Q3 2021 Amyris Inc Earnings Call

Hi. This is the conference operator today's call will begin in just a few minutes and we ask you. Please continue to hold again todays conference call will begin shortly please continue to hold.

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Okay.

Welcome to the Amyris third quarter 2021 financial results conference call.

Call is being webcast live on the events page of the investors section of the Amyris website at <unk> Dot com.

As a reminder, today's call is being recorded.

You may listen to a webcast replay of this call by going to the investors section of Amyris website.

I would now like to turn the call over to Han Kristen Bell Chief Financial Officer of Cameron. Please go ahead.

Good afternoon, everyone and thank you for joining US today with me are John Melo, President and Chief Executive Officer, and Eduardo Alvarez, Chief operating officer.

John will provide a business update and Eduardo will share operational performance highlights and I will finally review our final results for our financial results for the quarter.

Please note that on this call you will hear discussions of non-GAAP financial measures, including but not limited to underlying sales revenue gross margin cash operating expense and adjusted EBITDA Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are contained in our financial summary section slides.

I'll be a companion presentation or the press release distributed today, which is available on our website.

The current report on form 8-K furnished with respect to our press release is also available on our website as well as on the SEC's website.

During this call we will make forward looking statements about future events and circumstances, including Atlas is outlook for 2021 and beyond.

His goals and strategic priorities anticipated transactions and other future milestones as well as market opportunities and growth prospects. These.

These statements are based on management's current expectations and actual results and future events may differ materially due to risks and uncertainties.

Clothing do as detailed from time to time in our filings with the Securities and Exchange Commission, including our 10-K for full year 'twenty 'twenty.

Amyris disclaims any obligation to update the information contained in these forward looking statements, whether as a result of new information future events or otherwise.

Before we begin today I'd like to note that included in our webcast is a slide presentation. We will refer to the slides will also be posted on the investor relations sections of <unk> website. Following the call I'll now turn the call over to Joe Joe.

Thanks, Todd and good afternoon, everyone.

Today I'll cover our third quarter business performance.

An update on our strategy in the near term outlook, including our initial 20 twenty-two outlook.

Slide four.

With the third quarter, we delivered another quarter of very strong strategic execution amid challenging and very frustrating global supply chain conditions.

These supply chain issues are impacting near term performance and as a result, our revenue in the third quarter was below our expectation.

Shipping delays along with major manufacturing disruptions in China are global in nature and persisting into the fourth quarter. However, we believe that these are short term in nature and have no impact on our long term growth targets and the increasing consumer demand for high quality sustainable products.

I will speak to these issues in more detail shortly.

In the third quarter, we once again realized record underlying revenue and record consumer revenue growth demonstrating continued year over year and sequential growth.

Our third quarter underlying revenue was up 40% versus the third quarter of 2020, and consumer revenue was up 89% versus the same quarter last year.

Also our multiyear consumer growth was very strong at 121%.

Cumulative annual growth rate for the three quarters year to date of 2021 compared to 2018.

2021 will be the first year that our consumer revenue outsize as our ingredients revenue we have been deliberate in our choice of clean beauty personal care health and wellness markets. These markets are high growth high margin and capital light, we believe the clean beauty will become the beauty industry.

Our segment for which we are viewed as leaders and which is growing at double the rate of the traditional personal care market.

Turning to slide five now our consumer business continued to grow sharply during the quarter with very strong execution of the launch of our new brands. The response to our new brands and customer loyalty to our existing brands during the quarter.

For instance, our belief and conviction and conviction in our longer term growth targets.

We have grown our consumer business by over 8.4 times over the last 24 months. This is exceptional growth and the best growth at scale that we are aware of and beauty demonstrating the power of our strategy our portfolio and our ability to effectively engage the consumer there.

The momentum in all of our brands gives us confidence to accelerate investment in our consumer business and continue to develop amazing clean and sustainable platform molecules that enable us to deliver the best performing consumer products in the categories we participate in.

We launched four new consumer brands during the quarter Rose, Inc. J B N clean hair terrorists on our clinical and all liquor further expanding our foothold in clean beauty and personal care end markets.

We started late in the quarter with these new brands and they have less than a full month of sales included in our third quarter results that said the new brands have exceeded our initial expectations and their strong traction is accelerated into the fourth quarter, we expect J D N and rosy to deliver more than two.

20 million of revenue in their first 12 months. Additionally.

Additionally, we completed three acquisitions, including Oh, My God beauty labs, and empty empower, adding strategic digital online influencer and social selling capabilities as approximately 50% of our consumer revenue is being generated from ecommerce.

Our online business is the fastest growing business in our portfolio and also our most profitable with most brands delivering over 80% gross margin for online sales.

Rose ink clean color cosmetics, J P M clean hair care and Paris, Sonic clean skin care are each formulated with one or a combination of our unique sustainable ingredients that we created and manufacturer. Each of these brands has a hero ingredient that we invested in Peru.

Juice, along with distinct formulations that are disrupting their respective categories or products have excellent consumer ratings and industry, leading repeat purchase this gives us great.

Confidence in the underlying demand to support continuing more than doubling our annual revenue for the next few years, we are delivering the best growth in our sector and we expect to continue at this pace or better for the next few years.

J B and is a great example of our portfolio of connection with heavy squalene at the core of its formulation.

With heavy squalene, we invented new chemistry to remove the use of silicones in hair and body care with this hero ingredient, we are truly revolutionizing hair care and also making our planet safer and more sustainable for all this ingredient along with our exclusive formulations and incredible brand partner.

<unk> is leading us to much better growth got all effects, our key competitor in this category.

This is our lab to market platform at work, we targeted a major sustainability problem with the widespread use of harmful silicones, we invented new chemistry and are now a leading producer and supplier of the best performing replacement for Dirty Silicones.

Demand for him you squalene is growing rapidly both in relation to the JV and brand and as an ingredient for other brands and formulated.

Zinc another brand launched during the quarter is similar to the JV and story and the clean color cosmetics category delivering comparable revenue to JV and in the third quarter bio silica is a key ingredient to the color cosmetic line. We have developed a process the derived bio silica from the ashes of.

Sugarcane that is used in our industrial applications and are in process of using this as the new default base for color cosmetics in the industry.

In addition to reusing residual products bio silica enabled clean color to perform much better on the skin and lasts twice as long.

The change doesn't stop there. We then formulate our color products, which is great with our squalene.

When squalene is incorporated with color cosmetics formulations, the product moisturizers skin and makes the color youll softer on the skin not a hard drive pace.

Great applications, rather than sustainability and powered by the performance of synthetic biology.

