Amyris Inc. (AMRS), the U.S. biotechnology company 21 percent-owned by Total SA (FP), reached a record low after reporting a fourth-quarter loss that surpassed analysts’ estimates and JPMorgan Chase & Co. cut its price target by two- thirds.
Amyris fell 11 percent to $5.73 at the close in New York, the lowest since the company began trading in September 2010.
The company, based in Emeryville, California, posted a net loss of $59.4 million, or $1.30 a share, it said in a statement yesterday. Analysts had expected a loss of 80 cents, the average of 7 estimates compiled by Bloomberg.
The company incurred “substantial production costs” during the fourth quarter that will fall as the company increases its output, Chief Financial Officer Jeryl Hilleman said yesterday in a conference call.
That growth is coming slower than expected, Jeffrey Zekauskas, an analyst with JPMorgan Chase in New York, wrote in a research note today. He cut his December 2012 price target for the shares to $6 from $19.
“Amyris is having difficulties reaching satisfactory production yields at its contract manufacturers, which is leading to uncertainty over the magnitude and timing of scale-up at its Brazilian facilities,” Zekauskas said.
He expects the company to sell this quarter about 1 million liters (264,000 gallons) of its main product, farnesene, a hydrocarbon that can be processed into fuels or specialty chemicals. “Amyris retreated from its goals of selling roughly 9 million liters of product in 2011,” Zekauskas said.
Amyris has produced 1.3 million liters of farnesene to date, including 565,000 liters in the fourth quarter and 717,000 liters in 2011, Chief Executive Officer John Melo said on the call.
The company’s three contract manufacturing sites are currently producing at about half of their available capacity, Melo said.
“Our focus is now on maintaining yield at scale,” Melo said. “These are the challenges of large scale fermentation.”
Amyris expects to generate $1 billion in annual revenue by 2016 by targeting the $10 billion market for specialty chemicals that can be made from farnesene, Melo said. Squalane, a cosmetic ingredient the company is developing, has sold for as much as $30 a liter, Hilleman said.
“We are focusing our resources on high-value renewable chemicals, polymers and plastic additives, flavors and fragrances, cosmetics, and home and personal care markets,” Melo said.
Lower-value products with larger markets, including diesel and lubricants, will be produced primarily with joint venture partners Total and Cosan SA Industria e Comercio (CSAN3), Melo said.
Revenue for the fourth quarter climbed 40 percent to $41.5 million from a year ago, according to the statement.
Future expansion projects will be funded in part with proceeds from an $83.7 million private placement of stock and notes completed yesterday and loans from Banco Nacional de Desenvolvimento Economico e Social, the Brazilian Development Bank, Hilleman said.
Amyris expects to receive about $70 million from its production partners this year to fund administrative expenses and further research and development, including work on diesel and jet fuel for Total and isoprene for the tiremaker Michelin & Cie., Melo said.
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