What’s up with Algae now? 

Solazyme

Solazyme is a renewable oil and bioproducts company that transforms a range of low-cost plant-based sugars into high-value oils. Headquartered in South San Francisco, Solazyme’s renewable products can replace or enhance oils derived from the world’s three existing sources – petroleum, plants and animal fats. Initially, Solazyme is focused on commercializing its products into three target markets: (1) fuels and chemicals, (2) nutrition and (3) skin and personal care.

Bottom line, in February the Digest noted, “Moema’s delayed, the big volumes are now in 2016 or 2017, so Solazyme’s shifting to higher margin, lower-volume markets.” Though the big power and steam problem with Moema has since been resolved.

The stock went into freefall after this strategic shift, even after a signature partnership with Versalis was announced to commercialize Encapso dilling oils. Versalis said that its initial emphasis for Encapso will be oil and gas fields operated by its parent company Eni, which represent a significant amount of the world’s petroleum drilling activity. Encapso will be featured as part of the company’s recently launched Specialty Oilfield Chemicals product portfolio.

Those are timing issues for investors — and legitimate for their purposes, of course. But let’s focus on the larger story here — while significant ramp-up risk is out there for the long-term, investors have priced in almost zero revenue growth next year, at this stock price, if we take the Cowen & Company analysis which pegged a $4 target price to 15% growth. Which makes this an opportunity for those who see in the Eni deal the means of revenue growth that investors have discounted for the near-term.

This month, Natura Cosméticos and Solazyme announced that Natura is purchasing Solazyme’s high-performance AlgaPūr Microalgae Oil, which will be incorporated into Natura’s multiple product lines.The move follows one year of testing and product validation using Solazyme’s AlgaPūr oils, which offer “higher hydration levels, a silky but not greasy skin feel, mildness on the skin, neutral color and odor, and improved shelf life.” Natura and Solazyme have been working together for two years on several projects on joint efforts to develop new formulations with Solazyme’s microalgae oils. Specific purchase volumes were not disclosed by the partners.

In other news, in April we learned that Solazyme’s oils were instrumental in creating the world’s first algae-based, sustainable surfboard. Solazyme supplied its innovative algal oil to scientists at UC San Diego, who in turn used these sustainable oils to create an algae-based surfboard. The surfboard was publicly unveiled and presented to San Diego Mayor Kevin Faulconer just before Earth Day.

Solix

Solix Biosystems, Inc. was founded in 2006 with a vision of realizing the full commercial potential of photosynthetic microalgae.  Headquartered in Fort Collins, Colorado, Solix Biosystems has developed and deployed a robust algal growth system that is based on its proprietary extended-surface area closed photobioreactor panels.  The technology is applicable to a broad range of microalgae species.

The Company has operated its demonstration facility in southwestern Colorado for multiple years, confirming the technology’s reliability, industry leading volumetric productivity, and scalability.  Coupled with an experienced leadership team and committed international investors, the Company is now poised to exploit its technology in the development and production of multiple high-value specialty algal products for the nutrition, personal care and aquaculture markets.

In January 2014, formeer Calera president Austin Maguire was named as CEO.

Triton Algae (Triton Health & Nutrition)

Triton Health and Nutrition owns and develops the ”PhycoLogix Platform” which “improve animal and human health without the use of antibiotics or hormones, instead relying on highly effective natural proteins, activating mammal’s innate defense systems to prevent infection and reduce morbidity and mortality.”

After completing work on MAA, Triton began developing other biologic molecules to insert into the PhycoLogix Platform. Not only has Triton extended the platform to other proteins, but many additional types of complex molecules have been produced in this platform, including enzymes and metabolic products. These products are derived from multiple classes of proteins, including antibacterials, antioxidants, chelators, and calcium binders. Each of these proteins is valuable in multiple markets as well, spanning therapeutics, nutraceuticals, and cosmetics.