Randy Baron updates $AMRS and $RNLX (Podcast #104 bonus episode!)
Randy Baron updates $AMRS and $RNLX (Podcast #104 bonus episode!)
Randy Baron returns to provide an update on his RNLX and AMRS thesis. You can find Randy’s first pod appearance on AMRS here, Randy’s second appearance on RNLX here, and his most recent appearance on GDS here.
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Transcript begins below
Andrew Walker: All right. Hello, and welcome to Yet Another Value Podcast. I'm your host, Andrew Walker. With me today, this is a special bonus episode, I've still got Randy Baron. We just did an episode on GDS. You can go listen to that. There will be a YouTube link in the show notes or anything, but we're doing a little bonus episode. He's been on twice and we're going to provide an update on first, Renalytix, and then Amyris. So, Randy, why don't we start with Renalytix and I'll just turn it over to you.
Randy Baron: All right. Just for the audience at home, we didn't even leave our seats. I think we should like to stress that. Yeah.
Andrew: Let me just... We'll put the disclosure up front, right? Nothing on here is investing advice. Everyone should consult their own advisor. With that, I'll turn it over to Randy. We did not leave our seats.
Randy: Both names that we're updating on right now are very volatile. So if you're not comfortable with volatility go to the next video, but both of these have amazing upside. I'm going to do Renalytix really quickly. Two weeks ago, Renalytix, and think about how the XBI has been trading in this year. The XBI, this is the healthcare carve out of ESP, founded in 2006. You are now currently April 22 in the largest down draw a retrenchment of the XBI since inception, over 50% peak to trough delay. Everyone is of the opinion... and by the way, I'm sure you see it, companies can't get meetings. People are on the sidelines, people have capitulated. It is a harrowing moment in the world of investing, but yet two weeks ago, Renalytix pulled off a 30-million-dollar fund raise, which extends their cash runway two years. What does that mean?
It basically means they can now negotiate a partnership from a position of strength. They've been talking publicly about doing two or maybe even three partnerships over time. I find this stock fascinating because the street is totally offsides. When you look at the JP Morgan numbers for example, there are 35,000 test and just remind your viewers, average test price for Renalytix is $950 a test. We're still waiting for FDA but they have multiple paths being reimbursed. When you talk with the company and you say their VA Salesforce just rolled out. In other words, they did the spend, the VA just started. What's the status? By the way, what's the most sales people that you can have in your W2 world? They talk about 250 salespeople. Well, hold on, you can't do commission sales people. You're paying $250,000 all-in per person. So the next question becomes, what's the revenue or how many tests do you need to have to support your sales people? The answer— a million tests a year.
What I'm saying to your audience today is if the streets are 35,000 tests a year and Renalytix has at least modelled out. Not that I'm saying it's going to happen, but at least they're aware of what that would be a million a year. That's a huge delta right there that we're not appreciating all of the issues, and you can certainly link to the first episode talk about Kidney Care. That has not changed. This is a real issue for the healthcare system. The last thing I want to say in Renalytix is we expect they're going to get local coverage termination in the near term. Everyone is so caught up on FDA while these guys don't have FDA approval. Therefore, what they're missing is you can have FDA approval and still not have a business. Right? If you can't make money you don't have business. I don't care if you're [inaudible] or not. These guys have learned in the past what matters is reimbursement. They have multiple paths to reimbursement and I'm pretty comfortable this is my second largest position. I'm pretty comfortable that this is going to have some really healthy days ahead.
Andrew: Great great. Anything else on Renalytix you want to talk about or should we turn to the Amyris?
Randy: Let's do Amyris really quickly. This one will be a little longer.
Andrew: Yeah. Just full disclosure for our listeners. I didn't do a lot of updating on Renalytix. I don't have questions. I did do some decent bit of updates and I follow Amyris much closer. So, hopefully, I can add a little bit more value here, but I'll turn it over to you. Amyris so much interesting has happened over the past since the podcast update and everything. I'll just turn it over to you. What's going on with Amyris?