Well, Jonathan Van Ness, and Rosie Huntington Whiteley, our great partners to help promote the message of clean beauty formulated with high performing sustainable ingredients created and manufactured by Amyris.

We are coupling our product leadership with amazing data science tools and digital marketing, we strategically added beauty labs and empty empower to our portfolio in the third quarter.

M. T. Empower is a leader in Influencer marketing, which I believe is the future of digital marketing empty empower is the key enabler to our fastest growing sales channel life selling sessions hosted online by key micro influencers directly to their followers.

Is the equivalent of home shopping network on the Internet with much deeper engagement and much better sales conversion, we believe accessing the right influencer talent and having deep data and learnings with this community is the key to thriving online.

Direct to consumer is currently about 50% of our consumer revenue and delivering gross margins that are greater than 80% for most of our brands. We believe this revenue mix is sustainable as we expand our portfolio.

We now go to slide six and let's talk about our challenging operational conditions during the quarter.

As a growing global business, we rely on timely marine shipping to meet customer demand.

During the quarter, we experienced delays at the port of Savannah, Georgia related to a cargo that was scheduled to be unloaded in August which was not in loaded until mid September, causing a shortage of foreign athene, which is critical for producing squealing bottlenecks like this negatively impacted our ingredients revenue.

Approximately $6 million in the third quarter and increased our cost by approximately $3 million to $4 million negatively impacting our gross margin during the quarter.

Another major pinch point globally has been accessing materials from China, where critical packaging and other items for our brands are produced across the board our consumer business was impacted by supply chain disruptions related to China, and we estimate a negative impact of between six and $7 million.

During the quarter to our consumer business as an example pipe that are fast growing clean baby and mother care brand experience out of stock conditions and four of the top selling products during critical sales and promotional periods in the third quarter. The shortfall lasted about seven weeks.

We are focused on removing our dependency on global supply chains, and taking control of our manufacturing to avoid future surprises. We are very focused on completing construction of our Brazil ingredient plant and completing the build of our consumer products production facility in Reno, Nevada.

Eduardo will update you on the progress of these projects in a moment.

Jill will start production early in 2022, and Reno will be full production in the first half of 'twenty to 'twenty two.

Facilities will not only provide us much more resilience on the supply chain. It will also reduce our operating costs significantly and improve our gross margin by about 1000 basis points.

The challenges I just described are manageable I can confirm that the man for our clean sustainable ingredients and for our industry, leading clean beauty brands is increasing beyond our expectations. These supply chain issues are global in nature, and we know they will have an impact during the fourth quarter as well anticipating this.

During the third quarter, we prioritized and secure the supply needed for most of our expected demand in the fourth quarter. We're now doing the same to ensure we have replenishment for the end of the year shipments to set up for the first quarter.

Let me now turning to slide seven the JV partnership for next generation COVID-19, RNA vaccine.

As I have explained on multiple locations are allowed to market platform is versatile we have chosen to focus on certain verticals because of addressable market growth and margin profile and the speed of technology adoption, we have the only proven business model and our industry and the demand for our products is a great Testament to the future.

<unk> of all chemistry, it will be clean and sustainable and mostly made from synthetic biology enabled through fermentation.

Flavor and fragrance and health ingredients, whereas our first commercial vertical including such amazing ingredients, there's natural vanilla and sandalwood, we where we are now the words the worlds leading supplier.

We have some of the best brands in the fastest growing categories in beauty and personal care and our business model is delivering the best growth in our sector beauty is our second major vertical.

Over the years, we have established strategic partnerships with the leading companies in each of these sectors. This is how we've built amyris.

Today, we announced the creation of our latest commercial platform with the creation of a new 50 50 joint venture with immunity bio a leading late clinical stage immuno therapy company developing next generation therapies that drive immunogenic mechanisms for defeating cancers and infectious diseases.

We are very excited with the expansion into our next vertical biopharma immunity by our executive Chairman Dr. Patrick soon shiong and I share a common vision to make the lowest cost best performing next generation RNA based COVID-19 vaccine that's available to all.

Immunity bio has invested significantly in developing world, leading DNA and RNA vaccine production capacity and will be responsible for the manufacturing of the vaccine once human trials were successfully completed in South Africa.

Partnering with immunity bio provides us the capability to complete human trials and upon successful completion quickly move into manufacturing with the objective to deliver 1 billion doses next year through our JV addressing the unmet needs of access to vaccines in developing countries cold chain.

And durability challenges facing the world today.

We have visited immunity by those manufacturing facilities and can't confirm they will be ready to produce over 1 billion doses in 2022, starting as early as the first quarter.

The JV company is structured to minimize capital investment for both parties, we will each be leveraging what we already have.

Unity has excellent manufacturing assets and clinical trial capability.

Airbus has capacity for billions of doses of squalene supply for the adjuvant and its contributing our advanced RNA technology, specifically for COVID-19, we are in active discussions with several governments from the U S to Brazil, Portugal, and South Africa, and with the successful completion of human trials.

Can quickly scaled distribution that.

J P will be operated as a separate entity with its own management to not just distract us from our core business.

Before I hand off to Eduardo.

Let me make a few comments about the rest of this year and the outlook for 2022.

We have built the leading synthetic biology platform in the world.

Can be measured in many ways the number of products scale individual molecules from from different pathways produced and fermentation and delivered at industrial scale to partners not just foreigners seem derivatives.

Tons of clean ingredients produced that are reducing the carbon footprint of many industries. We have the underlying assets expertise pipeline growing brands to deliver $2 billion of revenue by the end of 2025.

We are experiencing stronger demand than expected for our consumer brands and our super frustrated by the short term challenges.

Global supply chains, we will.

I'll quickly walk through these issues.

We expect to end the year between 330 million and $370 million in revenue, we are changing our outlook out of Prudence. We are adjusting to inventory that we have on hand, we have the potential for significant upside. If we are able to access more components and ingredients we are.

Everything possible to ship material, but these external factors are directly impacting our revenue and margins.

For 2022, we expect revenue to exceed $500 million. We have previously indicated unexpected revenue of $1 billion for 2023. This performance is consistent with the guidance, we've been providing a doubling recurring revenue annually.

Our 2022 revenue consists of around $200 million from our legacy brands. Most of this from Bioscience, and pipettes, which drove both accelerating in growth and delivering very strong performance since at the four quarter.

50 million of this from brands launched in 2021, such as JV, Ed and rosy $75 million for from brands that we have a plan on launch and our purchasing in 2022, we have a strong pipeline upside brands and are in the middle of purchasing three new assets for the <unk>.

Portfolio.

