Why Zymergen Stock Is Crashing Today

Zymergen Inc (NASDAQ: ZY) shares continued to plummet in the pre-market trading on Tuesday.

What’s Moving? The synthetic biology company which traded as high as $48.50 after it went public in April, has dived to $11 pre-market hours on Tuesday, far below its initial public offering price of $31. Zymergen shares had closed 2.35% higher at $34.83 0n Tuesday.

Why Is It Moving? The Emeryville, California-based company founded in 2013 warned investors on Tuesday after market hours that it no longer expects to generate product revenue in 2021 and that revenue next year will be “immaterial” as it does not expect revenue from its experimental products anytime soon.

The biofacturing company also said co-founder and CEO Josh Hoffman is stepping down from the position and will be replaced on an interim basis by Jay Flatley, former CEO of Illumina.

See Also: Zymergen Shares Open For Trade At $40.30; IPO Priced At $31/Share

“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,” Flatley said, adding that the company will take longer to accomplish goals than previously expected.

Zymergen, which raised about $465 million in its IPO earlier this year, said it now has cash and equivalents of $588 million. For the second quarter, it expects total revenue of $5 million to $6 million and operating costs of $100 million to $105 million.

Zymergen said several key target customers encountered technical issues in implementing Hyaline into their manufacturing processes which resulted in a delay in the commercial ramp. Hyaline, launched in 2020, is an optical film created using a biomolecule that can be used in touch screens. 

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