Amyris Inc (NASDAQ:AMRS) announced that it has expanded the scope of its relationship with Phyto Tech Corp. Blue California is based in Southern California and is a global leader in food, flavor and fragrance ingredients and nutraceuticals.
Amyris No Compromise® ingredients into China have been more than doubling in sales and are expected to continue strong growth in the personal care and nutrition segments. To support this product growth without capital investment, Amyris has entered into an agreement with Blue California whereby its affiliates will provide access to its fermentation manufacturing in China and provide the necessary capital to produce No Compromise ingredients for Amyris. Blue California and its affiliates have an expanding fermentation production base in China with capacity to support the Amyris technology. This partnership also includes Blue California’s status as the preferred contract manufacturer for Amyris outside China when and where it is able to meet the current cost structure of Amyris production to maintain Amyris’s low cost, high performance product value proposition. In this relationship, Amyris will provide the technology and our partner is providing the capital and capacity for manufacturing that meets Amyris’s demand and Amyris is responsible for delivering the products to its customers and collaboration partners.
With the strong demand for farnesene-based Vitamin E oil with another Amyris partner in China, and the company’s opportunity to supply intermediates and ingredients for the large and fast growing Chinese food ingredients market, the revenue opportunity in China is significant. The company expects to generate $50 million or more in revenue over the next 12-18 months from its sales into China.
“We’re very pleased with the access to Blue California’s fermentation capacity and the continued deepening of our partnership with them,” said John Melo, Amyris President and CEO. “Blue California’s leadership in natural ingredients creates a strong strategic linkage between our two businesses. We believe that our relationship, which is incremental to the current strategic and financial transactions we have been engaged in, will contribute to Amyris revenue growth over the next 12 months and will play a key part in our record product sales into the Chinese market. This expansion is a result of the successful license agreement and technology transfer with Blue California in December and is one of several key strategic partnerships we are in the process of completing.”
Shares of Amyris are falling nearly 13% to $0.61 in pre-market trading. AMRS has a 1-year high of $1.43 and a 1-year low of $0.31. The stock’s 50-day moving average is $0.51 and its 200-day moving average is $0.68.
On the ratings front, H.C. Wainwright analyst Amit Dayal reiterated a Buy rating on AMRS, with a price target of $4.00, in a report issued on January 10. The current price target represents a potential upside of 471% from where the stock is currently trading. According to TipRanks.com, Dayal has a yearly average loss of 12.4%, a 33% success rate, and is ranked #4368 out of 4560 analysts.
Amyris, Inc. engages in the research, development, manufacture, and sale of fuels and farnesene-derived products. Its products include cosmetics, flavors and fragrances, performance materials, diesel, jet fuel, and lubricants. It operates through the following geographical segments: United States, Brazil, Europe, and Asia.