And then $100 million from the earn out and technology collaboration payments and over $100 million and ingredient sales. This is how we underpinned over $500 million of 22, 2022 revenue, which we have a lot of confidence in.

We expect this to deliver gross margin in the 60% to 65% range and to be EBITDA positive for 2022.

We've grown our consumer business by eight four times during the global pandemic and expect to deliver over 325 million of profitable consumer revenue in 2022 from a business that delivered $17 million of revenue. During 2019, we have not been able to keep up.

With this growth and our supply chain and back office and we are really focused on investing and keeping up with that slowing down this consumer demand for our products.

We are very pleased with the underlying demand in our business and the growth in our recurring revenue. This is the best proof that synthetic biology is truly a critical component to the to a healthier planet. We are the only sustainable path to clean natural chemistry that is sustainable and that is what consumers throughout the world are demanding.

Now.

He'd water will now cover our operational performance and provide an update on our new projects for resilience and added capacity Eduardo.

Thank you John.

He said to reviewing operational results I'm going to describe the strategic investments, we are making in production capabilities for both our ingredients and for our consumer portfolio.

In our ingredients business, we achieved record results for our leading fragrance product.

<unk> production and performance that was 20% higher than our production stretch targets during the third quarter production campaign.

We achieved similar improvements for all our favors in fragrance ingredients, we produce in the third quarters.

Our teams are delivering the best performance for all of these ingredients as we continue to scale that.

Despite shortfalls, we sold all of our ingredient production as consumers continue to demand the best natural.

Natural and sustainable ingredients.

Expanding also on John's comments on the supply chain shortages in ingredients I wanted to add a few comments.

John captured only those shortfalls due to raw materials.

In fact, we had delays in the delivery of membranes, which pushed out about half our vanillin purification through the fourth quarter.

This represented another $2 million in revenue missed ingredients that were pushed to the next quarter.

By the way that production campaign right now is running very smoothly.

We are making strong progress with sustainable squalene for pharma position as an ingredient for vaccine adjuvant.

Our squalene scale up production already achieved industry, leading purity levels of over 99, 5%.

Our natural fermentation based squalene supply.

Has the potential to be transformational and the world needs a scalable vaccine platform that can replace adjuvant is derived from shark.

As a result, we are finalizing our long term production agreement to scale up production, all squalene operating under pharma GMP conditions.

Another new ingredient bio silica, which is produced by processing sugarcane ashes.

This is a waste product of burning sugar cane fibers to generate sustainable electrical energy our fermentation plant.

This project demonstrates our full commitment to capturing value from our waste streams and cultivating the circular economy.

Commercially we have received tremendous interest from the market.

Over 500 customers have sampled our biophilic with many more in the pipeline.

Let me also provide an update regarding our new fermentation plant at <unk> in Brazil.

Although we have encountered difficulties related to the sourcing of certain construction materials, especially steel.

We have worked very hard to keep the delivery of key items on schedule.

Yeah.

All different mentors are already installed in the fermentation power and all are long lead equipment will be delivered in the next few weeks and also in the first part of 2022.

We remain on target to start production at this plant in early 2022.

Looking at our consumer products during our third quarters, we launched four new brands and our team successfully formulated produced and delivered 28 new products on time.

We're making important changes to our production and supply chain capabilities to underpin the future growth.

As John mentioned, we are building a new production capability to support to support the scale up of our brands and we have leased 150000 square foot manufacturing facility in Reno, Nevada.

Facility is designed to bring full.

Pounding feeling and packaging capabilities in house.

Facility is large enough to accommodate our growth expectations across product lines and brands to meet our needs for the next three years.

We are targeting production of this new facility for the first half of 2022.

The advantages.

Are much simpler resilience production model faster scalability and lower unit costs.

This plant will be a crucial foundational capabilities to supplement our excellence in formulation marketing and brand building.

Let me close by concluding on the three priorities that we have for the rest of this year.

First we must continue progress on construction of the new plants.

Bonita and Reno.

Second our consumer business.

And all hands on deck approach to deliver the best end of the year holiday season and to ramp up for first quarter production.

For example for Kitkat our production in the fourth quarter must also deliver the opening inventory for 6000, new doors, we expect in the first quarter of 2022, and we are on track to do that and.

And finally monitoring and reporting on the progress of our RNA vaccine clinical trials that John mentioned with that I will turn the call over to <unk> to review the financial results.

Thanks, Eduardo please turn to slide nine.

Aspired the factors, we've discussed which impacted revenue during the quarter, our revenue growth trajectory remains intact and we recorded another quarter of record sales revenue, both on an underlying basis and for our consumer brands.

Also continued to systemically address our capital structure and have made tremendous progress over the past 18 months on both the debt and equity side of the balance sheet.

We further reduced our legacy debt position to 102 million. This compares to 297 at the start of 2020 and $171 million at the start of this year, we have consistently guided for that to be below $100 million by the end of this calendar year and we have clear line of sight to achieving this.

On the equity side, we have continued to diversify our shareholder base with the expansion of long institutional investors versus the year ago quarter.

So we have nearly fully address the outstanding warrants of which only $4 million remain which compares to $50 million. This time last year.

Cash at the end of the quarter wasn't other than $15 million compared to $38 million at the end of Q3 2020.

During the quarter, we had above average use of cash of around $100 million. In addition to working capital needs associated with our rapidly growing business uses of cash included 23 million associated with various transactions, including M&A.

$15 million associated with ongoing construction of the Brazil plant, which was in full motion during the quarter and approximately $7 million of investments in inventory and other cost to ensure supply chain readiness for our new brand launches in the end of year holiday season, which equated to that.

Total revenue of 48 million, increasing 40% compared to Q3 2020 revenue of $30 million product revenue of $37 million increased 17% compared to the third quarter of last year with product revenue of $31 million driven by record consumer revenue of.

$23 million and 89% increase.

Total yesterdays revenue of $277 million improved 197% versus the prior year period.

Total revenue included 154 million of proceeds resulting from strategic transactions.

Total underlying revenue, which is the sum of product and collaboration R&D and other services increased 39% to $123 million compared to $89 million in the first nine months of 2020.

Product revenue of $102 million increased 26 million or <unk> 33 per cent compared to the first nine months of last year, driven by a 25 million or 73% increase in consumer sales.

Biosolids International expansion continued through space in Canada U K and can now be felt in 14 different retailer change worldwide. The pet also continued to live on its commitment to improve the accessibility of clean products for babies mothers and families and can now be filed in 236, new stores across Canada.

And it was also launched 18.

18, new stores in the U S. During the quarter.

Yeah.

Also as previously commented rose Inking J P. N hosted a number of launch events and got into the market in this past quarter.

