Biocatalysis

Following a recent going concern warning by its auditors, Verenium has now announced that John Malloy has resigned. Previously Malloy was Executive VP of Biofuels.

Formed through a merger of San Diego-based Diversa Corporation and Cambridge, MA-based Cellunol a couple of years ago, Verenium has set cellulose-derived ethanol production as its major goal. The company still maintains a small but growing industrial enzyme business operated out of San Diego and has extensive technology and state-of-the-art know-how in the genetic engineering and optimization of enzymes, but for today’s Verenium, future success appears firmly hitched to the fuel ethanol wagon.  Having British Petroleum as a major funding partner doesn’t hurt. BP made a 90 million investment last year to help Verenium finance its development and commissioning of its Jennings, LA demonstration plant.  Just last month (Feb. 2009), Verenium and BP formed a 50-50 joint venture to commercialize cellulosic ethanol from no-food feedstocks. The first commercial plant is planned for Highlands County, Florida, with groundbreaking set for 2010. As for technology, Verenium uses classical pre-treatment technology along with enzyme treatment for converting cellulosic waste such as bagasse to fermentable sugars, which are then converted to ethanol.

The Jennings and Florida plants better just be a start. Revenues from those plants will not even come close to bringing the company to breakeven, let alone profitability. As long as BP supports the company, Verenium will have some staying power. And since the industrial enzymes business is not a good fit with an ethanol producer, look for enzyme business to be spun off or separated at some point.