I haven’t post…

I haven’t posted in a month, but I have a very good excuse: the weather has been really nice in NYC, and I’ve been pursuing my passion for fermented products at the city’s many biergartens. News has been somewhat light, but there have been a number of developments worth noting:

Myriant Signs Biodegradable Plastics Partnership

DaniMer Scientific has partnered with Myriant to use biobased succinic acid in the production of biodegradable polymers. The two firms have already demonstrated production of “numerous” materials containing biobased succinic acid at DaniMer’s Bainbridge product development center. DaniMer says it is constructing a large-scale production facility that will incorporate Myriant’s succinic acid into its production processes.

Myriant says the nature of the polymer will be disclosed in the near future.  Polylactic acid (PLA)/biobased succinic acid blend could be a safe bet; both companies are familiar with PLA chemistry. Myriant has already commercialized a technology that permits the production of either D(-1) and L(+) lactic acid in one biosynthesis, reducing the need for costly separation steps in PLA production, and DaniMer’s product line includes processing additives and color concentrates for manufacturers looking to switch to PLA. The announcement also closely follows news that BioAmber and NatureWorks have formed a joint venture to develop and manufacture compounded resin blends of PLA and biobased succinic acid.

Biobased acrylic acid is really hot right now.

Propylene priceyness and attractive end markets have made a acrylic acid a renewables darling. Arkema and Cargill have (separately) been working on engineering a viable pathway for several years.  Myriant announced late last month that it was “immediately” beginning scale-up of its biobased acrylic acid process so it could begin shipping kilogram-sized quantities for potential customers in the second half of 2012.

OPX Biotechnologies announced it had the 3,000-L mark for biobased acrylic acid production, a “major step toward commercialization.” The company’s organism produces 3-hydroxypropionic acid (3HPA), which can be catalytically dehydrated to acrylic acid. OPX has a biobased acrylic acid joint development agreement with Dow Chemical, the largest U.S. producer of acrylic acid (second-largest globally).  Dow and OPX are planning to begin a demonstration-scale unit in the first half of next year. If certain milestones are achieved, the two companies plan to move into a joint commercialization effort.

Meanwhile, I spoke with Metabolix CEO Rick Eno last week regarding the company’s business model after the dissolution of Telles. I will have a more in depth post on that shortly, but I bring it up now because Eno says biochemicals, including acrylic acid, will play a bigger role the revamped company’s product portfolio. The company’s uses 3-Hydroxypriopionate as a platform molecule for several C3 chemicals.

 Most execs in this space say competition is a good thing; it validates targets and technology, and can give piece of mind to customers wary of switching to chemicals with a single supply source.   But the race to commercialize biobased acrylic acid could become an interesting case study for which of the biobased chemical “musts” (scale, low-cost technology, financing, drop-in replacement chemical, best technology, experienced management team, upstream partner, downstream partner, end market pull, etc) provides the most value. OPX has the advantage of having Dow as a partner, although I suspect Myriant will begin racking up partnerships in the very near future (if the pace in which they accrued partners for succinic acid is any indication).  As a pioneer in bioplastics, Metabolix’s team has the advantage that it has successfully scaled up its fermentation—and ironed out the kinks over years of operation.

Key Partnerships Advance

Several joint ventures and partnerships advanced in the last month, a number of which includes capital projects.

DSM and Roquette Frères (Lestrem, France) have officially launched Reverdia (Delft, the Netherlands), their previously announced joint venture, which will produce biobased succininc acid using proprietary technology. Reverdia last year announced plans to build a 10,000 m.t./year biobased succinic acid at Roquette’s Cassano Spinola, Italy. The jv’s plant is expected to come on stream by the end of third-quarter 2012.

 Algae oils firm Solazyme (San Francisco) and Bunge say they have signed a definitive agreement to form a tailored oils joint venture at Bunge’s Moema, Brazil facility. The site will have an annual production capacity of 100,000 m.t. and use Solazyme’s oil production technology to convert Bunge’s sugarcane to triglyceride oils for oleochemical and fuel applications. Start-up is expected in the second half of 2013. The joint venture will operate under the name Solazyme Bunge Produtos Renováveis. Bunge and Solazyme signed preliminary agreements for the jv in August of last year.

Technip signed a cooperation agreement with  Compagnie Industrielle de la Matière Végétale (CIMV) to commercialize CIMV’s technology that converts solid biomass into hydrocarbons.  CIMV’s process passed from the pilot stage to the industrial stage through its collaboration with Technip, the company says.