Good quarter ingredient revenue decreased versus the prior year quarter, primarily due to previously discussed supply chain and sourcing challenges during the quarter demand for our ingredients remains strong and through the end of Q3 sales volume for squealing, Houston skincare and other products surpassed total 2020 sales volume.

We look forward to have a robot at Benicia plant coming online early in 2022 as demand continues to increase and production capacity will only become more critical to meeting our ambitious growth targets.

Non-GAAP gross margin of eight 2 million or 37% of revenue grew from $14 million or 41% of revenue in Q2 2020.

Margin as a percent of revenue was down primarily due to the impact from the supply chain challenges that we've previously described on this call.

Shipping cost and especially afraid among others were drivers of cost increases lastly, ingredients product mix was a factor as well as no longer having the value share on the SNF portfolio. Following the DSM transaction, we said it was $4 million in the comparative quarter of last year.

Cash operating expense of $81 million increased by 33, 8 million or <unk> 88 per cent compared to the prior year quarter.

We invested approximately $9 million in head count and 5 million for fulfillment and shipping due to increased consumer sales, partially driven by the new brand launches.

Okay.

Adjusted EBITDA was minus $73 million decreased 40 million year over year, primarily due to a higher operating expense.

GAAP net loss is significantly influenced influenced by noncash mark to market adjustments related to changes in the fair value of debt and derivatives GAAP net loss of $33 million or 11 cents per share compared to a loss of 84 million or <unk> 37 per share in Q3 2020.

Adjusted net loss of $80 million or 27 cents per share compared to an adjusted net loss of $50 million or 22 per share in Q3 of 2020.

Let me make a few comments regarding year to date.

Total year to date revenue of 277 million improved by 197% versus the prior year period.

That total revenue included $154 million of proceeds from strategic transactions on.

Underlying revenue increased 39% to $1 23, compared to $88 million in the first nine months.

And then product revenue of 102 million increased 26 million or 33% compared to the first nine months of 2020, driven by a 25 million.

Or 73% increase in consumer sales.

Non-GAAP gross margin of $205 million or 74% of revenue improved from $44 million or 47% of revenue in the first nine months of 2020.

Excluding the contribution from the strategic transactions gross margin of 51 million to $30 million compared to the first nine months of 2020, primarily due to consumer related growth.

Adjusted EBITDA minus $12 million improved $84 million year over year due to revenue and margin growth and proceeds from the strategic transactions.

Now, let me turn to slide 12 shortly.

Shortly after announcing our third quarter financial results. We also announced that we have commenced a $400 million convertible note offering.

This offering is a natural continuation of an 18 months process of retiring costly legacy debt diversifying and institutionalizing our shareholder base.

Well as the funding of strategic capital projects, such as whole Barra Bonita ingredients plant and funding rapidly accelerating growth we.

We are excited about the future and believe these strategic steps, both operationally and regarding our capital structure, we'll set it will set us up well for continued success with that I'll turn the call back over to John.

Thank you Heidi.

We set ambitious operational financial goals, and we believe that our winning business model an advantaged portfolio is well positioned to achieve an estimated 2 billion in revenue during 2025.

Given the high growth expectation for the consumer portfolio and the end markets. We have chosen to serve the portfolio is expected to shift further towards consumer from 40% of total revenue in 2020% to 72% by 2025.

Targeted 2025 consumer revenue was $1 4 billion from our expanded family of brands. Meanwhile, We also expect to continue to grow our ingredients business to a total of about half a billion with a total of 30 molecules being scaled and actively being manufactured.

We have the leading technology platform and our registry, a proven business model and significant growth momentum.

Now it's also the right time to execute the last step in our strategy for capital structure now.

Now is the moment to really capitalize our business for growth eliminate expensive legacy debt and fully fund our manufacturing footprint.

Over the last two years, we have all observed firsthand how delicate the balance of our world is and I'm really proud of the people at amarin for their dedication and commitment to creating producing and making available products to the world that impact all of us with minimal impact to our environment.

Andrea Let's now go to the questions. Please thank you.

We will now begin the question and answer session.

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And our first question will come from Colin Rusch of Oppenheimer. Please go ahead.

Thanks, So much guys can you give us just a sense of the timing for the completion of trials with immunity by on one of them. We can see those results come out.

Hey, Collin and good to have you on the call. We're expecting early results by the end of the year and then final results probably early in the year early first quarter.

Perfect and then with the.

The capex elements that are come in first part of the next year. What are you guys waiting on for those deliveries in and where are those elements right now just in terms of their their location in the world and their timing.

I guess, how confident are you in terms of having those things all arrive on time early next year.

We actually need them to a REIT.

Hopefully by the beginning of December one of the things.

That I know, it's pretty hard to appreciate is where the level of growth we're experiencing on the consumer business.

We're having a pull forward as much raw material as we can and when I say raw material I'll give you. An example of one of the things that's kind of silly, but causes significant issues for us the caps on bottles is a perfect example, and pumps. Those are two great. Examples of different components that are actually critical for our <unk>.

Tumor business and.

We expect our mostly from China.

I'd tell you right now that most of what we need is on water. So the big issue is can we get it all unloaded and can we get ports cleared we.

We believe based on what we're seeing right now that will be fine, but just for you know the abundance of Prudence, we wanted to make sure we realigned our expectations.

Expectations for the year with what we have on hand, and hopefully if we can get the ships unloaded in the components and on time for manufacturing will be able to ship everything we expect by the end of the year in the nearer to where we thought we'd finish off our year to begin with so I hope that helps colonies water do you want to add anything to that.

And I think you captured it very well the numbers that you saw really include product that's already.

They produce are already in the distribution centers.

Okay. Thanks, so much guys I'll I'll take it offline. Thanks.

Thanks Colin.

The next question comes from Ross <unk> of Raymond James. Please go ahead.

Oh, good afternoon, Jon Hamm and Guido thank so much for taking our questions and John it's good to speak with you again.

I guess my first question is you know congratulations on being the first company with a CBD products to market. So you can really cover that too much on the call. So would you give us a little bit of an update on the CPG.

Beauty products that you know any sort of next cannabinoid and sort of new form factors around the capital.

Sure happy to do that.

First thing I'll tell you is we've already booked.

Multi millions of revenue this year from CPG. So I can tell you the CPG.

<unk> is off to a good start and we're excited about its potential right.

Right now the major product, we're formulating and obviously as our.

Product targeted at acne and other skin conditions.

What I will tell you that we're finding from consumer feedback is that for achy bones.

For muscle pains specially sport related muscle pains.

Covid related cramping and muscle pains, and a lot of other bone inflammations that combination of the C. B G.

