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Amyris announced that it has signed an exclusive license agreement with British specialty chemicals company Croda International for the supply of sustainable squalene. Amyris' squalene is a biofermentation-based adjuvant developed using Amyris' unique Lab-to-Market technology platform. Squalene, used in adjuvants to boost immune responses, is commonly derived from shark liver. Amyris' sugarcane-derived, sustainable squalene is molecularly identical to the traditional shark source, offering a higher purity and a more predictable cost profile compared to sourcing directly from sharks. Under the terms of the agreement, Amyris will manufacture and supply squalene to Croda and Croda will license squalene technology from Amyris to market, distribute, and sell squalene as an excipient, or as an ingredient in formulated products for use in human and veterinary vaccines, drug delivery systems, or nucleic acid delivery systems. Croda will also leverage its experience with good manufacturing practices for the pharmaceutical industry and accelerate commercialization of the final packaged squalene products. In addition to an upfront payment of $4M and a future - performance based - milestone payment of $4M, Amyris will receive a share of profits generated from the sale of squalene excipients and formulated products incorporating Amyris' squalene technology for use in the vaccine field.
Jefferies analyst Laurence Alexander downgraded Amyris to Hold from Buy with a price target of 65c, down from $3.10. While new asset monetizations and the Givaudan deal address the company's near-term liquidity crunch, pulling value forward from milestones and royalty agreements also appears likely to come with concessions at the expense of 2024-2028, the analyst tells investors in a research note. In addition, the path for Amyris' ore profitability likely faces additional challenges in the second half of 2023 as the credit cycle leads to a tougher U.S. consumer environment, contends the firm.
As previously reported, TD Cowen downgraded Amyris to Market Perform from Outperform with a price target of $1.25, down from $4. Uncertainties on additional cash from divestitures and earnout advancements necessary to self fund has triggered a going concern disclosure, notes the firm, which says the lack of details to solve for the company's cash needs moves the firm to the sidelines.
The company said, "Our current outlook for the FY23, including revenue guidance provided by the company on March 15, 2023, remains unchanged. In connection with the company's ongoing strategic review, as previously communicated on April 24, 2023, the company is focused on cost efficiency, capital structure, and liquidity required to fund the business. The company updated its going concern disclosure in its quarterly report on Form 10-Q and has signed forbearance agreements with the company's lenders, Foris Ventures, LLC, Perrara Ventures, LLC, and DSM Finance B.V. relating to the maturity of an aggregate $92.5M of debt principal. The lenders have agreed to forbear from exercising any rights and remedies with respect to certain payment defaults until June 23, 2023."
Reports Q1 revenue $56.1M, consensus $53.04M. "During Q1, we were very focused on our liquidity and cost control efforts," commented John Melo, President and CEO. "We expanded the Fit-to-Win scope to all aspects of our operations and entered into a strategic review of our cost structure and liquidity plans to continue to support growth across the portfolio and achieve profitability. We have much more to do on our Fit-to-Win agenda. To fully leverage our assets and drive enterprise value, we are focused on efficiency, lowering costs, and simplifying our portfolio."
Pre-earnings options volume in Amyris is 1.7x normal with calls leading puts 7:5. Implied volatility suggests the market is anticipating a move near 20.6%, or 0c, after results are released. Median move over the past eight quarters is 13.5%.
Unusual total active option classes on open include: Amyris (AMRS), iShares Barclays 3 to 7 Year Treasury Bond Fund (IEI), Dutch Bros (BROS), SoFi Technologies (SOFI), Truist Financial (TFC), Norwegian Cruise Lines (NCLH), MGM Resorts (MGM), FuelCell (FCEL), ON Semiconductor (ON), and Wayfair (W).
Canaccord analyst Susan Anderson initiated coverage of Amyris with a Buy rating and $1.50 price target. Amyris is a consumer biotechnology company that develops and manufactures sustainable ingredients mainly for beauty and food and has also developed consumer brands focused on clean, green, and sustainability, the analyst tells investors in a research note. As consumers continue to gravitate toward clean, green, and sustainable products, a "biotech beauty boom is on the horizon," says the firm. It believes Amyris "can emerge a winner" given its sustainable molecule offering, combined with its clean consumer offering.
