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Amyris, Inc. (NASDAQ: AMRS) provides various alternatives to a range of petroleum-sourced products worldwide. The company uses its industrial bioscience technology to design microbes primarily yeast, as well as to convert plant-sourced sugars into renewable ingredients.
On March 15, 2018, AMRS released its Q4 2017 financial results showing significantly higher revenues. The earnings release contained the following highlights:
- Q4 2017 GAAP revenue of $80.6 million, compared with GAAP revenue of $22.2 million for Q4 2016
- Q4 2017 operating income of $33.0 million compared with Q4 2016 operating loss of $34.5 million
- Q4 2017 GAAP net loss attributable to common shareholders of $8.0 million, or $0.17 per basic and diluted share, compared with a net loss of $48.8 million, or $2.67 per basic and diluted share for Q4 2016
- Non-GAAP net income of $27.0 million, or $0.61 per basic and diluted share for Q4 2017, compared with a Non-GAAP net loss of $36.0 million, or $1.98 per basic and diluted share for Q4 2016
- Fiscal year 2017 total GAAP revenue of $143.4 million, compared with $67.2 million for 2016 and $34.2 million for 2015 (105% three-year revenue cumulative annual aggregate growth)
- Total GAAP revenue outlook of approximately $185-$195 million and expects more than $10 million of positive EBITDA for 2018
The AMRS brand of renewable farnesene, a long-chain, branched hydrocarbon molecule that they manufacture through fermentation using engineered microbes. Farnesene derivatives are sold in hundreds of products as nutraceuticals, skin care products, fragrances, solvents, polymers, and lubricant ingredients. In 2014, AMRS began manufacturing additional molecules for the flavors and fragrance (F&F) industry; in 2015 they began investing to expand capabilities to other small molecule chemical classes beyond terpenes via a collaboration with the Defense Advanced Research Project Agency (DARPA), and in 2016 they expanded into proteins.
AMRS has worked to create microbes that produce molecules from sugar or other feedstocks at commercial scale. This platform has been used to design, build, optimize, and upscale strains producing five distinct molecules, leading to more than 15 commercial ingredients used in over 500 consumer products.
The company’s direct-to-consumer sales of the Biossance product line are continuing to grow through their Sephora sales channel as well as online sales from their website Biossance.com. Biossance was initially launched with Sephora on their online store where it was the most successful brand launch for Sephora.com. Biossance products are now sold in 359 Sephora stores.
Recent Events
February 8, 2018. Amyris announced that Aprinnova, its joint venture with NIKKOL GROUP, has launched pharmaceutical grade Neossance® Squalane USP. This new material meets the industry standards required by the United States Pharmacopeia (USP) and the National Formulary (NF) for drug actives and pharmaceutical excipients, which are used by regulatory agencies and manufacturers to ensure products have the appropriate identity, quality, purity, and consistency. As a result, Aprinnova is now able to supply these industries with FDA-regulated sugarcane-derived squalane, which was previously unavailable to these markets since shark-derived squalane was the only source reference in the regulatory monograph for squalane. https://finance.yahoo.com/news/amyris-aprinnova-joint-venture-launches-133000840.html
February 1, 2018. Biossance™, the consumer beauty brand from Amyris, Inc. (AMRS), announced its innovative line of clean beauty products will be available beginning this month, and in over 60 Sephora locations across Canada by mid-month. The brand’s success has resulted in an earlier than planned expansion outside of the U.S., with additional market growth opportunities being pursued for later this year. https://finance.yahoo.com/news/amyris-biossance-starts-2018-over-133000073.html
Products
Malaria Treatment Amyris’s first major milestone came in 2005 when, through a grant from the Bill & Melinda Gates Foundation, their scientists developed technology capable of creating microbial strains to produce artemisinic acid — a precursor of artemisinin, an effective anti-malarial drug. Artemisinin-based Combination Therapies (ACTs), are recommended by the World Health Organization (WHO) as the primary first-line treatment for malaria and have saved thousands of lives, especially among children.
Nutraceuticals Amyris first entered this market via a significant supply agreement in 2016 for Biofene® to be converted to Vitamin E. And, today, the disruptive partner applications for our technology within the nutraceuticals sector have expanded with key collaboration and supply agreements with Royal DSM for animal and human nutrition.
Cosmetics cosmetic products are plant-derived, renewably-sourced and ECOCERT-approved. To make these innovative products they convert renewable sugarcane into high quality cosmetic ingredients, ensuring supply, price and composition for customers around the world.
Flavors AMRS’ success in commercially scaling and producing fragrance molecules within the Flavors and Fragrances market has created an emerging opportunity into the area of flavors.
Fragrance Utilizing their biotechnology platform and industrial fermentation processes, they convert plant sugars into cost-effective, sustainable F&F ingredients at scale in serving the current and future needs of these partners and their global customers.
