, to accelerate innovation and enable the company to further extend its leadership position in the industrial biotechnology sector. The first grant is in Europe and focused on furthering the company’s current artificial intelligence and Informatics platform at Amyris and the second grant is from National Institutes of Health for the development of a novel isoprenoid pharmaceutical application.

The Bottom Line

Forecasting is generally focused on the microeconomy and generally assumes not much will happen in the macroeconomy. “My product will be introduced into a market that is changing only in the forces that foster my product,” is sort of the way those business plans were written.

There’s an unknowability in markets, and as former Secretary of Defense Donald Rumsfeld put it, it it is the unknown-unknowns that keep you up at night, not the things you know but the things that you don’t know that you don’t know. Or, as the Talking Heads put it, “You may find yourself / In another part of the world…And you may ask yourself, well / How did I get here? / Letting the days go by, let the water hold me down / Into the blue again after the money’s gone / Once in a lifetime, water flowing underground.

Which is why Amyris’s pivots are really a sight to behold, even if the company has been pilloried by its critics who wander around in some post-Keynesian dream that economies are ordered, that state planning or corporate planning works, that innovation is about anticipating and meeting static and ever-reliable market demand with market supply. That theory works very well if you consider that information works in the same way, at the same speed, and at the same volumes as 100 years ago.  Amyris, for better or worse, looks a lot like companies of the future will all look — a transformative invention followed by a furious search for markets to serve as expected markets fail to materialize and new ones appear.

Which is why I sometimes wish that Amyris billed itself as The Nimble Company instead of the No Compromises guys. For compromise is what finding markets is all about, and the company that changes the world is the nimble one. Xerox made no compromises, Kodak made few either, and neither did Blockbuster. But Apple didn’t set out to make iPhones, Virgin didn’t start out in the transportation or even the music business, Mars didn’t start out with pet foods, and Microsoft didn’t even write much of MS-DOS, Excel, or the first releases of Windows.

Information is changing everything, and especially as biological sciences and information sciences are becoming almost indistinguishable. One of these days we might look at biology as an base-4 information science (with A,C,G.T as the digits instead of 0,1) , and that computer science is ultimately a simplified, inorganic version of biology. Dumbed down and stripped of the forces of life and evolution, perhaps that’s what we’ll one day think of the languages, machines, and technology that we deploy to support information in this day and age.

We don’t have much time to think about all that because information is changing, fast, and that means capabilities, habits, actions, and markets are getting shredded and born at high speed.

Making havoc for companies that attempt to navigate the choppy waters. But Amyris is coming nearer and nearer to shore. One only hopes that its workforce, those there today and those looking potentially at working there, see the mission that lies behind the products.

Biossance is a valuable product platform, but that’s not really what the work is about, is it? Year ago I subscribed to the Musical Heritage Review which wrote of Mozart and the flute this way: “Mozart loathed the flute…nonetheless, he completed and delivered two flute quartets, K. 171 and 298; the concerto, K. 313, and the Andante, K. 315…Mozart chafed under the commission, but he needed the money and hacked away diligently.

Yet Mozart ultimately delivered The Magic Flute to us of which it is written:

Although there were no reviews of the first performances, ^“it was immediately evident that Mozart and Schikaneder had achieved a great success, the opera drawing immense crowds and reaching hundreds of performances during the 1790s…Mozart’s delight is reflected in his last three letters, written to Constanze, who with her sister Sophie was spending the second week of October in Baden. “I have this moment returned from the opera, which was as full as ever”, he wrote on 7 October, listing the numbers that had to be encored. “But what always gives me the most pleasure is the silent approval! You can see how this opera is becoming more and more esteemed.” … He went to hear his opera almost every night, taking along [friends and] relatives.”

The opera is today the third-most performed of all operas around the world.

What led Mozart to Die Zauberflote? As we see, not love of the flute. It was a commission. Which shows that markets have powerful impact on training great minds upon the task they will become known for; the winds of change blow us towards our most brilliant productions.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

The post Amyris In The Age Of Rapid Change appeared first on Alternative Energy Stocks.

Alternative energy companies delivered compelling returns for investors.  A look at Crystal Equity Research’s ‘indices’ of renewable energy, conservation and environmentally-friendly technology companies found some exceptional price moves.  We review five companies here that have experienced top price moves from 52-week lows.

