Chinese expansion: Amyris signs nutritional product royalty agreement with Xinfu
04 Jan 2019 --- Biotech company Amyris, Inc. has signed a long-term agreement with Xinfu of China, for a significant initial payment and a long-term minimum annual share of an existing nutritional product royalty arrangement. This agreement is aimed at enabling the company to monetize a portion of the long-term royalty opportunity to better manage volatility in a high-margin revenue stream, while maintaining access to future upside in the royalty payment structure.
“We are very pleased with our relationship with Xinfu, which is an extension of existing strong relationships we have built within China over the last year,” says John Melo, Amyris President & CEO.
“We now have two programs under development with Xinfu that are performing very well and have now partnered on an additional nutritional product royalty arrangement, resulting in one of the best performing nutritional product portfolios in the industry.”
This agreement also provides Amyris with the opportunity for a more rapid value creation in nutritional products. It includes a material upfront payment equal to the US$50 million expectation set during the third quarter earnings call and an additional long-term annual upside based on the market performance of the nutritional product portfolio, Melo explains.
“After extensive discussions regarding the potential structure of this agreement, we opted for a royalty rights partnership instead of a license agreement. We believe this structure better protects the future value of our technology for our shareholders and reduces any potential intellectual property associated risks in the future,” continues Melo.
“We are pleased to have this completed and to have closed out a good year for Amyris where we’ve executed well on most of our strategic initiatives. We are very excited about the performance of our product sales and the continued success and market leadership of our product and technology pipeline.”
Last year, Amyris made significant moves in the zero-calorie sweetener market. In September 2018, the company announced that its zero-calorie sweetener made from sugarcane received designation as GRAS (Generally Recognized as Safe) by an independent expert panel.
Just a few weeks later, the company joined forces with the ASR Group in a major supply and distribution deal.
With sugar reduction dominating innovation and strategy globally, consumers continue to look for high-quality calorie reduction solutions that taste as good as sugar. Melo told FoodIngredientsFirst during an interview in October, “you cannot compromise on clean ingredients,” as the demand for reduced sugar solutions accelerates.
Amyris is and continues to tap into these trends and enables some of the world's leading brands to achieve sustainable growth through natural solutions that offer alternatives to sugar.
In December 2018, Amyris partnered with Camil Alimentos, one of the largest food companies in Latin America, to meet the growing consumer demand for zero-calorie natural sweeteners derived from sugarcane. The agreement involves the development of an innovative option of a natural sweetener, which is zero-calorie and extracted from sugarcane.
