Amyris Inc (AMRS) 2014 Q1 法說會逐字稿

Welcome to the Amyris first quarter 2014 conference call. This call is being webcast live on the Events page of the Investors' section of Amyris's website at www.amyris.com.

This call is the property of Amyris, and any recording, reproduction, 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 Investors' section of Amyris' website.

I would like to turn the call over to Joel Velasco, Senior Vice President.

Good afternoon. Thank you for joining us. With me today are John Melo, our Chief Executive Officer, and Paulo Diniz, our Chief Financial Officer.

On the call today and on this online webcast, you will hear discussions of non-GAAP financial measures. Reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is contained on the press release distributed today, which is available at 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.

We will provide certain forward-looking statements about events and circumstances that have not yet occurred, including projections of Amyris's operating activities for 2014 and beyond. These statements are based on management's current expectations, and actual results and future events may differ materially due to risk and uncertainties, including those detailed in the Company's recent SEC filings and the Risk Factors section of Amyris's quarterly report on Form 10-K filed with the SEC on April 2nd, 2014.

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 a detailed discussion of the relevant risks and uncertainties.

I will now turn the call over to John Melo.

Thank you, Joel.

Good afternoon, and thank you for joining us today.

During the first quarter, we delivered strong collaboration inflows, continued executing on our commercialization roadmap, and ended the quarter with a stronger cash balance.

We are pleased with our 2014 manufacturing performance to date, particularly our first four weeks of farnesene production at Brotas.

We have achieved performance superior to our best fermentation runs last year at Brotas. This start underpins our goal to become cash flow positive from operations during the second half of this year and profitable during 2015.

During our call, I will cover three topics -- our operational performance; our commercialization roadmap; and our outlook. I will cover the first two before passing to Paulo for a financial update. I will cover our outlook after Paulo discusses our financial performance.

Let me start with our operational performance. In this section, I'll cover production and manufacturing, technology, partnerships, and renewable product sales.

We have successfully restarted our industrial plant in Brotas and are achieving our operational targets. We've had no operational issues since the restart. Our strains are performing better than expected, and we are achieving some of our best recovery yields to date.

We've now successfully engineered, scaled, and commercialized three fermentation molecules -- artemisinic acid, farnesene, and patchouli.

Our customers and partners tell us that we have the most capital-efficient model in the sector. We have an industrial plant that cost about $50 million to build, and we expect it will generate $300 million to $400 million in annual revenue based on our current product mix and commercialization roadmap. We are on track to deliver full payback on a cash basis by the end of 2015 for our Brotas facility. This result represents a two-year payback post the start-up year.

Please turn to slide 11 in the accompanying presentation.

This chart shows we have delivered farnesene-producing yeast strains, represented by the green line, that achieve 80% of the theoretical maximum yield in about six years, and with a modest team of about 120 people, we went from concept to our commercial farnesene strains.

Farnesene, it's not our technology's only success story. Last year, our partner Sanofi industrialized our artemisinin strains for the production of a malaria drug.

Also last year, Amyris successfully developed a third molecule to produce a high-value fragrance oil. In only 18 months, we developed a strain capable of producing our first high-value fragrance oil. We did this not just in the lab, but like farnesene, we produced it at industrial scale with the same efficiency, yield, productivity, and overall performance.

With this unmatched track record, we are currently engineering and developing strains for three additional molecules and have a development pipeline of over 20 additional molecules at various stages of development and mostly funded by our partners. About half of these are new strains to make new molecules, while the remainder are farnesene derivatives.

While we are not a single-molecule company trying to use complicated chemistry to adapt a single molecule into many markets, farnesene is a building-block molecule capable of delivering a suite of renewable products, from fuels to emollients.

Our first fragrance oils are leading the way to a range of new opportunities for fragrance formulators, large and small. You'll notice this in our differentiated average selling price. We delivered an average selling price of $9.84 per liter across all of our products for the first quarter and expect to stay in this range through the next several years. This represents an average selling price of around $9,000 a ton, for those of you that are focused in the commodity chemical and fuel business.

Our technology platform continues to expand as our collaboration partners select high-value molecules for us to develop, scale up, and value-share long-term.

We have over 10 different partners. Most, if not all, are leaders in their fields. We expect to add more collaboration partners this year based on advanced negotiation with several others.