Randy: Well, the biggest change since we record our podcast last summer is that today you are buying the leader in synthetic biology, the leader in growth at value prices. I mean, this is now officially a [inaudible] value stock where I'm literally buying enterprise today, which trade two billion dollars for the price of bioscience, or what the value bioscience is, billion dollars plus. The value of Jonathan Van Ness is hair product JVN, which has been such a blowout success. These guys spent $12 million on this brand. It's worth $500 million today.
Andrew: Yep.
Randy: That is unbelievable. Now there are reasons as to why turns out a lot of fancy hair shampoos have silicones in them. Silicones don't biodegrade. So they created something called, we talked last podcast about Squalane. We don't need to get into that, but they created a molecule called Hemi-Squalane. Hemi-Squalane gives the same kind of glossy texture effect, so much so that other hair products like L'Oréal are going to Sephora and saying, "Where can we get Hemi-Squalane?" This is really a game changer. So, JVN has been a total success. What that means in practical terms is in 2019, the consumer brand which back then was Biossance, Pipette, and Purecane. Purecane is the sugar substitute.
Andrew: Yep.
Randy: It had $19 million of revenue. This year 2022, the consumer portfolio in total would be $220 to $230 millions of revenues. Why does that matter? This company, since our podcast five months ago, did the capital raised. You could certainly say it wasn't well-timed. They did it on the back of quarterly miss. By the way, I asked the question "Are you going to miss three weeks early?" They said, no, we're not and then they missed. And then they did a raise, and then by the way, they upsize the raise. It was a lot of examples of bad stewardship or at least bad timing. However, when you look back now at the current state of the capital markets, it was pretty well timed. Right? I mean, they raised $690 million. They did a cap call feature for $80 million that raise the effect of price to conversion of $15.92. Stock today is at $4.20. That's been maligned. Right? Management has been viewed as a gang that can't shoot straight, but what people are missing is the fact that they continue to execute at a very high level. So let me give you a couple of anecdotes for why I think they're going to beat analysts’ expectations this year in 22, by between 20 and 30%. First off, last year, they did a major deal with DSM. DSM is a big chemical company out of Europe.
Andrew: Yeah.
Randy: It has three problems to it. The first problem with $200 million they received cash up front. That's done. That was last year. This year starts the middle phase. By the way, the third phase is future R&D credit like the tail but let's say we talk about that. What I care about is between 2022 and 2024, they're getting milestone payments per annum with no ceiling per year. The only reason there's a ceiling is that they're [inaudible], their new facility plant in Brazil just came online a week ago actually, just the initiation started and so it's volume limited. So as they prove for this year they're staying 15 percent of somewhere between $250 and $270 million is what the total value of the contract is over time. It's going to be achieved this year. So they've been telling the street $39 million. Well, what has happened this year in the wake of Russia and Ukraine is that all the commodity input costs have gone up.
Andrew: Yep.
Randy: You want to look at Vitamin E, for example, you use petroleum. And the way Amyris does its products member. This is creating clean chemistry. It's not pricing thing chemistry premium. The way they're substituting is saying we're pricing the same. So the market price goes up they go up with. For the first time last week they rang the bell at the stock exchange. They talked about the potential of accruing quarterly for this milestone payment because it's been that significant. Now, I don't know what the number is going to be. I know it's more than 39 million for the year. Now, whether it becomes... so that's 15 percent of the total. Maybe it's 25 percent, maybe it's 30, but let's say it's 50 million. That's an extra twelve and a half million dollars of crude quarterly. They wouldn't get the cash until 2023 because the auditors have to go through.
Andrew: Yes.
Randy: I'm sure we'll push back but it's still crude, right? It's a receivable. That setting up right there, if that happens for a 15 to 20 percent beat on quarterly expectation. So, I really see this year despite negative use on management. I mean, that is the number one critique of Amyris, is that management can't execute. I think this is a year where they're going to show they're able to execute. This is a year they're going to also expand their brands, which I'll talk about in a second. But the point is that you can do a quarterly beaten raise system. I think at some point, not the first quarter but maybe in the second or third time, you're going to be out of the doghouse and people are going to realize that we are on a trajectory to exit 2023 to run rate fourth quarter 2023 revenue of $1 billion. Put a 10x multiple on that, which is what the value of bioscience would be today because that's their main consumer brand. Once it stops growing more than 50 percent, that would then come down to about eight times but still, which is rough numbers. Billion revenue 10x divided by 440 million shares to get $20 plus a share on a stock today, trading it for dollars.
