Amyris, Inc.
Q1 2016 Earnings Call Transcript

Published: 11 May 2016

[Operator:]

Welcome to the Amyris First Quarter 2016 Conference Call. This call is being webcast live on the Events page of the Investor Section of the Amyris' website at amyris.com. This call is the property of Amyris and any recordings, reproductions, or transmission of this call without the expressed written consent of Amyris is strictly prohibited. As a reminder, today's call is being recorded. You may listen to a webcast replay of this call by going to the Investor Section of Amyris' website. I would now like to turn the call over to Peter DeNardo, Director of Investor Relations and Corporate Communications.

[Peter DeNardo:]

Good afternoon and thank you for joining us this afternoon. With me today are John Melo, our Chief Executive Officer; and Raffi Asadorian, our Chief Financial Officer. Please note that on this call today, you will hear discussions of non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most comparable GAAP financial measures is contained in the news release distributed today, which is available at investors.amyris.com. The current report on Form 8-K, furnished with respect to our press release is also available on our website as well as on the SEC's website at sec.gov. During this call, we will make forward-looking statements about events and circumstances that have not yet occurred, including projections of Amyris' operating activities, anticipated closing of committed financing, our plans to potentially divested business and financial results for 2016 and beyond. These statements are based on management's current expectations, and actual results and future events may differ materially due to risks and uncertainties, including those detailed in the company's recent SEC filings and the Risk Factor section of its quarterly report on Form 10-Q filed today. Amyris disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to the Amyris SEC filings for detailed discussion of the relevant risks and uncertainties. Before we begin today, I’d like to note that included in our webcast is a slide presentation we will refer to in today's presentation. I’ll now turn the call over to John Melo. John?

[John Melo:]

Thank you, Peter. Good afternoon and thank you for joining us today. In the first quarter we executed on our strategy of focussing our business in personal care, health and industrial performance markets. The partnerships and collaborations that help us accelerated option and enable our mission of making renewable products become mainstream. In the quarter, we realized 50% product sales growth over the first quarter of 2015. We delivered continuous operating cost reductions with 15% lower SG&A costs. We executed a significant expansion of partnerships with our first $100 million [Indiscernible] agreement for farnesene and we demonstrated our proven ability to continue to finance our growth to the support of our strong shareholder base. We continued to limit sales of fuels and are delivering significant growth in high value markets. We are enabling our partners to disrupt their end markets. Our continued success in scaling up and manufacturing multiple high value molecules from renewable sources and delivering these at lower cost and with better performance that exist resources is the best proof that we built a leading industrial biotechnology platform and we are starting to see this delivery in our business results. During our call today, I will provide performance highlights from our quarter and an update on our strategy. And we’ll end our outlook for the year. Raffi Asadorian, our CFO will review our financial highlights for the quarter. Let’s review our performance highlights for the quarter and since the start of the year. First, we delivered 50% growth in renewable product sales compared to the first quarter of 2015. We experienced strong growth from our personal care segment as expected. This is typically our smallest quarter of the year and despite that we are on track to achieve 100% renewable product sales growth for the full year compared to 2015. We signed our first major farnesene offtake agreement valued at over $100 million for the health and nutrition market. We expect this to be the first of several major farnesene offtake agreements this year. After two to three years of application development with excellent partner relationships, we are now converting each of these applications into long term supply agreements that we expect to deliver significant cost and performance improvements with the