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Metabolix Inc. (MBLX)
Q3 2010 Earnings Call Transcript
November 8, 2010 4:30 pm ET
James Palczynski – IR, ICR Inc.
Rick Eno – President and CEO
Joe Hill – CFO and Treasurer
Lucy Watson – Jefferies
Scott Reynolds – Stifel Nicolaus
Ian Horowitz – Rafferty Capital Markets
JinMing Liu – Ardour Capital
Previous Statements by MBLX
» Metabolix, Inc. Q2 2010 Earnings Call Transcript
» Metabolix, Inc. Q1 2010 Earnings Call Transcript
» Metabolix, Inc. Q4 2009 Earnings Call Transcript
I would like to turn the conference over to Mr. James Palczynski of ICR. Please go ahead.
Thank you and good afternoon to everyone. Metabolix released third quarter 2010 financial results after the market closed today. If you do not have a copy of the press release, one maybe found on the Web site at www.metabolix.com in the Investor Relations section.
Making today’s presentation will be Richard Eno, President and Chief Executive Officer of Metabolix and Joseph Hill, Chief Financial Officer of the company. They are joined today by Oliver Peoples, the Co-founder of Metabolix and the company’s Chief Scientific Officer.
Before the company begins formal remarks, I need to remind everyone that part of the 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 Securities and Exchange Commission 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 Chief Executive Officer of Metabolix. Rick?
Thank you, James. I’d like to welcome all of you to the third quarter 2010 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 continue to make good progress on our commercialization and development activities that maintains 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 currently have three business platforms. First, Mirel, a biobased and biodegradable plastic currently being commercialized with our partner Archer Daniels Midland Company through a joint venture called Telles; industrial chemicals, initially focused on C4 chemicals and crop-based activities, which include our programs in oilseeds, switchgrass and sugarcane.
I would like to begin with the Telles business, or joint venture for commercializing Mirel. We continue to make good progress in this early in this early phase of the business.
I will review our assessment of the overall market, where we are as a business, including recent accomplishments and our current plans and expected timing to sellout Clinton 1.
The market for bioplastics and biomaterials continues to be very robust. This is driven by a high degree of interest by consumers and brand owners in renewable materials in some of the benefits that they provide.
As an example, just in the last 10 days at two major trade shows, we received over 300 new leads from potential customers that wish to create products with Mirel. In addition, a number of external parties have recently projected bioplastic market growth rates at between 15% and 30% per year over the next five to 10 years.
We are pleased to be well positioned in such a rapidly growing market. We have confident there is sufficient customer interest to sellout Clinton 1 and form the basis for our plant expansion decision.
Now, I will provide you with an overview of where we are in regards to serving this large market opportunity by commercializing our bioplastic Mirel. I will focus on our progress over the last quarter. As you know, ADM’s Clinton, Iowa polymer plant, supply source for Mirel bioplastic is up in running.
ADM with metabolic support is in the process of improving yields, reducing costs and increasing capacity. This will be an ongoing process and inherent in how we operate the business.
We expect the plant will have capacity available ahead of market demand until the 110 million pound per year nameplate design is reached. We have now moved eight compounded product grades to commercial status since the Clinton startup.
These are four different injection molding grades, two film grades, one sheet grade and one thermoforming grade. This required us to say Clinton material, which was produced to our quality standards in the second quarter of this year, and scale of the necessary formulation and compounding operations for each grade and build appropriate inventory to begin to supply the market.
With the exception of two additional compounded film grades, which are currently being optimized to world scale levels, this process is sufficiently complete and we can now supply potential customers out of inventory. This allows us to provide customers the assurance of supply and will help to accelerate development of new customers.