And the squalene formulation, we're seeing have a tremendous impact on those things I mean somewhat.

Very very surprising like overnight.

Cramping going away and muscle pains, and bruising going away. So we're in process of launching an application targeted at that based on how good we're seeing the efficacy and the clinical data that we're getting back.

And again, we expect to see our consumer brand around that those categories terrorists on it continues to do very well I always look at consumer ratings and how well we're getting repeat purchase from the brand as a great sign of the brand's future potential in <unk>.

We're seeing that in spades, and I'd expect to see quite a bit of growth going into the fourth quarter and into next year. So those those are two examples of where we're a really.

Aggressively moving CPG.

We have several other reminder, cannabinoid now in the portfolio I would expect our second and third likely out by the end of 2022 and the other thing I'd say is we've had some major breakthroughs and enzyme discovery and gene use to provide us great confidence that we have no I T.

<unk> now relative to anybody else in the markets, where we are in the pathway and how we've evolved the technologies. So not only we have a platform now that it's able to very quickly six months or less engineer and scale a minor cannabinoid, but also clear if anybody's IP and really focused on ensuring we've got the best.

The best pathway to be able to scale minor cannabinoid quickly to market.

I mean, the other thing I would say really unemployed.

Important point.

We're now under about $1000, a kilo and we expect over the next couple of quarters will be at a 500 kilo or less for production cost of CPG and that's also pretty miraculous I don't think anyone is anywhere near that cost of goods for CPG and we're excited about what that gives us in market power and being able to really.

Scale for different applications as we take minor cannabinoid just the market.

Indeed, that's really good color I appreciate that but just a quick follow up question and pivoting towards fermentation capacity you refer in the PR to a nuc limitation facility being constructed.

How do you see the balance and it shouldn't be a balance between our proprietary fermentation capacity versus CMO are you seeing bottlenecks out there and how he says how are you setting up your strategy around fermentation capacity.

Look I mean, it starts with our observation that third party fermentation capacity is not as efficient.

It has significantly greater risk of contamination and its much higher cost so for us. The priority is really simple it's move everything we can as fast as we can to our proprietary manufacturing in Brazil, and just to give you a sense I mean in a way our cost of goods and our proprietary system is at least half.

Of what it is do we ended the third party and in some cases, a third right. So for US that's a major priority. It is not keeping us from volume. We we've I mean CPG is a good example, we've been producing as much C. B G. As we want it our Spanish facility beyond the Spanish facility is a great manufacturing facility that we've actually.

Taken a lot of downstream processing and skips and really customize the facility for our strains in our production, but it's costly the feedstock is constantly in the process as there's not we're not as efficient. So we do have approval and expect to be producing CPG in Brazil as soon as he'd widen gets the plant.

Up and operating which was the early in 2022. So we're very excited about that which is why I put out there that with the Brazil move for all of our fermentation will add about 1000 basis points of gross margin to our overall.

Prove it by 1000 basis points to our overall gross margin. So we're excited about that but that's how we look at it's not a matter of can we do third party or not scaling in a third party is very simple we have a machine for how we do that we put our people in a third party we have great S&P's for how we do that we operate in bigger small tanks doesn't really matter to us, but it's all a matter.

Of efficiency and cost and then being able to actually do it resilient way, which is really what he'd water has been working on you'd wanted would you like to add something to that.

Rahul just to build on that I think.

The two things I would say for us the Barra Bonita plan also gives us resilience not just access to scale.

Because of the fact that we can start to do a lot of our processing in a single site and avoid some of the risks and raw material deliveries that John alluded to in the ingredients up discussion around the third quarter. The second point that I would like to just say is that we've sized the.

Facility for Brazil for Barra Bonita to more than meet our needs for the next two to three years and this is remembering that we are seeing 30% to 40% CAGR on all of those natural ingredients that we manufacture.

Great John Thanks, so much for including Us and the questions today ill get back in the queue.

Thank you thanks Cheryl.

The next question comes from Laurence Alexander of Jefferies. Please go ahead.

Good evening I guess the first one is you gave some initial comments on the bridge for 2022.

How should we think about the odds of further molecule monetization in 2022 2023 that is.

How.

Much of a priority is it for you or what do you see as kind of a demand pull or the pulse of potential magnitude if that were to happen.

Hey, Laurence good to have you on the call.

We're not proactively working that but I will tell you I mean, a good example is our.

Our Novi.

Our Novi industrial lubricants company.

It's been doing well in the background and that's something we talk about very much but it is now.

Partially owned I think somewhere between 20 and 30% owned by Chevron.

And I can tell you on the back of some of the moves Chevron has made and lubricants that that is a potential for us to monetize that technology, it's not core to us long term.

And you know I would I would expect a potential.

Potential opportunities to come our way there I think the other is are some of the foreign exchange derivatives, especially on the industrial side, we have been very surprised at how much demand has accelerated for our foreign has seen.

All of them are application into the tire industry. So you know I I I would say in our core specialty ingredients not likely at all especially the unique pathways unique molecules, but on pharmacy derivatives, where.

There are very interesting derivatives that are accelerating demand for industrial markets, we may be opportunistic around that.

I also wanted to just clarify that none of that is built into our north of $500 million revenue.

For 2022 so it will be opportunistic.

And how should we think about the SG&A run rate going forward, given where it was in Q3.

Look I think the main message for Q3 is there is a lot of one times in there that are related to both costs of a lot of the M&A activity cost of supply chain Onboarding, just a lot of different costs and there are probably in the $8 million to $10 million range that we're in.

One time so a.

When you look forward I mean, I I would expect a more steady number to look around the $70 million range versus what we put out there and.

And we are looking at that cost base very carefully to ensure we have leverage.

We continue to grow Han is there something else you'd like to add on that.

No I think that's spot on I think in terms of the bifurcation between the ongoing in the and probably more one off items in nature.

John also mentioned.

Just just launching in setting up the new brands, obviously takes an initial effort and investment. So we don't capitalize that we put it we put it out there.

In expense.

And then lastly, what I would say and we've talked about this in the past is there is a variable component to the growth of the consumer business and particularly because the fulfillment and shipping expense is actually captured in selling.

And so as the business continues to grow.

In terms of consumer activity and number of orders that support that.

We'll we'll be somewhat proportionate to that but that's our that's where I would put it.

And then just lastly, if I may just one quick one on the enzyme some given can you characterize it sounds as if you have a pretty broad freedom of action.

And enzymes and if so is there a revenue opportunity to license.

For people, who are in kind of more conventional enzyme markets.