Andrew: I want to talk about a lot there but let me start with two things on management. So, you and I were talking about this before the podcast. Again, I follow these guys decently closely. Obviously not as closely as you, but when they did the equity raise last year... If I remember correctly, they reported Q3 earnings. The stock was down and then they did the raise and the stock was on a lot more because everybody looked at the raise and said, "This is awful." I think the stock kind of settled in the tens, twelve range after the equity race. Now the stock is at $4. So, my first question and it's more like a philosophical one because I hated equity raise at the time. We thought it was very poorly done. But now you even said it's like, "hey, that was pretty fortuitous," like you raise that. So I just wonder like, was it a bad equity raise, or did they kind of have a view or anything that it actually was good? Are we digging them too hard for that equity raise? Because with the benefit of hindsight, they'd be paying a lot more if they raise right now.
Randy: Well, I think you're absolutely right. We, all of us as investors because we see the nominal value of our shares going down, are quick to criticize. I think it's a lot harder to create than to destroy, to be totally blunt about it. And so, often when I'm modeling, and you have the same thing, you realize you're not in the room. You're not the CFO. You don't see all the flows. I think they saw the supply chain issues which was the reason for the third quarter miss, by the way. I think they saw the writing the wall and realize they needed to upsize to get there. Now, mind you, the other critique on this company and their management, as they still have a significant cashflow, right? A 150 million the first quarter could be 130 in the second before they reach cash flow breakeven, which is going to be roughly... by the way, not net income breakeven but just funding the business cashflow caught fourth quarter of this year. I think people again are going to be really quick to criticize to say, "Oh, well, you're burning cash and you're going to need to know the raise."
I don't know the threshold below which management will be uncomfortable enough that it feels a need to do something. But the argument I'm putting out there for your audience today is, I think the days of the equity raises are behind us because when I pencil this out, you get to roughly 80 to 100 million of cash on hand before that inflection point hits. And you may say, "Okay, well, that's enough cash. You need a bigger buffer." Well, then, great. There's two assets at least that they could sell. Do an 18% of a brand called NOVVI, which is majority 40% owned by Chevron. Chevron wants more of this. We've all seen what's happened to the price of oil this year. This is basically a synthetic way to attack it. When you look at GiVo and some of the other things that happen with Delta this year, you want to have fuel that's better for the world. This is not new news. This was actually in biostudy ten years ago when oil was hundred dollars a barrel. Then, with Shell, it collapsed to thirty and all those businesses other than Amyris went out of business. Right?
But as I look at that, that's probably worth 100 to 120 million to Amyris for that 18 percent stake today. They also have a partnership about 20 percent of patents. Our partnership with a company in Japan, Kirara, that does liquid rubber. So, synthetic liquid rubber and the application basically is... and by the way, you know I've never talked about this. You take the tires and it gets more flex so you don't need to swap out winter or summer tires. That's another thing they could sell, certainly a non-core. They also, at some point, are going to start trimming their consumer brands. They've got six brands. It'll be nine brands by the end of this year. They're launching two new brands this year. One is a partnership with Naomi Watts— Stripes. This is a menopause brand which I jokingly talk with management it makes me really uncomfortable to talk about. And then their answer is, "well, when it comes to lubrication squalane works", which is even more uncomfortable.
[crosstalk]
Andrew: On the YouTube I'm covering my face uptight.
Randy: Yeah, I'm turning red talking about it. But the point is, to a lot of women, Naomi Watts included, menopause is the last great taboo. If Amyris can do something to make that a little better dealing with the cellar wall, they're going to have a new hero ingredient, a new Hemi-Squalane type thing. We don't know what that is yet. That's going to launch. The other brand they're launching is something called Eco Fabulous. This is the same idea of Biossance but just with the millennium market involved. If you want to see who cares the most about clean beauty, it's the millennium market. Then anecdotally, as we look to the fourth quarter, this may be no news to some of your audience. I don't know how fully ink this is so take it with a grain of salt. Walmart really wanted the Jonathan Van Ness kind of hair brand. Walmart doesn't have a great kind of beauty brand.
