|Traded as||NASDAQ: SZYM|
|Headquarters||South San Francisco, California, United States|
|Key people||Jonathan Wolfson, CEO |
|Industry||Renewable Fuels, Renewable Oils|
|Slogan(s)||Renewable oil - for fuel, for food, for life|
Solazyme Inc. is a publicly held biotechnology company in the United States. Solazyme uses proprietary technology to transform a range of low-cost plant-based sugars into high-value oils. Their renewable products are designed to replace or enhance oils derived from petroleum, plants and animal fats.
Solazyme's, Inc., was founded on 31 March 2003, with the mission of utilizing microalgae to create a renewable source of energy and transportation fuels. Founders Jonathan Wolfson and Harrison Dillon, who met while attending Emory University, started the company in Wolfson's garage. About their partnership, Dillon said: "Neither of us wanted to go work for some giant organization where we were a tiny cog in a huge wheel. We wanted to make a difference and create something that had never existed before.”
In 2004 and 2005, Solazyme began development of an algal molecular biology platform, and identified and initiated a platform for microalgae-based oil production. The company then expanded focus to skin and personal care products.
Solazyme continued development of the algal molecular biology platform in 2006. Key microalgae strains for oil production into fuels and chemicals were identified. Solazyme demonstrated ability to produce and extract oil from microalgae, and invented alguronic acid which received positive in-vitro skin care results. The company expanded focus into nutrition.
In September 2007, Solazyme received a $2 million grant from the National Institute of Standards and Technology, signed a joint development agreement with Chevron through its division Chevron Technology Ventures, began operating in commercially sized standard industrial fermentation equipment (75,000-liter scale), worked with a third party refiner to demonstrate the compatibility of the oil with standard refining equipment, and produced over 400 liters of microalgae-based oils.
In January 2008, the company attracted attention at the Sundance Film Festival in Park City, Utah, by presenting a Mercedes Benz C320 fueled with its Soladiesel brand of algal fuel. The algal fuel-powered car was also used to call attention to the documentary film Fields of Fuel, which was playing at the festival and which featured coverage of Solazyme.
The company announced a partnership with Chevron Technology Ventures in January 2008 to explore the commercialization of algal fuel. In September 2008, the company stated it produced the world's first jet fuel derived from an algal source. Harrison Dillon, the company’s president and co-founder, announced the fuel passed eleven tests conducted at a fuel analysis laboratory that certified its worthiness for aviation usage. "This is not like conventional biodiesel, where you can take french fry grease from McDonald's and turn it into oil in your garage," said Dillon during a press conference. "Planes will fall out of the sky if you don't have a high-quality fuel that meets strict standards." 
In 2009, Solazyme was awarded approximately $22 million from the United States Department of Energy for the construction of an integrated biorefinery project and two contracts from the United States Department of Defense for delivery to the United States Navy of both microalgae-based marine (renewable F-76) diesel fuel.
In 2010, Solazyme entered into a 50/50 joint venture with Roquette Freres, to develop, produce and market nutrition products worldwide. The company also saw the first launch of consumer nutrition products containing Golden Chlorella on store shelves in Whole Foods Markets and General Nutrition Centers, executed a distribution agreement with Sephora International for the Algenist skin care product brand, entered into a joint venture agreement with Therabotanics, an affiliate of a leading direct response marketing company, for the sale and distribution of another microalgae-based skin care line to be launched in 2012, and produced over 400,000 liters (364 metric tons) of oil.
To satisfy the testing and certification requirements of the United States Navy, Solazyme partnered with Honeywell UOP to refine a portion of this oil into approximately 200,000 liters (182 metric tons) of military specification marine diesel and jet fuel. In 2009, it sold 20,000 gallons of algae fuel to the Navy and in 2010 it received another purchase for 150,000 gallons. On 22 October 2010, the United States Navy conducted a full-power demonstration of Solazyme's algae-based fuel on a Navy Riverine Command Boat at the Naval Base in Norfolk, Virginia. The test showcased the compatibility of a 50/50 blend of algae-based fuel with NATO F-76 fuel. Rear Admiral Phil Cullom, Director of the Fleet Readiness Division, spoke at the demonstration, saying: "If you have alternatives other than petroleum, then you are never beholden to just one type of fuel. And those additional alternatives give you flexibility ... it's mission accomplishment because you have that additional capability." The use of alternative fuels supports Secretary Mabus' plan to reduce energy use aboard Navy ships.
In the second quarter of 2011, the company announced that it had produced over 283,000 liters of military-spec diesel (HRF-76) for United States Navy contract. The initial fuel production for phase 1 of a 550,000 liter contract was completed ahead of schedule. Additionally, the United States Navy has indicated its intent to exercise its phase 2 option, which would be produced through the first half of 2012. Sephora Canada and The Shopping Channel agreed to distribute Solazyme's anti-aging skincare line, Algenist, throughout Canada. This increases the brand's physical retail presence by 26 stores. The launch into Canada accompanies Algenist's debut in the United Kingdom, which includes distribution in all 60 Space NK locations throughout the country. Solazyme will shift the location of its integrated biorefinery to its Peoria facility. Solazyme began the build-out of this recently acquired facility, adding fermentation capacity and performing upgrades after completion of the acquisition in May 2011. The fermentation portion of this facility is expected to be operational in the second half of 2011, with end-to-end manufacturing expected in the first half of 2012.
