Genomatica Withdraws IPO, Instead Raises $41.5M in Private Financing

8/2/12Follow @bvbigelow

Almost exactly a year ago, San Diego-based Genomatica filed paperwork to raise roughly $100 million through an initial public offering, with a proposed listing on NASDAQ under the symbol GENO. Then the industrial biotech went silent.

Today, the company is announcing that it is withdrawing its IPO, and has raised $41.5 million in a Series D round of preferred stock financing led by Versalis, the largest Italian chemical company. In a statement issued this morning, Genomatica says existing investors TPG Biotech, Mohr Davidow Ventures, VantagePoint Capital Partners, Draper Fisher Jurvetson, Alloy Ventures, and Waste Management joined in the new round.

With the $84.2 million raised previously, according to last year’s IPO filing, Genomatica has now attracted a total of $125.7 million from its investors, who presumably will have to wait a bit longer before reaching their exit from the firm, which was founded in 1998.

On the plus side, the company says the latest financing was done at “a significant increase in valuation” compared to its Series C-1 round of financing, announced in March 2011.

In a phone interview, CEO Christophe Schilling said Genomatica’s IPO filing had given the company an additional financing option. But he added that Genomatica’s capital needs are not as big as some of its competitors, because the company’s business plan “is more of a licensing model, like Qualcomm’s.” San Diego-based Qualcomm (NASDAQ: QCOM), which is the world’s largest provider of wireless chips, hires semiconductor foundries to manufacture its products and licenses its technology to telecommunications-equipment makers, cell-phone makers, and others.

It was the first time I’ve heard Schilling describe Genomatica’s business model as a technology licensing strategy, although the company has disclosed several industrial development partnerships with Tate & Lyle, Novamont, and Waste Management.

Using genetically engineered microbes, Genomatica has developed technology for making 1,4-butanediol (BDO), an intermediate industrial chemical usually made from petroleum-based feedstocks, from renewable raw materials like corn syrup and sugar cane. Genomatica has the capability, though, to apply its technology to produce an array of other petrochemicals from renewable raw materials.

In emerging from its year of silence, Genomatica disclosed several other recent milestones:

—Forming a joint venture with Novamont, a new Italian bioplastic manufacturer, for industrial-scale production of BDO, with initial production scheduled for 2013.

—Reaching a limited exclusivity agreement with Mitsubishi Chemical for producing BDO in Asia.

—Genomatica said it also had signed a memorandum of understanding with Versalis and Novamont for a partnership in bio-based butadiene.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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