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13 Aug

Amyris Files for Chapter 11 Bankruptcy – WWD

Amyris Files for Chapter 11 Bankruptcy – WWD

Amyris, a onetime biotech darling that sought to alter the wonder industry with progressive and sustainable ingredients and later moved into the celebrity brand world, has filed for Chapter 11 bankruptcy in a Delaware Court and is seeking to off-load its consumer arm. 

The announcement comes just a couple of days after it shuttered three brands — Costa Brazil with former Calvin Klein designer Francisco Costa, Onda Beauty cofounded by Naomi Watts and Purecane — and terminated 260 positions, a rep confirmed. 

“Over the past months, now we have been hard at work on a strategic transformation plan to cut back costs, improve operational effectiveness, and achieve sustainable growth,” Han Kieftenbeld, interim chief executive officer and chief financial officer of Amyris, said of the filing. “We imagine the step forward our company has taken today puts us on the most effective path to handle our financial challenges and achieve a comprehensive solution — rooted in Amyris’ ground-breaking science, formulation capabilities and technology.”

As a part of the method, Amyris has secured a commitment from existing lender Foris Ventures for $190 million of debtor-in-possession financing to support continued day-to-day operations. Court documents state that its debt totals $1.3 billion.

Amyris filed a series of customary motions looking for to proceed operating as usual, including requests to proceed to pay wages and supply advantages to employees, and maintain its customer programs and policies. It pledged to pay vendors within the strange course for all goods received and services rendered after the filing.

At the identical time, the Emeryville, California-based biotechnology company plans to exit its consumer brands and can begin marketing them on the market. Because the sale process progresses, Amyris said it’ll proceed to operate these brands, including through retail partners and the brands’ e-commerce platforms.

The corporate’s brands include Naomi Watts’ menopausal beauty brand Stripes, color cosmetics line Rose Inc. with model Rosie Huntington-Whiteley, and hair care brand JVN with “Queer Eye” star Jonathan Van Ness. It originally launched with Biossance, centered around Amyris’ star ingredient, squalane.

Naomi Watts attends the Stripes launch party hosted by Amyris.

Getty Images for Stripes

The shuttered brands were deemed not core to the long run of Amyris, WWD understands. Product might be available for a limited time period.

A banking source told WWD that there may be more likely to be most demand for Biossance, launched in 2016, and JVN, however the sale process for the prior could also be complicated. That’s because its key ingredient is squalane derived from sugarcane, produced by Amyris, but owned by Givaudan. A separate banking source described Biossance as “an excellent brand with a number of support from Sephora,” adding that there will certainly be interest in it.

In Amyris’ most up-to-date financial results, core revenue got here in at $56.1 million for the primary quarter ended March 31, down 3 percent in comparison with the identical period a 12 months earlier. Consumer revenue of $34.2 million decreased 1 percent. The decline was driven by lower Biossance revenue on account of reduced marketing and media spend, offset partly by the launch of our 4U by Tia brand at Walmart in addition to increased MenoLabs direct-to-consumer revenue, it said. It reported a net lack of $193.3 million.

The announcement comes not long after John Melo stepped down from his longtime role as president and CEO and a member of the board. The board appointed Kieftenbeld as interim CEO, on the time as the corporate cut 148 jobs. Combined with layoffs from August, the cuts represent roughly 30 percent of its workforce.

John Melo

John Melo

Courtesy Image.

Amyris began in 2003 with a $42 million grant from the Bill and Melinda Gates Foundation to create a molecule to treat malaria by engineering the genetics of yeast strains and fermenting them in sugarcane syrup so as to convert basic plant sugars to hydrocarbon molecules. The corporate adapted this technology to develop other “clean” ingredients, including sugarcane-derived squalane, a substitute for that present in deep-sea shark livers, for countless markets. 

It then appeared to alter course, diving deep into the celebrity brand sphere. Prior to COVID-19, 80 percent of Amyris’ business was in supplying ingredients to other corporations, while the remaining 20 percent was its consumer brands, including Biossance. Melo told WWD last 12 months that around two-thirds of the business was dedicated to consumer brands and one-third was focused on supplying other businesses.

But with the celebrity play failing to make the corporate profitable, Amyris earlier this 12 months sold certain cosmetic ingredients, including its squalane to Givaudan, the world’s largest fragrance and flavors supplier. As a part of the deal, Amyris continues to fabricate ingredients for Givaudan to make use of in cosmetics.

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