Metabolix, Inc. (MBLX)

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Metabolix, Inc. (MBLX)

Q3 2012 Earnings Call

November 1, 2012 4:30 PM ET


Richard Eno – President and CEO

Joseph Hill – CFO and Treasurer

Oliver Peoples – VP, Research and Development and Chief Scientific Officer


Laurence Alexander – Jefferies

Enrique Akashi – Piper Jaffray

JinMing Liu – Ardour Capital



Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Metabolix, Inc. Third quarter 2012 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 for you to queue up for questions.

I would like to turn the conference over to Ms. Allison Townsend of ICR. Please go ahead.

Allison Townsend

Thank you and good afternoon to everyone. After the market closed today, Metabolix issued its third quarter 2012 financial results press release. If you do not have a copy of this press release, a copy may be found on the website at www.metabolix.com in the Investor Relations section.

In addition today we have provided several slides to accompany the presentation. These slides are being webcast live and will be available on the Metabolix website in conjunction with today’s call.

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 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. Investors are also cautioned that statements from the discussion today which are not strictly historical statements constitute forward-looking statements.

Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated including the other risks and uncertainties detailed in Metabolix’s filing with the Securities and Exchange Commission including the company’s 10-K filed on March 12, 2012 and 10-Q filed on July 27, 2012 and risks related to international business activities particularly in Europe. 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 the conference call.

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

Richard Eno

Thank you Alison. I’d like to welcome all of you to the third quarter 2012 Earnings Conference Call for Metabolix. We’re particularly cognizant of and appreciate the efforts of our New York-based investors and analysts who have joined us today. We wish you and your families the best as you recover from Hurricane Sandy. I look forward to describing the progress we are making and the momentum we are building across each of our three business platforms. After my remarks Joe will take you through the financials.

I will first remind you that at Metabolix we are focused on three business platforms. Our first Metabolix biopolymers, a family of bio-based and biodegradable polymers. Second biochemical initially focused on the family of C4 and C3 chemicals as drop-in replacements for conventional chemical and third, crop-based activities which include our programs and switch grass, oil seeds and sugarcane.

All of these efforts are enabled by our PHA or Polyhydroxyalkanoates technology around which we have over 700 patents either awarded or pending.

In our review of the business I will begin with our biopolymers business. After the ADM termination of the Telles joint venture in January, I outlined our plans for you. I told you that we would launch biopolymers under the Metabolix nameplate; I said that we would initially target a 10,000 metric ton-per-year plan, maintain the ability to engage multiple partners, deploy our most recent technology and retain the potential to create an integrated value chain.

We continue to be well on our way to delivering upon all of these objectives at a very rapid pace. I also told you that we would pursue high-value market segments. In today’s call I will begin by outlining the key aspects of our commercial strategy for the biopolymers business, specifically our focus on value-added applications and then I will address the results for the quarter.

Over the last nine months we’ve taken the time to take a close look at the biopolymers business in order to define our focus and priorities. We look at the markets, our customers, our product portfolio and the commercial options available to us. In summary, we’ve identified a number of compelling opportunities, aligned our team to pursue them and are very enthused about the potential.

I am now on slide two. This graphic illustrates a typical price-volume relationship in the polymers industry. Our earlier vision in business strategy was established on the basis of a large 50,000 ton-per-year initial plan. It aimed us towards markets and applications where volume was key. Similarly, it drove us towards pursuing a relatively broad set of processing technology such as thermal forming, forms, (nonwovens) and others.

With a smaller initial facility we have the opportunity to focus on applications which are more oriented towards value and volume, near-term in nature and based in areas where we have historical customer experience. We also have the ability to focus on a limited set of opportunities and be more selective around our resource deployment. I’ll emphasis that we still have the opportunity to pursue the many applications which we have described to you earlier and we’ll do this commensurate with our future scale and cost structure.

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