Metabolix, Inc. (MBLX)

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Metabolix, Inc. (MBLX)

Q4 2009 Earnings Call

March 10, 2010 4:30 pm ET


James Palczynski – IR, ICR

Richard Eno – President and CEO

Joseph Hill – CFO

Oliver Peoples – Co-founder, Chief Scientific Officer and VP, Research


Michael Cox – Piper Jaffray

Amanda Sigouin – Jefferies

Scott Reynolds – Thomas Weisel Partners

JinMing Liu – Ardour Capital

Ian Horowitz – Rafferty Capital Markets

Pamela Bassett – Cantor Fitzgerald



Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Metabolix Incorporated fourth quarter 2009 earnings conference 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. Instructions will be provided at that time, if you have a question. I would now like to turn the conference over to James Palczynski. Please go ahead, sir.

James Palczynski

Thank you, operator, and good afternoon, everybody. Metabolix released fourth quarter and year-end 2009 financial results after the market close today. If you do not have a copy of the press release, one may be found on the website at www.metabolix.com in the Investor Relations sections. Making the presentation today will be Richard Eno, President and Chief Executive Officer of Metabolix, and Joseph Hill, Chief Financial Officer of the company. They are joined by Oliver Peoples, a co-founder of Metabolix and the company's Chief Scientific Officer.

Before we begin our formal remarks, I need to remind everybody 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 would like to now turn the call over to Rick Eno, President and Chief Executive Officer of Metabolix. Rick.

Richard Eno

Thank you, James. I'd like to welcome all of you to the fourth quarter and year end 2009 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 on our commercialization and development activities 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 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 and plant science in fermentation, microbial and polymer engineering and in product and market development.

Over the years, Metabolix has received numerous awards for its ground-breaking technology. Most recently, in December of 2009, we received recognition by the world economic forum with their selection of Metabolix as a technology pioneer and received this award at the annual meeting in Davos, Switzerland.

We are honored by our selection by this influential group and are proud to add this to the list of awards that the company has got us. We currently have three business platforms, first Mirel, a bio-based 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.

I'd like to begin with the Telles business, our joint venture for commercializing Mirel. We have made some very substantial progress since our last call. I'll provide you with an update on the Clinton plant, the food contact notification process with the FDA, our pipeline and our broad description of our expectations for the coming year.

The Clinton plant hit the production source for our first commercial product, Mirel. Consistent with what we outline in our last call, the construction for the initial phase of the plant was completed in the fourth quarter of 2009 and the plant was fully handed over to ADM operations staff. I'm very pleased to say that all primary areas of the plant have been commissioned, that the plant is now in production.

Initial inventories are being built up and the product has been shifted to Telles for valuation. We expect product to be shifted to our core customers within the next month. Successful startup of this plant is a major milestone for Metabolix and the Telles business. We will now have an operating world scale source to supply and can begin to satisfy the significant market demand for the product. I'm pleased to note that the startup process has gone very well, the transition from constructions to operations was executed very safely and it was a high degree of coordination between the ADM polymer manufacturing team, Metabolix technology specialist and ADM technical support throughout the process.

The integrated team rapidly worked through a few minor mechanical and scale of issues as this large complex facility was brought online. Over the next year, the ADM Clinton plant team with support from Metabolix and ADM technology will continue to optimize the product and improve operational efficiency at the site. There are also numerous future technology improvements which we already have in late stage development including next generation microbial streams, recovery technologies and product enhancements.

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