We have a strong track record of meeting milestones for our partners, and this is demonstrated by our ability to expand collaboration agreements as with the case of Total and others. They choose us because they have assessed us to be the best and the only ones to have successfully industrialized synthetic biology and have developed sophisticated strains from the lab to industrial scale three times, each time more efficient, faster time to market, and less cash to cash.

On the collaboration front, we are very pleased with our continued performance in the first quarter of $15 million of collaboration inflows and remain on track for $60 million to $70 million in collaboration inflows for 2014, with over 50% of this already contracted.

We were very pleased to add BASF to our partner portfolio in the first quarter and view this initial project as a start to a long-term relationship where we can apply our inspired science to solve product challenges that support BASF's mission to be a leading sustainable chemical company while we create a long-term revenue stream from some of these solutions.

Turning now to our renewable product sales efforts --

We are making good progress on high-value generating opportunities for our product portfolio while transitioning the larger-volume commodity-oriented opportunities through our joint ventures.

Today, I'm also very pleased to announce to the market the market introduction of two new products as we expand our high-value product portfolio -- Amyris high-performance solvent and Neossance Hemisqualane emollient.

Our current renewable product portfolio includes sales of our Neossance Squalane globally, the Diesel de Cana volumes sold in Brazil, farnesene sold for high-performance polymers, lubricants, and of course, our new fragrance oil sold through Firmenich.

We put these products in four categories -- consumer care, performance materials, lubricants, and fuels. You can see a graphical illustration of this on slide 13 of the accompanying presentation online.

First, our consumer care segment includes both our Neossance cosmetic emollient derived from farnesene, as well as our flavor and fragrance products.

In this category, we have reached over 100 million consumers. Our squalane is used in over 300 brands throughout the world. These brands have put our Neossance squalane in products ranging from luxury facial creams and hair care products to everyday lip balms distributed through mass retailers like Wal-Mart, CVS, and Target.

We have become approved supplier to some of the world's leading brands, including Shiseido, Amorepacific, and Elizabeth Arden. These companies are all interested in the best-performing product for their consumers, the best economic performance for their shareholders, and doing right for our planet.

Research has shown that a 34% cell turnover for skin, a significant result for the attractive anti-aging market, this is a direct result of our squalane.

Squalane is on track to represent about $15 million to $18 million of our renewable product revenue this year and about two-thirds of our renewable product gross margin this year.

We remain on track to become the world's leading squalane supplier while growing the squalane market to historical size and expanding our product offerings in the emollient market. Our customer list includes two of the top three global users of squalane.

We are also expanding our emollient product offering with today's introduction of Hemisqualane. This product will build on the success of our premium emollient, squalane, and is 100% plant derived and ECOCERT approved. We have previewed this new emollient to a select customer list under the Neossance brand and received sample requests from everyone. This product is positioned to be higher performing than the midpoint emollient market, which is about an $8- to $12-a-kilo market.

We expect to provide the industry a stable supply and a set price and deliver a higher-performing emollient than is currently available at this price point. We expect this market to be five to seven times larger than the size of the squalane market.

Turning to our other consumer care segment focus, our flavor and fragrance business continues to grow both in terms of milestones, progress in our collaboration activities, and in industrial-scale manufacturing.

In the first quarter, we delivered the initial volumes of our first batches of our fragrance oil to Firmenich, which will be marketed to leading brands around the world under our existing collaboration agreement.

As I described before, this versatile and high-value fragrance oil will be used in many consumer care applications, from laundry detergents to high-end fragrances. We expect to bring one to two new fragrance molecules to market every year for the foreseeable future using the Brotas facility.

To help get us to achieve our goal of a 25% market share of the fragrance ingredient market globally by 2017, we expect this business to deliver $9 million to $10 million of our renewable product revenue this year. This business is delivering better results than we expected.

Second, our performance material segment provides a high-value market opportunity for our renewable hydrocarbon building block molecule.

As we announced a few weeks ago, we expanded our collaboration with Kuraray in Japan to include a new category of farnesene-derived elastomers shown to have improved flow properties and low residual strain, opening opportunities for vibration-dampening product applications.

