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Aurora Biofuels is no more. The company announced today it has changed its name to Aurora Algae, effectively repositioning itself in a crowded biofuels market by no longer tying its name or products to just biofuels. Rather, it will leverage its proprietary strain of algae to produce pharmaceuticals, protein bars and oils that can be used in hand creams.

“Food or pharmaceuticals give us the possibility to be profitable from day one,” said CEO Greg Bafalis.

Bafalis forecasted the company could reap $100,000 in gross revenue per acre, and plans to be in large commercial production within 30 months, quickly scaling up to 1,000-plus acres. The company is constructing a first demonstration facility in Australia, which will have eight one-acre ponds for cultivating the company’s algae.

While algae technology companies abound, biofuels made using algae are years away from broad-scale commercialization as companies have struggled to scale. And with diesel fuel at $3-$4 a gallon, biofuels — which require high start-up costs — have yet to make a compelling value proposition. Few algae companies have managed to make money (Sapphire Energy and Solazyme are among the few that have).

But algae can yield omega-3 fatty acids, proteins and oils at more profitable margins than other methods of production. So although Aurora will still compete in the renewable fuels market, it will also make sustainable products outside that industry, such as pharmaceuticals, medical foods, fishmeal and nutritional supplements.

“In about two and a half years we’ll be cash flow positive,” Bafalis predicted. “We’ll be tackling private equity and venture capital in the next year.” The company has raised $40 million to date, with its third round in March yielding $15 million.

Aurora’s move to remake its image as an algae – not biofuel – player is also telling in the wake of some bold and, according to critics, poorly-considered IPO moves by other biofuels players, namely PetroAlgae and Gevo. Both companies are chancing a rocky IPO market, aiming to raise $200 million and $150 million respectively.

But Aurora isn’t alone in branching out. Solazyme, a bigger player in the algae world, locked down a strategic partner and investor in Unilever last week. Unilever already uses Solazyme’s algal oils in its soap as a substitute for the environmentally unfriendly palm oil — and is looking to find other ways to incorporate algae products into its consumer goods.

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