Amyris said it's too young a brand. It's growing too fast. We're not ready to put it in Walmart. So they're going to partner hopefully with Walmart with a Walmart led influencer with curly hair, who can then be the face of this. It's going to basically be JVN. Enough change so that there's no patent issue in case we eventually want to sell JVN because it's worth so much now. But Walmart will be the first customer. We'll have another direct to consumer business on Amyris. My point is you're very quickly getting to ten or twelve consumer brands. Some of which are successful, some of which aren't. Two of the brands they launched. Terrasana has not been a big success yet. I think they're going to start pruning that portfolio. So, the point is there's lots of shots on goal to raising capital, short of more dilution.
Andrew: That's a great transition to the brand. I think the two headliners here, Biossance and JVN, are the two points. Let's just talk about how you value these things because they provide detail but I don't think it's like crazy amounts of details, right? Like I'm just looking through their 10K in their presentation. It says consumer, 92 million of revenues in 2021. That's up from 52 million in 2020, but they don't give much beyond that. So, how are you thinking about the value of these brands?
Randy: Well, let me start with the big one, which is Biossance, which they do break out in the K and they break out the script. Right? So, you and I in our seats, we pull information from all these places. There's also a wonderful Reddit that I would kind of draw all of the audience's attention to the Amyris Reddit where they collect all of this data. One of the things that they collect is they track the sales orders for Biossance. The way the Biossance-- and by the way, sorry, for biossance.com. So call it, it's not quite 50/50, but it's like 55/45. But Sephora is half, Biossance.com, which is a higher margin. We want go by Biossance, their guys everybody. We want more margin.
Andrew: That sweet DTC money.
Randy: It's DTC. Let's do it. Boom. Right? But the point is they track it monthly. Like really interesting anecdotes come up. For example, when Reese Witherspoon posts, and if you see one of her Instagram posts in her Powder Room packing for a trip. She says, what's my go-to things that I needed? She's got her pajamas, her toothbrush, and then it's all the Biossance products. Page six actually, the day after Amyris rang the bell last Monday had Reese Witherspoon on the billboard with her new rose oil that she's using. Fine.
Andrew: Interesting. Okay.
Randy: The point is, when she posts, we can check these numbers because it's linear. It's totally linear so we can extrapolate. You see a 3 to 4x increase in the spend. What's more interesting to me is some of the smaller acquisitions they've been doing... For example, they bought micro influencer brand, which people were like, why are you buying that? Well, part of the reason is, Reese Witherspoon is super expensive. You need to get— I'm making this up— a five or ten or fifteen million dollars of incremental revenue to make that worthwhile. But what's more interesting than micro influencers, the Andrew Walkers of the world.
Andrew: Well.
Randy: Yeah, I'm making my point. You may have, I don't know, a hundred thousand followers. I'm making numbers up. Let's say you do a live podcast or a live event that you get 2 to 3 percent of your audience. They're able to convert 40 percent on that. So, all of a sudden, with the incremental sale. That makes it really viable. They bought a company out of Cambridge UK a bunch of former gamers called Beauty Lapses. Spend a lot of money on this for basically 25 or 30 data scientist. But what these guys are doing is essentially creating augmented reality. So, here's the example. You go to Alta which is the competitor Sephora.
Andrew: Yep.
Randy: This is kind of the way Amyris gets in with its products eventually. And you go up to the mirror, you know, you seem like on the ad for the LeBron James mirror on the wall. I know your pellets on guy but there's other stuff too, right? That's up on the wall. And you do your work out well here. If you go up and you hold up your color cosmetic with it and it's going to show you on the mirror what you look like.
Andrew: Yep.