With Kuraray in Japan, we are developing new products such as Hydrogenated Styrenic Farnesene Copolymer, what we call HSFC, that can deliver differentiated properties in high-performance thermoplastic rubbers. We expect HSFC's key market applications to include dampening automotive sealants, high-temperature adhesives, and compounding agents for shoes and rubber products. Of course, this builds on the success of liquid farnesene rubber, LFR, which is on track for initial commercialization in the tire industry later this year.

Today, we are also very pleased to announce the introduction of Amyris's high-performance solvent based on farnesene. We are introducing a solvent product to address a need of cleaning product formulators who are being forced to move away from existing solvents due to restrictions in the use of volatile organic compounds, known as VOCs.

The global market for solvent is approximately 70 million liters. Our solvent solution is a great opportunity for Amyris to differentiate itself and to provide a household, industrial, and institutional cleaning industry with a way to address worker safety and biodegradability concerns through low VOCs with improved oxidative stability and flammability profile.

We believe our farnesene-based solvent meets the highest industry standards and is stable compared to more volatile solvents. We are better performing than the current alternatives without price volatility and with ratable supply volumes. We are positioning our product as better performing and at a competitive price to [delimoning] without the price or supply volatility.

As we have been testing our solvent solution, we see exceptional cleaning efficacy on oil and tar soils while addressing market regulation on VOCs in the United States and Europe. Many potential customers have been enthusiastic about this new product and are testing our farnesene-based solvents in product formulation.

Let me now turn to our renewable mobility segment and speak about diesel and jet fuel. Two high-performance farnesene-derived products, we expect to commercialize via our joint venture with Total. First, our Diesel de Cana that fuels about 400 busses in Brazil continues to receive accolades. The US Department of Transportation's Maritime Administration, or MARAD, published an extensive report on the performance of our renewable diesel in maritime applications. They found a reduction of NOX and particulate matter and noted improved fuel consumption.

We were also pleased to receive Brazil's first approval, known as the authorization for specific use of a renewable diesel last month. We had a brief interruption of diesel sales during the first quarter due to the regulatory reporting requirements for fuels in Brazil. We are pleased to be again selling our high-performance Diesel de Cana without restrictions in Brazil to avoid any future disruptions. We expect our Diesel de Cana sales to remain consistent with 2013 performance.

Turning to our jet fuel, we are in the final week of the last committee balloting prior to ASTM validation of our jet fuel, a key milestone for airlines to use our jet fuel in commercial aircraft globally. Working with Total and a number of partners, we have submitted our farnesene jet fuel to an extensive series of tests, including flights on an Airbus A321, Boeing 777, an Embraer E-195 aircraft.

In late March of this year, we received the requisite approval from the ASTM's aviation fuel subcommittee and expect the final key vote in the next committee in the next week or so.

Based on our current view of the process, we expect to be in a position to start selling jet fuel in late Q2 or early Q3 and are in active negotiation with our first few customers, making joint customer calls with our partner, Total.

Finally, let me touch briefly on our lubricants. Novvi, our joint venture with Cosan, has validated its technology with key OEM stakeholders and continues to sample product to lubricant formulators globally. Based on this and since quarter-end, Amyris and Cosan have committed to an additional investment in the joint venture to accelerate production of Novvi's base oils later this year.

As you can see in slide nine of the accompanying presentation, we are not including any of our joint venture sales or volumes, namely, lubricants and fuels, in our planning and forecasts. We believe that simplifies communication and the modeling of our business.

For clarity, we are expecting the initial sales of jet fuel to be recognized by Amyris this year as we will be supplying this product to Total and the Amyris/Total joint venture.

Our business model integrates collaboration inflows and renewable product sales. Our collaborations drive our product pipeline and long-term revenue growth while delivering a recurring cash stream.

As we built out our collaboration pipeline over the last years, we not only realized approximately $60 million in annual collaboration inflows; we have also grown our product portfolio.

To recap, we have a strong pipeline of molecules under agreement. This represents more than $1 billion in revenue near the end of this decade, as you can see in the slides. This excludes fuels and lubricants' growth in our joint venture partners.

Our collaboration and product pipeline provides the foundation of our expectation of establishing and maintaining 60% to 70% cash gross margins. We are bringing to market new No Compromise products from a new cosmetic emollient to cleaning solvents and polymers, as well as the world's best-performing renewable fuels.

