Amyris Inc (NASDAQ: AMRS) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company has signed an agreement that puts it right in the middle of the pot stock craze. As you could imagine, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The company’s entrance into the marijuana space;
- what we’re seeing from AMRS stock as a result; and
- what we’ll be watching for ahead.
AMRS Enters the Marijuana Space With a New Contract
As mentioned above, Amyris is having a strong start to the trading session this morning after joining the pot stock craze. In a press release issued early this morning, the company announced that it has signed a binding term sheet.
The sheet surrounds a planned cannabinoid development, licensing and commercialization partnership that the company says is valued at up to $255 million excluding “significant royalties.”
In the release, AMRS said that the $255 figure comes from a mix of upfront payments as well as linked milestones that are expected to be achieved within the next one to three years following the closing of the transaction. The company also said that it may receive significant milestone payments for commercially scaling each product produced.
In a statement, John Melo, President and CEO at AMRS, had the following to offer:
We are pleased to have been recognized by a well-capitalized partner as the company best suited to leverage fermentation-based technology in the production of the best quality and lowest cost and sustainably-produced cannabinoids. The dollar value of this agreement and our roster of partners who are leaders in global markets combines to be a strong endorsement of our technology platform and ability to bring No Compromise™, sustainably-produced products to market. We share the mission of our partners to become the leader in sustainably-sourced CBD products in the near term as we focus on enabling the global beverage and skin care markets, including our own brands, to support the health and wellness of people and our planet.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Amyris, the news proved to be overwhelmingly positive for a couple of reasons:
- Cannabis – First and foremost, cannabis is all the rage these days in the market. The big dogs in the space have seen tremendous gains as we see global changes to laws, allowing for an emerging market. So, investors are naturally excited when they see companies getting involved in this potentially explosive opportunity.
- Validation – The news also serves as yet another point of validation as companies from several sectors of the market continue to look to AMRS for various chemical needs.
With that in mind, it’s not surprising to see that investors are pushing the stock on a run for the top in the market today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:12), AMRS is trading at $4.38 per share after climbing $1.22 per share or 38.61% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMRS. In particular, we’re interested in following the expansion of the company’s partnerships with various others to create and refine chemicals across several sectors. We’re also following the news surrounding the cannabis partnership as this could lead to a line of products that generate significant milestone payments and royalties for the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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