Myriant Corporation Files for IPO


Myriant Corporation has filed an S1 registration statement with the SEC, seeking to become publicly-traded. 

According to the filing:

We are an industrial biotechnology company focused on becoming a low-cost producer of high-value biochemicals that substitute for traditional petroleum-based industrial chemicals. We have developed a proprietary technology platform that we believe will enable us to manufacture a variety of "drop-in" chemicals and replacement chemicals for large and growing markets using a broad range of low-cost, renewable and readily available feedstocks. Our technology platform, which we have validated in our laboratories and third-party tolling facilities and commercialized with our licensee, Purac Biochem BV, or Purac, a wholly-owned subsidiary of CSM N.V., is based on a single-step anaerobic fermentation process that allows our microorganisms to grow and produce target products simultaneously, resulting in greater productivity and yield relative to other known bioproduction processes. We believe that we can produce our target high-value chemical intermediates at an average of half the cost of traditional petrochemical intermediates at a wide range of oil and industrial sugar prices without relying on government subsidies.

We have validated our proprietary technology as cost-competitive using commercial-scale unit operations and multiple feedstocks. Our technology platform combines proprietary microorganisms, or biocatalysts, and a fermentation process capable of using diverse industrial sugars to create various chemical intermediates, such as succinic acid (a $7.5 billion addressable market at current market prices), fumaric acid (a $1.7 billion addressable market at current market prices), acrylic acid (a $14.5 billion addressable market at current market prices) and lactic acid (forecast to eventually become a multi-billion pound market). We believe that our technology can efficiently produce biobased chemicals at high yields while consuming less feedstock by using an anaerobic process that consumes, rather than produces, carbon dioxide, resulting in a reduced carbon footprint and higher renewable content of the target product. Based on current commercial-scale cost metrics, we estimate that our production process for our initial product, biosuccinic acid, will be cost-competitive with petroleum-based processes down to $45 per barrel of oil.

Our biocatalysts are feedstock flexible and can consume sugars from a variety of sources, including glucose from corn and grain sorghum, sucrose from sugarcane, cellulosic sugars from waste biomass and glycerol. Our biocatalysts can consume both pentose (C5s such as xylose) and hexose (C6s such as glucose) sugars, which we believe positions us to be a first mover when cellulosic feedstocks become more widely available. We plan to use the most cost-effective regional feedstocks or a combination of feedstocks in our future plants.

We have entered into or intend to enter into strategic relationships with leading international companies to accelerate the global commercialization of our products and development of our biochemical production capabilities. For example, we have signed a non-binding memorandum of understanding to enter into a definitive joint development agreement with Johnson Matthey PLC's subsidiary Davy Process Technology Limited, or Davy, a leading developer and licensor of advanced process technologies. Under that agreement, Davy would, after engineering and successful testing of our biobased succinic acid, or biosuccinic acid, guarantee to its butanediol process licensees that they could use our biosuccinic acid in their butanediol process in place of petroleum-derived maleic anhydride, or MAN, without significant additional capital expenditures. Davy believes that its butanediol process is the lowest-cost process in the industry and accounts for approximately 1.2 billion pounds or 27% of total global capacity, and 50% of plant capacity installed since 1992. We have also signed exclusive alliance agreements with ThyssenKrupp's subsidiary Uhde GmbH, or Uhde, a leading chemical plant engineering company, and its U.S. subsidiary, under which Uhde will integrate our fermentation technology with its separation technology in the plant design and, on a project-by-project basis provide process and performance guarantees for our future plants on mutually agreeable terms,

The timing of the IPO is unusual.  Investors have placed a premium on equities with significant earnings in the past year, reasoning that profitable companies will be better-situated to weather any future storms. 

Myriant is still a pre-revenue company, generating only $258,000 in gross revenues for the year ending 12/31/2010, according to its registration statement.  The company racked-up a net loss of more than $16 million for the year.

While there's plenty of reason to be optimistic about the future biofuels and bioproducts, Myriant is unlikely to generate a profit for years to come, making an investment in that company fairly speculative for the time being.

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