Scaling Success!

BioAmber says it has produced multi-ton quantities of 1,4-butanediol (BDO), tetrahydrofuran (THF), and gamma-burtyrolactone  (GBL) from biobased succinic acid. The company used hydrogenation catalyst technology it licensed from DuPont for the production campaign, which was performed at an undisclosed toll processing facility with large-scale hydrogenation reactors and distillation columns.  Demonstrating large-scale BDO production is a key milestone for the company, which has already announced plans to build at least three biobased succinic acid facilities that include capacity to convert succinic acid to BDO. Its first commercial-scale facility is set to come online in 2013 at Lanxess’ Sarnia, ON site.

Rivertop Renewables says it has successfully scaled-up its process for making the building block chemical glucarate from the lab to pilot manufacturing.

Biolatex binder firm EcoSynthetix (Burlington, ON) says it has commissioned an 80 million lbs/year production line at its Tennessee site, bringing its total annual capacity to 235 million pounds. EcoSynthetix also brought an 80 million lbs/year production train online at its Oosterhout, The Netherlands facility in late 2011.

New Partnerships

Georgia Gulf and Galata Chemicals say they are collaborating to develop flexible, biobased polyvinyl chloride (PVC) compounds containing Galata’s biobased Drapex Alpha primary plasticizers.

BASF’s Venture Capital investment arm has invested $13.5 million in Allylix, a start-up producing flavors and fragrances from terpenes derived from biomaterials. BASF’s investment was part of an $18.2 million financing round for the company. BASF did not disclose the ownership stake it receives in exchange for the investment. Other investors in this investment round are Tate & Lyle Ventures, Avrio Ventures and Cultivian Ventures. The investment could allow BASF to broaden its use of renewable raw materials for sustainable chemical solutions in the future and leverage its competency in aroma chemicals, nutrition and cosmetic chemicals, the company says.

Avantium and Danone have agreed to jointly develop bottles made from bio-polyethylene furanoate (PEF). Avantium claims that its YXY technology generates a material with superior functional properties compared with conventional polyethylene terephthalate (PET), including potential to be lighter weight, as well as providing superior barrier and thermal properties.

Volkswagen of America has partnered with Amyris and Solazyme to evaluate emissions reductions and demonstrate the performance of biobased  diesel in TDI Clean Diesel engines. Under the terms of the deal, Volkswagen will provide Amyris and Solazyme each with a 2012 Passat and a 2012 Jetta with TDI technology and examine the effects of fuels produced by each company on the engines and on vehicle emissions for a period of 12 months. The data will aid in the ongoing advancement of TDI clean diesel technology.

Just Because It’s Cool

California researchers have produced the versatile fuel and chemical precursor isobutanol from electricity and carbon dioxide. The findings, published in the March 30 issue of the journal Science, could offer a way to use electricity as a transportation fuel without changing the current infrastructure. Researchers at the UCLA Henry Samueli School of Engineering and Applied Science genetically engineered a lithoautotrophic microorganism known as Ralstonia eutropha H16 to produce isobutanol and 3-methyl-1-butanol in an electro-bioreactor using CO2 as the sole carbon source and electricity as the sole energy input. The electricity was generated by solar panels. Theoretically, the hydrogen generated by solar electricity can drive CO2 conversion in lithoautotrophic microorganisms engineered to synthesize high-energy density liquid fuels. But the low solubility, low mass-transfer rate, and the safety issues surrounding hydrogen limit the efficiency and scalability of such processes. Instead Liao’s team found formic acid to be a favorable substitute and efficient energy carrier. “Instead of using hydrogen, we use formic acid as the intermediary,” says James Liao, UCLA’s Ralph M. Parsons Foundation Chair in Chemical Engineering. “We use electricity to generate formic acid and then use the formic acid to power the CO2 fixation in bacteria in the dark to produce isobutanol and higher alcohols.”

Biobutanol Patent Battle Continues

The United States Patent and Trademark Office (USPTO) has agreed to a second request by Gevo (Englewood, CA) to have the agency review a Butamax Advanced Biofuels (Wilmington, DE) patent in an ongoing infringement battle between the two biobased butanol producers.

According to Gevo, the USPTO has rejected all of Butamax’s patent claims covering isobutanol-producing yeast in Patent No. 7,851,188 (‘188 patent), which Butamax claims in an earlier suit is being infringed by Gevo. Executive v.p. Brett Lund says the USPTO’s decision “solidifies” Gevo’s position that the patents Butamax has asserted against Gevo are invalid and unenforceable. “This represents yet another positive development that further strengthens our position in what we see as Butamax’s unfounded assertion,” he adds.

