Shares of Amyris (NASDAQ: AMRS) fell as much as 30.9% today, continuing a streak of significant volatility for the stock. While there hasn't been a stream of daily news feeding the sharp stock movements, investors are anticipating updates on several important outstanding questions that will dictate the course of the company's future.
Investors -- and Nasdaq -- are waiting for Amyris to file its annual report with the Securities and Exchange Commission. The filing is being held up by the inability to sort out the financial impact of various transactions negotiated in late 2018 with the Dutch company DSM -- Amyris' single largest source of revenue -- including liens against intellectual property, share purchase agreements, and Amyris' overestimation of royalty revenue throughout 2018. Put simply, it's complicated.
As of 12:06 p.m. EDT, the stock had settled to a 20% loss.
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Amyris hasn't made things any easier by turning in a disappointing year in 2018. The business missed its own revenue guidance by 58%, spent $1.15 to generate every $1 in product revenue, and encountered delays commercializing and scaling its zero-calorie sweetener ingredient -- which management expected to be an important catalyst for the business.
It may be tempting for individual investors to look at the amazing long-term projections for revenue growth given by management or the cannabinoid ingredient project. But a long history of missing guidance and failing to commercialize projects cannot be dismissed. And there's a new concern investors need to entertain: Amyris is increasingly likely to lose out to up-and-coming start-ups with more funding, higher-quality data from analytical research and development (R&D), and the ability to gobble up top workers and executives.
Consider that Amyris is valued at just $250 million and perpetually strapped for cash. Zymergen (founded by a group of ex-Amyris employees) and Ginkgo Bioworks are valued at a combined $2.5 billion or so. The former ended 2018 by raising $400 million and has a technologically differentiated approach that's better suited to bring R&D projects to commercial scale compared with its peers. In other words, Amyris is not positioned, financially or technically, to be the future of synthetic biology.
Volatility is likely to remain until the dust settles and the business can wipe away the cloud of uncertainty. Given its track record and serious competition, volatility could remain indefinitely. It's best to stay away from this synthetic biology stock altogether.
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