Shares of biotechnology company Zymergen (NASDAQ:ZY) were down nearly 70% in pre-market trading after it warned that revenue will be immaterial through 2022.
The revenue warning and stock plunge come three months after Zymergen priced its initial public offering (IPO) at the top of its expected range and its share price soared after making its market debut.
Zymergen said in a press release that it no longer expects to generate product revenue in 2021 and that revenue next year will be "immaterial."
The company also said that Josh Hoffman, who co-founded Zymergen in 2013, is stepping down as chief executive officer (CEO) and will be replaced on an acting basis by Jay Flatley, former CEO of Illumina.
Zymergen’s share price fell to $11.07 on the news, giving the company a market capitalization of just over $1 billion, down from a high in April of $4.8 billion.
Zymergen’s current challenges involve a product called "Hyaline," which the company launched in 2020. It’s an optical film created using a biomolecule that electronics companies can use for things such as touch screens.
To date, Zymergen has earned some revenue from research and development service agreements but almost nothing from product sales. In its IPO prospectus, Zymergen said it expected to start generating revenue from Hyaline in the second half of 2021.
Zymergen raised over $465 million U.S. in its IPO and said it now has cash and equivalents of $588 million U.S. For the second quarter, it expects operating costs of $100 million U.S. to $105 million U.S. on total revenue of $5 million U.S. to $6 million U.S.