power to disrupt the respective end markets. Third, we lowered our SG&A cash costs by 15% and expect continued reductions over the remainder of 2016. We are on track to deliver on our target of cash operating expense between $70 million and $75 million for the year. This is a $10 million to $15 million reduction over 2015. Fourthly, we’ve completed $40 million of new financing from existing investors that combined with the $40 million to $60 million of proceeds we expect from the sale of non-core assets is expected to support our business growth going forward. Fifth, we’ve partnered with the Gates Foundation's once again to help further reduce the cost of artemisinin, one of the leading malaria treatments. We are very aligned on the portfolio of solutions to eradicate malaria and we will apply the world’s leading synthetic biology platform to achieve this. We believe biotechnology has stabilized prices over the recent years and now is the moment to go further with lowering the cost, make more treatments available and save more lives. And lastly, in addition to these achievements, after our seasonal shutdown we recently successfully restarted our manufacturing in Brotas, Brazil. I have successfully delivered on all our year-to-date paid milestones for our collaboration partners. In summary, we are pleased with where we are at thus far in the year and we are on track to deliver on our 2016 goals. Our strategy remains to focus on growing revenue while reducing our cost and our cash burn with a plan of generating positive cash flow from operations in 2017. We expect our revenue to grow by over 100% this year and have visibility on over $500 million of annual revenue by 2020, most of this from current partners and current product applications. Our revenue is growing in each of our three focussed markets. First, we expect our personal care business to generate over $45 million of revenue this year. This includes our flavour and fragrance activity, our business-to-business cosmetic ingredients activity, and our cosmetic molecule platform business. This compares to $25 million from this segment in 2015. The health market is one of our fastest growing businesses, including new collaborations and we anticipate that it will represent around $20 million of our revenue this year. This business was not meaningful to our revenue in 2015. We also expect the industrial performance market to deliver around $20 million this year and is where we are experiencing the fastest growth in farnesene derivatives and long term demand for farnesene for the polymers, adhesives and industrial lubricant end markets. This segment generated less than $10 million in 2015. Our revenue from these markets is derived from three core activities inside of Amyris. First, we partnered with the worlds’ leading brands to develop and formulate farnesene derivatives that enable us to reduce their manufacturing cost and deliver performance advantage products to their customers. This comes from our distinct ability to provide the lowest cost access to a secret team that has very interesting chemistry and enables our partners to do chemistry that otherwise would not be affordable. Secondly, we value engineer, scale and produce organisms that have produced target chemistry, target molecules and industrial scale at a disruptive cost that enables our partners to grow and compete profitably. In many cases, we are enabling them to gain share from established competitors while providing their customers with distinctive performance properties. This is where the power of our best-in-class synthetic, biology platform is being applied. We are not just forming partnerships; we are delivering real technology, delivering real products enrolling half line revenue while reducing our costs. Thirdly, we provide partners access to our technology platform to help them build capability and to help accelerate the development of the bio economy. We call this Amyris bioservices. We do all this with a focussed business model of partnership and collaboration. We have 14 significant partnerships and most overall and expanding their work with us. This model enables us to do what we do best and benefit from our partners, market know how and market access to reduce our business risks. We don’t work on products we hope customers will buy. We work on products customers need and our partners were paying us to help scale and manufacture these products for their long term. Now let me turn to Raffi for a detailed financial result, and then I’ll provide some color on our outlook for 2016.