Randy: Why that's interesting is that Amyris is starting to get other revenue lines than just its own products. The number one critique of this company is oh it's just a consumer grip. Right? So it should just have CPG multiples on it. But what they're missing is the reason they went CPG is had they gone any other vertical, it would have taken two to three times longer to monetize what they're making. And so, yes, the clean beauty has a premium to all the other CPG brand. So that is, like I said, once you're above $25 million which both JVN and Biossance, the original question then you get that 10x multiple. Once the growth rate and drunk elephant is no longer at the growth rate. So that was not a great purchase two years ago for $800 million. Once you go below 50 million years on your chain, you can track that multiple back to about eight times. But both JVN and Biossance, to answer your question, you can put a 10x multiple. Rough numbers: 50 million for JVN, annualized. I mean, it's more than a hundred but you could use ten on a hundred to get a billion for Biossance. It's more than that now, probably worth about a billion to 120 million.
Andrew: You know, I'm just laughing because you just said people say, "Oh, it's just CPG branches. Just going to get a CPG multiple." Basically, any company I look at, I would love a CPG multiple these days. I'm just looking like Procter & Gamble is trading at six times revenue and that grows basically at the rate of inflation, lower than the rate of inflation the way inflation is going. So it's just funny. I guess, secondary question. Biossance and JVN, they've shown a great ability to launch these brands and get them going and stuff. So I guess my two questions are, should they just be doing nothing but CPG at this point? Because I know when we first talked about them we talked about this company in a little bit more of an expansive way, like really saving the world. But it seems like the value here is they've launched two killer CPG branches. Once his luck twice is kind of a trend in this space. I don't know a lot of people who've done this type of thing.
Randy: Hold on.
Andrew: Go ahead.
Randy: Because JVN was so successful it is eclipsed the success of Rose Inc.
Andrew: Yep.
Randy: So, this is Rosie Huntington-Whiteley. This is Jason Statham's wife who is a very minimalist. So it's all white color cosmetics. For example, instead of having... I know your wife had her wisdom teeth out. But instead of having two-night lipstick and a day lipstick, everything is about recyclability. So you can actually switch it out and have the same base in both, and it stays in your purse. It's a great idea. They've had a lot of success with Rose Inc, especially in the UK. But it gets eclipse because to your point these behemoths have just taken off. Again, $12 to $15 million spent on JVN worth $500 million. If they could repeat that, even if it was one out of ten times, but what they're showing is they're having about a 50 percent success rate on their consumer brands. I do think that they have a lot of secret sauce. They figured that out and they're going to stick with it. They're going to launch two to three brands a year. But you cannot forget the core of this business is going to be being the CMO to the whole synthetic biology space. There was a there was a SynBioBeta conference last week. While you ask me this question, I'm going to pull up the quote because I want to read it to your audience. I think it's really relevant because basically what's happening with Amyris is that people forget, like we talked about, the entire first podcast. Scale matters.
Andrew: Yep.
Randy: The reason we first talked about it has not proven scale yet, and all these new guys that are up and coming are still proving. The nice thing on Amyris today is you and I in our seats do not need to question the science. We don't need due diligence. It's done. They've proven scale. We don't need due diligence. Their success with CPG. The problem you could argue is because they're so good at ingredients and so good at consumer, just too much for people to follow. How do you swallow it? But ask your next question while I look up the quote.
Andrew: No. I want to hear the quote. The thing that attracted me to Amyris to begin with has all the visions of the story, but they had this killer CPG line. And at the time it was really just Biossance was what attracted me, but I know how valuable these things can grow. I've seen companies where everybody thinks of them as one thing, but they've got this one killer CPG brand that is worth more than the whole company. Now I keep looking at it saying, well, Biossance and JVN, is there a sale, is their financial engineering, all the service stuff?
Randy: Like I said, they're going to monetize, they're going to overtime start pruning, but to the other side of the business, the bar beneath the plant, which in your show notes. Please put a link to that YouTube six-minute video they put up because I think everyone that's interested in stock should look at this and realize that this is the largest and most impressive precision fermenter ever made. It's kind of like when Elon Musk was SpaceX started. What did he do different than NASA? One of the things he did different was he said "Why are we building vertical like they did in Cape Canaveral? Let's build our rockets horizontally." So he paid regular warehouse prices and go that way. They did the same thing in reverse. They said, "Why are we making our lives hard? Let's use gravity." So this thing is twenty-five football fields wide. It's right next to the second largest sugar plant in the world raised in, but it uses gravity to come down. Let me tell you a little bit about this.
