Amyris Inc (NASDAQ:AMRS) is having an incredible day in the market today, and for good reason. Early this morning, the company announced that a strategic partnership has been expanded. This expansion comes with the expectation of increased revenue. Today, we’ll talk about the news, what we’re seeing in the market as a result, and what we can expect to see from ARMS moving forward.
AMRS Gains On Extended Collaboration
As mentioned above, Amyris Inc (NASDAQ:AMRS) is having a strong day in the market today after announcing that it has made the decision to extend its partnership with a global nutraceuticals market leader. This new agreement is an expansion on an older agreement that was announced to the public on April 27th. Under the agreement, there are new nutraceutical targets. On top of that, a credit line of up to $25 million with a 5-year maturity, and an option for a $5 million strategic investment from one of the leaders in nutraceuticals is also included in the deal.
The client that AMRS has expanded its agreement with has already accepted farnesene as part of the earlier announced supply agreement. In fact, in today’s announcement, we learned that the company has become an essential part of the nutraceutical leaders’ highly disruptive technology to take control of a larger market share. It was also announced that the undisclosed partner is nearing completion of a dedicated manufacturing facility. The goal at this facility is to convert farnesene and expand volume production over time.
What About The Money?
This is a great deal for Amyris Inc (NASDAQ:AMRS) when it comes to potential earnings. In fact, the company expects that 2017 revenue from the first target product in this relationship to come in around $40 million. After 2017, it’s expected that the company will bring in about $70 million a year as a result of the partnership. In a recent statement, John Melo, President & CEO at Amyris had the following to offer:
“We’re very pleased with our achievement to date and the significant expansion of our partnership. This relationship continues to be based on our ability to provide our partners with low-cost, high-performance farnesene that can provide them with a competitive advantage while enabling them to grow sustainably… This extended partnership agreement further transitions us to a more broadly diversified portfolio of high performance, sustainable ingredients to some of the world’s fastest-growing markets and a global leader in low cost, high performance ingredients for the neutraceuticals market.”
How The Stock Is Reacting To The News
One of the first things that we learn as investors is that the news moves the market. In this particular case, the news was overwhelmingly positive. So, it’s only natural that we’re seeing a positive reaction in the market. Currently (11:26), AMRS is trading at $0.57 per share after a gain of $0.06 per share or 12.61% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Amyris Inc (NASDAQ:AMRS). This year has been an incredible one for the company as it has launched several new collaborations that will likely drive strong revenue in the long run. Today’s agreement further validates the idea that the company is slated for growth. Considering the strong year of collaborations, the product, and the management’s ability to grow this business, I’m expecting to see gains in AMRS ahead.
What Do You Think?
Where do you think AMRS is headed moving forward and why? Join the discussion in the comments below!
Disclosure: Joshua Rodriguez holds no positions nor plans to hold any positions in any stock mentioned in this article for the next 72 hours.