Guy8 hours ago
My notes from the Morgan Stanley talk that just concluded. Some interesting new nuggets in their to discuss:
Company started with a grant from Bill and Melinda gates to make a key anti malaria drug that come from wormwood trees.
They are a leading producer of natural vanillin, they just launched CBG in the Cannabinoid space, they have the leading emolument in squalane.
Revenue on track for over $400m this year.
Beauty brands are experiencing significant growth, driven by the focus on health, the Chinese consumer, purchasing on-line and the leading ingredient - squalane.
How early are we in terms of the adoption of sustainable products? Melo: it varies across markets. But if you make a product that costs less AND is sustainable, you'll have great success. But price is very important. Must have a strong value proposition for the consumer.
They want to expand the number of markets they are in to deliver
Manufacturing is currently done by contract manufacturing but they will move 70% of that in house. Because of fast growth, the don't have the capability to meet the demand they are seeing. They do all the formulation. New factory in Nevada will be on-line by end of the year.
Manufacturing is blending ingredients. That is easy compared to the large scale fermentation process. That is the tricky part. Especially doing it at scale. Manufacturing then polishes and purifies this product.
Health and Wellness: What market opportunities are you trying to meet? Competitive advantage is that they are delivering actual products to consumer from synthetic biology. They have an 8-10 year advantage.
They believe that the skin micro biome needs to be taken care of. Their products provide great efficacy. Proof of that is the Vitamin C Rose Oil. Number one seller right now. Their products take care of the skin microbiome.
Lubricants: handled by Novvi. They have identified a lubricant that can be used in EV's. The have the best PAO technology and see themselves expanding in that market.
They have jet fuel technology which they sold partly to Total. This can be deployed if there is a carbon tax.
Mono clonal anti-bodies: Healthcare has very dirty chemistry. Ex using sharks to get squalene. Or Chinese Hamsters for MC antibodies. They are looking to hire a leader in the health care sector. (A sign of growing importance)
Metrics: Biossance - fastest growing skin care brand in North America. Doubled last year and is doubling again. Current run rate is 80m, retail sales of $120m, 70% on line, 30% retail during Covid. Now it's closer to 50 - 50. Digital is here to stay. Opportunity - Human Social Commerce. Sees digital becoming bigger.
18 molecules in the pipeline. Means they already have an organism that can make it but now they need to scale.
Now on track for 30 or more molecules by the end of the year. These will all be scaled by 2025. Expects 6-8 molecules at scale a year. A significant shift in the industry. They can do it because of how reliable their technology has become.
Purecane: when will it become high volume? They already have 150 products that are using it. Some of the biggest brands have been slower to adopt. But ingredion has a fantastic channel to market that they think will speed up adoption.
In Brazil sugar consumption is flat to declining, and other parts of the world will follow that trend.
He thinks that when the new factory starts operating, they will be cheaper than sugar. Sustainable, no calories etc AND less expensive is a winning proposition.
Brazil sugarcane is non GMO, uses little fertilizer, circular economy. This is how he thinks of sustainability.
Synthetic Biology: John Doerr - he believes that genetic coding is the next big thing to remake chemistry sustainably for most markets.