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The next industrial revolution is already here $AMRS DD Thread
Synthetic Biology 
$4 Trillion TAM
$177M Q1 revenue (500% YOY)
91% Q1 GM 
$3.1B valuation 
Unique lab-to-consumer play
Business model uses IP and brands to generate long term revenue Lets go!
What does $AMRS do
Amyris is a synthetic biology company that owns consumer brands and supplies sustainable and natural ingredients
AMRS has a Lab-to-market platform to engineer, manufacture and market high performance, natural and sustainably sourced products.
Lets Define 
Synthetic biology: Engineering organisms to develop new abilities
$AMRS engineers yeast to create a roster of molecules
Molecules can be used as ingredients for everything from cosmetic products to sweeteners and cannabinoids
Following so far? Good
Synthetic biology: Engineering organisms to develop new abilities $AMRS engineers yeast to create a roster of moleculesMolecules can be used as ingredients for everything from cosmetic products to sweeteners and cannabinoids Following so far? Good
Why is this the next industrial revolution?
Moore’s law type progress: Molecule production now <1 year, compared 5 prev, and getting lower
Cost: $AMRS' Squalane for eg. is 1/3 traditional cost
Global sustainability tailwinds
Greater purity control = Synthetic > Sourced
Moore’s law type progress: Molecule production now <1 year, compared 5 prev, and getting lowerCost: $AMRS' Squalane for eg. is 1/3 traditional cost Global sustainability tailwindsGreater purity control = Synthetic > Sourced
The $AMRS business model$AMRS has a lab-to-market platform
Engineer microbes to ‘create’ molecules that can be used as ingredients
These ingredients are manufactured at industrial scale
$AMRS sells these ingredients through partnerships and consumer brands
$AMRS has 2 revenue modelsEnter a supply partnership w/ MNCs (Ingredion), $AMRS receives licensing fees & profit share on sales. See below$AMRS also develops their own consumer brands like Biossance. They market and sell products directly to retailers and consumers
A challenging business model; but worth it if successful
Challenging: R&D, supply and brand mgmt all at once is difficult in terms of resource allocation and focus
But if executed well, $AMRS has control over supply and demand. They reap all cost savings and revenue rewards
Challenging: R&D, supply and brand mgmt all at once is difficult in terms of resource allocation and focusBut if executed well, $AMRS has control over supply and demand. They reap all cost savings and revenue rewards
$AMRS has a massive TAM
Melo (CEO) stated that 1/3 of us already consume a product with an $AMRS molecule
Already serves a $257B TAM (Beauty, Flavors, Fragrance, Sweeteners)Could unlock a greater TAM for global chemicals of $4T$AMRS is currently valued at $3.1B
DisclaimerIf you’ve read this far, know that I will not be able to include every piece of $AMRS insight into this thread
This is a summary of what I think is important
If you think something new needs to be highlighted, comment at the end
Got that, ok now lets move on
Brands live longer than IP
$AMRS believes the consumer business is more rewarding than their licensing sideThe numbers dont lie (excl. One-offs, Consumer & Ingredients rev accounted for 85% of underlying revenue in Q1)$AMRS can truly go to a Lab to Consumer model
Consumer brands are high profile$AMRS brands include: Biossance, Pipette, Purecane
Exciting new brands include: Clean Beauty Collaborative with Rosie Huntington-Whiteley; and a new hair brand with Queereye’s Jonathan Van Ness
Amrys is going for the consumer jugular here
Consumer brands is $AMRS hedge on its tech stack
Syn-bio is innovating and right now the competition is in the tech stack
$AMRS is pushing its commercial headstart into consumer ownership
If a competitor develops better tech, Amyris has hedged this by owning downstream demand
Syn-bio is innovating and right now the competition is in the tech stack
$AMRS is pushing its commercial headstart into consumer ownership
If a competitor develops better tech, Amyris has hedged this by owning downstream demand
Interlude: Follow or give a like if you appreciate this DD
@riskrewardcap
What you can expect:
DD on strong risk-reward opportunities