We are also very pleased with the continued success of our partnership with Total. Total remains our largest shareholder, and we've now completed a new agreement to expand our relationship by entering into a new five-year process development and scale-up cooperation. In this new agreement, we will work with Total to scale up new products, and they will pay for access to 25% of our pilot plant facility in Emeryville.

We are also exploring new molecules and new markets beyond fuels to continue growing our technology collaboration and have started joint selling efforts of our renewable fuels outside of Brazil. This remains a well-integrated, trusted partnership with one of the world's leading oil and gas companies.

So before turning the call over to Paulo, let me summarize our year-to-date results.

First, we have successfully engineered yeast to produce three different molecules at industrial scale. We have built and are now operating one of the world's first industrial biorefineries that can produce sustainable No Compromise fermentation molecules. This plant is operating at industrial scale and meeting our production targets.

Second, we have commercialized products that are impacting over 100 million consumers being sold through 300 different brands, including leading global brands. We have introduced two new No Compromise products -- Neossance Hemisqualane and Amyris high-performance solvent. These products are expected to deliver first revenue by the end of 2014.

Third, we have contracted or are in final negotiation over 50% of our collaboration inflows for this year and have visibility into most of the customers for our renewable product sales for this year. We have secured our first collaboration with the world's largest chemical company, BASF.

Fourth, we are on track for more than doubling our renewable product sales year on year, delivering $60 million to $70 million of collaboration inflows and becoming cash-flow positive from operations during the second half of this year. We have made our first sales from farnesene.net and, most importantly, have identified our first development relationship from one of these sales. It's a start, and we have more to do in making this channel more available.

I will now turn the call over to Paulo Diniz for a review of our first quarter financial results. We will then review our current guidance for 2014 and provide an outlook for the coming years. Paulo?

Thank you, John, and good afternoon, everyone.

Let me highlight some key points from our first quarter results.

Looking at revenues from renewable products and collaborations, we finished the first quarter of 2014 with total revenues of $6 million, with $2.8 million from renewable products and $3.2 million from grants and collaborations.

These total revenues of $6 million compares to $7.9 million in the first quarter of 2013. However, looking at the low GAAP cash basis, the way that we manage our business with focus on cash growth, total renewable product revenues and collaboration inflows were at $17.9 million.

In other words, in addition to the same $2.8 million for renewable product sales, we had $15 million in collaboration inflows. This $17.9 million in total revenue from renewable products and collaboration inflows compares with $14.7 million in the first quarter of 2013 on a non-GAAP basis.

Our first quarter, renewable products revenues of $2.8 million represent revenues from sales of squalane, [forkosmatics], renewable diesel for fuels, and our fragrance oil shipments to Firmenich.

These renewable revenues were negatively affected by a delayed regulatory approval for our diesel in Brazil, which caused a temporary interruption on diesel sales in the quarter.

However, regulatory issues were cleared, and shipments of diesel resumed mid-April. As John noted, we are pleased that A&P, the Brazilian government agents that regulates fuels in Brazil, approved a fuel license for a specific usage for our renewable diesel. This is the first of its kind in Brazil and simplifies the process going forward, another important step to our niche diesel business.

In terms of grants and collaboration -- $3.2 million on a GAAP basis and $15 million on a cash inflows no-GAAP basis -- we are on track with our annual target. It's worth noting that these numbers do not include the $2 million cash payment received in April related to the $4 million collaboration agreement with Kuraray we announced in March.

Just refreshing, the biggest difference between the GAAP and no-GAAP collaborations figures is timing of revenue recognition, and as mentioned before, for management, primary focus is on cash inflows.

Turning to our cost of goods sold, our COGS decreased to $6.2 million for the first quarter of 2014 compared to $9 million in the same period of last year when we exclude loss on purchase commitments and write-off of production assets that were 107,000 for the quarter.

The no-GAAP cost of goods sold, that is excluding depreciation and amortization, our cash COGS for the first quarter was at $4.9 million and compares to $7.5 million for the first quarter of 2013.

Also, let me point it out that on this $4.9 million cash COGS for the quarter, we had $1.2 million for idle capacity related to fixed manufacturing costs that we incurred during the period while Brotas was undergoing a maintenance upgrade; John discussed earlier.

As discussed in our press release, let me also note that we achieved a no-GAAP gross profit of $13 million in the first quarter, representing a 73% cash gross margin on our Total no-GAAP total line from renewable products and collaborations compared to a no-GAAP gross margin of 49% in the first quarter of 2013, so a 24% (inaudible) improvement.

