Dna For Kids

Gevo, Amyris, KiOR – as the Khosla Kids mature, scale, differentiate, who's on ...

They share Khosla Ventures in their DNA, and are next-gen companies – but there, the similarities begin to fade. KiOR – making biocrude from woody biomass. Gevo, making isobutanol and jet fuel from corn. Amyris, making Biofene and renewable diesel from sugar.

Much has been written on the technologies – fascinating they all are – but as the companies are beginning to show differentiation in their go-to market strategies, analysts and observers have had the opportunity to differentiate between the companies in strategic terms.

Over the past few weeks, several star analysts have been writing furiously, amidst a blizzard of quarterly filings and initiation of coverage, about the future of the companies. Their intent? To inform the public investor about attractive investment opportunities – a worthy goal at any time. But they also, in their conversations and writings, have formed interesting views on the technologies and strategies themselves – and thereby offer cautionary tales and encouragements to project developers, communities, researchers, and government – on how the market views the various strategies out there.

So, let’s put some definition on the sectors, and then look at what the analysts have reacted to favorably, and those elements that leave them skeptical. Woe betide any company founders who, in heading for scale, tempt powerful analysts to give negative outlooks, express skepticism, or become perplexed.

The latest on Gevo

For the second quarter, Gevo reported earnings per share of $(0.48), below the Street’s consensus of $(0.39). Revenue from corn ethanol was low, though margins were high. The big announcement – Gevo announced that it signed its first definitive commercial off-take agreement with Sasol Chemical Industries. This agreement makes Sasol Gevo’s first isobutanol customer and will utilize the majority of its isobutanol production capacity into 2013. The agreement is an index contract with favorable economics for Gevo, and includes specific timing and pricing commitments.

From Pavel Molchanov, at Raymond James: Recommendation. While fully recognizing the inherent execution risks in an early-stage story such as this, we believe Gevo is well positioned to be a leader in the Gen2 biofuel space, with a capital-efficient and highly scalable business model, rapid access to numerous chemical and fuel end markets, and a wide range of industry partners. We reiterate our Outperform rating. GEVO shares are currently trading at a 22% discount to our DCF estimate of $21.45, detailed on page 2. Given Gevo’s unique technology platform and “scarcity value” as one of the few publicly traded Gen2 companies, we believe a multiple of ~1.1x DCF is warranted, which yields our target price of $24.00.

Maternal Nutrition Affects Kids' DNA

Reveals poor maternal nutrition can modify an infant’s DNA and lead to metabolic diseases at the adult age.

Researchers from Centre de Recherche de l'Institut du Cerveau et de la Moelle Epinière (CRICM, CNRS/UPMC/Inserm) and the Unité de Nutrition Humaine (INRA/Université Clermont conducted an animal-based study that found maternal nutritional status can have repercussions at the level of the leptin gene, the hormone that regulates satiety and metabolism.

They studied the consequences of maternal nutrition during the perinatal period on epigenetic modifications of the genome. These alterations involve chemical transformations, such as DNA methylation and/or histone modifications (methylation, acetylation and deacetylation).

Pregnant mice were fed from the first day of gestation up to weaning either with a diet containing 22% protein (control mice), or with a low-protein diet containing 10% protein. After weaning, all the baby mice were fed a control diet. Young mice whose mothers had been given a low-protein diet were, as adults, thinner than the control mice and exhibited metabolic disorders. The researchers directly linked these consequences of protein deficiency during the perinatal period to demethylation at the level of the leptin gene. This epigenetic modification is specific, since overall methylation of the genome is not affected.

The study reveals the type of molecular process that takes place during the perinatal period and leaves an “imprint" in the genes of the fetus, lasting throughout the individual's lifetime. They said their work could, in the longer term, have an impact on the prevention of metabolic diseases.

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