Codexis, Inc. (CDXS:  Nasdaq) has gained 257% from its 52-week low. The company won a place in our Beach Boys group through development of proteins for a mix of applications from biocatalysts for industrial enzymes, chemicals and pharmaceuticals.  While the company has started generating revenue from its technology, it has yet to post a profit.  Codexis delivered a smaller than expected loss in the first quarter ending March 2018.  Revenue came in at $14 million in the quarter as the company successfully engaged a clutch of top customers such as Tate & Lyle, Nestle Health Science and Merck in compensation research and development projects.  The results were enough for management to reiterate guidance for 26% top-line growth in 2018.

From a technical standpoint CDXS is overbought.  However, another company in our Beach Boy’s group is still registering as oversold even after an impressive 193% appreciation from it’s 52-week low price.  Amyris, Inc. (AMRS:  Nasdaq) uses industrial bioscience to design yeasts that can convert plant-sourced sugars into renewable ingredients.  The company has found success in monetizing its technology through Novvi, LLC, a joint venture with Cosan, SA and American Refining Group.  Joint venture will be developing novel renewable base oil technologies with the Chevron, the world’s largest producer of lubricants and premium oils.  It will probably take some time to see significant revenue streams, but a relationship with Chevron most than likely means significant volumes over an extended period of time.  Chevron also made an equity investment in Novvi in late 2016.

The shares of TPI Composites, Inc. (TPIC:  Nasdaq) bounced 270% from its 52-week low. The stock has experienced two major price moves following major announcements.  The most recent was the disclosure that TPI is expanding its relationships with Vestas Wind Systems in Mexico.  TPI is the only independent producer of composite blades for the wind energy market.  The company will produce blades for Vestas’ four megawatt wind turbine platform beginning in Fall 2018.  The deal bodes well for long-term revenue streams. The Vestas deal follows directly on the heels of similar supply agreement with ENERCON GmbH, which will be buying blades for two of its turbine platforms.  Expect the consensus estimate for TPI to move higher in coming weeks.

Top of the pack in the Mothers of Invention group is Enphase Energy, Inc. (ENPH:  Nasdaq).  The stock price has soared 686% from its 52-week low earlier this year, propelling the stock well into overbought territory.  What has traders so enthusiastic is the promise of revenue streams from the sale of a newly introduced microinverter.  The Enphase IQ7X Micro is the seven generation version, providing the highest power and efficiency.  The company has yet to produce profits, but with new products aimed at the fast growing market for smart grid applications, there is optimism that the red ink will not be needed must longer.

The solar industry is undergoing vast changes as systems reach large scale. First Solar (FSLR:  Nasdaq), which was discussed in the recent post “Moving On with Solar in Ohio,” has clocking in 100% price appreciation from its 52-week low.  One more solar company with investors celebrating a doubling in their share value is Real Goods Solar, Inc. (RGSE:  Nasdaq). The company reported $15.2 million in total sales in 2017, resulting in a new loss of $18.1 million.  Investors apparently see much promise for Real Goods, ponying up $4.4 million in new capital in early April 2017.  The company’s in-roof solar shingle is expected to gain popularity with builders. The move by the state of California to mandate solar power installations on all residential structures is seen as confirmation of demand.

In the next post we look at additional companies in the alternative energy indices to find those which are still attractively priced.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

The post Alternative Energy Companies Posting Large Returns appeared first on Alternative Energy Stocks.

Biochemicals stocks are publicly traded companies whose business involves using plant or animal based feedstocks (biomass) to create new chemicals or substitutes of existing petrochemicals, plastics, or other fossil fuel derived substances other than fuels.

This post was last updated on 7/9/2021.

Amyris (AMRS)
BioAmber (BIOA)
Bion Environmental Technologies (BNET)
Circa Group AS (CIRCA.OL)
Codexis (CDXS)
Corbion (CRBN.AS; CSNVY)
Danimer Scientific, Inc. (DNMR)
Eastman Chemical Company (EMN)
Global Bioenergies (ALGBE: EURONEXT)
Novozymes (Copenhagen:NZYM-B; OTC:NVZMY)
Royal DSM (DSM.AS; KDSKF; RDSMY)
SECOS Group (SES.AX)

If you know of any biochemicals stock that is not listed here and should be, please let us know by leaving a comment. Also for stocks in the list that you think should be removed.

The post List of Biochemicals Stocks appeared first on Alternative Energy Stocks.

Biiofuel stocks are publicly traded companies whose business involves transportation fuels or any other form of liquid fuel made from plant or animal feedstocks (also called biomass).  Included (but listed separately) are ethanol and biodiesel stocks.

If you know of any biofuel stock that is not listed here or in the lists of ethanol or biodiesel stocks, and should be, please let us know by leaving a comment. Also for stocks in the list that you think should be removed.