Moving on, financial discipline remains a top priority for Amyris. We continue to focus on reducing our overall operating expenses. Our combined R&D and SG&A expenses were $26.4 million in the first quarter compared to $30.6 million in the same period of last year.

On a non-GAAP basis, that is excluding no cash items such as depreciation, amortization, and stock-based compensation, our combined operating expenses were $20.4 million in Q1 of 2014 compared to $23.4 million in Q1 of 2013, so a 13% reduction.

Our first quarter EBITDA, a non-GAAP measure but important for how we managed our business, was minus $7.5 million. This compares to minus $16.2 million in the first quarter of 2013, so a 54% loss reduction in EBITDA. This is a clear positive result of how the Company's efforts in lowering production costs and reducing spend.

As you can see in our press release, we had GAAP net income of $16.4 million for the quarter, or about $0.21 per share, attributable to common stockholders' base or minus $0.34 per share to common stockholders diluted.

Needless to say that such positive result is based on recouping part of the unrealized loss we faced last quarter on the changes in the fair value of derivatives embedded in our outstanding convertible notes.

However, when we exclude this no-cash gain in other no-cash expenses, such as the depreciation, amortization, and the stock-based compensation, our non-GAAP net loss was $24.1 million for the quarter, or a non-GAAP loss of 31 shares -- $0.31 per share.

Turning to our balance sheet, our cash balance at the end of Q1 2014 was $49.1 million, which compares with a cash balance of $24.9 million at the end of Q1 2013.

In the first quarter, we raised $25 million in a straight-term loan and $28 million in a convertible debt led by Temasek. This is another clear demonstration of our strong shareholding base and ability to obtain financial support for our business strategy.

[We] closed the quarter with a debt position of $178.6 million, which the great majority being convertible notes issued to our main shareholders -- Total, Temasek, and Fidelity.

Also important to note is that the balance of $114.8 million of other current liabilities is mostly the result of embedded derivatives in our convertible notes, again, with our main shareholders, Total and Temasek.

Let me briefly address our full-year 2014 outlook before turning the call back to John to discuss our long-term outlook.

Although we do not provide straight quarterly guidance, it is worth saying that our second quarter 2014 earnings will be lower than the current consensus estimated of about $18 million in revenues due to the expected timing of certain activities and inflows in our business plan.

This implies that the reminder of the revenues for the year will largely be reflected in the second half of the year when we should be above the current consensus estimate for those periods.

We are on track with the targets we discussed with you last quarter. That is, one, over $100 million from renewable products and collaboration inflows for the year; two, cash operating expenses for R&D and SG&A to be less than $85 million; and, three, capital expenditures of less than $10 million.

Finally, considering current efforts on one blending renewable product sales and collaboration inflows to be (inaudible) top line; two, operating our large-scale manufacturing facility consistently and cost-effectively; and three, remaining cost-conscious by embracing financial discipline. We continue to be confident of our ability to achieve a robust no-GAAP gross margin of over 60% and to become EBITDA positive during the second half of 2014.

Well, let me turn the call back over to John now for some additional comments.

Thank you, Paolo.

As you step back and look at Amyris, here's what we'd like you to see. Our business is about taking problems our customers have, whether a consumer care company faced with supply and price volatility, or an airline seeking high-performance fuel, and develop a microorganism, a yeast strain, to produce the molecule they need, scale up and produce this product to access a long-term recurring revenue stream. We use our inspired science to build living factories and establish fermentation processes that convert sugars into target molecules. Through our collaborations, we get paid to develop and scale these molecules, covering most of our overhead, and share some of the cost and performance benefit and product sales as a long-term annuity. That's our business in a nutshell.

Let me end by providing you a roadmap of what you can expect over the next several years.

First, we expect production of two molecules at Brotas this year -- farnesene and our first fragrance oil -- and to increase that in the coming years by one to two molecules a year. We believe we can achieve our production plan with Brotas alone through 2016 and expect a two-year cash payback.

By using Brotas as a true biorefinery, this allows us to keep capital expenditures stable at about $10 million per year in the short term and medium term. This is consistent with our revised agreement for the start-up of our next plant with Sao Martinho.

