Amyris Files for Chapter 11 Bankruptcy
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Amyris, a onetime biotech darling that sought to change the beauty industry with innovative and sustainable ingredients and later moved into the celebrity brand world, has filed for Chapter 11 bankruptcy in a Delaware Court and is looking to off-load its consumer arm.
The announcement comes just a few days after it shuttered three brands — Costa Brazil with former Calvin Klein designer Francisco Costa, Onda Beauty cofounded by Naomi Watts and Purecane — and terminated 260 positions, a rep confirmed.
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“Over the past months, we have been hard at work on a strategic transformation plan to reduce costs, improve operational effectiveness, and achieve sustainable growth,” Han Kieftenbeld, interim chief executive officer and chief financial officer of Amyris, said of the filing. “We believe the step forward our company has taken today puts us on the best path to address our financial challenges and achieve a comprehensive solution — rooted in Amyris’ ground-breaking science, formulation capabilities and technology.”
As part of the process, Amyris has secured a commitment from existing lender Foris Ventures for $190 million of debtor-in-possession financing to support continued day-to-day operations. Court documents state that its debt totals $1.3 billion.
Amyris filed a series of customary motions seeking to continue operating as usual, including requests to continue to pay wages and provide benefits to employees, and maintain its customer programs and policies. It pledged to pay vendors in the ordinary course for all goods received and services rendered after the filing.
At the same time, the Emeryville, California-based biotechnology company plans to exit its consumer brands and will begin marketing them for sale. As the sale process progresses, Amyris said it will continue to operate these brands, including through retail partners and the brands’ e-commerce platforms.
The company’s brands include Naomi Watts’ menopausal beauty brand Stripes, color cosmetics line Rose Inc. with model Rosie Huntington-Whiteley, and hair care brand JVN with “Queer Eye” star Jonathan Van Ness. It originally launched with Biossance, centered around Amyris’ star ingredient, squalane.
The shuttered brands were deemed not core to the future of Amyris, WWD understands. Product will be available for a limited period of time.
A banking source told WWD that there is likely to be most demand for Biossance, launched in 2016, and JVN, but the sale process for the prior may be complicated. That’s because its key ingredient is squalane derived from sugarcane, produced by Amyris, but owned by Givaudan. A separate banking source described Biossance as “a great brand with lots of support from Sephora,” adding that there will definitely be interest in it.
In Amyris’ most recent financial results, core revenue came in at $56.1 million for the first quarter ended March 31, down 3 percent compared to the same period a year earlier. Consumer revenue of $34.2 million decreased 1 percent. The decline was driven by lower Biossance revenue due to reduced marketing and media spend, offset in part by the launch of our 4U by Tia brand at Walmart as well as increased MenoLabs direct-to-consumer revenue, it said. It reported a net loss of $193.3 million.
The announcement comes not long after John Melo stepped down from his longtime role as president and CEO and a member of the board. The board appointed Kieftenbeld as interim CEO, at the time as the company cut 148 jobs. Combined with layoffs from August, the cuts represent roughly 30 percent of its workforce.
Amyris began in 2003 with a $42 million grant from the Bill and Melinda Gates Foundation to create a molecule to treat malaria by engineering the genetics of yeast strains and fermenting them in sugarcane syrup in order to convert basic plant sugars to hydrocarbon molecules. The company adapted this technology to develop other “clean” ingredients, including sugarcane-derived squalane, an alternative to that found in deep-sea shark livers, for countless markets.
It then appeared to change course, diving deep into the celebrity brand sphere. Prior to COVID-19, 80 percent of Amyris’ business was in supplying ingredients to other companies, while the remaining 20 percent was its consumer brands, including Biossance. Melo told WWD last year that around two-thirds of the business was devoted to consumer brands and one-third was focused on supplying other businesses.
But with the celebrity play failing to make the company profitable, Amyris earlier this year sold certain cosmetic ingredients, including its squalane to Givaudan, the world’s largest fragrance and flavors supplier. As part of the deal, Amyris continues to manufacture ingredients for Givaudan to use in cosmetics.
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