[Raffi Asadorian:]

Thank you, John, and good afternoon, everyone. We are certainly encouraged by our first quarter progress on building and converting our collaborations and product sales pipeline thus far in 2016. We expect more pipeline conversion in the near future as we execute on our planned focus, on our four strategic relationships. As John already mentioned our success with this focus is evident by the new significant farnesene supply agreement we announced last month with our strategic partner that plans on introducing Disruptive Technology in a large nutraceutical market segment. Before we are giving our results for the quarter, I would like to take moment to discuss our recently closed financing disclosed earlier today, which along with the expected proceeds from our previously announced plan strategic transactions we expect to provide us with the capital needed to execute our 2016 plans. In addition to the previously announced $20 million shareholder loan closed in February and the $5 million equity investment from the Bill & Melinda Gates Foundation that we announced in April. We announced today the initial closing of a new investment from another existing investor for a total of $15 million in new capital. This is investment expected to close in two tranches and immediate $10 million tranche closed today and another $5 million tranche in the third quarter. The investment within the fourth convertible notes that are repayable monthly in cash or stock at the Company's option over the 18-month term. More details on the terms of this transaction are provided in our security filings today. Our debt balance has been reduced by $130 million since the first quarter of 2015 largely due to the support of our key shareholders, Temasek and Total and their conversion of debt-to-equity in July 2015. We plan on making further improvements to our capital structure over the next 12 months as we focus on delivering our 2015 plan. We appreciate the continued backing from all our existing investors and strategic partners who are supporting our goal to make renewables the mainstream. This goal being achieved as we advanced our partnered pipeline towards executed agreement. Now let's move to the first quarter results. First quarter revenues were $8.8 million, compared with $7.9 million in the first quarter of 2015, contributing to revenue in the quarter was $5.7 million in collaboration revenue about flat with the year ago period, and product sales of $3.1 million which was up 50% over the first quarter of 2015. The 50% growth in product revenues is driven by our personal care segment and the shipment of a newly launched ingredient to one of our key partners which was delayed by the fourth quarter of last year. Our personal care business may have 92% of the total product sales in the first quarter, which was inline with our expected product mix to deliver higher value products. The remaining amount of this new ingredient that was produced in that shift in the first quarter will be sold during the second quarter, while the production of the second batch is expected to begin again in the third quarter of this year. As John mentioned, we continue to build a healthy pipeline of potential collaboration and we expect to execute on closing some of these in the current quarter which will provide additional cash beyond the committed financing agreed year-to-date. Q1 adjusted cost of products sold, which excludes depreciation, inventory provision with excess capacity charges were $6.1 million compared with $2.7 million for the first quarter of 2015. The increase was driven by our new personal care ingredient shipped during the quarter for which we incurred start-up related costs that were expensed during the period. The start-up related cost of this new personal care ingredient more than offset the positive impact from a favourable revenue mix of 92% of our sales in the quarter from high value personal care products. The Favourable product mix was in line with our plans, while the start-up cost were higher than planned as this was the first ever bio production of this new ingredient. The upfront start-up cost investment expected to provide solid returns when we manufacture our second batch of this product in the third quarter of this year. Moving now to our operating expenses. First quarter adjusted operating expenses representing combined R&D and SG&A expenses, excluding stock-based compensation and depreciations and amortization was $20 million down $1.5 million for the same period last year. The decline was driven by a $2.1 million reduction in G&A expense driven by our continued implementation of cost control measures as previously announced. On a GAAP basis, Q1 2016 SG&A expenses of $12.2 million represented a decline of 15% from the year ago quarter. We continue to target full year 2016 cash operating expenses of about $70 million to $75 million. Our first quarter run rate adjusting for non-recurring items and for the timing of certain expenses is already tracking close to this range. Moving now to cash flow for the quarter. Free cash flow in Q1 was negative $24 million, a decline from prior year, which included a closing of several large collaborations with inflows of $28.2 million in the first quarter of 2015. New cash outflows in the quarter were lower than last year and driven by the timing of closing collaboration and working capital and start-up costs related to the newly ingredient production. Our reported net loss for Q1, 2016 was $15.3 million, or $0.07 per basic share. Included in the net loss were the gains and changes in fair value of embedded derivatives and extinguishment of debt. Adjusted net loss excluding these items and stock-based comp was $34.7 million, or $0.17 per basic share. In summary, we have lots of work to do but we are pleased with our progress in our commercial pipeline and the conversion to agreements with further expected conversions in the second quarter as mentioned early. This combined with our progress in controlling and reducing our operating expenses is what we need to continue to deliver for the rest of this year. We are also thankful for the continued support of our existing investors to ensure our capital structure supports the delivery of our objectives for the year. Now, let me turn call back over to John.

[John Melo:]

Thanks, Raffi. Let me now review our outlook for the remainder of the year. In the coming months, our progress should be measured by the following. We are in the process of expanding our agreement with Total for another five years and expect to include several industrial performance applications. They will help us expand near-term product sales and support their mission of increasing renewables to become 20% of their total revenue over the next 20 years. We are executing on two to three major collaborations, including those that I mentioned earlier in the pharmaceutical sector. We expect to close one additional pharmacy uptick with a potential value of over a $75 million. We are completing the divestiture of non-core activities to generate cash and further reduce our OpEx while focusing on our core strengths. These divestments are expected to be completed in the second half of 2016. And finally, we will do these things while maintain vigilance on our cost structure with the goal of achieving $70 million to $75 million in annual OpEx for 2016 and a reduction in overall cash burn. These steps will continue to improve our financial position, strengthen our business and more broadly help us deliver our mission of making renewable mainstream while building shareholder value. We are on track to deliver on our outlook for non-GAAP revenue for the year of about $90 million to $105 million. We appreciate the continued support of our shareholders, the commitment of our team inside Amyris and the collaborators and partners who have worked with us to build the leading synthetic biology platform in the world and share our mission of making new renewable products mainstream. I would now like to open the line for any questions you may have. Eric, can you help us open the line?

[Operator:]

[Operator Instructions] Our first question comes from the line of Sven Eenmaa from Stifel. Your line is now open.

[Sven Eenmaa:]

Yes. Thanks for taking my question. I wanted to first ask about revenue cadence. How do you think about evolution of this year, next quarter versus second half versus fourth quarter of the year?

[John Melo:]

Sven, thank you making the call. When you talk about the evolution, are you thinking about topline revenue?

