Total expands financial commitment to Amyris; French oil major doubles down on renewable diesel, jet fuel

August 3, 2012 |

In California, Amyris announced the signing of an amendment to its collaboration agreement with Total. Under the enhanced collaboration, Total reaffirmed its commitment to Amyris’s technology and dedicated its $82 million funding budget over the next three years exclusively for the deployment of Biofene, Amyris’s renewable farnesene, for production of renewable diesel and jet fuel. Total’s commitment includes a $30 million payment to Amyris this year.

In related news, Amyris announced a Q2 loss of $46.8 million on revenues of $19.0 million, with revenues down from $32 million for Q2 2011.

Analyst opinion:

At Cowen & Company, Rob Stone and James Medvedeff led with “Progress On Opex; Cash Needs, Production Cost Remain Hurdles.” They added that the “Q2 loss was 5% wider than St, as much lower revenue and wider gross loss were partially offset by lower expenses. An amended agreement with Total provides incremental funding, but additional financing will be needed this year. While gross loss narrowed Q/Q, we estimate bioproduct margin will remain negative until internal production at Paraiso ramps in 2013.”

At Piper Jaffray, Mike J. Ritzenthaler led with “Total Agreement Infuses More Cash, Next 12 Months of Burn is Critical; Neutral” and added “Amyris burned $29 million in 2Q. Our view is that debt capacity is approaching its limits, thus we are expecting funding to take the form of partner collaboration…We believe that commercialization and management credibility headwinds will likely limit any upside in stock performance.”

At Raymond James, Pavel Molchanov wrote, “No surprises in 2Q12. Compared to the very messy 1Q, 2Q was better, though not great…As expected, revenue declined, reflecting the winding down of the non-core fuel marketing business…The 50 million liter Paraiso plant has reached mechanical completion and is in the process of commissioning, but the timeline for ramping up output is much less clear….Building on their long-standing partnership, Amyris and French oil major Total (TOT) are amending their diesel collaboration to firm up and accelerate R&D funding.”

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