My impressions of the Ceres Power AGM of Nov 7, 2013

Our Environmental Choices study evaluated consumer reaction to the original Ceres Power micro-CHP prototype (report 3d), and as a long-term shareholder of Ceres Power, I decided to attend their AGM on November 7 at their Horsham offices.

I really enjoyed the day. From 11am to 12pm we covered the formal matters of the AGM, followed by an overview presentation from new CEO, Phil Caldwell. Then for the next hour, we were shown around the Ceres Power plant by Mark Selby (Director of Technology) and Subhasish Mukerjee (Director, Fuel Cell & Stack Development).

Apart from allowing me to thank some of the current management team for saving the company, the visit to Ceres Power made me think about these three main things:

#1 – The importance of protecting their IP

Given the new Ceres Power strategy of working with OEM partners, they will need to share their know-how with such partners. There was quite a lot of discussion about the importance of protecting their IP in these arrangements.

 

#2 – The importance of generating up-front payments from licencing deals

There seems to be similar business challenges that cleantech and biotech/pharmaceutical companies face given the advanced scientific nature of their businesses, their typically long product development timelines and the way commercial partnership arrangements are constructed. Last year, I attended a very interesting keynote speech at a pharma conference in Toronto about ‘Partnering and Acquisitions – the Glue between Pharma and Biotech Pipelines’ given by David S. Young. His experience was in running a small Canadian start-up biotech company for a number of years, and he talked about the great importance of generating at least some revenue during the development period rather than relying on cash-burn. His company eventually achieved commercial success with a sale to Roche in 2008. (You can see a somewhat similar overview presentation about his start-up experiences with this video.) As Phil Caldwell of Ceres Power said in his presentation on November 7, there is a danger in always talking about ‘jam tomorrow’ in the development of their fuel cell technology – so their licencing deals are now designed to get significant up-front payments from their commercial partners.

 

#3 – The ‘lifecycle appeal’ of the Ceres Power design

Most products have a lifecycle, and the design should take into account what happens at the end of their working life. (I sometimes worry about what is going to happen to all today’s rapidly evolving electronic equipment, such as iPads, and whether they can be disposed of in a non-polluting way at the end of their, rather short, product lives.) Phil Caldwell’s presentation prompted me to think about how the low-cost, metal construction of the Ceres Power fuel cell could potentially be recycled at the end of product life in an environmentally-friendly way. It was something I hadn’t really thought about before.

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