San Diego-based Genomatica, an industrial biotech that uses engineered microorganisms to produce high-value chemicals in fermentation tanks, has submitted plans for an initial public offering, according to a regulatory filing today. The underwriters include Morgan Stanley, J.P. Morgan Securities, and Jefferies & Company, and the company hopes to someday trade under the ticker symbol GENO.
All shares to be sold in the IPO will be offered by Genomatica. The company did not specify the number of shares to be offered, or the price range, but CEO Christophe Schilling indicated in June that Genomatica was looking to raise about $150 million.
The San Diego company, which was founded in 1998, has emerged in recent years as a pioneer in industrial biotechnology. Using a proprietary software technology to model metabolic processes, the company has successfully demonstrated its ability to create a blueprint for genetically engineering microorganisms such as E. coli bacteria to consume renewable resources (sugars) and produce butanediol, or BDO—and more recently—butadiene. Before now, such chemicals were produced by the petrochemical industry, using methane and other fossil fuels as the raw material in CO2-spewing processes.
BDO is used to make a resilient plastic material, which in turn is the raw material for making spandex clothing, running shoes, and dashboards, among other things. In its IPO filing, Genomatica says global demand for BDO in 2009 was 2.8 billion pounds, which equates to a market size of approximately $4 billion (based on prices in June 2011). The company estimates that the global market for butadiene, a basic chemical used in a variety of other everyday products such as tires, carpeting and latex products, is even bigger—about 20 billion pounds and $40 billion. The company says it has identified about 20 other intermediate chemical products for its future product pipeline.
Because of the industrial-scale production required, Genomatica has been forging partnerships with industry partners, such as Tate & Lyle in the United States and Novamont in Europe.
Genomatica was founded in 1998, and operated as a research and development group with specialized expertise in using its proprietary software technology to model metabolic processes. The company funded its operations mostly through collaborative research agreements, grants, and by licensing its software to other researchers. In 2007, the company seemed to re-invent itself—or at least to focus more directly on its current commercialization strategy.
The company says it has raised $84.2 million in total proceeds from the issuance of convertible preferred stock. It’s biggest existing shareholders include Fort Worth, TX-based TPG Biotechnology Partners, which holds 19.1 percent; Menlo Park, CA-based Mohr Davidow Ventures, 17.3 percent; San Bruno, CA-based VantagePoint Venture Partners, 12.6 percent; Palo Alto, CA-based Alloy Ventures, 10.4 percent; and Batios Holdings of the British Virgin Islands, 7.4 percent.
