August 2, 2012

Genomatica Withdraws IPO

Christophe Schilling, Genomatica CEO
So the blog found out yesterday that Genomatica withdraws its $100m IPO (initial public offering), which it registered with the US Security and Exchange Commission (SEC) in August last year.

Unfortunately, the news was under embargo so I was not able to post it immediately. According to Genomatica's SEC statement today, the company withdrew the registration "in light of current market conditions."

The company was also able to secure a private funding worth $41.5m from new investor (and partner) Versalis -- an Italy-based chemical company, and existing investors Alloy Ventures, Draper Fisher Jurvetson, Mohr Davidow Ventures, TPG Biotech, VantagePoint Capital Partners and Waste Management.

In my interview with Genomatica CEO Christophe Schilling yesterday, he noted that the company is also focusing its business model more on licensing its technologies as opposed to operating assets.
"In view of the current market environment, the private financing will give us better opportunity to demonstrate our technology and differentiate our business model. Our business model is more like a UOP-type licensing model as opposed to operating assets. We are positioned to offer process technology, not a producer of chemicals." - Schilling
Still, Schilling said it will still enter the public market again if opportunity exists as the company moves forward.

According to Genomatica, the $41.5m financing will be used partly for commercialization of the company's 1,4 butanediol (BDO) technology as well as expanding the company's portfolio including the newly announced bio-based butadiene (BD) development with Versalis.

Speaking of this partnership, Genomatica wants to clear out some of the blog's musings on this deal. It seems that there are other routes and processing that can produce butadiene aside from using 1,4 BDO or 2,3 BDO, which the blog posted before.

Schilling said they will not use 1,4 BDO or even 2,3 BDO to produce butadiene for this partnership with Versalis and Novamont.
"At this point, all we are comfortably sharing is that Genomatica has multiple technologies that it is developing to produce butadiene. As far as specific technology and the routes that we are developing, we are not disclosing those. We've done 1,4 BDO to butadiene but we think that there are some better ways to make a lot more economical sense to produce bio-based butadiene and even better than using 2,3 BDO as well. Versalis has understand and has seen this value, hence the partnership." - Schilling
More interesting tidbits from the interview:
  • The 40m lb/year planned commercial bio-BDO facility between Novamont and Genomatica is completely separate from the Versalis partnership. This facility is located in Adria, Italy, and is expected to initially produce bio-BDO in 2013.
  • When asked if the Matrica joint venture (Versalis and Novamont 50/50 partnership) will consider producing bio-BDO at Porto Torres in Sardinia, Italy, Genomatica said it has not disclosed this type of information. (In short, no comment).
  • Genomatica also did not talk about any timeline for the production of bio-butadiene with Versalis, although my colleague Andy Brice had an exclusive interview with Versalis CEO Daniele Ferrari. According to his article on ICIS News (requires subscription), the partnership will be capable of industrializing at least part of the bio-butadiene processing technology within the next 2-3 years, with a plant possible within 4 years.
“At the moment we don’t have a precise location for any plants but obviously it has to be close to an agricultural supply chain and supply of biomass, and has to be close to the elastomers business in the future. We don’t know about the size of the plants at the moment because we need to decide on the process and technology first.” - Versalis' Daniele Ferrari.

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