Zymergen Inc (NASDAQ: ZY) opened about 70% down in the stock market on Wednesday after the company said it expects no product revenue this year and immaterial product revenue in 2022. The nosedive slashed the biofacturing firm’s market cap from over $3 billion when it went public in April to under $1 billion this morning.
Zymergen’s sole product runs into technical issues
Zymergen launched its sole product, Hyaline, in 2020. The idea was to offer a cost-effective, environmentally sustainable alternative product to electronics companies that can be used in touch screens.
Many of its potential customers, however, ran into “technical issues in implementing Hyaline into their manufacturing processes,” Zymergen said in a press release late on Tuesday. While the company is still confident that there are no “intrinsic technical issues with Hyaline”, the development will still hurt its commercial push.
Originally, Zymergen had expected that Hyaline would start generating revenue in the back half of 2021. So far, its revenue has come from research and development (R&D) service agreements only.
Co-founder and CEO Josh Hoffman stepped down
In its announcement on Tuesday, Zymergen also said that its co-founder and CEO Josh Hoffman had quit the role, effective immediately. It named Jay Flatley, who has previously served as the CEO of Illumina, as the new acting chief executive of the company.
“We are disappointed by these developments, and the board and management team are focused on resolving the underlying issues to ensure Zymergen moves forward as a stronger company with a compelling operating plan. We are confident in Zymergen’s opportunities and prospects, although it will take longer to accomplish our goals than previously expected,” Flatley said in the press release.
Zymergen had debuted on Nasdaq at $31 per share in April. At its peak, the stock had traded at more than $50 per share versus $8.0 per share at the time of writing.
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