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BioAmber files for IPO, solidifies partnership with Mitsui

BioAmber has filed with the US Securities & Exchange Commission for a proposed IPO of its common stock

GLOBAL

Minneapolis-based renewable chemicals firm BioAmber has filed with the US Securities & Exchange Commission in New York for a proposed IPO of its common stock. This came shortly after the company fleshed out some more details of its manufacturing joint venture with Japan's Mitsui.

Although the number of shares to be offered and the price range have not yet been officially revealed, the figure of $150 million has been mentioned in some quarters. The lead book-running managers are Goldman, Sachs and Credit Suisse Securities (USA), with Barclays Capital, Stifel, Nicolaus & Company and Pacific Crest Securities also involved.

BioAmber's first product is biobased succinic acid (bio-SA), which is made by fermentation in a process that, it claims, is cost-competitive with petroleum-derived succinic acid. Applications include plastics, food additives, and personal care ingredients and as a building block for other intermediates, including 1,4-butanediol (BDO). The company is also developing biobased adipic acid and caprolactam for use in making the engineering polymer polyamide.

The JV partnership with Mitsui, in which BioAmber will be the majority shareholder, is centred on building and operating a previously announced manufacturing facility in Sarnia, Ontario, Canada, which will have initial capacity of 17,000 tonnes/year of bio-SA in 2013, when it begins commercial production. Plans are to increase this in time to 35,000 tonnes/year of bio-SA and 23,000 of 1,4-BDO.

BioAmber has so far made only 221 tonnes of bio-SA at its pilot facility in Pomacle

Mitsui has targeted renewable chemicals as a growth platform and has secured renewable feedstock in Brazil, Thailand and other countries. The two companies also intend to jointly build and operate two additional facilities that will bring total worldwide capacity to 165,000 tonnes/year of bio-SA and 123,000 of BDO.

A feasibility study is now taking place in Thailand for the construction of one of these facilities in 2014, on partnership with PTT MCC Biochem, itself a joint venture between Mitsubishi Chemical Corporation and PTT, the state-owned petrochemicals firm. The third should be in either North America or Brazil and similar in scale to the Thai site.

At present, BioAmber is currently producing bio-SA at a pilot scale plant at Pomacle, France. Its SEC filing, however, states that it has made only 221 tonnes of product and has not yet booked any sales. Much of its appeal to potential shareholders is staked on partnerships with bio-SA buyers, also including Solvay and Lanxess, with whom a deal in bio-based phthlate-free plasticisers was agreed in October.

The IPO announcement came just as some market-watchers saw signs of waning interest in bio-based chemicals firms. This has due to a mixture of falling stock prices for those that have already launched, the overall downward trend of the market and the inevitably long lead time between fund raising and achieving large sales and serious profitability.

Of those that filed this year, biobased chemicals producer Gevo saw its stock price fall by 49% between February and November, while that of renewable fuels and biochemicals firm Solazyme was 37% down between May and November and biobased chemicals firm Amyris fell 22% between September and November. All are US-based.

Among those regarded as major IPO candidates are Genomatica, which seeks to produce high volume intermediates and basic chemicals from renewable feedstocks and which is first targeting BDO and butadiene, and Elevance Renewable Sciences. Both, like BioAmber Myriant Technologies, which filed for a $125 million IPO in May but has yet to go public, have alliances with major chemicals firms and more than one technology platform. Roquette and Purac are also major players in the field, who have alliances with DSM and BASF respectively.

Separately, BioAmber has made a series of senior management appointments. Andrew Ashworth has arrived as CFO after 13 years with another industrial biotechnology firm, Genencor, which recently became part of DuPont. Also new are three new senior VPs: Thomas Dries, for operations strategy, Babette Pettersen, for marketing and sales and Kenneth Wall for manufacturing. Heinz Haller and Raymond Land have joined the board as independent directors, and William Camp has joined representative of the majority owner, Naxos Capital.

 

 

From Online Issue: December 2011