Second, we expect revenue this year from squalane, Hemisqualane, Amyris solvent, [Elifar], Diesel de Cana, Amyris renewable jet, all of these farnesene derivatives, and our first fragrance ingredient. Over 80% of the revenue expected this year is from squalane and our fragrance ingredient.

Third, we expect one to two new collaborations every six months. We expect collaborations to cover 80% or more of our OpEx. We expect this to result in scaling and are commercializing two to three new molecule products a year for the next several years.

Fourth, and last, through 2017, we expect to deliver 60% to 70% cash gross margins from sales and collaboration inflows. Based on our current business model and product mix, we expect to be cash flow positive by the end of this year and profitable in 2015.

Karen, would you please open the line for questions?

Certainly. (Operator Instructions)

Jeff Zekauskas, JPMorgan.

Good afternoon. This is [Silica] for Jeff.

Is there a little bit more detail on the new Total collaboration? And are you still expecting to collect the -- I think there's like another $20 million or so, too, that was supposed to be collected under the old collaboration. Do you still expect to receive that?

It's two direct answers. First of all, it's, I think, $22 million in total, $22.5 million that's remaining. That has now been guaranteed as part of an agreement that we finalized at the end of the first quarter.

And then, secondly, the new agreement is specifically for access to the plant and then services and cooperation, and that new agreement is incremental to the old one and goes out for five years. We have not disclosed the financial terms of that agreement.

Okay. Does it become something like an access fee, or do you think it's something that's more fixed in nature?

I can tell you that it's an operating agreement that is, I'd say, pretty fixed in nature. It's not a pay for services. We have a fixed amount and then, obviously, an opportunity to do more as we decide to work together on specific projects.

Okay. That's helpful.

And, secondly, as you look at like the 20 new product opportunities that there are, what do you think you'll see in 2015? What are like the most likely product opportunities? Will it be more on the fragrance side, or will it be more on the industrial side?

For 2015. For 2015, I'd say our growth would be performance materials first; secondly, cosmetics; and third, fragrance. And I think the three will add a pretty even mix as we go into 2015 in growth.

When I look at absolute, I'd say on the absolute side, it's really cosmetics being the biggest contributor in 2015.

Okay. And my last question is in terms of timing of orders, what is just like being delayed from like the second quarter to the third quarter? Is it a specific shipment of like the fragrance oils, or is it that some inventory has been built already and reorders are slow? I was just wondering if you can explain that.

We actually have no delay. The issue is we never provided quarterly forecasts to the market and no guidance, and I think analysts kind of divided equally or somewhat equally across the year our flows, and that's not actually how we'd expected them and not how we've built out the business.

So there's actually no delay on our side. Everything is going according to our plan, and this is just to ensure we're giving a view as to how we had looked at the flow quarter on quarter.

That's helpful. Thanks very much. I'll get back into queue.

James Medvedeff, Cowen and Company.

Hi, James. How are you?

I'm pretty good. How are you guys?

Very well.

That sounds like it. So can you say about how much of diesel sales were lost in the quarter? Was it the entire quarter's worth of sales or just part of the quarter?

Probably around two-thirds of the quarter. Paulo, you probably have a better--.

Correct.

Yes, about two-thirds of the quarter we did not have diesel sales.

Okay, so there were some diesel sales in the quarter but just not as much as one might have expected.

(Inaudible - multiple speakers).

And what about base oils to the Novvi joint venture? Any sales there?

No, we did not expect any and we did not have any. If we have any, it will be late in the year, and again, we're not really forecasting, so anything that comes from Novvi late in the year would be upside to our plant.

Okay, thanks. Any other categories that would just be squalane and flavor and fragrance and a little bit of diesel was the entire volume in the quarter?

Yes, I think that's exactly right -- squalane, the fragrance, and the little bit of diesel.

Okay. Let's see. So how much of the $60 million to $70 million of cash inflow do you expect from collaborations do you expect to actually report in revenue for the year?

I'd say all but about, call it, $15 million or so will likely not be revenue for the year.

15 will be revenue and 45--?

No.

55 will not? Is that correct?

All but 15 will be revenue or should be revenue for the year.

Okay. Got it. And that includes the 3 million from this quarter, right?

The 3 million from this quarter meaning the second quarter, correct?

Well, from the first quarter, sorry.

Yes, that's exactly right.

It's part of the 15, okay. Or part of the 45 to 55.

