Amyris reports another strong quarter of product sales growth and expects strong finish for 2017

Amyris, Inc. (Nasdaq:AMRS), the industrial bioscience company, today announced financial results for the third quarter ended September 30, 2017.

“The demand for our technology and products has enabled us to continue executing key partnership agreements while continuing to lead the industry with product revenue growth,” said John Melo, Amyris President & CEO. “The trend to natural and sustainably-sourced products and the significant growth in the health, cosmetics and nutrition segments are continuing to drive our short-term results. We are very pleased by our near-term visibility and we anticipate having a stronger finish than expected for 2017.”

Key Highlights

Other key operating and development highlights during the third quarter and more recently included:

• Executed separate $27.5 million commercial license agreement with leading global company
• Entered into three product development and production agreements and one additional license agreement with Royal DSM for a food and nutrition molecule, a key ingredient for Vitamin A and for a new class of human nutrition ingredients
• Announced appointment of Eduardo Alvarez, an experienced executive who has led operational and technology-enabled transformations for Fortune 100 companies, as Chief Operating Officer
• Simplified Ginkgo partnership and entered into value-based working relationship with one product included in future cooperation.

Financial Performance

Third Quarter 2017

• Third-quarter 2017 GAAP revenues of $24.2 million compared with $26.5 million for the same period of 2016. GAAP revenues for the third quarter of 2017 did not include $8.3 million of revenue related to the Royal DSM license agreement executed in the third quarter for which the company received full payment early in the fourth quarter. The decrease in GAAP revenues was driven primarily by significantly lower collaboration revenue, somewhat offset by higher product sales in the company’s health and nutrition business. Collaboration revenues were $12.9 million, down from $19.7 million for the same period last year. Product sales of $11.3 million were up from $6.8 million for the third quarter of 2016.
• Q3 2017 selling, general and administrative expenses were $15.5 million up from $11.4 million for the same period a year ago. Primary drivers for the increase are unplanned expenses related to transactions and activities such as those related to changes to accounting standards, and legal fees, as well as expenses related to Biossance sales channel expansion and additional personnel expenses bolstering higher product sales revenue. Research and development expenses of $15.2 million for the quarter were up from $12.3 million for the third quarter of 2016 reflecting increased spend due to higher than expected collaboration activity.
• GAAP net loss attributable to Amyris common stockholders for the third quarter of 2017 was $42.8 million, or a net loss attributable to stockholders of $1.14 per basic and diluted share, compared with a GAAP net loss attributable to common stockholders for the same period of 2016 of $19.7 million, or $1.19 per basic and diluted share. Included within other loss for the quarter was a loss of $2.7 million arising from the reduction in derivatives liabilities primarily related to the conversions of Series B Preferred stock in August 2017, offset by changes in fair value of derivative liabilities recognized primarily in connection with the closing of the company’s Series A, B and D Preferred stock financing rounds in May 2017 and August 2017. The GAAP net loss attributable to common stockholders included non-cash items such as changes in fair value of embedded derivatives, accretion of debt discount and interest expense related to convertible debt. Non-GAAP net loss attributable to Amyris common stockholders for the third quarter of 2017, excluding these items and stock-based compensation, was $30.4 million, or $0.81 per basic share, compared with a non-GAAP net loss attributable to common stockholders for the same period of 2016 of $16.5 million, or $0.99 per basic share.

Nine Months Ended September 30, 2017

• GAAP revenues for the nine months ended September 30, 2017 were $62.9 million, compared with $45.0 million for the same period last year. The increase was driven by a 117% increase in product sales led by the health and nutrition and personal care businesses as well as slightly higher collaboration revenue. Year to date, collaboration revenues were $30.5 million, up slightly from $30.1 million for the same period for 2016. Year to date collaboration revenue excluded the $8.3 million of revenue related to the Royal DSM license agreement referenced above. Year to date product sales were $32.3 million, up significantly from $14.9 million for the prior-year period illustrating the benefits of leveraging the company’s partner-driven sales channel model.
• GAAP net loss attributable to Amyris common stockholders for the nine months ended September 30, 2017 was $125.9 million, or $3.32 per basic and $4.61 per diluted share, compared with a GAAP net loss attributable to common stockholders for the same period of 2016 of $48.6 million, or $3.21 per basic and $4.24 per diluted share. Included in GAAP net loss attributable to common stockholders for the period was a gain of $35.4 million arising from a reduction of the derivative liabilities primarily related to the conversions of the Series A and B Preferred stock issued in May 2017 and August 2017 offset by the change in fair value of derivative liabilities recognized primarily in connection with the closing of the company’s Series A, B and D Preferred stock financing rounds in May 2017 and August 2017. The GAAP net loss attributable to common stockholders included non-cash items such as a change in fair value of embedded derivatives, accretion of debt discount and interest expense related to convertible debt. Non-GAAP net loss attributable to Amyris common stockholders for the nine months ended September 30, 2017, excluding these items and stock-based compensation, was $134.5 million, or $4.93 per basic share, compared with a non-GAAP net loss attributable to common stockholders for the same period of 2016 of $83.5 million or $5.52 per basic and diluted share.

FINANCIAL RESULTS AND NON-GAAP INFORMATION

Condensed consolidated financial information has been presented in accordance with US GAAP as well as on a non-GAAP basis. Management believes that it is useful to supplement its GAAP financial statements with this non GAAP information because management uses such information for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Amyris’s historical performance as well as comparisons to the operating results of other companies. Management believes these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its financial and operational decision-making.

Non-GAAP financial information is not prepared under a comprehensive set of accounting rules and, therefore, should only be read in conjunction with financial information reported under U.S. GAAP in order to understand Amyris’s operating performance. A reconciliation of the non-GAAP financial measures presented in this release, including non-GAAP net loss, and other measures to the most comparable GAAP financial measure is provided in the tables attached to this press release.