Zymergen, which describes itself as a “biofeeding company using biology to reinvent the world,” plunged 68% in its extended trading Tuesday to $ 11.07, down from its IPO price of 31. $. The company said in a press release that it no longer plans to generate product revenue in 2021 and that next year’s revenue will be “intangible.”
The company also said Josh Hoffman, who co-founded Zymergen in 2013, is stepping down as CEO and will be replaced on an interim basis by Jay Flatley, former CEO of Illumina.
Zymergen’s market cap fell to just over $ 1 billion from a high of around $ 4.8 billion in April.
“We are disappointed with these developments, and the board and management team are focused on resolving the underlying issues to ensure Zymergen progresses as a stronger company with a compelling operating plan.” Flatley said in the press release. “We are confident in the opportunities and outlook for Zymergen, although it will take longer than expected to achieve our goals. “
Zymergen’s current challenges are with a product called Hyaline, which the company launched in 2020. It’s an optical film, created using a biomolecule, that electronics companies can use for things. like touch screens. Zymergen’s goal is to have an environmentally friendly product at significantly lower costs than those produced by traditional chemical companies.
To date, Zymergen has earned revenue from research and development service agreements, but almost nothing from product sales. In his IPO prospectus, Zymergen said he plans to start generating Hyaline revenue in the second half of 2021 from Hyaline.
This goal has been pushed back a long way. Zymergen said Tuesday that several potential customers during the quarter “encountered technical issues while implementing Hyaline in their manufacturing processes.” While Zymergen said there were no “intrinsic technical issues with Hyaline”, there is now “a delay in the company’s commercial ramp.”
Zymergen raised more than $ 465 million on its IPO and said it now has cash and cash equivalents of $ 588 million. For the second quarter, it forecasts operating costs of $ 100 to $ 105 million for total revenue of $ 5 to $ 6 million.