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.