Biofuel, Company initiatives, People

Codexis cuts R&D ties with Shell

Speaking of enzymes again, I have been following the biofuel collaboration between Codexis and Shell especially this year when Shell dropped cellulosic ethanol developer Iogen as its research partner in June. Codexis has been collaborating with the Shell-Iogen deal on developing technologies related to conversion of cellulosic biomass to ethanol.

Codexis and Shell have finally reached an agreement yesterday where the companies terminated their biofuel research collaboration effective August 31, two months early before their collaboration contract expires on November 1.

Shell said it will pay Codexis $7.5m for the remaining full-time employee equivalents (FTEs) and milestone payments that would have been due under the original agreement. Shell also agreed not to sell any cellulase enzymes to third party biofuel customers using technology developed by Codexis after the end of the Shell Research deal.

Shell retains its right to use and manufacture the enzymes including those enzymes that result from Codexis development in the span of a ten-year period beginning August 31, 2012. The enzymes will be for Shell’s and its affiliates’ own use only. Shell can also sub-license the right to manufacture the enzymes to third parties but only for Shell’s own use.

Codexis, on the other hand, was able to get a royalty-bearing, non-exclusive license to develop, manufacture, use and sell cellulase enzymes for biofuels use worldwide (except in Brazil) developed during the companies’ research collaboration since November 1, 2006. Codexis, however, has the exclusive rights to commercialize its cellulase enzymes in other fields such as in chemicals manufacture.

The company said it is currently in discussion with Brazil-based ethanol producer Raizen (which owns 16% stake in Codexis and is a joint venture between Shell and Brazilian sugar company Raizen) regarding commercialization of Codexis’ cellulase enzymes for second generation ethanol production in the Brazilian market.

Codexis is obligated to pay Shell a low single-digit percentage royalty on net sales of CodeXyme cellulase enzymes to customers other than Shell and its affiliates. Codexis will also have to pay Shell a low single-digit percentage royalty on the use of its own cellulase enzymes in biofuels application. Should the companies mutually agree to enter a future supply deal, Shell is entitled to preferential pricing on the purchase of cellulase enzymes from Codexis.

As my head is already spinning from these back-and-forth legalities (kind of like when I have been recently reading my severance documents…), the last thing to note here is that Codexis is now laying off around 133 employees as of October 30 as a result of the termination of this research collaboration.

Codexis said the workforce reduction is part of its effort to control expenses and conserve cash. Codexis estimates that it will incur total charges of up to $3.6m in the second half of 2012 as a result of this workforce reduction, including $2.9m in continuation of salary and benefits of the affected employees and $700,000 of one-time termination and miscellaneous costs.

I can empathized with the laid-off employees given my current situation. The good news is that I have seen recent announcements from other industrial biotechnology/renewable chemical/biofuel/chemical companies on several job openings within their companies.

Here are some of them taken mostly from LinkedIn (you have to be a registered member to see the link):

About Doris de Guzman

Will Green Chemistry save the world or is it hype? Doris de Guzman examines alternative processing, new technology, R&D and other sustainability initiatives aimed at preventing pollution; replacing ingredients; and using renewable feedstocks in Green Chemistry. She has been covering the oleochemicals market for 15 years and spread her beat to inorganics, biofuels and green chemistry.


2 Responses to “Codexis cuts R&D ties with Shell”

  1. Doris, for job openings: Don’t forget P2 Science:
    Chemical Engineer:

    Posted by Neil Burns | September 6, 2012, 7:08 am
  2. Thanks! I’ll put that in.

    Posted by Doris de Guzman | September 6, 2012, 7:14 pm

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