Another Bioenergy Company Joins Crowded IPO Queue (CDXS, AMRS, GEVO, SZYM, KIOR, PALG)

The last year or so has been good for IPOs in the biofuel and bioenergy sector. Beginning with Codexis, Inc. (NASDAQ: CDXS) in 2010, four other companies have successfully issued stock this year: Amyris Biotechnologies Inc. (NASDAQ: AMRS), Gevo Inc. (NASDAQ: GEVO), Solazyme, Inc. (NASDAQ: SZYM), and Kior Corp. (NASDAQ: KIOR). PetroAlgae Inc. (OTC: PALG) came close in 2010, but ultimately didn’t make it.

There are at least another half dozen companies that have file for IPOs in the same space. These include Myriant, Ceres, Mascoma, Elevance Renewable Sciences, and Fulcrum Bioenergy. The latest entrant is BioAmber, Inc., which filed an S-1 with the SEC last week. Though all the companies come at the problem from a different technological angle, the big prize is to develop an alternative to petroleum, either as a transportation fuel or as a replacement for chemicals derived from petroleum.

BioAmber is developing a method for making succinc acid from renewable feedstocks. Succinc acid is currently derived from petroleum and used in a variety of products from food additives to polyesters, plastics, polyurethanes, and cosmetics. The company claims it can make succinc acid at a cost that rivals crude oil at $35/barrel. Unlike some of the other biotechnology companies, BioAmber expresses no market for its product as a transportation fuel.

A company that is still privately held and has not yet filed for an IPO but that is aimed at making biofuel is Joule Unlimited. Joule is working on a process that makes biodiesel and ethanol from sunlight, non-potable water, and carbon dioxide. The details of its process are available in this article in the peer-reviewed journal Photosynthesis Research.

Joule says its research produces “genetically engineered cyanobacteria [which] convert industrially sourced, high-concentration CO2 into secreted, fungible hydrocarbon products in a continuous process.” In essence, the process is artificial photosynthesis. The company announced that it received two patents on its process in July, and describes how it differs from other biofuel processes this way: “Unlike competing technologies that utilize microorganisms to produce ethanol by fermenting sugars from cellulose or other biomass materials, Joule’s platform microorganism is engineered to produce and secrete ethanol in a continuous process, converting more than 90% of the CO2 it consumes directly to end product, with no reliance on biomass feedstocks.”

Whether or not BioAmber or any of the others succeed in an IPO, or if Joule’s process proves to everything the company claims it is, the fact is that the combined efforts of a lot of smart people are working on ways to replace petroleum. The payoff remains years away, but it’s getting to the point that the big question might be ‘when’, not ‘if’.

Paul Ausick