Last week I mentioned there was a SynBioBeta conference and this is from someone in the room. I'm not going to name them but I like his work a lot. I'm going to read you this paragraph. Interesting from the conference how under the radar Amyris is. The star startup was Sologen. They open the conference and have just raised a rounded funding valuing them at Canadian two billion dollars. It's an interesting company but they've built one ten kiloton peroxide plant. Peroxide sells for 700 to 800 per ton. So, at full utilization that's a 7 to 8 million-dollar revenue plant. You need 100 plus of those to get to a billion dollars in revenue. Contrast that to where Amyris is. That just summarize the entire thing. Again, scale matters and line-of-sight matters. These guys because management is frowned upon, people are missing the story that they are building a masterpiece that is going to be a generational compound.
Andrew: Let me just ask last question here and then I think both of us are going to need to go. With Amyris in these high growth companies, financing is obviously concerned. We already talked about the financing they did back in November, that kind of take the stock. I think at this point they have almost 500 million in cash on their balance sheet. They'll climb because they're still burning cash this year. I think you are hopeful in the next 12 months they kind of hit cash breakeven if I'm remembering correctly. Are there concerns about future financing here? Or, can they flip the switch at some point and go into, my personal favorite, share BuyBacks at some point?
Randy: Wow. I mean that would probably not going to happen because another complaint against management now has been management's not buying shares at these levels. Right? One of the comment my clients say is, if management won't buy shares, who will?" Now that's not fair. Eduardo Alvarez in the past has bought shares and others too, will close when we talk about John Mellows RSU package which is Elon Musk assets. Really fascinating. But I look at it the other way, which is what are the potential revenue drivers? In other words, everyone saying, "okay, you're paying for revenue because you're spending this money." I think what they're missing is that SGNA is going to be somewhere between $400 to $500 million eventually. And that top line grows because of the partnership money, because of consumer, because the ingredient stuff is going to really start exponentially going out.
They talked about a number that they shouldn't, say 20-25 revenue could be $2 billion. We are all short of that. But conceptually, back in the envelope you could because there's a lot of found money and things that people are account for. I'll give you two examples. One, they have a partnership with Patrick Soon-Shiong who runs IBRX ImmunityBio. Covid is still a pandemic. It's not endemic yet, and the places where the new variants are coming from is Africa because the average vaccination is 10 to 15 percent in Africa versus the rest of the world. South Africa in particular where PSS is from. So, he has a partnership with Amyris, 50-50 joint venture where Amyris supplies the adjuvant. You can refer to the earlier podcast what an adjuvant is. But basically, it makes it a booster for that.
Andrew: Yep.
Randy: By the way, also makes it shelf stable so it could sit on a doctor shelf for three weeks. Anyway, if they priced it at $7, a share is about a $7 a shot. There's $3 cost of goods so call it $2 each. You need a billion shots of Africa and then you discount that greatly because what's the odds that this is the winner, not Eli Lilly or Pfizer. So give a two to five percent likelihood, right, if this is the winner. But the point is, if it becomes a winner, that's a tripling of the stock price overnight. The other thing is these guys are always really creative and one of the new things that came out in the last week is that they're looking at carbon credits because their new plant in Brazil is net neutral carbon-wise.
What people forget about Tesla, and that's a great transition to the stock plan, is that Tesla before it made cars, how to make its money with carbon credits. I'm not saying this is going to be a huge number, but when you look at like the Minerva, that's a big Brazilian public company that's the meat partnership. Minerva makes its most money on those carbon neutral kind of organic animals that use it. So I think that there's a lot of found money and when you look at the cell sites, like the cell site is so myopic and so discounting until we see it we're not going to believe it. You're really setting up for a great short covering event if and when that happens.
