That translates to the price of price of 14 shares of the company’s stock, which is probably the reason they’ve been plummeting since the company made the announcement.
As we write, the stock is selling for $2.02, one cent under the morning’s opening trade.
From Kevin Bullis of MIT Technology Review:
Shortly after it was founded, Amyris had set out to make biofuel using genetically modified organisms and simple chemistry to turn sugar into a type of oil that’s similar to diesel. It had some success making bio-derived biodiesel for buses in Brazil. But the chemicals produced by the company’s microörganisms can be used for other things as well, such as moisturizers and fragrances, that sell for higher prices.
[Tuesday] night, the company said the average selling price for all its products is $7.70 per liter, or $29 per gallon, far higher than the price for petroleum-based diesel. (In Brazil, diesel costs about $1 per liter.)
The average price—which is propped up by the price it can charge for moisturizer—is higher than what Amyris sells bio-derived biodiesel for. (It didn’t disclose the exact price for the fuel.) But even $7.70 per liter isn’t enough for the company to break even.
Amyris is still producing biodiesel, in limited amounts, the company said last night. It is also still working on joint ventures that could allow it to build large plants for making fuels at some point in the future, but first it will try to make its moisturizer and fragrance business profitable. Meanwhile, it’s looking to raise new money this year, mainly through partnerships and collaboration agreements, to keep itself afloat.
This isn’t the first time Amyris has failed to deliver on promises of cheap stuff made with GMO bugs.
The corporation was originally created by UC Berkeley bioengineer and serial entrepreneur Jay Keasling with bucks from Bill Gates to deliver a vastly cheaper version of the antimalarial drug artemisinin.
The bug makes the drug, but at the same price as the kind derived from the wormwood plants [artemisia] farmed by thousands of subsistence farmers in Africa and Asia — and that’s when it’s sold for no profit by Big Pharma’s Sanofi Aventis.
End of Total contract would cost Amyris a fortune
We also discovered a little item buried deep in a filing with the Securities and Exchange Commission, a 23 November 2011 amendment to the contract between Amyris and French oil giant Total, their principal corporate partner in developing fuels from Amyris’ genetically modified microbes.
The joint venture agreement ends 31 December 2013, and if Total decides not to renew, Amyris would be left with an obligation to pay the company $150 million.
Here’s the language that caught our eye:
TOTAL Option Upon the Renewable Diesel Project Completion Date
As used herein, “Renewable Diesel Project Completion Date” shall be December 31st, 2013 or any other date as determined by the Management Committee to achieve the End-Project Milestone (as defined in the Renewable Diesel Development Project Plan).
A. For a period of 90 days following the Renewable Diesel Project Completion Date, TOTAL shall have the option, exercisable in its sole discretion, to notify AMYRIS in writing that TOTAL does not wish to pursue the production or commercialization of the Renewable Diesel Product (such option, the “TOTAL Royalty Option”). Provided TOTAL timely notifies AMYRIS of its decision to exercise the TOTAL Royalty Option (such date of notification, the “Royalty Notification Date”), then the following provisions shall apply:
B. Effective as of the Royalty Notification Date, all of TOTAL’s rights in or to any and all Collaboration IP developed during the performance of the Renewable Diesel Development Project Plan (hereinafter, the “Diesel Collaboration IP”) shall terminate and TOTAL shall assign to AMYRIS all right, title and interest of TOTAL in and to Diesel Collaboration IP. TOTAL shall, at AMYRIS’ reasonable expense, execute all documents and take all actions reasonably requested by AMYRIS from time to time to perfect AMYRIS’ title to and ownership thereof. Prior to the Royalty Notification Date, TOTAL shall not assign or transfer to any of its Affiliates or third parties any such right, title and interest so as to ensure that AMYRIS obtains the benefit of this provision.
C. In consideration of the benefits AMYRIS may derive from the technology and intellectual property developed during the Renewable Diesel Development Project and TOTAL’s assignment of its right, title and interest in and to the Diesel Collaboration IP, commencing on the Royalty Notification Date and ending on the date when AMYRIS has paid TOTAL an aggregate amount equal to $150,000,000 (the “Aggregate Royalty Amount”), AMYRIS shall pay TOTAL a royalty of twenty percent (20%) of Net Income (as defined in the Collaboration Agreement) on a yearly basis derived from (i) any licenses under or sales of the Diesel Collaboration IP by AMYRIS or any of its Affiliates to third parties, but not to the extent such licenses or sale relate to the use of the Diesel Collaboration IP for the Initial Non-Exclusive JV Products, and (ii) the Net Income (as defined in the Agreement) of AMYRIS on a consolidated basis other than that derived from a Product resulting from the Biojet Development Program and the Non-Exclusive JV Products (the “TOTAL Diesel IP Royalty”). In addition, in the event AMYRIS sells all or substantially all of its renewable diesel business prior to the time the time the Aggregate Royalty Amount has been paid, AMYRIS shall pay TOTAL fifty percent (50%) of the net proceeds from such sale up to the then-remaining unpaid amount of the Aggregate Royalty Amount.
For clarity, Net Income shall be calculated in accordance with generally accepted accounting principles consistently applied by AMYRIS and in the event that the foregoing Net Income is negative for a given fiscal quarter, AMYRIS shall not be required to pay any royalty for such fiscal quarter).
D. AMYRIS shall provide TOTAL, upon reasonable advance notice, all information, and access to all advisors and representatives of AMYRIS, as reasonably requested by TOTAL in order for a third party auditor appointed by TOTAL and reasonably acceptable to AMYRIS, and subject to mutually agreeable customary confidentiality restrictions, to verify all calculations and amounts paid pursuant to this Section 12 and to report any inaccuracies to TOTAL.
E. Notwithstanding anything in this Section 12, any JV Company established with regard to JV Products other than Renewable Diesel Products will continue to operate following any exercise of the TOTAL Royalty Option.
F. The TOTAL IP Royalty payments shall cease from the date when the sum of all such TOTAL Royalty payments equals $150,000,000.
G. Notwithstanding anything in this Section 12, beginning on the sixth year from the Royalty Notification Date, the aforementioned royalty in section C (ii) shall be additionally derived from the Non-Exclusive JV Products.