Verdezyne: Biofuels Digest’s 2015 5-Minute Guide

Company description

Verdezyne is a privately held industrial biotechnology company that is developing and commercializing novel genetically engineered microorganisms for use as “factories” to manufacture renewable chemicals. Verdezyne’s unique microorganisms permit greener, cleaner and more cost effective production of chemicals compared with traditional methods. The Company is commercializing its technology through partnerships with leading chemical manufacturers.

Rankings

30 Hottest Companies in the Biobased Chemicals and Materials: #13, 2014-15

The Situation

The company’s first commercial is impending.  Verdezyne and Bio-XCell Malaysia have reached an agreement to construct Verdezyne’s first commercial-scale renewable chemicals manufacturing facility in Bio-XCell’s premier biotechnology and ecosystem park in Nusajaya, Iskandar, in southern Malaysia. The multi-faceted agreement includes the 13-year, renewable lease of a 6.9-acre site, as well as a loan of approximately $75 million from Bio-XCell.

Construction is expected to commence in 2015, and the plant will be capable of producting up to 30 million pounds per year of diacids, including DDDA, and will be the world’s first bio-based plant for the production of DDDA.

Past Milestones

In December 2012, Verdezyne entered into a strategic relationship with Universal Fiber Systems, and its operating companies, Universal Fibers and Premiere L Fibers.  Verdezyne will supply its bio-based adipic acid to Universal Fiber Systems for certain exclusive fields of use.

In June 2013, Verdezyne entered into a collaboration with Malaysian Biotechnology Corporation in its assessment of Malaysia as the destination for its first biochemical production facility in the Asia Pacific Region. The collaboration is set to accelerate Verdezyne’s process to full-fledged commercialization following the success from its pilot plant that was established in November 2011, with an eye on Malaysian palm oil. Verdezyne is an industrial biotechnology company using proven and proprietary metabolic pathway engineering tools to develop unique yeast strains for cost-effective production of bio-based chemicals.

In September 2013, Verdezyne was awarded “BioNexus” status by Malaysian Biotechnology Corporation. BiotechCorp is an agency under the purview of the Malaysian Ministry of Science, Technology and Innovation. As part of its collaboration with BiotechCorp, Verdezyne expects to open a bio-based chemical production facility in Malaysia. BioNexus status is awarded to qualified companies undertaking value-added biotechnology and/or life sciences activities in Malaysia, and includes fiscal incentives, grants and other guarantees to assist growth. Verdezyne was awarded BioNexus status by the Prime Minister of Malaysia, The Right Honourable Dato’ Sri Mohd Najib Bin Tun Haji Abdul Razak.

In April 2014, Verdezyne has negotiated key terms for an investment of $48 million led by Malaysian multinational conglomerate, Sime Darby Berhad. The initiative was launched in a ceremony on Monday, April 28, at the Ritz-Carlton in Kuala Lumpur, Malaysia, attended by United States President Barack Obama, Malaysian Prime Minister Dato’ Sri Najib Razak, Verdezyne President and CEO E. William Radany, Ph.D., and Sime Darby Berhad President and Group Chief Executive, Tan Sri Dato’ Seri Mohd Bakke Salleh.

Led by Sime Darby, this $48 million financing for Verdezyne was joined by existing investors BP Alternative Energy Ventures, DSM Venturing B.V., OVP Venture Partners, and Monitor Ventures. Individually, Sime Darby was reported to invest $30 million in return for a 30 percent stake in the company, which would give Verdezyne a valuation of $100 million

Also in April 2014, Verdezyne announced that it had produced more than one metric ton of bio-based dodecanedioic acid (DDDA) using its proprietary yeast platform and downstream process. The Michigan Biotechnology Institute (MBI) and the Michigan State University (MSU) Bioeconomy Institute (BEI) worked with Verdezyne to run the bio-based DDDA process at the 4,000-liter scale. This production confirmed the scalability of Verdezyne’s process and produced polymer-grade material for potential customers and partners.

Future Milestones

Announce on adipic acid partners.

Technologies & feedstocks

Verdezyne is a product-focused company that is leveraging its technology platform to optimize the metabolic pathways, microorganisms and fermentation processes that enable economical production of renewable chemicals. Feedstocks include Plant-based oils, by-products from plant-based oil processing

Products:

Dodecanedioic acid (DDDA)

Dodecanedioic acid (DDDA) is used in the production of high performance nylon 6,12, molding resins, in addition to lubricants, adhesives and powder coatings. It is traditionally produced from butadiene via a multi-step chemical process. Verdezyne has leveraged its yeast platform for cost-advantaged production of DDDA from low cost plant sourced oil feedstocks. With an addressable and rapidly growing market of over $250 million per year, Verdezyne’s bio-based DDDA is a valuable target intermediate which will transform the nylon 6,12 market.

Sebacic Acid

Sebacic acid is an intermediate used in the production of nylon 6,10, a plastic widely used in everyday household items like toothbrush bristles and fishing line. It is also found in coatings, adhesives and polyester resins. Sebacic acid is currently produced from a limited supply of castor oil. Verdezyne has demonstrated proof of concept for cost advantaged production of sebacic acid from widely available low cost plant sourced oil feedstocks. A $600 million annual market provides a compelling opportunity for commercialization of Verdezyne’s technology

Adipic Acid

Adipic acid is a key component of nylon 6,6 and thermoplastic polyurethanes. Everyday products which contain adipic acid include clothing, footwear, furniture, carpets, automobile parts and nylon fabric. Verdezyne is currently the only company that has demonstrated production and recovery of adipic acid at pilot scale through fermentation of low cost plant sourced oil feedstocks. Adipic acid is a $6.3 billion annual market, and is currently produced from benzene, a carcinogenic petroleum fraction.

Business Model:

Verdezyne plans to build plants and produce great products.

Competitive Edge:

Verdezyne is a product-focused company that is leveraging its technology platform to optimize the metabolic pathways, microorganisms and fermentation processes that enable economical production of renewable chemicals.

Verdezyne aggressively pursues intellectual property protection for all aspects of its technology platform and product portfolio. Verdezyne’s yeast platform, including the proprietary metabolic engineering methodology “Combinatorial Pathway Engineering” and trade secret algorithms for protein optimization, allows rapid and efficacious strain development with pathways for adipic acid and other chemicals.

Website.