Butamax, however, says the reexamination was granted in error, and in “clear conflict” with earlier USPTO decisions, namely an October 2011 denial by the USPTO to reexamine the ‘188 patent at Gevo’s request and a subsequent denial by the US PTO director on appeal, Butamax says. “Given the very strong and declarative order issued by a US PTO director, our foundational patent is reaffirmed. The subsequent grant of the second request for reexamination on the ‘188 patent is not consistent with this ruling,” says Paul Beckwith, Butamax CEO. “We are seeking clarification on the basis for the re-examination, we do not believe the USPTO should have considered Gevo’s second reexam request.”

The USPTO had previously agreed to reexamine Butamax Patent No. 7,993,889 (‘889 patent). Butamax filed suit against Gevo in early 2011 claiming Gevo infringed upon the ‘188 and ‘889 patents. Gevo filed a countersuit in September, alleging Butamax infringed upon two Gevo patents covering modifications to yeast that enable the organism to produce high yields of isobutanol.

Butamax says both patents remain in full force and effect during any reexamination process, which can take years to conclude. Trial is set for April 2013.

Isobutanol is a four-carbon chemical that can be sold directly in the marketplace as a solvent and gasoline blendstock, or it can be converted into butenes, the precursors for 40% of all petrochemicals and 100% of all hydrocarbon fuels. Potential specialty chemical market applications for isobutanol total 1 billion gals/year, while the annual fuel blending opportunity is as high as 40 billion gallons, Gevo says. Penetrating just 1% of the fuels market and 5% of chemicals market translates into 9 billion gals.
The global market for isobutanol to date, however, has been limited to about 500,000 m.t./year because of the high cost of petroleum-based routes.

Gevo is currently retrofitting an ethanol facility at Luverne, MN to produce 18 million gal/year isobutanol. Start-up is expected in the first half of 2012. Another 38 million gal/year is expected to be online in late 2012 at a retrofitted facility at Redfield, SD.

Butamax, a DuPont and BP joint venture, expects to deploy its first retrofit project in 2014 at a 50 million gals/year ethanol plant at Lamberton, MN. Beckwith recently told CW he is confident Butamax will emerge victor the victor. “Our position—and with very sound basis—is that we were the inventors, we did the pioneering research, and we have received key patents,” he said . “We are very confident that we will be successful. We wouldn’t have filed this suit unless we were clearly convinced infringement was occurring.”

Amyris Secures $83 Million, Genomatica and Mitsubishi Chemical Advance BioBDO Discussions

Setbacks at some of the more established biobased chemical and fuel firms seemed to cast a pall over February (see earlier posts), and I was prepared for more bad news as I dragged myself into the office. I was pleasantly surprised, however, to see several positive developments sitting in my inbox this morning:

• Just two weeks after Amyris CEO John Melo ate crow and admitted the company was struggling to maintain peak yields (and would ratchet back aggressive capacity expansion targets), he announced a $58.7 million private placement of common stock. Existing investors Temasek Holdings, Total Gas & Power, SAS and Naxyris were included, as well as new investor, Biolding Investment. Amryis gained 7%, to close at $6.44. The company also secured $25 million in convertible debt due in 2017. Amyris had said it would need to raise cash after admitting it would not reach its 2012 guidance of producing 40-50 million liters of farnesene and becoming cash flow positive. I had hoped to hear an updated guidance at last week’s Clean Technology Conference (hosted by Jefferies), but Amyris canceled at the last minute.
• Mitsubishi Chemical agreed to exclusively negotiate definitive agreements for a joint BDO commercial operation with Genomatica. The companies signed a MOU in April of 2011 to study the viability of deploying Genomatica’s bio-BDO process in Asia; however, Mitsubishi Chemical’s joint venture with PTT signed a separate deal with BioAmber to produce succinic acid and BDO for their PBS project. But it looks like Mitsubishi, one of the largest BDO producers globally, remains interested in Genomatica’s technology to supply BDO for its PBT and PTMG production units.
• Arkema and Elevance Renewable Sciences have agreed to codevelop specialty polymers made from 9-decenoic methy esters produced at Elevance biorefineries. The news closely follows Arkema’s $365-million acquisitions of biobased polyamide-10,10 producer Hipro Polymers and castor-oil derived sebacic acid producer Cascada Biomaterials.

