Are investors ready to buy into a vision for a biofuel planet?
The Amyris globe logo
Codexis Globe Logo
A longstanding logjam in biofuel finance may be about to break, owing to the recent filing of IPO shelf registrations by Amyris and Codexis. These companies look a lot more like traditional biotech plays than their pipes and steel biorefinery project cousins. They both seek to sidestep the brutal project finance environment in the U.S., where only the most predictable, profitable and low-risk energy projects can raise debt and equity, through partnerships that leverage up their renewable energy intellectual property held in their bioenergy patent portfolios.
It’s looking right now like the future of the biofuels gold rush lies in life science engineers sporting white lab coats and working with sophisticated biotech lab equipment than in engineers with hard hats and project blueprints.
Codexis uses genetic engineering methods to create what it calls “super microbes” capable of withstanding extremes in pH and temperature.
Amyris is also a microbe play, designing enhanced yeast strains for converting sugars into biofuels.
But Greentech Media points out in an article today (These Aren’t the Greentech IPOs We’re Waiting For) that both are riding into the IPO waters with revenues from other “bridge” sources that do not fully reflect the business models they are touting, namely to rake in monies from royalties on the sale of fuel from their intellectual property, in other words their patented microbes. Most of Codexis’ revenues are from contract R&D work for Shell, while Amyris is selling ethanol from third-parties to distributors in the southeastern U.S.
It will be interesting to see whether these offerings can get the institutional support to go public. Whether they do will be a lead indicator of whether people are willing to put their capital on future hopes as opposed to proven profits. Both are yet to achieve profitability, both could be big winners if their technology scales in the market, something that won’t happen for a while, or may never happen at all.
Here are links to the shelf registrations for Codexis and Amyris.
