Metabolix, Inc. (MBLX)
Q1 2011 Earnings Call
April 27, 2011 4:30 pm ET
Richard P Eno – President and Chief Executive Officer
Joseph Hill – Chief Financial Officer
Mike Ericson Brother – Piper Jaffray
JinMing Liu – Ardour Capital
Laurence Alexander – Jefferies
Scott Reynolds – Stifel Nicholas
Ian Horowitz – Rafferty Capital Markets
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And now, I’d like to turn the conference over to Allison (inaudible) of ICR. Please go ahead.
Unidentified Company Representative
Thank you, and good afternoon, everyone. Metabolix released first quarter 2011 financial results after the market closed today. If you do not have a copy, 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; and Joseph Hill, Chief Financial Officer of the company. They are joined by Oliver Peoples, the 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 the call over to Rick Eno, President and CEO of Metabolix. Rick?
Richard P. Eno
Thank you, Alison. I’d like to welcome all of you to the first quarter 2011 earnings conference call for Metabolix. Today, I will provide you with a review of the Metabolix vision and an update of our ongoing activities. Joe will then take you through the financials.
We continued 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 in plant science, in fermentation, microbial, and polymer engineering and in product and market development.
We are leaders in producing and upgrading a broad family of materials called PHAs. PHA is our energy storage molecules found in nature, which have a number of useful properties as plastics and can also service the unique source of renewable chemical intermediate.
Metabolix has been recognized as a leader in this field and has received numerous awards. Most recently, over the last quarter, we were selected by Bloomberg New Energy Finance as one of their 2011 new energy pioneers. We are honored by this award and are pleased to be recognized for the long-term gain changing potential of our core PHA technology.
We currently have deployed our PHA technology across 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. Second, industrial chemicals, initially focused on C4 chemicals. And third, crop-based activities, which include our programs in oilseeds, switchgrass, and sugarcane.
I’d like to begin with the Telles business, our joint venture for commercializing Mirel, we continue to make forward progress in this early growth base of this business. I will review this overall status of the business, primarily addressing market and customer activity including opportunities and challenges as well as review of our overall growth plans.
In the Telles venture we are very focused on the successful launch of the Mirel business. The market for bioplastics continues to be very robust and we have an ongoing stream of over 50 increase per month. From this high level of interest we are currently working with about 100 targeted prospects reflecting a broad range of process technologies and markets.
We are now working to exploit a number of near term opportunities these are primarily in film markets specifically in compost bags, agricultural mulch film, and packaging. This is due to the strong market pull in these segments in both the U.S. and in Europe as well as the uniqueness of the Mirel offering. Mirel offers biodegradability in a wide range of environments, a higher biobased content, and incumbent film products and in some cases will improve the physical properties of the film.
While still early in the development of this business this pool appears to be validating the Mirel value proposition and price point. We are also seeing good near-term progress in marine applications as well as in horticulture.
In general, we are seeing smaller innovative customers move faster than the larger customer, which leads to a somewhat smaller initial order size in what we expect to see in the long-term. This quarter we continued to expand the customer base primarily in Europe. New customers placement orders include two European film converters will be selling compostable bag into the Italian bag market.