The blog has compiled several news from the financial community starting with the closing of BioAmber’s initial public offering (IPO) on Wednesday.
I’m guessing it is still a difficult market for renewable chemical companies wanting to be public as BioAmber was only able to get to the low end of its IPO expectations, raising $80m or an equivalent of $10/share of an 8,000,000 unit offering. BioAmber already reduced last week its initial target range of between $15 to $17/share reported in the company’s amended S-1 filing in April to $10 to $12/share.
According to BioAmber, the units consists of one share of common stock and one warrant to purchase half of one share of common stock at $10/unit before discounts and commissions. Each warrant will be excisable at a price of $11 per whole share of common stock.
The shares will start trading on the New York Stock Exchange (NYSE) under the symbols BIOA (and BIOA.WS for the warrants) on June 10, 2013. BioAmber also intends to list its common stock at the NYSE Euronext in Paris.
Biofuel Digest recently posted a good explanation on what warrants meant and why several companies like BioAmber and maybe even Myriant are taking so long to “test the IPO waters.”
EARNINGS GALORE
The blog has been deluged with lots of emails on recent earnings reports and I will try to sift through most of them to get to some of the highlights delivered to you. The blog actually hates reporting earnings numbers and therefore will mostly give updates on company activities and milestones.
Solazyme:
The company said it is on track with its 2013 goals of product development with its tailored algal oils; getting production at its Lestrem (France), Moema (Brazil), and Clinton, Iowa (USA) facilities on schedule; and commercializing their products.
Solazyme recently announced its development collaboration with AkzoNobel on producing tailored algal oils for surfactants, and paints and coatings applications. In February, Solazyme has also partnered with Mitsui to develop a suite of triglyceride oils for use in the oleochemical industry. According to a recent equity report from Jefferies, an additional 3 or 4 more joint development collaborations will make Solazyme’s medium-term earnings trajectory easily achievable.
“With another customer announcement, Solazyme remains broadly on track for positive cash flow in 2014 and initial commercial capacity that could support $150m+ of sales (ex-Algenist). We reiterate our Buy rating.” – Jefferies
Solazyme expects that by the second quarter of 2014, it will have a 65,000 tons/year production capacity from the 50KTY Moema facility via the Solazyme/Bunge JV; 2,600 TPY Lestrem facility via the Solazyme/Roquette JV; and 2,000 TPY production from the Clinton facility owned by ADM.
In terms of oils development, the company said it has further elevated the myristic acid content of its high-myristic oil from 50% to 60% in less than two months. This fatty acid level is a four-fold improvement over coconut or palm kernel oil. Another new product development is that Solazyme claimed to be the first to be able to control the position of a specific fatty acid on the glycerol backbone.
This means consumers of their oils can get improved product formulations without compromising functionality particularly on texture, melting and pour-point properties. This toolkit is in addition to Solazyme’s capabilities to tailor a triglyceride oil’s chain length and saturation.
Metabolix:
The key news from Metabolix is whether it will be able to fix production issues and supply for their PHA (polyhydroxyalkanoate) resins. The company announced last month that it has partnered with Chinese PHA producer Tianjin GreenBio Materials Co. for PHA supply as well as distribution of GreenBio’s PHA-based heat shrink film in Europe by Metabolix. GreenBio currently has the capacity to produce 10,000 tons/year of PHA in Binhai District.
Last year, Metabolix announced a PHA manufacturing deal with Spain-based Antibioticos with the expectation of initially producing 10,000 tons/year of PHA resins at Antibioticos’ Leon facility. Unfortunately, Antibioticos is said to be undergoing financial restructuring and there is no definite date yet when Antibioticos will start producing Metabolix’s Mirel PHA.
The good news, according to Metabolix, is that it was able to sign and began delivering upon its first annual contract for Mvera B5008, a compostable film grade resin designed for consumer compost bags, can liners for commercial compostable food waste and shopping/retail bags, which represents $1m in potential revenue for the company in 2013.
Metabolix was also able to reduce costs of its PHA production process by 20% within the last 16 months. The company said it expects to launch a range of unblended and blended products with potential $50m of revenue potential.