Another great question Lauren So we don't talk much about our enzyme discovery engine, mainly because we've used it for our own needs right. We probably have one of the most advanced enzyme discovery machines inside of our platform, we do it for enzyme or.

To facilitate the development of our pathway for producing our target molecules.

And I'll tell you, where we are looking at monetization there, it's actually and in Biopharma, we see very interesting in somatic needs in Biopharma and we see that our discovery platform could be very interesting and we're currently exploring targets.

Especially as we think about our relationship with immunity by on some of their needs for both proteins and enzymes and some of the work we could do there as a way to start to really explore that portion of our platform. So the answer is yes targeted biopharma and very focused on some specific targets that we're currently exploring.

Thank you.

Our next question comes from Dan Brennan of Cowen. Please go ahead.

Oh Hi, good afternoon. This is Kyle on for Dan. Thank you for taking my questions here at all.

I'll put these two together and then jump back in the queue. So I'm just I just wanted to talk about the guidance a little bit performance in the quarter for consumer revenues. So.

Relative to our expectations consumer revenue missed by you know pretty pretty good margin and I was just wondering if there's anything to point to here in the underlying business that may have been weaker than expected or is most of this dominated by supply chain issues and then my second question you Guy.

The full year to $330 million to $370 million and and total revenue, which is lower than the magnitude of the Q3, Miss and fairly wide range. You know is there any detail you can provide on on the bridge to the updated guide for by a consumer revenue ingredients revenue grants and collaborations et cetera.

Yes.

You bet, Kyle So I'll take the first part and maybe Han can take the second part on the bridge to the guidance.

On the first part.

Look I think the most.

Material part of this was the supply chain issues specifically.

Across all brands Componentry, and componentry from China that really started to become a problem through the quarter as the Chinese started to shut power off and limit the operation of many factories in China.

I think the other point Kyle.

The the new brands only had a few weeks of selling during the third quarter. So if you wanted to connect two dots are those would be it I can tell you that the weeks that they sold for we generated much more revenue do we expect it on a weekly basis and I can also confirm for you.

That.

Were now a month into the fourth quarter and those brands are performing extremely well better than we expected and our base is doing very well I can tell you like just to start off the month of November.

Science is well over <unk> last year's November right. So if we can maintain that momentum I think we have a great quarter in the making.

And one that I think we've we've done the prudent thing by getting expectations are in the right place for everyone. So maybe that actually takes us the PON and how we connect the dots for the.

The fourth quarter.

Yeah really.

Certainly as it relates to consumer.

Three dynamics, we think about John already touched upon it a little bit, but just to put them to put them. Together. So you have continued sequential growth in the brand. So we've obviously seen that.

Two quarter. So that's that's one element.

The other one as John just alluded to is the the new brands. The addition that we had kind of a week at the backend of the of Q3 and now we will have a full quarter of these new brands performing.

So that's the second the second break if you will and then the third piece is really.

The fact that we have the holiday season at the end of year holiday season ahead of us and Sheila.

Look historically at our performance.

So last year when we have three brands. When you look at Q3 to Q4, you see a significant uptick because of that level of activity in the holiday season. So again.

To repeat three dynamics sequential growth ongoing.

Holiday season, and then the new ones that come in and that gives us that gives us confidence that where we put guidance that.

Q4.

Should be able to deliver on getting us into that range.

And that Kyle for your I think for your benefit and everybody else's out there here's the way to think about it think about consumer.

In the fourth quarter somewhere in the $50 million to $60 million range think about ingredients in the $15 million to $20 million range, and then think about the rest being.

Some of the collaborations that are really.

Pretty consistent quarter.

Quarter on quarter and that that kind of gets you to.

Our solid.

You know call it $70 million to $80 million, that's built in of which most inventory is currently on hand for us to deliver on and again, whether we do more than that really depends on can we get additional stock and we're working hard on that but I hope that gives you a sense of magnitude and where the buckets are in the fourth quarter.

That's great. Thank you so much.

Okay.

Our next question comes from Tycho Peterson of Jpmorgan. Please go ahead.

Hi, This is Rachel on for Tycho. Thanks for taking the question and so sticking with Palestine is that consumer brands diving into the four new brands that you guys launched this quarter and you mentioned that they launched later than expected can you just give us some more color on what led to that delay was that was that really only supply chain driven or were there any other factors that led to that.

<unk>.

Completely supply chain as a matter of fact, we ended up not having all the skus that we wanted ready to go in the right quantities and we were not really able to fill all the retail orders, we had to be able to get those brands out in stores right, so but purely driven by.

Supply chain and having product ready to go.

Great. That's helpful. And then I know like I said in consumer brands, you've got in Biosciences Thai baht towards about 200 million next year. So what do you expect the legacy brands to do in 2021, especially given the recent supply chain headwinds and then can you talk about your confidence in the ramp to those legacy brands through next year.

Yeah look I expect the legacy brands to do somewhere between $1 25.

125 range for 'twenty.

<unk> 2021.

And then the second part Rachel regarding next year.

Yeah, just can you talk about your confidence specifically for those legacy brands ramping from that 125. This year to 200 million next year.

Yeah look the majority of that growth if I think about you know what what's driving it is bioscience.

And you know the number we've guided to is actually quite a bit softer than the current growth rate Bioscience right now is growing at a little more than double last.

Last year's fourth quarter, and if I just look at current our current performance right and we're guiding to something slightly less than that if you think about the current run rate to give you a way to connect dots current run rate for bioscience is about $130 million and just based on normal trajectory.

And being a bit softer in how we want to guide that gets us very comfortably north of $200 million between bioscience pipette and pure cane.

Great. Thank you.

Our next question comes from Amit Dayal of H C. Wainwright. Please go ahead.

Thank you good afternoon, everyone.

Maybe this is for.

And what should we think about in terms of the margin outlook for the fourth quarter.

Yeah.

Oh, Hey, Amit thanks for joining.

I think look.

We've if you think about margin profile, it's it's very similar to what we've been saying right. So if you just bifurcate between the two big pieces, one being consumed and the other one being ingredients.

I think we made some comments last quarter about ingredients in a bit more detail that dues are.

Economically disadvantaged right now because of not having to Barra Bonita facility.

All of that OLED emphasis as John explained it Eduardo emphasize too that that is a critical project to us and.

And getting us in a more integrated facility.

On the consumer side, we've always got a 60% to 70% with some of the brands being at the higher end of that range certainly.

As you know 50% of our revenue in consumer E Commerce and direct to consumer that's it's even above the top end of that range. So we see that we've continued to see it every quarter. So that isn't changed from a guidance perspective, and we've even seen that now with the with the new brands coming in so if you think about.

<unk> profile that that's the way to kind of model it out.

