Metabolix, Inc. (MBLX)

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Metabolix, Inc. (MBLX)

Q4 2008 Earnings Call

March 11, 2009; 4:30 pm ET


Richard Eno - President & Chief Executive Officer

Joseph Hill - Chief Financial Officer

Oliver Peoples - Chief Scientific Officer and VP of Research

Anthony Gallo - Managing Director of Integrated Corporate Relations


Laurence Alexander - Jefferies

Michael Cox - Piper Jaffray

Pamela Bassett - Cantor Fitzgerald

Michael Carboy - Signal Hill

Jinming Liu - Ardour Capital

Jeff Osborne - Thomas Weisel Partners



Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to the Mextabolix fourth quarter 2008 earnings conference call. Today’s call is being recorded and at this time all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time for you to queue up for questions.

I would now like to turn the call over to Mr. Anthony Gallo, Managing Director of Integrated Corporate Relations; please go ahead sir.

Anthony Gallo

Thank you Nicole and good afternoon everyone. Metabolix released fourth quarter financial results after the market closed today. If you do not have a copy of the release, one may be found on the website at www.metabolix.com, in the Investor Relations section.

Making the presentation today will be Richard Eno, President and Chief Executive Officer; Joseph Hill, Chief Financial Officer of the company. We are joining today by Oliver Peoples, Co-founder of Metabolix and Chief Scientific Officer.

Before we begin our formal remarks, I need to remind everyone that a part of our discussions today will forward-looking in nature. These statements are not guarantees of future performance and therefore undue reliance should not be put upon them.

The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. We refer all of you to our recent filings with the SEC for a more detailed discussion of the risks that could impact our future operating results and financial condition.

With that I’d like to turn it over to Rick Eno, President and CEO of Metabolix. Rick.

Richard Eno

Thank you, Anthony. I’d like to welcome all of you to the fourth quarter and year end 2008 earnings conference call for Metabolix. Today I will provide you with a review of the Metabolix vision and a broad update of our ongoing activities. Joe will then take you through the financials.

We continue to make good progress and have maintained a strong financial position. For those of you new to these calls, Metabolix is an innovation driven Bioscience Company, which is focused on bringing environmentally friendly solutions to the plastics, chemicals and energy industries.

We are developing and commercializing pathways and products that lessen the world’s dependence on oil, reduce CO2 emissions relative to traditional materials, and address critical solid waste issues. We are founded on hard science and have had exceptional capabilities in plant science, in fermentation, Microbial and Polymer Engineering, and in market development.

We currently have three business platforms. The first Mirel of bio-based and biodegradable plastic currently being commercialized with our partner, Archer Daniels Midland through a joint venture called Telles.

Secondly, industrial chemicals initially focused on C4 chemicals and third, crop-based activities, which include our programs in switchgrass, oil seeds and sugarcane. With that context, I will now provide you with highlights of recent activities across all three platforms.

First, let me begin with Mirel. This past quarter we continued to move towards commercialization of Mirel. I will update you on our progress on governance, the Clinton plant and ongoing market development activities.

The joint venture relationship agreed between ADM and Metabolix outlined the broad roles of the parties for the venture. In the current construction Phase, ADM is responsible for designing and building the plant and Metabolix is responsible for developing the market and technology.

There are a series of governance, principals and bodies which are designed for making key decisions around the business. It became clear that as we approached commercialization, Telles will acquire a more conventional governance structure in order to execute the many day-to-day decision required to maximize the performance of a business of this type.

So, last year we embarked on a formal search for a General Manager of Telles. This individual will report to the Telles Board, which has equal representation for Metabolix and ADM and have the authority to make a number of operating decisions on behalf of the joint venture.

We are pleased that in January, Bob Engle joined us as the General Manager of Telles. Bob brings extensive operating experience in the high performance plastics business from Ticona, the engineering polymers division of Celanese. Bob has also served in a variety Celanese joint venture Boards, so he is deeply familiar with JV structures and how to ensure the maximum effectiveness.

He also has extensive international experience in Asia and most recently in Germany where he was based. ADM and Metabolix are excited about having Bob joined the team and are pleased that we’re putting governance structure in place for an effective business startup.

I would now like to provide an update on the Clinton plant progress. As mentioned in our last call, ADM was conducting a detailed review of the project. This review is still ongoing with conclusions expected in late April. Our earlier guidance indicated startup of the plant in Q2 of this year. Based on input from ADM, we are now using in October startup production for our internal planning purposes.

Let me provide you with some back ground under the like. The initial Phase of the project is now in the final stages of construction with the bulk of the remaining work being final piping assembly and detailed electrical and instrumentation installation. ADM had a construction work force of about 500 working to complete the facility.

One of the preliminary findings from the detailed review which I described was that the productivity of this work force was begin to decline. In essence, the pace of construction was beginning to out run the ability of engineering to prepare detailed design packages for construction.

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