CBD milestone: Amyris earns first US$10 million from LAVVAN partnership

01 Apr 2019 --- Sustainable ingredients company Amyris has reported on its first milestone for its US$300 million cannabinoid (CBD) collaboration with LAVVAN, earning its first payment of US$10 million. The companies entered into a partnership for the multi-million dollar development of a fermented CBD ingredient in February. The previously undisclosed partner, LAVVAN, is a newly-formed company backed by players from across the pharmaceutical, cannabis and financial sectors, which intends to bring the first fermentation-derived CBD products to market.

“We are pleased with meeting our first milestone and confident in the capabilities of our R&D team toward rapidly meeting the objectives of this major agreement,” says John Melo, President & CEO of Amyris. “We can create highly pure CBD molecules and we can bring down the cost significantly to support broad consumer adoption. This is the start of what we believe will be a mutually rewarding relationship with our partner, LAVVAN.”

The fermented cannabinoids products that Amyris will formulate are expected to offer several benefits to consumers and the market. These include:

• Consistent purity and dosage depending on formulation due to controlled fermentation-based production without the variability resulting from plant-based ingredients;
• Fermentation purity, which should support lower regulatory risk;
• Significantly reduced cost over traditional production methods;
• Improved yield of economically difficult-to-source compounds with sufficient purity and efficacy;
• 100 percent free from pesticides, as ingredients are not farm or grow operation sourced.
• Sustainably-sourced products derived from rainfall-hydrated, natural sugarcane feedstock that results in less water and land usage. 

Upon announcing its plans to develop, license and commercialize a fermented CBD with LAVVAN, Amyris’ stock reportedly went up by 20 percent. The news came as the company released its preliminary unaudited financial results for its fourth quarter and fiscal year 2018, which ended on December 31, 2018. The results were reportedly “below expectations,” prior to the partner reveal. 

As low Tetrahydrocannabinol (THC) hemp has recently become legal in the US, there has been a flurry of activity on the cannabis platform. Technological innovations aiming to bring purity to the growing CBD and hemp market are proving popular. The fact that hemp was previously considered a schedule 1 controlled substance and banned as an agricultural crop, means it can lack substantive plant biology research and has suboptimal genetics, highly fragmented germplasm and inconsistencies. Further R&D is thus a welcomed development for many companies in the industry.

Earlier this year, Arcadia Speciality Genomics, a strategic business unit of agricultural food ingredient company Arcadia Biosciences, announced it was seeking to bring improved plant quality to cannabis crops by applying its proprietary approach to plant breeding and gene editing. The recent announcement of its foray into the cannabis-space – which has largely been grown unlawfully until recently – attracted “significant inbound interest from the cannabis industry,” Matt Plavan, President of Arcadia Speciality Genomics, tells NutritionInsight.