The post List of Biofuel Stocks appeared first on Alternative Energy Stocks.

By Jim Lane

Over the years we’ve all seen a lot of curveballs in the advanced bioeconomy. You see companies like Valero, which lobby the United States Congress with unbridled intensity to get rid of the Renewable Fuel Standard, on the verge of becoming the single-biggest producer of RINs in the United States (with news that they might take capacity at Diamond Green Diesel up to 540 million gallons).

You see companies like Solazyme which love the Renewable Fuel Standard and drive up to nearly a billion-dollar post-IPO valuation based on delivering fuels at volume, then announcing that there are even more exciting opportunities in nutrition and changing the name of the company to pursue that, only to sell themselves for $20 million to Corbion.

There are quite a number of examples of the Chutes and Ladders kind. Companies rise up, then inexplicably plunge. Companies that have plunged into total obscurity, finally put together the critical JV or first commercial financing. Everyone heading for Brazil, then no one heading for Brazil. Many fleeing California for Texas, citing high production costs. Then many pouring back into the California market, citing the high prices.

It’s been a decade of chutes and ladders, curves and slides and curveballs and a lot of slide decks. But lately there’s been a spate of curves offered up of the economic chart kind that offer some real insight into where the advanced bioeconomy might head next when it comes to early-stage venture opportunities and models.

First, some curves offered over the years that give you the necessary backgrounding.

The RFS Curve

Here’s what was expected. Falling biofuels costs and rising production would sustain a Renewable Fuel Standard that was rapidly expended in 2007.

The Price Curves

Here’s the basic one that drove the bioeconomy towards fuel production. A spate of curves suggesting a long-term oil price at or above $100.

But then there was this forecast in 2009, which hasn’t been all that far off when you think about it. What you might consider that happened is that the global petroleum market started out in 2009-2013 as if it were in the high or med-range scenario, but down-shifted to the low-end scenario around the beginning of 2015.

With expectations of $100 oil and an enhanced Renewable Fuel Standard passed in 2007, here’s the expectation that we saw in projection after projection of the volume in renewable fuels.

What actually happened was that the biomass-based diesel and corn ethanol sectors produced what was expected, more or less. The Cellulosic sector has fallen wildly short of expectations on volume — producing in the hundreds of millions rather than the billions of gallons.

In part, that was driven by the oil price scenario — the prospect of lower prices crushed investment in many technology developers and technologies starved.

Long before the oil price debacle, there was the natural gas price crash — and that was a fundamental reason that many investors stayed away from renewables. Cheap methane arrived in volume while cheap sugar did not. A number of bio-based players — especially those in gas fermentation — shifted focus from syngas fermentation based on biomass feedstocks to methane fermentation based on fossil fuels. They were counting on the delta between oil and natural gas prices to persist — providing markets with a cheaper route to fuels by using cheap methane as a feedstock instead of cheap petroleum.

But for bio-based technologies, oil prices hurt, a lot — but it was more than that. Those that did get out into the market struggled to meet expectations on deployment speed or production rate. Plants that were designed to produce 25 million gallons of fuel struggled to produce more than a small fraction of that, causing capex costs (on a per gallon basis) to soar beyond the point of project viability.

The Cost Curves

Here’s a slide typical of the early 2010s — biobased companies like Solazyme , Amyris (AMRS), Gevo (GEVO) and others expected to be driving very quickly down the cost curve, opening up more and more markets and moving from small specialty niches like advanced foods and nutraceuticals into specialty chemicals and then fuels.

The Innovation Curve

There’s been revived optimism of late, though, especially among those investing in earlier-stage renewable chemicals that the advanced bioeconomy has been passing through what is known as the Gartner Curve of innovation. Generically, that’s this: the idea that there’s a rush of enthusiasm over new technology that leads to a trough of disillusion and ultimately to a slope of enlightenment.

A surge in unreasonable exuberance from 2008-2012 gave way starting in 2013-14 or so to the trough of disillusionment. Sofinnova Ventures managing partner Denis Luquin offered this slide a few years back, suggesting that the peak of inflated expectations came in December 2011 and that the trough of disillusionment was reached in 2015.

At ABLC Next 2017, Luquin updated his slide to suggest that the Trough of Disillusionment has lasted far longer than expected, and has been reached in 2017.

