Codexis reveals plans for $100m biofuel IPO

A US bio-science firm specialising in the development of catalysts that could play a major role in the commercialisation of next-generation biofuels has further stoked optimism that the clean tech IPO market is recovering fast after announcing plans last week for a $100m (£62m) flotation.

Codexis disclosed its plans to raise up to $100m in an IPO in a filing with the US Securities and Exchange Commission, revealing that it planned to use the resulting cash as working capital and to potentially fund both acquisitions and increases in production capacity.

The offering will be underwritten by Credit Suisse, Goldman Sachs, RBC Capital Markets and Pacific Crest Securities, and shares will be traded on the Nasdaq Global Market under the symbol CDXS.

However, the California-based company did not set a date for the IPO, nor reveal how many shares it intends to sell.

Codexis' technology is based on enzymes that start or speed up chemical reactions in a range of areas, including reactions that help to turn biomass into biofuel. Other key target markets include the pharmaceutical and chemical sectors.

Codexis generated sales of $58.7m in the first nine months of 2009, while posting losses of $15.1m. However, the company is widely regarded as a major player in the emergence of sustainable second generation biofuels and has secured a number of big-name partnerships over the past year.

Most notably, the firm is currently involved in a major collaboration project with oil giant Royal Dutch Shell, which is scheduled to end in November 2012. The oil and gas producer is believed to have a 20 per cent stake in Codexis, and is working with the company to try and develop new enzymes that enable the development of commercially viable second-generation biofuels made from non-food based energy crops.

Codexis has also worked with Iogen, a biofuel developer in which Shell also has a stake. Its enzymes have been tested at Iogen's plant in Canada to break down the cellulose in waste agricultural matter such as wheat straw and create sugars that are subsequently distilled to make ethanol.

The development of this so-called cellulosic ethanol from waste organic matter is seen as a potentially lucrative new avenue for the burgeoning global biofuel industry, as it allows low-carbon fuels to be developed without impacting food supplies.

The proposed IPO makes Codexis the latest in small flurry of high-profile clean tech firms to consider going public, providing a further boost to predictions that the IPO market will strengthen throughout 2010.

Battery firm A123Systems kicked off the trend back in September last year, with the move followed by a series of reports that a number of high-profile clean tech firms are looking to IPO during 2010. For example, electric car firm Tesla Motors has been rumoured to be considering an IPO, while last month solar specialist Solyndra announced plans for a $300m IPO.