Lubricants Novvi is leveraging Amyris’s leading synthetic biology platform to produce targeted hydrocarbon molecules from plant sugar as well as Cosan’s feedstock capabilities and supply and distribution infrastructure to pursue the large global market for lubricants. In June 2016, American Refining Group committed to an equity stake in Novvi and, later in December 2016, Chevron, as well, enabling market access and accelerating revenue growth of Novvi’s high performance, sustainably sourced, renewable lubricant products.
Fuels Building on the Biofene® hydrocarbon building block, the renewable fuels they developed with Total, one of the leading energy companies in the world, deliver energy density, engine performance, and storage properties comparable to the best petroleum fuels.
Polymers In the area of liquid rubber, commercial tires marketed by Sumitomo Rubber Industries, Ltd. under their Dunlop brand utilizing their renewable liquid-farnesene rubber (LFR) developed with Kuraray launched in early 2017. This marked an industry first for liquid farnesene rubber to be used in car tires and this unique additive has boosted the tire’s performance.
About
Amyris, Inc. provides various alternatives to a range of petroleum-sourced products worldwide. The company uses its industrial bioscience technology to design microbes primarily yeast, as well as to convert plant-sourced sugars into renewable ingredients. It produces and sells Biofene that converts to squalane, which is used as an emollient in cosmetics and other personal care products; and natural oils and aroma chemicals for the flavors and fragrances market. The company also provides renewable solvents, polymers, and lubricants for industrial markets; Biofene ingredients for nutraceuticals and vitamins market; and renewable fuels for transportation fuels markets. It has a collaboration partnership with Total S.A. to produce and commercialize Biofene-based diesel and jet fuels. The company was formerly known as Amyris Biotechnologies, Inc. and changed its name to Amyris, Inc. in June 2010. Amyris, Inc. was founded in 2003 and is headquartered in Emeryville, California.
Q4 2017 operational highlights
Expanded strategic alliance with DSM through the sale of Amyris Brasil Ltda. and established long-term manufacturing partnership for Amyris’s high-volume products.
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.
Introduced pharmaceutical grade Neossance® Squalane USP through our Aprinnova joint venture opening new markets among FDA regulated products such as topical and dermal applications, including therapeutic skin creams and ointments.
Announced the award of two grants, valued in aggregate at approximately $25 million, to accelerate innovation and to enable the company to further extend its leadership position in the industrial biotechnology sector. These grants are focused on furthering Amyris’s artificial intelligence (AI) and information platform and for the development of a novel isoprenoid pharmaceutical application.
Analysts
Jan-25-18 Initiated B. Riley FBR, Inc. Buy $8
Insiders own 36.65% of the outstanding shares. Temasek Holdings Ltd. And Vivo Capital LLC each hold positions over 5% of the outstanding shares.
The consensus estimate for 2018 revenues is $187.25 million.
Financial review Q4 and FYE 2017
Fourth Quarter 2017
GAAP revenue for the fourth quarter 2017 was $80.6 million, compared with $22.2 million for the fourth quarter 2016. The company recognized approximately $57.3 million of license and royalty revenues from the multi-element license and value share agreement with DSM.
Sales, general and administrative expenses were $18.8 million for fourth-quarter 2017 compared with $12.7 million for the fourth quarter of 2016.
GAAP net loss attributable to Amyris common stockholders for the fourth quarter of 2017 was $8.0 million, or $0.17 per basic and diluted share, compared with a GAAP net loss attributable to Amyris common stockholders for fourth-quarter 2016 of $48.8 million, or $2.67 per basic and diluted share
Fiscal Year 2017
GAAP revenue for fiscal year 2017 was $143.4 million, compared with $67.2 million for 2016. License and royalty revenue contributed $64.5 million, compared with $15.8 million for 2016 primarily due to the DSM transaction
Fiscal 2017 selling, general and administrative expenses were $63.0 million, up from $47.7 million for 2016.
GAAP net loss attributable to Amyris common stockholders for fiscal year 2017 was $98.4 million, or $3.05 per basic and diluted share. Non-GAAP net loss, excluding non-cash items, was $72.1 million, or $2.59 per basic and diluted share and compared to a non-GAAP net loss for 2016 of $119.5 million, or $7.52 per basic share.
Cash, cash equivalents, short-term investments, and restricted cash at December 31, 2017 was $60.1 million, compared with $32.9 million at December 31, 2016.
Stock influences and risk factors
Continued improvement in the company’s top line could be a stock catalyst;
Wider acceptance of the AMRS product line, and technology could impact the stock’s performance;
Their manufacturing operations require sugar feedstock, energy and steam, and the inability to obtain such feedstock, energy and steam in sufficient quantities or in a timely manner, or at reasonable prices, may limit their ability to produce products profitably, or at all;
The concentration of capital stock ownership with insiders will limit the ability of other stockholders to influence corporate matters and presents risks related to the operations of significant stockholders.
Stock chart
In early trading on March 16, 2018, AMRS shares were at $6.82 (+22.22%).
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