Andrew: Perfect. Why don't we wrap it up by talking, you know... Again, the two things that really get my juices flowing are share buybacks and align management looking to create value. You're the one who pointed out to me, it reminded me Elon Musk has had one charter, had one to great effect where in the dark days of cable balls in 2018. He would say, hey, the stocks at 300 but they gave Tom Rutledge RSU's that best when the socket's 525. They think they can get there or else they wouldn't have given them. That's why it's there. So, I'll just give that background. Probably crazy guy problem.
Randy: The Dolans never gave it and look at why he left, right? Like John Malone, he gets it.
Andrew: Yep.
Randy: The owners of Charter and the old Cablevision respectively for the audience. I'm going to just start this ultimate section with the Charlie Munger quote which is true. "Show me the incentive and I'll show you the outcome." In the case of this and obviously the stock has retrenched a lot from today. Because again, we to have make a decision any given day. Do we own a security?
Andrew: Yep. Absolutely.
Randy: From April 2022, John Mellows package does not start for his RSU or option package from 5 to 6x the current level and it tears up from there. That is a symmetrical to the upside and totally consistent with what I said earlier with the company is kind of telegraphing. That if they leave 2023 with a billion-dollar run rate, that's a 7x return on the stock. And that's roughly where John Mellows starts to get his payout, which would work out to $60 million.
Andrew: I think at the high-end it was like almost 200 million would be a stay out plan. Yeah.
Randy: From your mouth to God's ears on that topic. Again, the reminder for your whole audience is, please no one says I'm pumping. This is in my kids account. This is generational. You are owning this because these scientists are wonderful people. The other fact I learned recently, attrition in the science department under 5 percent. You talk to Sunil, the head of R&D. So how is that possible? No one's making money options. I love his answer, and this is a wonderful place for us to conclude. He says, "We don't fire people when they fail." Think about that. You're encouraged to take risks, you're encouraged to create the future and these guys are artists and again, as I said before, so happy to be able to ride with them.
Andrew: I'll give you the last word in a second but it's interesting you said that because one of the companies I do these [inaudible] deep dives where-- [inaudible] gives me extra calls and one of the companies I did was Regeneron, which was a hugely, very interesting company, people know them best from. They made the Regeneron Covid antibodies that literally saved our son's life when he got Covid.
Randy: And Eylea is the other one, too.
Andrew: Yeah. Eylea is their big eye drug but I talked to a bunch of the people inside and they said, "Look, all of us got stock options that were priced at, you know, the stock was at 500 and it stayed flat or went down for the next seven years. You would think these are all very high in-demand PhD scientist. You would think there was a huge turnover and no one left because they all loved what they were doing. They were working for the leader in the space. They could do really creative stuff and really push the edges of scientists." So, all these people stayed even though they were probably underpaid and they were very much in-demand elsewhere. What you're saying with Amyris kind of reminds me that.
Randy: Let me close with another. I'm reading people stuff with no credit given and then purposely because they don't give me credit to read it. But this is someone who's not in the c-suite. This is a rank-and-file Amyris employee who in response to... I have a list that I send out my thoughts every once in Amyris which is not always positive, to Andrew's point. Sometimes we're very critical of our friends. Good friends can take a criticism. But I love this. He goes, this person says, "As an Amyris employee of four years, I've seen a million ups and downs, but really there is something that keeps me here. There is an undying optimism and magic that flows through now the somewhat empty office. It's stayed through the stock highs and lows of frustration of cash flows for vendors in the changes/editions of leadership. The core values have stayed, making changes for the health of the planet. Meaning changes for the help of plan and have stayed.
And honestly, the fun that we have never ever left." I wish investors and critics could see some of that. You and I, you channel checks all the time. This is a fundamental disconnect. You own two things, right? You have a company and you have a sheet of paper, a stock certificate and they're rarely aligned. This is one of those moments that I want to close with this thought. I've never in my 25-year career seen a growth stock 20, 30, 40 percent top-line growth trading at true value prices with a major margin of safety.
Andrew: Cool. Well, hey, that's a perfect place to wrap it up. Randy, thank you so much for your third appearance and your bonus appearance here. I know people are going to love this podcast, but looking forward to catching up with you soon. Looking forward to eventually having you on for the fourth podcast.
Randy: Thanks, Andrew. Always fun.
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