↓ Expand ↓

Category → IPOs

Codexis – An example of “integrated innovation”?

I’m at the Lux Research Executive Summit today. You can follow my twitter stream from the conference.

Lux Research Director Michael Holman (who also happens to be a PhD chemist) just gave a presentation discussing the shortcomings of the venture capital model for bringing innovations in physical sciences to market (especially in materials science, energy, and the environment). VC investments worked well for tech companies like Google, which raised a mere $25 million of venture funds before going public.

Another problem is that scientists with lab-discovered innovations do not always pick the right markets and applications for their discoveries. Holman suggests that physical sciences start-ups would be better off partnering in their early stages with the venture and partnership arms of larger corporations.

Corporate partners have a clear understanding about where new technologies are most needed, and they know a great deal about the potential market sizes. Still, most early-stage start-ups are very concerned about being taken over or co-opted by corporations that might not care about the smaller firm’s health and possible future. Holman suggests that agreements that include particular financial incentives can help smooth the way.

One company that Holman says successfully partnered with corporate ventures is Codexis, a biocatalysis firm targeting renewable fuels, pharmaceuticals and chemicals. Codexis went public last week and raised $78 million, a strong result in a fragile economy. (Though Codexis originally hoped to raise a cool $100 million). Though the firm did raise some venture money, it partnered early and widely with firms like Chevron, GE, Pfizer, and Shell. Holman says firms like Codexis benefit from the insights of corporate partners and can even speed up their time to market for their products or to exits like IPOs.

Amyris files for $100 million IPO

While I enjoyed a few days of R&R, my colleague Alex Tullo reported on the news that Amyris has filed for an IPO.

Amyris makes genetically engineered bacteria. The designer microbes eat cane sugar and produce various chemical or fuel precursors. The company has already gained some fame for helping to develop a biotech route to artemisinic acid, a precursor for the antimalaria compound artemisinin. Now Amyris says it will be making farnesene, which can be converted to diesel and several commercial products.

Amyris may have been embolded to file its S1 after Codexis’ similar move back in January. Codexis is a biotech firm focused on ezymes for biofuel, pharma, and chemicals production. Both firms are seeking to raise $100 million in capital.