Amyris gives “food for thought” with Q2 revenue miss, coupled with entry into speciality ingredients. Poised for big second half? 

In California, Amyris reported Q2 reported revenue of $7.8mn, up 2% over 2014 but below consensus estimates of $15.7mn, with inflows of $35.5 million that were up 36% from same period of 2014. The company highlighted in its earnings report that it launched its bio-opioids initiative expected to enable low cost supply of active pharmaceutical ingredients to global market for chronic pain management products, “executed entry into large and fast-growing food ingredients sector via multi-year, multi-million-dollar collaboration agreement with global food ingredients supplier,” and “converted and restructured $180 million of debt and raised $25 million in a private placement in July 2015.

More on Amyris

Amyris: The Digest’s 2015 5-Minute Guide

Amyris: The Digest’s 2015 8-Slide Guide

The Company website

Analyst reaction

Raymond James analyst Pavel Molchanov noted, “After Amyris’ first years (2013-2014) with operations truly in commercial mode, 1Q15 marked the first quarter in the company’s history with operating cash flow in positive territory, and 2Q swung back into the red but also included an important debt restructuring. As before, historical reliance on partner-based R&D payments makes quarterly financials choppy. In addition to updates on the production ramp-up at the Brotas plant, the market wants to see more clarity on the pace at which Total will be scaling up its fuels JV with Amyris – a prospect with an uncertain timetable in the context of the oil and gas industry’s current period of austerity. We maintain our Market Perform rating.”

Meanwhile at Cowen & Co, analyst Jeffrey Osborne noted the “Soft Quarter, top and bottom line misses,” but predicted that Amyris is “Poised for Revenue Acceleration in 2H15 as New Products Ramp.” Osborne added that “Amyris has taken meaningful steps this quarter to position the company for growth heading into the end of the year. The company’s recently announced restructuring converted $180mn of debt in addition to raised $25mn in cash. Amyris’s more flexible capital structure will help the company to ramp up and deploy the new products it has slated for launch this year. Amyris’s Biossance Facial Moisturizer has seen traction in the cosmetics industry.

“Management is positioned to capitalize on that momentum with the launch of five additional Biossance products. The company is not only focused on cosmetic products, but is also supplying pharmaceutical ingredients to companies like Ipca Laboratories Ltd. Muck Daddy, while only in the pre-launch stage, had received high praise for its notable performance. Amyris sold its first batch of liquid farnesene rubber, which can be used to manufacture tires. Management expects this product to be launched later this year. In addition to these 2H15 launches, Amyris has also begun a bio-opioids initiative, which can help patients to manage chronic pain. 2H15 is shaping up nicely for Amyris with multiple shots on goal. We believe there could be material revenue growth leading into the end of the year as these products enter the market place.”

From Management

“During the second quarter, we continued growing our specialty ingredients business with our new collaboration partnership into the food ingredients sector and our announcement today of our entry into bio-opioids as the key ingredient into the large and fast-growing chronic pain products market,” said Amyris CEO John Melo.

“These are markets where we believe our technology platform is uniquely positioned to deliver low cost, high performing sustainable products. Our farnesene renewable product platform continues to deliver lower cost, better performing products into the personal care and industrial cleaning markets. These products are continuing to realize strong consumer acceptance and continued revenue growth evidenced by our recent successful product launches of Biossance skin care and Muck Daddy™ hand cleaner products,” continued Melo.

“We’re very pleased to have successfully transitioned from the development phase of our hydrocarbon fuel development program to the commercialization phase with our partner Total and expect to realize further simplification and focus on our high-margin & high-growth specialty ingredient and performance materials business,” concluded Melo.

 

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