Metabolix, Inc. (MBLX)

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Metabolix, Inc. (MBLX)

Q1 2009 Earnings Call

May 6, 2009 4:30 pm ET


Anthony Gallo - IR

Richard Eno - President and Chief Executive Officer

Joseph Hill - Chief Financial Officer

Oliver Peoples - Co-founder and Chief Scientific Officer


Laurence Alexander - Jefferies

Michael Cox - Piper Jaffray

Pamela Bassett - Cantor Fitzgerald

JinMing Liu - Ardour Capital



Good afternoon ladies and gentlemen thank you for standing by. Welcome to the Metabolix Incorporated first quarter 2009 Earnings Call. Today’s call is being recorded. 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.

At this time, I would like to turn the conference over to Mr. Anthony Gallo of ICR. Please go ahead.

Anthony Gallo

Thank you Darren , and good afternoon everyone. Metabolix released first quarter 2009 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 of Metabolix; Joseph Hill

of the company. We are also joined by Oliver Peoples, a co-founder of Metabolix and Chief Scientific Officer.

Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. 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 first quarter 2009 earnings conference call for Metabolix. Today, I will provide you with the 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’re developing and commercializing pathways and products that are intended to 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 exceptional capabilities in plant science, in fermentation, microbial and polymer engineering, and in market development.

We currently have three business platforms, first Mirel, a biobased and biodegradable plastic currently being commercialized with our partner, Archer Daniels Midland, through a joint venture called Telles. Second, industrial chemicals, initially focused on C4 chemicals, and third, crop-based activities, which include our programs in switchgrass, oilseeds and sugarcane.

In today’s call, I will focus most of the discussion on our Telles activities. This past quarter, we continued to move towards commercialization of the Telles business. I’d like to first update you on the progress of the Clinton plant, the production source for our first commercial product, Mirel.

As discussed in our last call, ADM was conducting a detailed review of the project with conclusions expected in late April. These conclusions were reviewed with Metabolix management about two weeks ago. While optimization of project completion and start up will continue right up to the date of initial production, ADM expects mechanical completion for the majority of the facility to occur in the September through November timeframe with production expected to begin in December.

Let me provide some additional details. The overall approach to finishing the construction and starting up the facility is a parallel process. Specific sections of the plant such as utilities, fermentation and recovery will be completed by the construction team and sequentially turned over to operations. ADM expects mechanical completion for the majority of the plant to occur between September and November. But some supporting systems such as utilities and solid handling will be completed earlier. As systems are completed, they are transitioned to the operations team which will then run through a detailed checkout and commissioning process prior to introducing feed.

ADM is anticipating production in December. The Clinton plant is designed in a modular fashion with multiple fermentation and recovery systems. Efforts are currently focused on completing the critical equipment and systems needed to support the initial production capacity so we can get commercial Mirel products to our customers as soon as possible. Additional major equipment, all of which is on site and most of which is already in place will be ready for production ahead of customer demand.

While start-up plans and initial production slates are being finalized with a great deal of detail; a new production process of this type will always possess initial start-up risks which could affect the schedule. We of course are working with ADM to minimize these risks. ADM’s plan to allow the engineering effort to catch up to construction has gone well, and the plant is now in the process of increasing its construction staffing. There are slightly more than 300 people working onsite and we expect this number to increase. We have reviewed a detailed Gantt chart reflecting all primary activities through completion and these activities focus on defining a number of detailed work packages which are currently being assigned to the construction workforce in a way to maximize construction productivity.

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