I should probably get used to the fact that not all news in the space will be job-creating, pollution-busting, disruptive technologies. The general consensus is  financing will get more competitive in 2012 and players in the space will consolidate.

Codexis Interim CEO: Management and Partnerships Remain Sold

Codexis’ interim CEO Peter Strumph , speaking at Jefferies’ Clean Technology conference today in New York, took the opportunity to dispel rumors circulating following the recent resignations of CFO Bob Lawson and CEO Alan Shaw, insisting “many threads of continuity” still exist among the company’s management and the departures do not indicate a breakdown in Codexis’ key enzyme partnership with Shell.

Strumph acknowledged concerns from investors over the proximity of the two resignations, but says there is no connection. Lawson left to accept a position at a private software company, while Shaw’s departure “was more prospective by the board of directors,” he said.

Codexis shares plummeted 19% Monday following Codexis’ announcement Friday that Shaw, who had been with Codexis since it was spun out of Maxygen in 2002, had stepped down. Lawson’s resignation was announced in late January, although he is staying on until the annual report is complete.

Rumors that the turnover indicates delays in the roll-out of biocatalysts developed under a long-standing biofuel collaboration agreement with Shell—set to expire this year—are also false. Nothing changed in the Shell relationship to provoke the board, Strumph said. “Our interests and Shell’s interests are very aligned,” he added. “Our work is nearly but not completely done, and there is a shared interest in moving the project forward.”

Shell and Codexis first signed the collaboration and licensing agreement in 2006, and over the years Shell has both committed significant funding to biocatalyst development and increased its equity stake in Codexis to 15.7% (which was placed into Shell’s Raizen sugarcane ethanol jv with Cosan in June).

While Shell is not the only player on Codexis’ dance card (a recent agreement with Mossi & Ghisolfi subsidiary Chemtex gives Codexis exclusive access to the highly regarded Proesa technology for the production of biobased detergent alcohols), royalties from the partnership are substantial. For the nine months ended September 30, 2011, Codexis posted $47 million in revenue from the agreement, accounting for 52% of the company’s total sales.

Executive Exodus Indicates Trouble at Codexis?

Codexis fell 19% today after several analyst downgrades and the announcement that long-standing CEO Alan Shaw was stepping down. Shaw, who has been with Codexis since its founding and been CEO for a decade, is leaving to “pursue other interests,” according to the release, although market watchers suspect pressure over delays in the company’s cellulosic biofuel joint venture with Shell and poor stock performance played a role.

Shaw’s departure closely follows CFO Bob Lawson’s decision to step down once the company’s annual report has been filed.

In 2010, Shaw led Codexis through what would be the first in a string of biochemical/biofuel initial public offerings (IPOs), although the stock has fallen 70% from its $13/share offer price. 

Struggles at Amyris, news that energy crop maker Ceres had slashed its IPO price (then delayed the offering altogether), and now a management exodus at Codexis threaten to cast a pall over biofuel/biochemical prospects in 2013. 

Codexis senior v.p. and CBO Joseph Sarret will speak later this week at Jefferies Global Clean Technology Conference, and will hopefully be able to address reported project delays.

‘Humbled’ Amyris Scales Back Expansions Plans

Synthetic biology firm Amyris (Emeryville, CA) says operational challenges have forced it to re-evalutate its commercialization strategy and scale back ambitious 2012 production targets for biobased farnesene. The company will focus on higher-value opportunities in specialty chemicals for the versatile C15 hydrocarbon, leaving higher-volume base oils and biofuels efforts under previously-established joint ventures with Total and Cosan.

“2011 was a year of accomplishment and a year of learning, CEO John Melo told investors on a recent conference call. Amyris opened three facilities in 2011 to produce initial volumes of farnesene and began commercial sales of derivatives squalane and diesel. However, the company has found over recent months that “it takes time to translate from peak yield levels in the lab to maintaining those yields over longer operational periods in the field,” Melo said.

Because of this, the company will not follow through on its previously announced expansion at Antibióticos’ León, Spain facility, and instead focus solely on a production project at Paraíso Bioenergia’s São Paulo, Brazil site.

Amyris will also focus on operational quality versus production quantity, Melo added. “We need to retain flexibility in how we optimize between production volume, cost, customer demand and cash, rather than driving to deliver a predetermined production volume.” The company had previously set a target of producing 40-50 million liters of farnesene in 2012—considerably higher than the 1 million liters it has produced to date.

Melo also said the company will no longer achieve its previous forecast of positive cash flow from operations in 2012 and is looking to raise equity financing to cover the gap.