Codexis:
Because of the termination of Codexis’ research collaboration with Shell last year, the company noted on its first quarter 2013 earnings report that year-over-year financial performance comparison will be inappropriate and instead used a quarter-over-quarter basis. It is after all difficult for the company to lose more than $350m of funding that came from Shell over several years but it looks like Codexis getting back on its feet especially with the help of its pharmaceutical business.
The company launched in March its next generation cellulase enzyme CodeXyme 4 and CodeXyme 4X, which reportedly can convert up to 85% of available fermentable sugars at high biomass and low enzyme loads making the cellulases enzymes the lowest-cost once in full production.
Codexis said it is looking to expand commercial opportunities for its biocatalysts from pharma applications into other complex chemistry applications like agrochemicals, cosmetics, food additives.
For the company’s detergent alcohols platform CodeXol, Codexis said it has achieved mechanical completion of its 1,500-liter demonstration facility in Rivalta, Italy, with its partner Chemtex. The plant is expected to start running later in the second quarter of this year. Codexis’ goal is to produce 40,000-60,000 tonnes/year detergent alcohols at a future commercial facility.
Codexis emphasized that its main initiative this year is to secure funding partners and are currently in the process of identifying potential partners for its CodeXyme and CodeXol portfolio.
Amyris:
The company’s stocks yesterday has been hit from news of class action lawsuit represented by firms Millberg LLP and Glancy Binkow & Goldberg LLP. The lawsuit alleged violations of federal securities laws stating that Amyris have misled investors in 2011 and 2012 of its ability to “produce commercially meaningful volumes of its farnesene.”
Amyris disclosed on February 9, 2012 that it no longer planned to complete expansion of one of its 100m-liter production facilities and that through 2011, the company experienced significant number of operational issues at its Biomin contract manufacturing site. This led to Amyris’ stock falling 48% from November 2011 to February 2012.
The lawsuit was filed on behalf of investors who bought shares of the company between April 29, 2011 and February 8, 2012.
Last month, Amyris reported its first quarter 2013 results stating it is on track with its production, commercialization and collaboration milestones. The company said it will further reduced its farnesene production costs by switching its in-season feedstock from raw VHP sugar crystals to concentrated cane syrup, and introducing its latest yeast strains at its Brotas, Brazil plant.
In terms of collaboration, the company expects to get $30m in funding from Total in the second quarter; it has expanded collaboration with flavor and fragrance companies Firmenich and International Flavors & Fragrances; it has has expanded its Novvi joint venture with Cosan to include renewable additives and finished lubricants; and has selected Laserson as its new European distributor for its farnesene-derived squalene.
Amyris said a leading personal care ingredient supplier in Europe committed to purchasing 9% of its annual squalene needs from the company.
The company has also begun shipping test quantities of high purity farnesene to Kuraray, which is developing polymerized farnesene called liquid farnesene rubber as alternative to rubber materials such as isoprene and butadiene in tires application. Amyris said it expects first commercial sales of farnesene for tire manufacturers later this year.
In the F&F space, Amyris expects to begin commercial production of a fragrance oil molecule for Firmenich derived from another isoprenoid and not from farnesene. The fragrance oil will be the first of several new aroma and flavor molecules Amyris expects to produce for the F&F industry.
Gevo:
The company has been seeing a steady decline in its stock price since it reported in the fourth quarter last year the temporary shutdown of its isobutanol plant in Luverne, Minnesota, due to sterilization issues.
Gevo said in its recent earnings conference call that it continues to optimize its technology and remain on-track to restart isobutanol production this year and to begin to introduce isobutanol on a commercial basis.
Some of the good news during the conference call is the favorable court ruling for Gevo this year in a patent infringement lawsuit with Butamax Advanced Biofuels’ ‘188 and ‘889 patents. Gevo also said that it has entered a contract with the Defense Logistics Agency to supply the US Army with 3,650 gallons of renewable jet fuel to be delivered by the second quarter of 2013 at a fixed price of $59/gal during the initial testing phase. This order may increase by 12,500 gallons.