On 8 August 2011, Solazyme and Bunge Limited announced a joint venture to develop renewable chemicals in Brazil using Solazyme's algae-based sugar-to-oil technology. Bunge owns a sugar cane mill in Brazil and both companies will contribute to retrofit that facility to produce renewable chemicals. Bunge is one of the worlds' largest vegetable oil distributors and also a sugarcane processor in Brazil. It invested in Solazyme in 2010.
On 16 November 2011, the United States Navy launched its largest alternative fuel test to date, pumping 20,000 gallons of Solazyme's algae-based fuel into a destroyer ship that was to embark on a 20-hour trip along the California coast. The ex-USS Paul F. Foster trip from San Diego to Port Hueneme is a part of the Navy's plan to unveil next year a small carrier strike group of small ships, destroyers, cruisers, aircraft, submarines and a carrier run on alternative fuels, including nuclear power. Naval officials will use data from an earlier trip of the same route to compare how the ship performs when running on Solazyme's biofuel.
Initial public offering
In May 2011, Solazyme set terms for its initial public offering. The company planned to raise $160 million by offering 10 million shares at a price range of $15 to $17 and ended up selling nearly 11 million shares for $18 each, and climbed 15% to 20.71 in its first day of trading.
Investment banking and securities firm Goldman Sachs reported in July 2011 that with the commercialization of new oil products, Solazyme stock had become less risky. The bank initiated coverage with a top rating and $31 target. In a note to clients, it said Solazyme (NASDAQ: SZYM) stands to boost sales and stabilize its business now that it's partnered with major agribusinesses like Bunge Limited.
The stock has since ranged from a high of $27.30 on 12 July 2011, to a low of $6.49 on 26 November 2012.
Solazyme grows microalgae in the dark, inside huge stainless-steel containers. The company's researchers feed algae sugar, which the organisms then convert into various types of oil. The oil can be extracted and further processed to make a range of fuels, including diesel and jet fuel, as well as other products.
By feeding plant sugars to an oil-producing microalgae in dark fermentation tanks, the technology utilizes "indirect photosynthesis", in contrast to common open-pond and photo bioreactor approaches. The platform is feedstock flexible and can utilize a wide variety of renewable plant-based sugars, such as sugarcane-based sucrose, corn-based dextrose, and sugar from other sustainable biomass sources including cellulosics. Solazyme's technology platform allows them to also produce and sell bioproducts which are made from the protein, fiber and other compounds produced by microalgae.
In the early years of Solazyme, the company's scientists discovered an extract from algae that demonstrated an ability to increase cell regeneration and to reduce inflammation, while protecting from UV light damage. The company created the name "alguronic acid" for the new discovery.
In 2010, Solazyme launched their first products, the Golden Chlorella line of dietary supplements, as a market development initiative, with current sales of products incorporating Golden Chlorella at retailers including Whole Foods and General Nutrition Centers.
In March 2011, Solazyme launched the Algenist brand for the luxury skin care market through marketing and distribution arrangements with Sephora and QVC. Distribution of the Algenist line of skin care products is expected to reach 850 retail stores worldwide by year end. Retailing for $65 to $95, Algenist moisturizers, serum and eye balm are already available in Sephora stores and at Sephora.com.
In addition, Solazyme is currently engaged in development activities with Chevron, Dow Chemical, Ecopetrol, Qantas and Unilever. In conjunction with these development activities, Solazyme entered into non-binding letters of intent with Dow and Qantas for the purchase of Solazyme's products. Subject to certain conditions, including entry into a supply agreement, Dow will purchase up to 20 million gallons (76 million liters) of Solazyme's oils in 2013 rising to up to 60 million gallons (227 million liters) by 2015 and Qantas will purchase a minimum of 200 to 400 million liters of the jet fuel per year. In 2013, the company announced an agreement with Unilever for 3 million gallons of oil, beginning in 2014.
On 1 July 2011, ASTM International gave approval for carriers to mix fuel made from organic waste and nonfood plants with kerosene, which is conventionally used to power planes. Chief Executive Officer of Solazyme Jonathan Wolfson said that by 2013 or 2014 his company will start producing "large commercial quantities" of its clean oils that can be refined into jet fuel.
Analyst Pavel Molchanov of Raymond James wrote in July 2011 that they are bullish on Solazyme’s roadmap to commercialization.
On 8 August 2011, Solazyme and Bunge Limited announced that they have entered into a framework agreement for the formation of a joint venture entity ("JV") focused on the production of triglyceride oils for chemical applications. The JV anticipates building a 100,000 MT renewable oil production facility located at a Bunge owned sugar cane mill in Brazil. Engineering for the plant will begin immediately and will be funded by both parties. Upon successful completion of site-specific engineering designs and execution of final JV agreements, construction on the facility will commence, with a targeted start-up during the 2013 cane harvest.
On 7 November 2011, United Airlines flew the world's first commercial aviation flight on a microbially derived biofuel using Solajet™, Solazyme's algae-derived renewable jet fuel. United also signed a letter of intent with Solazyme to purchase up to 20 million gallons per year of renewable jet fuel starting in 2014. The product is a mix of 40 percent algae-based and 60 percent petroleum-based fuel. Solazyme officials said it sold the fuel to United at the same cost as regular jet fuel.
- Inc. Magazine named Solazyme "America's Fastest-Growing Manufacturing Company" in its September 2011 issue.
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