Got it and then.

For next year.

The 500 million guidance roughly for the revenue side.

Is that just based on you know your potential estimates or are there any contracts etcetera underlying you know that number.

Support that view.

Hey, Amit for all the so on the on the ingredient side.

That's predominantly all contracted and that is all based on existing ingredients and current growth rate to our existing channels.

On the collaborations and the earn out.

It's also a predominantly contracted and then on the brand side and the existing brands August that's all based on all the current doors that we have contracted the brands. We launched this year is also based on current doors that are contracted and.

The brands that we are launching in the year I can tell you already are.

Several of those brands are already under contract with retailers that we're launching into so.

But maybe the best way to think about it is about 70% to 80% of that revenue for next year already has a spa.

Hoping for agreements and channels to be able to sell into.

Okay. Thank you that's helpful. That's all I have guys. Thank you.

Thanks for that.

Our next question comes from Craig Irwin of Roth Capital Partners. Please go ahead.

Good evening and thanks for taking my questions.

So John.

Understand that the global supply chain problem.

It's a headache.

No.

I think it's a cost of doing business right now.

The $50 million adjustment to your guidance I'm going against that a large chunk of that really is a consumer given the mix shift you guys have been driving.

And can you maybe talk us through the opportunity.

To use increased air freight.

No.

Incremental sales of $50 million.

Sort of a.

Chunky potential for upside and into the back end of the year.

I know, you'll probably give up 20 points of margin on those sales, but it fertilizes new customers for growth in 'twenty, two and beyond.

Can you talk us through the logistics of whether whether or not this is doable or feasible to allow amyris to execute on that put up for the holiday season.

Craig I really appreciate the question and you can only imagine our all of our frustration right. That's just not been a fun quarter, especially after.

A pretty good run for us.

And we are we have an army wired or wireless team.

Scoped out price.

And it has a few 740 sevens that were looking at being able to lease to be able to do some some some movement, especially in and out of China.

And.

The cost is pretty extreme it's actually a little more than the 20 points that youre, referring to and the other thing to highlight the mix of impact is actually on a revenue basis, especially as we go into the fourth quarter pretty even between ingredients and consumer.

So we're looking at that we may need to use that if we have a further limitations that we believe put it.

Put at risk some of the upside and our rationale and moving down the guidance is to really focus on everything we have in hand and in control right. Now so we know where we can in the quarter solidly.

We are again exploring those options for what can we add and really doing a cost benefit tradeoffs and to your 0.1 of my big drivers, where the team is I'm not willing to sacrifice any demand.

How we're managing making those decisions going into the rest of the quarter. So hope that helps I don't know if you'd want to wants to add anything on that.

Yes, the only other thing I would say John is we.

You know Craig we did actually de risk the components aside from the examples that John use them around the caps on the bottles for Pat that he mentioned all the rest of the components are in very good shape, I think where we are considering this expedited air.

Shipment has been in some raw materials.

And that's where we're looking at those options, but I think just to reemphasize up the numbers that guidance that Jon shared already are underpinned by products that are already produced done on on and on the on the distribution center. So anything else. We do would be just to kind of the risk in 2022, and making sure that we can capture additional upside.

Understood. Thank you then just to follow up on a question and I guess the associated from Cowen asked.

John When you responded to the the mix question about you know ingredients consumer other.

And have locked.

Into a range of about $10 million, and you said roughly $70 million to $80 million.

But the delta on your guidance of between the low and the high is it was a little bit wider than that its $40 million. So in a circumstance like this usually you know I understand our board is looking at a range of scenarios and they they really.

I want to give guidance it's responsible.

Can you maybe give us a little bit of color now do we need. This this increased use of airfreight to hit the top of the guidance.

Could it possibly carry us over and over over the top of the guidance and what would have to go wrong or what would have to.

It would be problematic to reach the low end of guidance.

Oh, great questions, So, let's let's play with.

Like that last 10 million to the top end of guidance.

60 to 70 range 360 to 370 range and the 360 to $3 70 range is really in in the reach what Eduardo just said of us having the stock that we need.

What would have to happen for us to go above that above the $3 60 to $3 70 is really.

<unk>.

You know.

Either.

Cargos getting unloaded.

On time at the U S ports, that's number one.

And if not cargos getting a loaded on time us.

Deploying the use of at least $7 47 to move goods between China and the U S. So those are really the two things that we could pool and we do have access to obviously, the least claim to be able to go above that 370 Mark.

Again, whether ports.

Start getting.

On congestion or not.

It's to be seen right, but we're watching that very carefully. So I hope that helps its $3 60 370 is what we have in house the underpinned.

And then hopefully we can bring something in above that but I wanted to be prudent and make sure. We're covered all the way through going into the fourth quarter.

Understood. Thanks, again for taking my questions.

Thanks, Craig.

We have time for one more question and that.

As Graham Tanaka Tanaka capital management. Please go ahead.

Hi, guys can you hear me.

We can Ryan.

Thank you Oh.

I'm trying to make this quick.

One of the subjects that were already covered I do think there are.

There is a need to try to understand a little bit more about the immunity Bayou joint venture to <unk>.

<unk> 50 relationship and I'm wondering.

If you could just start with if the clinical trials do prove to be positive what are your expectations on the performance of the second generation Covid vaccine versus what's out there now in terms of efficacy safety durability of response duration of response et cetera.

And as well as commenting on price for.

Chris Schott or vaccine.

Yeah Graham So a couple of things first of all I'm planning on we haven't we haven't defined a date, yet, but I am planning on Patrick and I do.

Doing a live session with investors.

On lines, I say live zoom session with investors to be able to answer your questions jointly and we will work on getting a date in place for that I think that would be helpful for everyone, especially around the questions.

Regarding some of your questions about the vaccine here's how we look at it and this is all based on data we have now and some initially a peer reviewed.

Results.

Results that we have from some of the early and current testing that were seeing okay. So think about it as 96% efficacy, 96% efficacy single shot.

And then as far as the data we have one year.

Efficacy.

The need for a booster shot whether it goes beyond a year or not it's just we don't have enough data to be able to say my my guess is we will see could see how that goes.

The way, we're thinking about pricing is somewhere around $7.

Based on where we are for cost of goods the way to think about this is.

So by the way that's $7 I think it's below.

The $7 pricing of our vaccine is below the cost of goods that we've seen out there for Pfizer and others. So that's really what we're thinking about and based on our based on our cost of goods.

We think 1 billion doses.

At that level contributes a several hundreds of millions of dollars to us and financial contribution for the JV.

In 2022.

