MARKABLES profit split method used in IP valuation of Amyris Inc. et al.

Amyris, Inc. is a synthetic biotechnology and renewable chemical company headquartered in Emeryville, California. Amyris serves the specialty and performance chemicals, flavors and fragrances, cosmetics ingredients, pharmaceuticals, and nutraceuticals markets. Amyris was listed on the NASDAQ since 2010 and delisted in August 2023 after filing for Chapter 11 bankruptcy protection. Amyris owned several consumer brands including Biossance and Pipette skincare, Purecane sweetener, Onda beauty services, and Menopause wellness supplements.

The United States Bankruptcy Court has retained The Michel-Shaked Group as Expert Consultant. In connection with its retention in this matter, MSG has conducted an enterprise valuation of Amyris, Inc. and its affiliated debtors (“Amyris”) on a going concern basis, as well as a valuation of Amyris’ intellectual property assets.

Bradley M. Orelowitz, a Managing Director of Michel-Shaked, used an interesting approach to value the Consumer Brands of Amyris at the insolvency date. This approach is based on the brand to enterprise value ratio (“brand profit split”) reported in MARKABLES. “To determine the value of the Consumer Brands IP, I first reviewed and analyzed the purchase price paid by third-parties to buy each consumer brand business. Next, utilizing comparable transactions I identified through the Markables database, I determined the proportion of the purchase price that was attributable to the brand IP.”

While this approach is often used as a hygiene check for the RFR method (relief from royalty), we have not seen it before as a stand-alone method. The Amyris case evidences the reliability of the IP to enterprise value ratio as retrievable from purchase price allocations. Be it as a stand-alone method or a plausibility check method, we think it is worth to be used on any IP valuation.

See the declaration and valuation report of Mr. Orelowitz here.