AE Biofuels acquires biotech outfit Zymetis

By Bryan Sims | July 07, 2011

Cupertino, Calif.-based advanced biofuel producer AE Biofuels Inc. bolstered its technology portfolio by acquiring Zymetis Inc., a privately-owned biobased chemical and fuel developer headquartered in College Park, Md. As a result of the acquisition, Zymetis will continue as a wholly-owned subsidiary of AE Biofuels.

Zymetis holds four granted patents and more than 10 pending patents centered on the core of its trademarked Z-microbe, a marine organism that was originally discovered to consume plant cellulose at a high rate in the Chesapeake Bay. The genome of the bacterium, Saccharophagus degradans, has been fully sequenced by researchers at the University of Maryland. Zymetis researchers have successfully engineered the microbe to produce approximately 90 enzymes to rapidly convert sugar, starch and cellulose into saleable biochemicals and biofuels via its Zymetis Integrated Process.

Zymetis was formed in 2006 to commercialize technologies discovered by founder Steve Hutcheson, a 25-year professor of cell biology and molecular genetics at UM, and Ron Weiner, Professor Emeritus also from UM.  Hutcheson made the decision to lead the company through its early days and began by licensing several patents and patents-pending from the university.

“Zymetis’ technology has already demonstrated the production of high-value chemicals to supply multibillion-dollar global markets, but we lacked a commercialization platform,” Hutcheson said. “AE Biofuels has demonstrated operational global management capability, constructed and operated advanced biofuel plants and has already achieved success in creating and adopting new technology through the conversion of first-generation biofuels facilities.”

The technical team of Zymetis will join AE Biofuels in similar roles with Hutcheson joining AE Biofuels’ board of directors.

AE Biofuels operates a 55 MMgy ethanol plant in Keyes, Calif., a previously idled asset it had acquired from Cilion Inc., the original developer and operator of the plant, in March of last year. AE Biofuels subsequently restarted the plant this March. AE Biofuels’ subsidiary, AE Advanced Fuels Keyes Inc., is operating the plant under a lease agreement with Cilion Inc. With the help from a $1.8 million California Energy Commission grant, AE Biofuels is currently developing a 1 MMgy pilot plant to incorporate its cellulosic conversion technology at the same location. In addition to its ethanol ventures, AE biofuels’ wholly-owned subsidiary, Universal Biofuels, operates a 50 MMgy biodiesel production plant on the east coast of India.

“The combination of AE Biofuels and Zymetis enables the launch of new specialty chemical and renewable fuels products at an accelerated rate compared to the normal product development and construction cycle of three years or more,” said Eric McAfee, chairman and CEO of AE Biofuels. “The technical and chemicals business development team at Zymetis joins almost 100 global employees at AE biofuels who currently operate 105 MMgy of biofuels plant capacity in the U.S. and India.”

Zymetis isn’t a stranger when it comes to aligning itself with partners to accelerate commercialization of its novel technology platform. In March 2008, the company entered into a partnership with Fiberight LLC to establish a full-scale cellulosic ethanol plant. Last September, Zymetis and Genencor initiated an effort to explore novel methods for producing biochemicals directly from biomass feedstocks through use of the unique marine microorganism under development by Zymetis.