Jim Lane
In Colorado, Gevo (GEVO)
reported Q2 2015 revenues of $8.9M compared with $7.7M for Q2 2014,
and Q2 loss of $6.5 million, compared with $9.0 million in Q2 2014.
The increase in revenue during 2015 is primarily a result of the
production and sale of approximately $8.0 million of ethanol,
isobutanol and distiller’s grains at the Luverne plant. Hydrocarbon
revenues were $0.8 million, primarily related to the shipment of
bio-jet fuel and isooctane during the quarter.
The company highlighted a flight planned with Alaska Airlines, an
upcoming wood waste-to-fuels flight with an undisclosed airline,
fulfillment of alcohol-to-jet supply agreements with the Defense
Logistics Agency, the first retail pump sales of
isobutanol-blended gasoline, in Texas, an agreement with FCStone
to originate and supply corn for Luverne plant and endorsement for
Gevo’s isobutanol in the marine fuel market from the National
Marine Manufacturers Association.
Late-breaking news from the courts
Just as Gevo’s earnings were announced news filtered out from the
US District Court for the District of Delaware in the complex
Betamax vs Gevo patent litigation:
“On July 3, 2015, the United States
District Court for the District of Delaware issued its
determinations concerning several pending motions for summary
judgment in Case Nos. 12-1036-SLR; 12-1200-SLR; and 12-1300-SLR.
Specifically, the Court denied all of Butamax’s motions for
summary judgment that Gevo, Inc., (the “Company’) infringed
various claims of U.S Patent Nos. 8,241,878 (the ‘878 patent);
8,273,558 (the ‘558 patent); and 8,283,144 (the ‘144 patent). The
Court granted one of the Company’s motions for summary judgment of
invalidity regarding the asserted claims of the ‘878 patent,
finding that the claims are not definite. The Court granted the
Company’s motion for summary judgment that claim 3 of the ‘878
patent was not infringed under the doctrine of equivalents, and
the Court granted the Company’s motion for summary judgment of no
willful infringement. Disputes of fact regarding infringement and
invalidity of the asserted claims of the ‘144 and ‘558 patents
remain alive and are set to be included within a trial set for
August 24, 2015.”
Gevo CEO Pat Gruber hailed the news.
“We have a trial set for August 24 in
one of our ongoing patent litigations with Butamax. In this
litigation, Butamax has asserted three patents against Gevo. We
refer to these patents as the Butamax ‘144, ‘558, and ‘878
patents. In the litigation, as is typical, the parties filed
various motions in an attempt to simplify the trial. Butamax filed
motions seeking a summary judgment of infringement with respect to
at least one claim in each of the asserted patents, and Gevo filed
motions seeking summary judgments that the asserted claims of the
‘144, ‘558, and ‘878 patents are not valid, that claim 3 of the
‘878 patent was not infringed, and that Gevo had not willfully
infringed any of the patents.
“Yesterday, the Court issued rulings
on those motions. The Court denied all of Butamax’s motions for
summary judgment of infringement of the asserted patents. It
granted one of Gevo’s invalidity motions finding that the asserted
claims of the ‘878 patent are not valid, because those claims are
not definite and infringement cannot be determined. And, it found
that Gevo has not willfully infringed any of the asserted patents,
because Gevo’s defenses are credible.
“As such, factual disputes regarding
infringement and invalidity of the ‘144 and ‘558 patents remain
alive and will be included in the trial set for August 24.”
Comments from analysts and stakeholders
Cowen & Company energy analyst Jeffrey Osborne said: “Gevo
continues to expand the commercialization applications for its
isobutanol. The company has made meaningful entryways into the $1
billion/year marine fuels market. The alcohol-to-jet fuel market
is a long-term strategic opportunity for the company as well.
Lastly, management expects legal clarity on its pending litigation
by 2H15.”
Looking at isobutanol fuels, Osborne added: “Management estimates
that the addressable market for marine fuels is approximately $1
billion/yr. This is one of the nearer term opportunities for the
company. We are also pleased to see the company securing its first
service station to sell gasoline blended with Gevo’s renewable
isobutanol. The Express Lube station in Texas will be selling the
fuel for around $4.50/gallon, which is a premium over the E10 fuel
that sells for close to $2.75. The fuel is primarily targeted
towards marine, outdoor, and off-road applications.”
Meanwhile, Gevo CEO Pat Gruber said, “Our balance sheet is in its
strongest position since the end of 2013 and this will support us
in meeting the important milestones that we established earlier in
the year, namely signing our first binding license agreement,
securing ASTM certification for our alcohol-to-jet fuel and
developing further strategic partnerships to propel our
alcohol-to-hydrocarbons business. These are all targets that we
still expect to achieve in 2015.”
Jim Lane is editor and
publisher of Biofuels Digest where this
article
was originally published.
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