NEW YORK (AP) -- Shares of Amyris Inc. fell Thursday after a law firm said it has filed a federal securities class action lawsuit against the company, saying Amyris misled investors about its production capabilities.
THE SPARK: Milberg LLP said its lawsuit will include investors who bought Amyris securities between April 29, 2011 and Feb. 8, 2012. The law firm said Amyris mislead investors about its ability to produce its chemical Biofene. Milberg said Amyris overstated its production capacity initially, and then announced in Nov. 2011 that it couldn't produce Biofene in the quantities it had previously expected, but that it had found a way to address the issue.
In Feb. 2012 the company again lowered its expectations.
Amyris said it believes the lawsuit has no merit and it plans to defend itself vigorously. The Emeryville, Calif., company said it couldn't comment further on pending litigation.
THE BIG PICTURE: Amyris uses genetically modified microorganisms — mainly yeast — to make products for a variety of markets including specialty chemicals, fuels and fragrances. In 2011 the company initially said it would produce between 6 million and 9 million liters of Biofene, but in November it cut that estimate to 1 million to 2 million liters.
Amyris said it expected to produce 40 million to 50 million liters in 2012, but in February of that year it withdrew that guidance because it had decided to expand one manufacturing plant instead of two, and said it would look for additional financing to pay its bills.
In April 2013 one of Amyris' partners, French drugmaker Sanofi, started large-scale production of a malaria treatment using technology Amyris developed. Sanofi plans to make the medicine available at low cost and Amyris won't get royalties on sales of the medication, but the news could be seen as a milestone for the company.
SHARE ACTION: Amyris fell 11 cents, or 3.4 percent, to close at $3.09. The stock fell about 66 percent during the period covered by the lawsuit, and shares are down 84 percent since Amyris cut its 2011 production guidance on Nov. 1, 2011.