Assuming again, we launch and get to 1 billion doses out there and produce so it's giving us a lot of excitement about what's possible and our focus is just managing the JV, making sure. It's got the right resources and letting it execute and making sure. It has the space, especially with Patrick's technical capability and its teams to really get this to market fast.

Yeah and your.

Target market I guess there.

134138.

Uh huh.

One 1 billion.

Population in Africa is this intended to be.

Proved applied for and approved and distributed in all of Africa, or where or what markets would you plan to ship the one day doses.

Well I mean I can tell you right now obviously, we're very focused on South Africa for the trial as we are in active discussions in Brazil to ensure that the Brazilians have access to this technology.

Active in discussions in Portugal, as an entry point to the EU and as you can imagine we're active in discussions with U S government for anybody to think that any government in the world right now is sleeping well, believing that cobalt is under control you gotta be kidding yourself.

There is a fourth waves party, we have no idea where this goes.

Frankly, everybody just wants.

Security upheld for their population and Theyre looking at technology that can do that in a cost effective way without a lot of complexity in the supply chain everything we've seen that the data from our vaccine and the conversation we've had with multiple government.

Give us confidence that if we can get great results, we can get this thing out scale.

We had a lot of value for us in our call.

Yeah, I just wanted to confirm that on an on cost.

You had said earlier based on the use of the swelling.

Swelling adjuvant then it would help reduce cost, but we're seeing the performance of the active ingredient for the vaccine.

How much lower could you how much could your costs be for.

For example, Pfizer reported last quarter that they had a high 20% pre tax margin on what they shipped in the third quarter I'm. Just wondering if you would be in that range or higher.

I expect it to be higher I mean, I mentioned that our selling price will be somewhere around the $7 range you can imagine that our cost of goods based on all the modeling and experience. We have to date would say that we're looking at a cost of goods south of $2 a unit.

Okay, and you might have different distribution costs that might be higher than size of course.

So so what would be the timing.

<unk>.

For example, if you could give us a little more guidance in terms of data points on your <unk>.

One I think it's a phase 123 trials. So that already is a little different if you could discuss when that data might be released when you might be applying for approval in South Africa. How could you could you get accelerated approval in other countries and is this something thats a second half next year phenomenon first half first quarter could you give us a little guidance on <unk>.

Thanks.

Sure Graham.

Look I'll just give you a couple of data points right from that from our results that were comfortable speaking publicly about I would say first quarter.

Our parallel tracking the approval in South Africa, we're working very closely when I say, we Patrick specifically and immuno your buyer with the South African government. So we expect that to be a fast track.

And we are in discussions with the Brazilians to be able to take the data from South Africa, and accelerate pretty quickly so I would say pre.

Production and approvals first half.

Real impact to.

To the P&L second half of the year.

Okay, and just to confirm Theres been some discussion of the fact that I guess it avoids the.

Cold chain issue in other words, it does not have to be frozen is that correct and and and and I'm. Just wondering if that would help how much that might help the process.

Yeah, you know based on our current production process to actually freeze dried and therefore can be in the market for one year at room temperature not any control temperature environment.

Well that's fabulous okay.

I just.

Getting back to some of the issues that were brought up earlier, if I could just ask one more question on where you're at.

This year is all set and done and we're looking at next year to model for next year with this year's startup cost D. In terms of impact of starting up new brands.

And investing in a new plant, which I understand you you you actually write awful lot of what might normally be capitalize on the bar, but need to plant. So if you could just estimate for us what the startup costs. It would be this year that would be absent next year.

And then what the lost revenues might be this year with your with your guidance type scenario for the fourth quarter, what kind of how much lower would total revenues b is that that is at that.

40 to 50 million that or I guess, it's 30 to $630 million to $70 million is that pretty much all the shortfall from the supply chain problems or there are there other issues.

Yeah, Greg and I mean, I think as we said earlier there were two drivers. The main one is supply chain, but we also did not get as much selling time in the third quarter from the new brands as we would've liked right. So.

We had a few weeks versus what we were hoping to be about six weeks or so of selling time. So.

That that has an impact.

And I think one of the one of the other folks.

On the call I think help clarify that at the end of the day you know, we're hoping for much more like a $30 million to $40 million impact in total between third and fourth quarter.

Then the total 70 that we guided but we wanted to give ourselves lots of cushion and ensure that we didn't have a problem with the delivering on what we say right, so, especially with the how unpredictable the supply chain is at this point in time.

I think the way our model is working as is actually a little bit better than or a lot better than our expectation, we expected new brands to deliver about $10 million a year in their first 12 months. The reality is the new brands. We're launching now are starting to really track towards 20 million first year revenues doubled what we expect.

Got it.

And the costs are actually really in check so think about it as $5 million to $7 million in investment to develop a new brand 20 to 30 million in total to make it profitable and our current track record is billion dollar valuation for our brand in three to four years versus five.

Or four to five years as we did with <unk> right now of Biosolids exceeds a 1 billion dollar valuation in the public domain basically looking at folks who buy brands like that.

I think.

We have pipe pet well on its way to that so that's 2 billion dollar brands and now with <unk> and J P. S performance, we definitely see them in that same in that same path, but getting there much faster so lower investment and expect it to get to profitability.

And then obviously a faster path to $1 billion in valuation based on our current performance for consumer.

And with that let me, let me move to closing comments otherwise I'd.

I have my colleagues and everybody else listening is probably going to take my head off so.

Let me.

Let me go there now look I just want to thank everybody for being on the call.

Thank everybody for their patience with us.

The headwinds around supply chain are super frustrating at the same time I can tell you I've never been more excited and confident about our underlying business demand is much stronger than we can deliver on and we're focused very much on not destroying demand keeping consumers engaged in making sure we stay in.

<unk> touch with them and on the <unk> side, we're moving a lot of inventory from partners and warehouses to ensure that no factory goes without being able to produce in products and that's something that's really giving us a lot of credibility with our partners on the <unk> side on the ingredient supply side I can tell you.

From our partners, whether it's EBITDA and permitting issue of DSM every one of them is having issues, having to slow down or stop factories, because they can't get raw materials.

We've been very fortunate to keep delivering the raw materials, even if it means moving inventory around it does affect obviously our revenue because we don't get credit for taking inventory from a distributor to an end customer.

But we see this as temporary.

Question in my mind, as we get through the fourth quarter, we will have a much more resilient supply chain and we'll get beyond this and keep our growth momentum and I think my last point is I couldn't be more excited about having the underpinning to 500 million or more in revenue for next year without any one time deals and seeing the amazing performance of our underlying.

With that I'd like to thank everybody I hope everybody has a good afternoon.

Operator.

Yeah.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.