It Doesn't Scale!
With new technologies such as novel hybrid strains or different biochemical pathways the results in the lab bench can be very deceptive. The move from a 1 liter desktop fermenter to a 1,000 liter tank to a 100,000 liter plant usually entails several unforeseen difficulties—differences in pressure, mixing, heat dissipation, and plumbing abound.
While you can try to design for these contingencies, scale-up disappointments are a natural part of experimental chemistry—thankfully, no scale-up problems like the Oppau explosion (where small fragments of a stored ammonium nitrate block were safely broken with dynamite charges, but, when applied to the bigger chunk, some 80% of the town was obliterated).
Several biofuel companies have suffered from technical and financial scale-up troubles. Range Fuels went bankrupt trying to fix its process problems, KiOR is still getting loans to pay for its production facility, and Amyris (farnesene diesel) saw its stock price plummet after it had to drop its farnesene-production estimates. Companies such as Gevo also scaled back their technological expectations, focusing less on the use of cellulosic sources (grasses, etc.) and more on producing specialty fuels with common sugary feedstocks and retrofitted ethanol plants.
For Amyris, LS9 (diesel/jet fuel), Codexis (ethanol), and other synthetic biology-based biofuel companies, putting off the scale-up makes sense. Alternative products are where their platforms can truly shine: engineered organisms (or their enzyme products) are excellent at green chemistry and manufacture of commodity and specialty chemicals such as biodegradable plastics, pharmaceuticals, cosmetics, and flavors/fragrances. Though the market value may be much smaller, so is the competition and the volume of product demanded.
Amyris is already partnered with the two largest flavors-and-fragrances companies, Givaudan and Firmenich, and is simultaneously producing the cosmetic base squalane. Solazyme (one of the many biofuel companies in jet fuels), Amyris, ZeaChem (cellulosic ethanol), and LS9 have all individually partnered with Procter & Gamble to produce commodity chemicals. Solazyme also has partnerships to sell both algae-derived skin-protecting cosmetics and nutritional products.
Codexis avoids direct contact with the fuels market, instead opting to design enzymes and license its technology to a Shell/Cosan partnership, while it's also working on intermediates and processes for pharmaceutical companies like Pfizer, Merck & Co., and Teva. This strategy has served Codexis well, keeping its revenue around $123.9 million (of which $49 million is products and $71.4 million is partnerships)—just a few million shy of breaking even.
Staying afloat during the long path to scaled-up production is tough, and these biorefineries can hardly afford to miss an opportunity to capitalize on their development along the way. Getting out of a titer bind is a little easier if you've left some financial room to maneuver