Tuesday, April 06, 2010

Old Crop Goes Synthetic

In December 2009, the Department of Energy awarded Amyris Biotechnologies, Inc. (private) a $25.0 million grant to build a pilot plant that will produce diesel and petrochemical substitutes through the fermentation of sweet sorghum. It is not likely to be difficult to come up with the required $10.5 million in matching funds. At the end of last month, Temasek Holdings invested $47.8 million into Amyris.

The verdict is still out on whether Amyris is good at producing renewable anything, but the Company appears to be fairly adept at raising money. One of the Company’s most recent press releases brags that Amyris has raised $244 million over the last seven years from the likes of Kleiner Perkins, Khosla Ventures, and the Stratus Group.

Amyris is a self-described “renewable products” company and claims they can have products for sale in the marketplace by 2011. One plus for Amyris is that its process produces a stable liquid that can be distributed under cold temperature conditions.

Amyris “made its bones” far from the renewable fuel market. The Company previously developed an anti-malarial treatment called artemisinin. Early molecular research on artemisinin paved the way for the so-called “synthetic biology” that under pins Amyris’ renewable fuel processes.

With serious venture capital behind it, Amyris is likely on a path to a public IPO. That said, do not expect a registration statement any time soon. Its goal to launch a commercial product in 2011 notwithstanding, Amyris appears to be at a very early stage.

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.

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