ENGLEWOOD, Colo. – Gevo, Inc. (NASDAQ:GEVO) today provided an update following the announcement that it had entered into worldwide patent cross-license and settlement agreements with Butamax Advanced Biofuels, LLC, ending a patent dispute related to technologies for the production of bio-based isobutanol.
"This settlement with Butamax is arguably the most important development for our company since Gevo went public in early 2011. This is a win-win agreement for both Gevo and Butamax and now enables us both to get on with making isobutanol a commercial reality and a big business," said Dr. Patrick Gruber, Gevo's chief executive officer.
Key impacts of the settlement for Gevo include:
- SG&A expense savings expected to be over $7.5 million per year;
- Removes legal uncertainties which should help accelerate agreements with customers, licensees and partners; and
- Settlement provides Gevo and its licensees access to all isobutanol markets, while leveraging both Gevo's and Butamax's capabilities and development efforts in the jet fuel and on-road gasoline markets, respectively.
"The cross license is a great outcome for Gevo as it provides access to all isobutanol markets for Gevo and its licensees. For our core, near-term markets, namely jet fuel, marine and off-road gasoline blendstocks, isooctane and solvents we can access these royalty-free, and in some cases, we may eventually generate royalties if Butamax looks to sell into certain of these markets,” said Gruber. “We believe that these core markets represent several billion dollars of value for isobutanol. To date, the on-road gasoline blendstock market has not been a near-term focus for Gevo because we believe that it will take significant resources and time to develop this market.
“Butamax has already made meaningful progress of gaining requisite EPA approvals. As Butamax gains these approvals and opens up the on-road gasoline blendstock market, we will be cheering them on because this is a potential longer-term market opportunity for Gevo. If, in the future, Gevo and our licensees look to access this market, we will pay Butamax a royalty, which is set at a rate typical for licenses of this type,” Gruber added.