After a valiant-but-failedattemptat disrupting the oil industry with microorganisms that churned out clean fuel, Amyris is charging into the consumer health arena.
The Bay Area company, which went public in 2010 after spending seven years as a startup, is still driven by the same renewable principles that inspired its biofuels push. This time, they’re being applied to products like fragrances,skincare, andsweetener.
Amyris is a pioneer in the field of synthetic biology. The goal is to move away from old, highly polluting manufacturing processes based on petrochemicals to cheaper, faster, and more sustainable methods founded on cells. Essentially, Amyris uses living things to manufacture its ingredients.
Synthetic biology has been a struggle financially. Amyris has reported financial losses every year but one since its 2010 IPO, and the company’s stock has lost nearly 99% over that time period. Today, the shares are trading at roughly $3, giving the company a market value of about $250 million.
Still, a growing group of companies are pursuing similar techniques to make less-toxicsweetenersfor food, biodegradablebuilding materials, andfoldable electronics, and investors have beenpouring moneyinto the field. From 2012 to 2017, funding for synthetic biology startups more than tripled, surpassing the $1 billion mark in 2016, according to areportfrom CB Insights.
Earlier this month, a synthetic biology startup called Zymergenraised $400 millionfrom investors including SoftBank and Goldman Sachs. Its aim is to make novel items like ultra-durable coatings and nontoxic insect repellents. (Of Zymergen’s three co-founders, two came from Amyris.)
Amyris is taking a different tack. It’s focused on making superior versions of consumer products that already exist. That includes perfumes, moisturizers, and sweeteners that are cheaper, can be made faster, and are less environmentally-damaging than what most people use today.
“I want people to become aware of us because we’re in their lives,” Amyris CEO John Melo told Business Insider on a recent tour of the company’s Emeryville, California headquarters, just north of Oakland.
“If I were to extrapolate that to its fullest, I would love to be the ‘Intel Inside’ everybody’s goods.”
Inside Amyris’ plan for global domination
Inside Amyris’ sprawling, multistory headquarters in a rapidly developing part of Emeryville, the sound of humming robots and other pricey lab equipment fills the air. Hundreds of employees work with the glimmering equipment to churn out all of the base ingredients for its range of consumer products.
A decade ago, a much smaller set of machinery was being used to make industrial goods. With funds from investors including Khosla Ventures and Kleiner Perkins and support from billionaire Bill Gates, Amyris produced the precursors to malaria drugs and hydrocarbon-based biofuel.
But neither operation could compete financially with traditional manufacturing processes, so after years of work, Amyris had to either shut down or spin off both enterprises.
Still, Melo doesn’t think the company’s work on malaria or fuel was all for nothing. Today, he says the work on consumer goods is succeeding — largely thanks to the hard lessons learned in biofuels.
“Not everybody has the benefit of those pieces,” Melo said.
From malaria drugs to biofuels to skincare, fragrances, and sweetener
Luckily for a company like Amyris, shifting from one industry to another isn’t as difficult as it sounds.
“Instead of a chemical company which has to change the pipes, all we have to do is change the organism,”Joel Cherry, Amyris’ president of research and development, said in December.
And changing the organism is precisely what Amyris did when it entered the health space in 2016.
Instead of focusing exclusively on yeast, the company feeds the same sugarcane waste that it used for malaria treatments and biofuel to a host of microorganisms like E. coli and different kinds of fungus.
The company can coax the microbes into making the scent of patchouli or sandalwood for Chanel perfume, or the moisturizing emollient in its own lineup of skincare products called Biossance, which have beensold at big name retailers like Sephorasince 2017. Together, the sweetener and skincare industries provide Amyris with $200 billion in market potential, Melo estimated.
And to ensure that it can compete financially, Amyris specifically looks for products whose supply could be threatened by changing climates or irregular harvests.
In its Biossance products, the key ingredient that Amyris makes is called squalene. Normally derived from shark livers, the ingredient is prized by the cosmetic industry for its ability to hold moisture and keep skin soft and pliable. But dozens of countries have banned shark hunting, which harms the species along with the ocean ecosystems. So Amyris makes squalene with genetically engineered microbes instead.
Amyris’ unique production method for squalene has other benefits, too.
In most face and body products, squalene only exists as a tiny fraction (some 2-10%) of the overall ingredient list. But some of Amyris’ Biossance products contain as much as 60% of the prized ingredient, something Melo says they do simply because they can.
“That’s the strategy for everything we do, where people start with a small volume of our ingredient because they can claim it, it’s good, and it does good things for the final product,” Melo said. “The more they use it, the more they decide, ‘We should be using more of this.'”
The company hopes to do the same thing with its new zero-calorie sweetener, made using synthetic biology and an ingredient from the stevia plant.
In October, Amyris signed its first major supply and distribution agreement with ASR Group, the largest cane sugar refiner in the world. Last month, protein shake companyShaklee announcedit would make its shakes with Amyris’ sweetener.
Business Insider sampled coffee sweetened with a packet of the ingredient and tasted a chocolate bar made with the product. Both tasted similar to products sweetened with Splenda (sucralose) or Stevia, only without the bitter aftertaste.
“We go after big problems and part of that is going after markets where we can be the number one technology in the world for those markets,” Melo said.
“I think of sweetener as the next market that we’re entering, and there will be many more.”