[Sven Eenmaa:]

Yes.

[John Melo:]

So when you think about our topline revenue through the year, what I would suspect is you will see it grow into the second quarter. I probably say gradual growth in the second quarter. Maintaining that growth weight at about the same level into the third quarter and then a strong fourth quarter and that strong fourth quarter is really based on the pharmacy contracts, both the one that we’ve just announced and another one that we plan on announcing over the next couple of quarters that will underpin most of that are fourth quarter revenue. So, unlike prior years against steady growth quarter-on-quarter, first quarter, second quarter, third quarter, maintaining significant growth versus last year and sequential growth quarter-on-quarter and then a big fourth quarter. It’s not very different I think than what’s expected today in the market.

[Sven Eenmaa:]

Okay. Thinking about the next quarter and quarter at the start, it remains a primarily driven also the personal care or how should we think about the [Indiscernible] like late in the year in the coming quarters? Is that the continued shift by the products which were delayed from the fourth quarter?

[John Melo:]

Yeah. I would see personal care still making up a good portion of the second quarter, not as much as the 90% or more that we saw in the first. So the first was predominantly personal care. Second quarter will continue to be weighted for personal care but adjusting a bit across the mix. And then if I think about what the third and fourth quarter looks like, the fourth quarter will be almost evenly split. Actually, I’d say fourth quarter, two-thirds industrial and health, one-third personal care and then the third quarter evenly split.

[Sven Eenmaa:]

Got it. That’s very helpful. In terms of the -- just the current quarter, so we understand the gross margin dynamics. I think you mentioned previously that there is -- you had some finishing items. You need to sort out on the cost structure side. Well that’s what kind of drilled the gross margin and headwinds in the current quarter and what is the normalized gross margins we expect will be here as we go through the rest of the year?

[John Melo:]

Yeah. What I would expect to see for the rest of the year is the direct gross margin in the 50% to 60% range. I think in the first quarter, not I think I mean, I know in the first quarter we had about a couple of million dollars or so hits on the direct gross margin line. That was directly related to finishing costs associated with the launch of a new product. We know that it was a new product. We know that we rushed it to make sure we met the customer needs and that had a lot of extra start-up costs that we know that went into the rest of the year do not exist.

[Sven Eenmaa:]

Great. And the last two questions. First is what was the average selling price in the quarter and the second is how do you think about the cash utilization through the year?

[John Melo:]

Yeah. We are -- on the ASP side just to hit back for a second, our ASP for the first quarter was about $13.9 per liter. So that gives you a sense of what we work for. I expect as the mix moves further away from personal care for the rest of the year that will come down slightly. So it won’t stay at $13.9 but that gives you the first quarter. I think cash utilization I think you will see us being negative cash in the second quarter and then in the third quarter start to bring in quite a bit of cash really from asset sales. And then we expect with the asset sales to actually generate cash in the second half of the year.

[Sven Eenmaa:]

Got it. That’s very helpful. Thanks so much.

[John Melo:]

Thanks, Sven.

[Operator:]

And our next question comes from the line of Thomas Boyes, Cowen and Company. Your line is now open.

[Thomas Boyes:]

Hi. Thank you very much for taking my call. Just a couple quick ones. You mentioned seasonality as a reason or seasonality has typically been a reason for weakness in Q1. Was that for cosmetics specifically or, and if it indeed was, how should we think about maybe seasonality affecting other segments of the business?

[John Melo:]

Okay. Purely, personal care and very specifically a part of our personal care business, probably a third of the personal care business going forward is really in the hands of our distributors and the way the distributors work is they build inventory through the year and then they are light on orders during the first quarter and that’s literally the effect. We’ve seen that same performance now for the last three years, so not surprising to us.

[Thomas Boyes:]

Got it. Got it. And maybe just talk about Biossance and Muck Daddy, what were the best kind of sales channels for those type of products or how do you see it?

[John Melo:]

Let me -- I want to go back to one more thing on the distributor bill.

[Thomas Boyes:]

Of course.