However, Melo touted the company’s long list of development partnerships in polymers, cosmetics, and flavors & fragrances, and says collaborations with Total and Cosan are continuing to develop successfully. “I’m proud of what we have accomplished through our team and our partners and humbled by the lessons we have learned.”

Considered one of the frontrunners of biobased chemical development, Amyris raised $85 million in an October 2010 initial public offering. Shares have since fallen 60%, to $6.41.

Melo is speaking at Jefferies 2012 Global Clean Technology Conference next week in New York, and will hopefully have more details about revised revenue and production targets.

 

Cargill Forges Ahead in Bioplastics

Barely a month after ADM pulled out of the Telles joint venture, Cargill announced it is looking to add a bioplastics compound to its portfolio. The company’s NatureWorks PLA-based bioplastic subsidiary—itself plagued by the slow adoption rates, pricey application development efforts, and a revolving door of equity partners—annonuced today it has formed a joint venture with succinic acid maker BioAmber to develop and manufacture compounded resins made from PLA and polybutylene succinate (PBS).

The scope of the investment was not disclosed or even alluded to, and it is likely far less than the $300 million spent to build its Blair, NE PLA plant and the $500 million reportedly spent on application development. So while it’s probably not accurate to say the company is doubling down in bioplastics, it’s encouraging to see them not only forge ahead with PLA but invest to broaden their product range.

Of course, an $150 million equity investment from PTT Chemical, an affiliate of PTT Group with a pre-existing relationship with BioAmber and a drive toward PBS (a biodegradeable polymer made from succinic acid and 1,4-butanediol, or BDO) probably helped. Cargill announced last year that PTT Chemical would become its latest partner in NatureWorks (following earlier exits by Dow Chemical and Teijin). The deal, which would give PTT Chemical a 50% stake in NatureWorks, is still pending regulatory clearance.

BioAmber was previously chosen to supply succinic acid to a PBS production site at Map Pha Tut planned by PTT MCC Biochem (Bangkok)’s a  PTT Group/Mitsubishi Chemical jv. The PBS plant is expected to be commissioned by 2014. BioAmber also plans on adding capacity to convert succinic acid to BDO using technology licensed exclusively from DuPont. BioAmber also had a pre-existing relationship with Cargill; the two have been collaborating to develop a next-generation yeast that will lower production costs and capex, boost succinic acid yields, and enable the use of ligno-cellulosic sugars.

Speaking of bioplastics, I should have more information about Metabolix’s strategic direction following news ADM was pulling out of Telles. Metabolix CEO Rick Eno will be speaking at Jefferies Global Clean Technology Conference next week.

Link

https://cwrenewables.wordpress.com/2012/01/13/adms-abrupt-exit-leaves-uncertain-future-for-pioneering-bioplastic-firm/

Biobased Chems Summit: Money Talk

The Biobased Chemicals Summit in San Diego wrapped up yesterday, and the topic that speakers and attendees kept circling back to was money. Is is available, how does my company get it, where should we invest it? I still have a mountain of material to sift through, but I pulled out a couple of key points in the interim:

• It’s a radically different IPO market than a year ago, and the outlook for those in the pipeline are uncertain.

A year ago, biochemical companies like Gevo and Amyris launched at the high end of their offer range and did well (initially at least; Amyris was at one point up 100% over its offer price). Companies that maybe would have waited to hit a milestone or two before registering raced to file, either to ride that early momentum or beat competitors (who could fail and forever tarnish public perception).

Speakers said that while it is too early to tell how successful those IPOs in the pipeline will be, what is certain is that they will have a tougher go of it than Gevo and Amyris. Investors now have the upper hand. Even in the overall IPO market, offer prices have been below range. This is likely to continue, particularly given ongoing macroeconomic uncertainty.

Oh, and IPO money is expensive. Bankers advise against using those funds as the majority financing for commercial assets.

• The dumb money is gone.

The biochemical industry has learned from previous mistakes and begun to mature. Investors have as well, and that means companies are under intense scrutiny and have to do all they can to derisk.

“Investors are looking for partnerships, joint ventures, a capital-light strategy, and off-take agreements,” says Sundeep Patel, managing director/investment banking at Barclays Capital (London) . Investors are wary about any uncertainty surrounding feedstock access, potential dependence on third party agreements, and high capital expenses.

Viable companies also have to demonstrate differentiated, protected technologies with a sustainable price advantage over time. An experienced management team is  also key, as is a  strong balance sheet.

But money is still available; LanzaTech announced earlier this week that it had raised $56 million in a Series C round.