But we’re not sure. We think that it might have been reached in 2015 or 2016 after all, following the realization that oil prices would not rebound and that the expected wave of cellulosic fuel technologies would not deliver anywhere near as fast as hoped. That crushed expansion hopes for fuels — which had the Renewable Fuel Standard to assure a market but lacked the investment drivers. Chemicals lack an assurance of market, so they’ve simply been crushed or delayed by persistently low oil and gas prices, excepting in selected cases where they can compete against tremendously complicated and expensive production processes from oil or gas (such as selected nutraceuticals and one-step organic acids), or where they offer functional advantages over traditional molecules (such as PEF’s functional advantages over PET as a clear plastic).

But there have been so many project announcements this year that it would be impossible to label 2017 as the Trough of Disillusionment’s low point. Even Valero, which rails against the Renewable Fuel Standard in DC, is tripling production with Darling (DAR) at their Diamond Green Diesel renewable diesel plant in Louisiana. We have LanzaTech deploying, Synvina under construction by BASF and Avantium, two projects underway with Clariant’s technology, Fulcrum’s first commercial under construction, Licella’s first project underway in Canada, Ensyn expanding fast, Neste considering expansion, Aemetis (AMTX) and LanzaTech deploying cellulosic at scale in California. Just to name a few.

That feels much more like the Slope of Enlightenment than the Trough of Disillusionment. So we think that the Gartner curve looks more like this.

But for early-stage investors, there remains the puzzle of how to make a successful market entry with a disruptive technology. It’s proven too tough to rely on fuels or chemical commodity markets and on the proposed rate of development and deployment. The markets have been priced too low and the technologies proceeding too slowly to offer the kind of rates of return that venture investors require.

So, where has our perfect storm left us?

Moving way, way, way up the value curve, that’s where.

Here’s a chart that looks like today. This is where Amyris’ investors are pointing that technology. Former Cobalt CEO Rick Wilson used to say, Why make a $3 fuel when you can make a $5 chemical,” and it was a good question at the time. But these investor’s aren’t looking any more for $900 per ton markets, not $1500 per ton markets — they’re leaving those to the strategics who need them or have the patient capital to weather the storms.

Why make a $3 fuel when you can make a $1744 nutraceutical?

Rather, they are looking for $10,000 per ton, even $100,000 per ton markets — or simply looking for service models which make money by selling, in many cases, to people chasing $10,000 per ton or $100,000 per ton markets.

It looks like pharma all over again, in many ways. If you think about active ingredient volumes in therapeutics and the price we pay for them, the opportunities are astronomical.

Only one difference. The investment group is looking to get as close as they can to pharma price points without incurring pharma’s ruinously long approval timelines or the narrow set of therapeutics that find big global markets.

Hence, nutraceuticals and advanced foods. People who will never pay more than $3 per gallon for algae fuels are more than happy to pay $25 at GNC for 45 grams of algae oil as a nutraceutical. That equates to $1,744 per US gallon, by volume — in case you wondered. Or $555,000 per metric ton.

Or, consider the burger. $17 is not unheard of for a quarter-pound Impossible Burger, and after subtracting perhaps a third for the other ingredients by weight, consider that a burger made with biotechnology checks in at a value of something like $845 per gallon equivalent (if we did equivalent weights), or $202,985 per ton. And the Impossible Burger is said to be gearing up to ship a million pounds a month right now.

The Super-High Value Expectation Curve

Yes, those are retail not wholesale rates — but consider the point. Venture investors aren’t looking necessarily for “higher-value markets”. They are looking for Super-High.

Only in those cases are they seeing that the timelines and risks associated with industrial fermentation scale-up are justified by the margins — and they sure like the commodity price swings of food more than they like commodity fuels and chemicals. Food is volatile, but not nearly as volatile as energy.

Larger markets — they make sense if there’s a strategic doing corporate venturing, and they want a venture investor to help them with early-stage technology risk.

Think of venture investors almost like accelerators these days — when it comes to commodity markets. Probably one of the reasons that Tech accelerators and venture investors are working so closely together. It’s no longer a question of investing from early-stage and going for the IPO when there is deployment at scale (i.e., the construction of the first commercial is underway). Markets are too leery of crashes like Amyris and Gevo.

Rather, in bulk commodity markets its about a hand-off through strategic acquisition to a partner or JV that can bear the costs and brings expertise to the scale-up.

Something like what we’ve seen with Virent, or REG Life Sciences (REGI), or lately with Corbion’s acquisition of TerraVia.

That model may well be the winner in terms of moving through the Slope of Enlightenment to the Peak of Productivity.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

The post A Decade Of Unexpected Curves In The Bioeconomy appeared first on Alternative Energy Stocks.