Gevo Provides Update Following Settlement With Butamax
September 21 2015 - 8:46PM
Gevo, Inc. (NASDAQ:GEVO) today provided an update following the
announcement that it had entered into worldwide patent
cross-license and settlement agreements with Butamax Advanced
Biofuels, LLC, ending a patent dispute related to technologies for
the production of bio-based isobutanol.
Key impacts of the settlement for Gevo include:
- SG&A expense savings expected to be over $7.5 million per
year
- Removes legal uncertainties which should help accelerate
agreements with customers, licensees and partners
- Settlement provides Gevo and its licensees access to all
isobutanol markets, while leveraging both Gevo's and Butamax's
capabilities and development efforts in the jet fuel and on-road
gasoline markets, respectively
"This settlement with Butamax is arguably the most important
development for our company since Gevo went public in early 2011.
This is a win-win agreement for both Gevo and Butamax and now
enables us both to get on with making isobutanol a commercial
reality and a big business," said Dr. Patrick Gruber, Gevo's Chief
Executive Officer.
"Over the past four years, the dispute has proven to be a
significant drain on our resources, in particular our cash. Since
2011, we have spent over $35 million on litigation-related expenses
and incurred significant additional costs related to patent-related
matters in the interest of defending our freedom to operate. It
will be very good to now be able to dedicate 100% of our resources
to growing the business. In addition, the uncertainty
surrounding the dispute has acted as a headwind for Gevo and our
commercialization efforts. The legal issues were complicated to
explain and the perception of potential risk caused some partners
and customers to stand on the sidelines. This uncertainty is now
gone. On the back of the news of the settlement, many of our
existing and potential customers, licensees and partners reached
out to us to congratulate us on the settlement and to express their
excitement in working with Gevo going forward. We are hopeful
that with this settlement in hand, we should be able to accelerate
our discussions with our potential partners, including licensees,"
added Gruber.
"The cross license is a great outcome for Gevo as it provides
access to all isobutanol markets for Gevo and its licensees. For
our core, near-term markets, namely jet fuel, marine and off-road
gasoline blendstocks, isooctane and solvents we can access these
royalty-free, and in some cases, we may eventually generate
royalties if Butamax looks to sell into certain of these markets.
We believe that these core markets represent several billion
dollars of value for isobutanol. To date, the on-road
gasoline blendstock market has not been a near-term focus for Gevo
because we believe that it will take significant resources and time
to develop this market. Butamax has already made meaningful
progress of gaining requisite EPA approvals. As Butamax gains these
approvals and opens up the on-road gasoline blendstock market, we
will be cheering them on because this is a potential longer-term
market opportunity for Gevo. If, in the future, Gevo and our
licensees look to access this market, we will pay Butamax a royalty
which is set at a rate typical for licenses of this type," said
Gruber.
About Gevo
Gevo is a leading renewable technology, chemical products, and
next generation biofuels company. Gevo has developed proprietary
technology that uses a combination of synthetic biology, metabolic
engineering, chemistry and chemical engineering to focus primarily
on the production of isobutanol, as well as related products from
renewable feedstocks. Gevo's strategy is to commercialize biobased
alternatives to petroleum-based products to allow for the
optimization of fermentation facilities' assets, with the ultimate
goal of maximizing cash flows from the operation of those assets.
Gevo produces isobutanol, ethanol and high-value animal feed at its
fermentation plant in Luverne, Minn. Gevo has also developed
technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates a biorefinery in Silsbee, Texas, in
collaboration with South Hampton Resources Inc., to produce
renewable jet fuel, octane, and ingredients for plastics like
polyester. Gevo has a marquee list of partners including The
Coca-Cola Company, Toray Industries Inc. and Total SA, among
others. Gevo is committed to a sustainable bio-based economy that
meets society's needs for plentiful food and clean air and
water.
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements relate to a variety of matters, including, without
limitation, statements related to anticipated SG&A expense
savings, the future market for isobutanol, the development of
partnerships, customer relationships and licensing agreements, and
other statements that are not purely statements of historical
fact. These forward-looking statements are made on the basis
of the current beliefs, expectations and assumptions of the
management of Gevo and are subject to significant risks and
uncertainty. Investors are cautioned not to place undue reliance on
any such forward-looking statements. All such forward-looking
statements speak only as of the date they are made, and Gevo
undertakes no obligation to update or revise these statements,
whether as a result of new information, future events or otherwise.
Although Gevo believes that the expectations reflected in these
forward-looking statements are reasonable, these statements involve
many risks and uncertainties that may cause actual results to
differ materially from what may be expressed or implied in these
forward-looking statements. For a further discussion of risks and
uncertainties that could cause actual results to differ from those
expressed in these forward-looking statements, as well as risks
relating to the business of Gevo in general, see the risk
disclosures in the Annual Report on Form 10-K of Gevo for the year
ended December 31, 2014, as amended, and in subsequent reports on
Forms 10-Q and 8-K and other filings made with the SEC by Gevo.
CONTACT: Media Contact
Karen Freedman / David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Mike Willis
Gevo, Inc.
+1 720-267-8636
mwillis@gevo.com
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