Applying my experience as a Strategist to analyse growth models
Updates, stock commentary and changes to thesis
Ok, back to work
@riskrewardcap
What you can expect:
DD on strong risk-reward opportunitiesApplying my experience as a Strategist to analyse growth modelsUpdates, stock commentary and changes to thesisOk, back to work
Q1 financials and guidance
$176.9M total reported rev (507% YOY)
$33M underlying rev (excl. A one-off payment)
91% GM (underlying GM 52%)
$103M (Adjusted EBITDA)
Debt lowered by $94M YOY
2021 Guidance
$400M total revenue
Positive full year adjusted EBITDA
$176.9M total reported rev (507% YOY)$33M underlying rev (excl. A one-off payment)91% GM (underlying GM 52%)$103M (Adjusted EBITDA)Debt lowered by $94M YOY2021 Guidance
$400M total revenuePositive full year adjusted EBITDA
But the stock plunged after earnings
GAAP net earnings affected by -$377 million of unfavourable non-cash mark-to-market adjustments related to changes in the fair value of debt and derivativesA better way of explaining this is in the image belowCredit SeekingAlpha
Investing in $AMRS is not without risks
Amyris is facing a lawsuit from a partner. See response below
A rough history of pivoting through dead-ends ranging from malaria treatments to renewable fuels
Anecdotally, retail holders have claimed CEO ‘overreaches’ on targets
Amyris is facing a lawsuit from a partner. See response belowA rough history of pivoting through dead-ends ranging from malaria treatments to renewable fuelsAnecdotally, retail holders have claimed CEO ‘overreaches’ on targets
The bear case for $AMRS
Tech stack might not be as good as other competitors
Checkered past of difficulty in finding proper commercialisation use cases
Challenging to break traditional ingredient sourcing industry unless Amyris really has cost, purity, trust advantages
Tech stack might not be as good as other competitorsCheckered past of difficulty in finding proper commercialisation use casesChallenging to break traditional ingredient sourcing industry unless Amyris really has cost, purity, trust advantages
The bull case for $AMRS
$4T global chemicals TAM
Consumer brand ownership to hedge tech
Cheaper and purer than traditional manufacturing
Able to enter a large number of sectors such as pharma and industrial materials
Multiple long term revenue streams & good margins
$4T global chemicals TAMConsumer brand ownership to hedge techCheaper and purer than traditional manufacturing Able to enter a large number of sectors such as pharma and industrial materialsMultiple long term revenue streams & good margins
$AMRS business model: its greatest risk and strength
Risk: Focus and business prioritisation
Company needs to perform smart decision-making all the way from R&D to sales and marketing
However within lies the biggest reward: a true lab-to-consumer play
Risk: Focus and business prioritisationCompany needs to perform smart decision-making all the way from R&D to sales and marketingHowever within lies the biggest reward: a true lab-to-consumer play
$AMRS has a commercialisation headstart against competitors
$ZY ($4b): only 1 product in market; no product sales revenue ( $AMRS 13 ingredients in market)
Ginkgo $SRNG ($20B): great company with disruptive tech and IP business model but no room for error with that valuation
$ZY ($4b): only 1 product in market; no product sales revenue ( $AMRS 13 ingredients in market)
Ginkgo $SRNG ($20B): great company with disruptive tech and IP business model but no room for error with that valuation
Weighing the risk/reward modelRisk: If execution is not consistent and leadership cannot balance focus on R&D, brands, tech, IPUpside: competitors are behind, tech is proven, recurring revenue models workIf executed well, this small cap will grow exponentially
My personal play
Don’t fight the (bear) trend in growth stocks, I fully expect prices to fall further
I have a starter position; will DCA in planned tranches
If the market cap falls to $2B I am buying with both hands
I am just a voice on Twitter, please do your own DD
Don’t fight the (bear) trend in growth stocks, I fully expect prices to fall further
I have a starter position; will DCA in planned tranches
If the market cap falls to $2B I am buying with both hands
I am just a voice on Twitter, please do your own DD
