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For Amyris, Biofuel Market is Still on the Horizon

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Next-gen biofuel firm Amyris (s AMRS) reported its first earnings results as a public company late Thursday, and the results were as expected: given the company isn’t yet in commercial production its revenues are flat and it’s still losing money. For the three months ended September 30 2010, Amyris generated $24.23 million in revenues (for the same period in 2009 Amyris generated $23.73 million) and lost $20.61 million, up slightly from the $19.77 million from the same period a year earlier.

But more interesting is that Amyris seems to be putting a bigger emphasis on bringing its non-biofuel products to market first, before it tackles the commercial biofuel market. Amyris has long said that it will commercialize its product in 2011, but Amyris CEO John Melo said on the call that Amyris would commercialize a cosmetic product and an industrial lubricant product in 2011, and will open a biofuel plant, Grupo São Martinho, in the second quarter of 2012. Melo also emphasized a new partnership with flavor and fragrance company Firmenich, and pointed out Amyris’ 6 product categories, from consumer goods to cosmetics to lubricants, only one of which is biofuels.

Currently Amyris makes a good chunk of its revenues by selling other company’s ethanol. And in 2011 Amyris will be adding revenues from cosmetics and lubricants, but won’t be adding revenues from large volumes of biofuels for quite some time.

The bulk of Amyris’ next-gen biofuel competitors have taken the same track. Aurora Biofuels changed its name to Aurora Algae recently to reflect a shift to non-fuel markets, and algae maker Solazyme has long said cosmetics and foods were its first markets before tackling algae fuel. Solazyme has an investment from Unilever and Amyris has a deal with Procter and Gamble.

The biofuel markets aren’t moving as fast as many have expected, and to produce large volumes of biofuels, companies need to drop their prices dramatically to compete with fossil fuels. That’s the tricky part for these next-gen biofuel companies: produce biofuel at a large volume at the barebones price that fossil fuels have done for decades.

Amyris’ stock is holding steady. Amyris’ 5.3 million shares were priced at $16 in late September, below the expected range, and started trading at $16.50 on September 28. By mid-morning of its first day of trading, Amyris’ shares had jumped to as high as $17.42, but by later in the afternoon they were back down around $16.50. This morning Amyris’ shares are trading at $17.25.

Melo says Amyris has $271 million in cash to keep building its business thanks to its IPO and other fund raising. The company raised hundreds of millions from venture capitalists Kleiner Perkins, Khosla Ventures, and French oil giant Total.

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