[John Melo:]

The distributor sales to the end customers in the first quarter did not slowdown. We have been seeing out for about six quarters in a row a very consistent doubling of sales for distributors down to the brands. So those sales were going well. What we are seeing is again, how we work with the distributors in the build of inventory that they have through the year just to create some distinction there for you. And then getting back to your Biossance and Muck Daddy question, I will tell you that with Biossance, we had a very successful show with Home Shopping Network. We really performed at the top tier of their global performance for a new brand first time on the show. We have a new show coming up. I think maybe a couple in this quarter that actually we expect will continue to grow our performance in Home Shopping Network. Financially, what did the best for us during the quarter was really in our online performance. The online store has done terrific for us. We don’t see it being the major part of Biossance sales long-term but for now this really was carrying Biossance. I think as we go through the rest of the year, we are in discussions with several retailers and expect to have a major retail channel in place around the midpoint to second half of the year that will actually be the third leg or the third channel for Biossance and that’s pretty much what we see going forward, really moving Biossance to those three channels. Our Internet channels, Home Shopping Network in retail, retail being number one, Home Shopping Network number two and our Internet channel being the third in overall driver of sales. For Muck Daddy, we’ve had some Muck Daddy sales through Amazon. We’ve had quite a bit of Muck Daddy sales through catalogues that are carrying the product and we are in discussions with several retailers and we think that what will really change Muck Daddy sales during the year is the retail. So, Muck Daddy, again because of the unit price, revenue was a lot lower and it does require a significant retail channel to really make a difference on revenue.

[Thomas Boyes:]

Got you. And then just maybe two more for me. One just how should we think about the OpEx declines throughout the year, is cost are being removed, just maybe as a cadence throughout the year?

[John Melo:]

Yeah. I would not be surprised to see somewhere between another 10% to 15% reduction from where we are now in the second quarter for OpEx. And then see about that same amount in total reduce in the second half of the year.

[Thomas Boyes:]

Got you. And then last one for me. I just was wondering if you….

[John Melo:]

Just to clarify, Thomas, to clarify the second half, a lot of which we are seeing now and a lot of which we will see in the second quarter are actions we’ve already taken. But they were taken late in the first, so the realization of the one OpEx will be the second quarter. For the second half of the year, there is a big chunk of costs that come out with our divestments, which is actually what will drive that improvement in the second half.

[Thomas Boyes:]

Excellent. The last one for me would just be any update that you had on isoprene or any of the non-personal care molecules, the things that you’ve been working on?

[John Melo:]

Yeah. We put all that in the industrial performance bucket and what we can tell you is our partnership with Kuraray is advancing very well. The adoption of pharmacy and derivatives in tires is going very well. I think we are now tracking somewhere around 60,000 tires that will be sold in the Japanese market during this year. So, we see that going well. We see the performance for the industrial lubricants, which were also pharmacy and derivatives sold through Novvi are doing very well. We expect Novvi this year to have somewhere between $6 million to $10 million of revenue, which last year they had less than $2 million, just to give you a sense of the growth Novvi’s experience in the industrial lubricant space. And then the rest of it, we are seeing is really with Cray Valley, Total and some of our health and nutraceutical business that are evenly really growing that’s seeing derivative activity. So that’s kind of the way we are looking at the theme derivatives, our polymers, adhesives and then what we are seeing going into the final tire market and all of those evenly split for the year in performance materials. Lubricants coming on strong as the fourth category of theme derivatives. And then beyond that at this point we really focused the portfolio on those activities for industrial performance products. At the isoprene, project with Michelin and Braskem continues to go but we don’t expect to see product revenue from that project until probably 2020.

[Thomas Boyes:]

Okay.

[Operator:]

Thank you. And our next question comes from the line of Sameer Joshi from Rodman. Your line is now open.

[Sameer Joshi:]

Thanks, John. So, the question relates to the sale of non-core assets, the estimate is $40 million to $60 million, and you expect to accomplish this in third quarter. Are you already in talks with potential partners, buyers and how long do you think is -- big? And will the $40 million to $60 million recognized in 3Q?

[John Melo:]

Yes. These are pre-assets that take up to $40 million to $60 million. The biggest of which we are in a very active sales process led by a niche investment bank that process is going very well. It has several engaged buyers and we expect that in the third quarter we should see proceeds from that assets.

[Sameer Joshi:]

And the biggest asset is it in that $40 million to $60 million range or is it one of the three?

[John Melo:]

It’s one of the three will makeup to $40 million to $60 million, but it is the biggest chunk of the $40 million to $60 million.

[Sameer Joshi:]

Okay. The second question relates to any progress on the Brotas expansion, I know it is early days, it was only announced in March, but has there any progress on that?

