Fermented cannabinoid development green light: Amyris lands US$255m deal

08 Feb 2019 --- Sustainable ingredients company Amyris Inc. has signed a binding term sheet with an unnamed partner in an agreement valued at US$255 million for the development, licensing and commercialization of a new fermented cannabinoid. The deal is expected to be finalized by the end of March after which development of the cannabinoid will immediately begin. The commercialization of the cannabinoid products is reportedly expected within the next 18-24 months, assuming appropriate regulatory approvals.

The partner is expected to provide initially lab-based and later commercial scale milestone cash payments in tranches for the development and scaling of technology to produce the cannabinoid. In return, the partner will be granted a license to commercialize these products. 

Amyris has a proven track record in leveraging its technology platform to scale sustainable products and help commercialize them like in the case of its No Compromise line.

John Melo, Amyris President & CEOJohn Melo, Amyris President & CEO, says it’s the company’s goal to become a leading party in sustainably-sourced CBD products with a focus on the global beverage and skin care markets, including its own brands, to support the health and wellness. 

“We are pleased to have been recognized by a well-capitalized partner as the company best suited to leverage fermentation-based technology in the production of the best quality and lowest cost and sustainably-produced cannabinoids,” notes Melo.

“The dollar value of this agreement and our roster of partners combine to be a strong endorsement of our technology platform and ability to bring No Compromise, sustainably-produced products to market,” he adds.

The fermented cannabinoids products that Amyris will formulate are expected to offer several benefits to consumers and the market, such as:

• 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. 

All R&D work executed by Amyris will be conducted in compliance with all US federal laws regarding controlled substances with adherence to state agency regulations.

A leading player in sugarcane fermentation among private and publicly-traded companies, Amyris says it has launched several successful products. These products include a World Health Organization (WHO) recommended first-line treatment for malaria – that claims to have saved thousands of lives – and many products in the flavors and fragrances, personal care and health and wellness markets. The company’s latest product is a zero calorie sweetener that touts a taste profile able to please everyone and is suitable for those suffering from diabetes and obesity. 

Last year our sister website FoodIngredientsFirst reported that Amyris had received GRAS designation for its zero-calorie sweetener made from sugarcane.

Just a few weeks later, the company revealed that it was joining forces with the ASR Group in a major supply and distribution deal.

As a string of regulatory greenlights have begun to move the cannabis plant and cannabis-derived products into an increasingly mainstream track, cannabis-derived products may well be the trend to watch in 2019. The FDA recently signaled a softened stance on cannabis-derived products with its most recent move which has legalized hemp and cannabidiol (CBD) derived from hemp. Such developments are exciting for the innovation front of food and drink products that contain cannabis-derived compounds. 

According to Innova Market Insights' data, there is a 34 percent average annual growth in the number of new food & beverage launches with hemp ingredients (global, 2013-2017), with US introductions enjoying an average annual growth of 21 percent over this period. The cannabinoid trend was also evident in this year's sweet and snack trade fair, ISM 2019, held in Cologne, Germany with many of the candy presented containing CBD.