Metabolix, Inc. (MBLX)
Q2 2012 Earnings Call
July 26, 2012 04:30 p.m. ET
Rick Eno, President & CEO
Joe Hill – CFO
Laurence Alexander – Jefferies
Mike Ritzenthaler -- Piper Jaffray
JinMing Liu -- Ardour Capital
Jeff Osborne -- Stifel Nicolaus
Uu Yang – JPMorgan
Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the Metabolix Incorporated Second 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 your questions.
I would like to turn the conference over to Ms. Allison Townsend of ICR. Please go ahead ma’am.
Thank you, and good afternoon, everyone. After the market closed today, Metabolix issued two press releases, the second quarter 2012 financial results press release and the announcement of a letter of intent with Antibióticos to manufacture Mirel Biopolymers. If you have not received a copy of these press releases copies 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 available via webcast 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 in 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 the Metabolix filings with the Securities and Exchange Commission including the company’s 10-K filed on March 12, 2012. 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 now over to Rick Eno, President and CEO of Metabolix. Rick?
Thank you, Allison. I’d like to welcome all of you to the second quarter 2012 earnings conference call for Metabolix. Today, as part of my update on our three platform areas I will provide additional detail and perspective on the announcement today of the signing of an LOI with Antibióticos for the manufacture of biopolymers which is a significant milestone in the launch of the Mirel biopolymer business under Metabolix’s control.
I will also provide you with an update on our chemicals program which is advancing rapidly with both the achievement of technical milestones and with the engagement of potential customers. After my remarks Joe will then take you through the financials. With so much to cover today I will not provide an overview, but I will remind you that at Metabolix we are focused on three business platforms, first Mirel, a family of biobased and biodegradable polymers. Second, industrial chemicals initially focused on C4 and C3 biobased chemicals as dropped in replacements for conventional chemicals. And third, crop-based activities which include our programs in switchgrass, oilseeds 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 Mirel biopolymers. After the ADM termination of the Telles joint venture in January, I outlined our plan forward for you. I told that you that we would launch Mirel biopolymers under the metabolics nameplate. We said that we would focus on high valued segments, initially target a 10,000 ton per year plant, maintain the ability to engage multiple partners, deploy our most recent technology and retain the potential to create an integrated value chain. I’m pleased to announce today that we are well on our way to delivering upon all of these objectives with the announcement of a manufacturing partnership.
So let’s turn to slide two of the accompanying slides. We selected Antibióticos in León, Spain for commercial production of Mirel biopolymer resin and have signed a letter of intent or LOI to initiate the collaboration. Antibióticos is a highly regarded toll manufacturer of fermentation products who has and been in business for over 50 years. They have manufacturing equipment very well suited to the production of Mirel resin and as such are an ideal selection for our initial production site.
We anticipate two phases of our relationship with Antibióticos. First, in demonstration phase which will begin immediately we will work together to integrate our technology and run the entire process of PHA fermentation and recovery on commercial scale equipment, the vast majority of which is already at their facility. The purpose of this phase is to initiate technology transfer to Antibióticos and to identify the specifics of any equipment needed to ultimately operate the facility at our targeted 10,000 ton per year scale.
Given that all fermentation assets are in place and much of the recovery equipment we are aiming to produce demonstration quantities of Mirel in this demonstration phase by early 2013. In addition, during this phase the companies will complete additional economic and engineering feasibility studies related to the establishment in commercial operation of Mirel biopolymer resin onsite in Antibióticos.
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