• You better have all your ducks in a row.
  

Anyone speaking about a biochemical displacing a petrochemical in the market will provide a litany of attributes needed to succeed, the most important being ‘Don’t be new and definitely don’t be more expensive.’ But that doesn’t fill two days of panels, so many of the more established firms offered additional advice:

Don’t rely on subsidies to be cost-competitive. “The government giveth, and the government taketh away.”

Ink committed off-take agreements,  showing potential investors that, if the first plant gets build, there are customers. Gevo has sold most of its initial isobutanol capacity to Sasol; Myriant’s CEO told attendees that most of its Lake Providence, LA succinic acid plant is sold out. Neither plant is online yet.

Don’t develop product-driven markets, develop market-driven products. The chemical industry wants biobased versions of familiar chemicals. If you’re producing a biobased chemical that can either be derivatized into a chemical already used in large-scale chemical manufacturing or can replace such a chemical—great. If your organisms/chemocatalytic process can produce it directly—-even better. For example, biobased succnic acid can replace petroleum-based succinic acid. It can be used in place of adipic acid in polyurethane production (no extra processing needed). Or it can be converted to 1,4-butanediol, itself a chemical with a large market in diverse applications.

Find a partner that brings something you need to the table, like downstream market knowledge. This may have felled bioplastics like PHA. Telles, a jv dissolved earlier this month, consisted of an agribusiness firm and a biotech start-up. Plastics manufacturers understand that thermoformers are cost-conscious and reluctant to switch materials Companies like Genomatica are partnering along the supply chain to bring in the competencies is needs; it has gained feedstock access knowledge through its partnership with Tate & Lyle; scale-up expertise from its deal with Mitsubishi, and understanding of downstream markets for packaging applications through its Novamont jv.

ADM’s Abrupt Exit Leaves Uncertain Future for Pioneering Bioplastic Firm

So, we need to talk. This isn’t working out. I’m taking the $300 million commercial-scale plant, you can take the intellectual property and vacation photos.

Archer Daniels Midland (ADM) told Metabolix earlier this week that it was terminating their Telles bioplastics jv−and ending production on its behalf−effective, February 8, 2012. The business isn’t delivering sufficient results now, nor is it expected to deliver sufficient results within a reasonable timeframe, ADM says.

Metabolic executives, clearly surprised and saddened, told analysts on a conference call earlier today that the company is evaluating alternative business models, but will be unable to meet customer demand in the near-term. All Metabolix technology that was used in the joint venture, including intellectual property rights, will revert solely to Metabolix.

Telles was formed in 2006 to produce resins based on polyhydroxyalkanoate (PHA), and  a 110 million lbs/year PHA facility was brought online at Clinton, IA in late 2009. But path to commercialization was much more complicated than anticipated. The plant took more money and time to build than expected. Thermoformers were reluctant to make the necessary investments to switch to PHA. The recession hit, and the green consumers the companies expected would create a market pull for their product became less willing to pay the green premium.

Bioplastics was largely uncharted territory.  Only Cargill’s Natureworks polylactic acid (PLA)  jv proceeded Telles, and suffered similar growing pains. At $500 million, market development for Cargill’s resin was nearly twice as expensive as the cost of developing the technology and building the  first plant. Cargill’s partners also had trouble stomaching ballooning costs and slow adoption. Cargill and Dow Chemical formed the 50-50 jv in 1997. Dow exited the venture in 2005, saying the unit had not performed as expected, and sold its stake to Cargill. Teijin bought a 50% stake in 2007, but exited the jv in 2009 amid poor economic conditions and portfolio restructuring. PTT Chemical (Bangkok) bought a 50% stake in NatureWorks in October, for $150 million.

While the innovative and entrepreneurial spirit behind PHA and PLA is often praised, the most recent class of biochemical/bioplastic firms appear to shun any molecule that’s not a drop-in replacement with large, existing markets. And if you’re not at price parity with the petroleum-based counterpart, don’t even bother pitching it.

If there’s any silver lining to be had here, it’s that Metabolix can now explore new business models, perhaps strategies that target smaller-volume,  but higher-value markets. The company is also in a reasonably good cash position, and is not obligated to pay anything to ADM. Considerable investments have already been made in application development for PHA, so the company won’t be starting from square one with customers. The company also has a DOE biofuels grant for fuels produced from switchgrass, and a C4 chemicals development deal with Korean firm CJ CheilJedang.

Today’s news was disappointing. I hope Metabolix is down, but  not out for the count.