That's right.

Okay. I guess I'll leave it there and get back in the queue. Thank you.

(Operator Instructions)

Mike Ritzenthaler, Piper Jaffray.

On the related party sales, I just wanted to ask a question about the Novvi marketing and market development efforts there and whether or not we should continue to see quarters that are high and low or how -- what's the best way to kind of think about that particular line?

Hi, Mike. This is John. I think the way to think about it is, again, in what we're sharing as a shape and providing a view on going forward, we're not including any of the Novvi potential revenue or volume. We look at that as incremental, and if you could think of it, you could say like, again, I think we've shared during the call, a majority -- I'd probably say something around half or slightly more than that -- of our revenue for the year will be in the emollients market; the other third or so will be in the fragrance market; and the rest of it will be rounded out by fuel and some performance material.

Okay. Thank you for that. And just on ASPs, I guess I was interested if there's any tie to sugar prices or anything like that with the tick-up -- pretty meaningful tick-up from fourth quarter to first quarter in the average selling price or if that's just a function of the mix.

A function of mix.

Okay. Let's see. What was the cash burn in first quarter, cash from operations?

9.5, negative.

Okay. Thanks very much. That's all the questions for me.

Great, Mike. Thank you.

Jeff Zekauskas, JPMorgan.

I was wondering if you'd explain like what the Brotas facility now could potentially produce with the improved strains? I remember back in the day so it was the idea that maybe the production yield could be somewhere between, I don't know, between 30 and 50 liters per ton of crushing material depending on how (inaudible) proof the organism was. And so I was wondering what Brotas could potentially now produce. At what level is it at?

Again, we've shifted our model from being completely farnesene focused at maximum farnesene volume to being multiple molecules. So the most important thing is how do we optimize the portfolio for how much cash we generate from Brotas. So I just wanted to hit that upfront, Silica.

Okay.

So we're not looking at it that way, but if we were looking at it that way, you'd say we're currently at a run rate that puts us somewhat north of about 14 million liters at the current technology on a per-year basis.

And how long would you think it would take to scale up the -- like it seems there's probably -- like it sounds like there's probably a year or two left until you would even meet Sao Martinho or the Sao Martinho plan.

That's correct. I think we've said that we don't expect Sao Martinho's volume in our base plan until 2017, and our contract with Sao Martinho aligns with that need.

Okay, that's helpful. Thanks very much for clarifying.

Thanks, Silica.

Brian Lee, Goldman Sachs.

Hi. This is Britt Boril on for Brian Lee. Thanks for taking the questions. I just have a couple of quick ones.

Once you get the approval on the jet fuel, do you have any sense of volumes going to goal given your MOU with them? And in your jet fuel trials and testing, have you primarily been testing 10% blends?

Hi, Britt. We've been testing 10% blends and would expect most of our sales to be 10% blends, and I would say that most of the volume that we see based on our current negotiations is actually for some of the large international airlines to fly intercontinental routes.

Okay, cool. And then just a final one. What was your CapEx in the quarter?

It was $1.3 million.

Okay, great. Thank you.

James Medvedeff, Cowen and Company.

Just a follow-up on volumes. Can you say how much squalane was shipped in the quarter in Q1?

No, we're not actually disclosing volume and/or price or margin per product mainly because we've gotten ourselves in a bit of trouble with some of our big customers and it's just something we're not able to disclose.

Yes, understood. Okay, thanks.

Thank you. And I see no further questions in the queue. At this time, I would like to turn the conference back to management for any concluding comment.

Great, Karen. Thank you.

I'd like to thank everyone for their time today and your continued interest in Amyris. Our vision remains to apply inspired science to deliver sustainable solutions for a growing planet, and we do this in a number of ways. We offer consumers a better choice so they can do better for our planet by giving them better products. Our philosophy is simple; you give folks better products, you sell it to them at a competitive price, and they'll make the right choice. And we see that with our partners and really working with our partners to solve supply solutions for them by removing volatility and helping them grow sustainably.

So I'm really excited about where we are with our plan, our traction currently, and our ability to continue to deliver on our strategy at this point. We're pleased with our results during the first quarter and optimistic about our outlook. Thank you very much.

Thank you. Ladies and gentlemen, that does conclude our conference for today. We thank you for your participation, and you may now disconnect. Everyone, have a good day.