[John Melo:]

I mean, I think the two things I would say or three things, I would say a lot of progress. We've got a very good engineering design. We've got a team on the ground, really advancing including using equipment from other assets that we're no longer pursuing as a way to reduce that overall CapEx for the project. So project design, project development, engineering design going very well. Secondly, we've actually really scaled up the project. Our initial thought was really to utilize equipment that we already have for the most part and actually what we realized in talking to the -- engaging the customers who are interested in participating in the project is that volume we need is greater than we expected. So this second plan will actually be a replica from a design standpoint of the first plan, would add a flexibility so we can make multiple molecules at the same time and make smaller volume molecules without having all the downtime when we switch from one molecule to the other, so we're very excited about that and that's really the second piece of the update. And the third is that we are very engaged with several partners. And it looks like we've go two or three who are interested in participating in the funding or support for excess of funding from the plant, which we expect to able to announce over the next three to four months.

[Sameer Joshi:]

Okay. So it is still going to be a partner funded exercise?

[John Melo:]

Exactly.

[Sameer Joshi:]

Okay. Stepping back fragrance ingredient shipment number two that was shipped in I think in May. Is that – do you know what size it was, are you disclosing if it’s in the $6 million to $8 million or is it more than that?

[Raffi Asadorian:]

We not specifically disclosed, that is part of the personal care segment, but you can take Q1 to Q2 it will be fairly similar in terms of size.

[Sameer Joshi:]

Okay. And then one last one relates to the Gates foundation investment, what are the resources that are being allocated to that project and what are the margins from that business?

[John Melo:]

The margins are fairly limited, and the resources are really more bio-engineering resources in fact limited, maybe a couple of FTs that we'll have on the project, and we will have a manufacturing partner that will work with us to ensure we scale up fast and reduce the cost aggressively from the current manufacturing cost of product.

[Sameer Joshi:]

And sorry, I said it was the last one, but one last one, if you could just let us know, has there been progress on the pathways program specifically?

[John Melo:]

We're seeing a tremendous amount of engagements and the engagements is coming in the form of industrial partners that want specific molecules and pathways, as well as partners who want the molecules we have versus that are developed for them. So quite a bit, I think we’ll be announcing some of those over the next couple of quarters and I think the most important thing is for us, is that DARPA is very pleased and looking at other ways that we could work together because of the progress we are making and a number of molecules were developing coming out of that investment.

[Sameer Joshi:]

Great. Thanks for that and good luck.

[John Melo:]

Thanks, Sameer. Appreciate.

[Operator:]

[Operator Instructions] And your next question comes from the line of [Indiscernible] your line is now open

[Unidentified Analyst:]

Hey guys. I think my questions have been partially answered. So this is more a clarification. For 2016, are you saying your expected gross margins will be in the 50% to 60% range for the year?

[John Melo:]

That’s correct, John [ph]

[Unidentified Analyst:]

Okay and then the 10% to 15% reduction in Q2 and then another 10% to 15% reduction in the second half, it’s about $3 million bucks each in reduction of operating…

[John Melo:]

John, it’s 10% to 15% more in the second quarter and then about the same that you see it in the first half versus second quarter sum delivered in the second half of the year.

[Unidentified Analyst:]

Got it. So is the quarter 3 million or about there in savings.

[John Melo:]

Yes, I think the second quarter will be about quite a few million savings and then you also get about the same in the Q3, Q4 timeframe.

[Unidentified Analyst:]

All of the second half will be similar to Q3?

[John Melo:]

On a relative basis.

[Unidentified Analyst:]

Okay, that’s what I was trying to put. That’s it. Thank you.

[John Melo:]

Thank you, John.

[Operator:]

[Operator Instructions] And I’m showing no further questions over the phone line. I would like to turn the call back to John Melo for any closing remarks.

[John Melo:]

Thanks, Eric. I appreciate that. I like to thank everyone for joining us today and appreciate your continued support for Amyris. We look forward to updating you on the continued growth in our business, when we report the second quarter result in August. In the meantime, Amyris will be reaching out to many investors by presenting at The Oppenheimer Emerging Growth Conference on May 17, at our [Indiscernible] Brazil Investor Conference on May 24, The Cowen 44th Annual TMT Conference on June 1, The Stifel Technology Internet and Media Conference on June 6 and 7 and we hope to see many of you at these events. Thank you and have a good afternoon or good evening.

[Operator:]

Ladies and gentleman, thank you for participating in today’s conference That does conclude the program. You may all disconnect. Everyone have a great day.