Solazyme Inc (SZYM), Amyris Inc (AMRS): Can These Companies Prove Big Oil Wrong?

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Despite being a year of steady progress, 2012 showed the world that industrial biotechnology is still not quite ready for the limelight. Big Oil shifted its focus to more proven thermocatalytic technologies that plan to transform the nation’s abundance of natural gas into fuels and high-value chemicals. Massive development deals involving hundreds of millions of dollars are few and far between for aspiring biotechnology companies these days.

Established energy companies are chasing more certain returns with their investments in renewable chemicals, but that hasn’t stopped a determined group from developing their platforms. Here’s a list of companies accepting Big Oil’s challenge of “don’t tell us; show us.”

Infecting the status quo
The brightest company investors can get their hands on is renewable-oils manufacturer Solazyme Inc (NASDAQ:SZYM) , which is hardly reeling from a lack of major energy company investments. This disruptor has partnerships and joint ventures in place with several big companies and recently received a $120 million loan from the Brazilian Development Bank. The loan actually has a negative interest rate after factoring in inflation rates for the Brazilian real.

Solazyme Inc (NASDAQ:SZYM)

The company will have manufacturing capabilities on three continents next year. Europe will initially be home to the company’s nutritional efforts, while Brazil will boast the largest and most diverse product lineup with Bunge Ltd (NYSE:BG). A smaller facility with Archer Daniels Midland Company (NYSE:ADM) in America’s heartland will be on call for partners, with potential for big expansions as needed.

Big Oil isn’t the only one pivoting. Amyris Inc (NASDAQ:AMRS) has transformed itself over the past year to focus almost exclusively on high-value chemicals. Initial plans to produce large amounts of sustainable diesel and jet fuels landed TOTAL S.A. (ADR) (NYSE:TOT)— which is still going all-in on Amyris Inc (NASDAQ:AMRS)– but also dampened the company’s financial situation. Investors will get their first glimpse of how full-scale industrial biotechnology works, as Amyris Inc (NASDAQ:AMRS)’ first commercial facility ramps up production through the second half of the year.

In the majority
Investors shouldn’t make the mistake of thinking that all of the action is happening from publicly traded companies. It’s quite the opposite. Numerous private companies are among the front-runners for bringing bio-based chemicals to the market. Some have even raised more money and are targeting a wider range of products than Amyris Inc (NASDAQ:AMRS), Solazyme Inc (NASDAQ:SZYM), and Gevo.

Genomatica has developed one of the premier industrial biotechnology chemical platforms to date, with plans build a biorefinery capable of producing more than 100 million pounds of butanediol per year by 2015.

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