Verenium Corporation (



Q1 2011 Earnings Call

May 12, 2011 5:00 pm ET


Kelly Lindenboom – Vice President of Corporate Communications

James Levine – President and Chief Executive Officer

Janet Roemer – Chief Operating Officer

Jeffrey Black – Senior Vice President, Chief Financial Officer


Rob Walker – Jefferies & Co.



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Thank you for holding. Welcome to Verenium’s first quarter 2011 financial results conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the Company’s request.

At this time, I would like to introduce your host for today’s call, Kelly Lindenboom. Please go ahead.

Kelly Lindenboom

Thank you for joining Verenium's first quarter 2011 conference call. I'm Kelly Lindenboom, Vice President of Corporate Communications. With me today are Jamie Levine, our President and CEO, Janet Roemer, our Chief Operating Officer, and Jeff Black, our Chief Financial Officer.

The agenda for today's call is as follows: First, Jamie will give an update on the current environment for our commercial products and trends we see for future business initiatives. Janet will then discuss commercial operations including Q1 product lines performance and key initiatives driving continued growth and success. Jeff will then summarize our financial results for the first quarter of 2011, and we will then take your questions.

Before we begin, I would like to advise you that this discussion will include certain statements that are not historical facts and our forward-looking statements that involve a high degree of risk and uncertainty. These statements relate to matters such as our strategy, future operating plans, markets for our products, partnering and collaboration activities, public policy and financing activities, technical and business outlooks.

The company’s actual results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, those discussed in our filings with the SEC including, but not limited to our reported on Form 10-K for the year ended December 31


, 2010. These forward-looking statement speak only as of the date hereof.

I will now turn the call over to Jamie.

James Levine

Thanks, Kelly. Good afternoon everyone and thanks for joining us on our first quarter call. On our 2010 earnings call, we lead out a vision for Verenium’s future based on the business we are today as a result of the transaction we completed with BP last fall. And today, I would like to provide some contexts for the strong first quarter performance Janet will discuss later on the call.

I’d like to discuss three topics. First, that the current high commodity price environment is great for Verenium’s near-term growth. Second, that the outlook for growth and demand for food and transportation fuel continues to have an immediate positive effect on our current partnering activities which will generate medium term growth, and then finally that I believe Verenium has reached critical math, where the scale and the performance of the enzymes products we sell today, are validating our business model to become the third major broad-based industrial enzymes company.

Beginning with the current high commodity price environment, our strategy is to use our unique technology platform to create manufacture and market enzyme products that address customer's unmet needs. Our development work always begins with the customer and starts with identifying the performance characteristics the customer will value.

Across our three main product lines of animal health and nutrition grain processing and oil seed processing the pressures of rising commodity prices are causing our customers to look for opportunities to become more efficient.

Customers who are traditionally more risk

diverse are showing greater willingness to try new solutions like the products Verenium sales to lower their costs. The current operating environment makes our higher performing enzymes look increasingly attractive. For example Fuelzyme, our product for corn bioethanol production reduces enzyme cost per gallon, so high corn prices improve the value proposition of switching to our product.

Similarly Purifine our product for soya oil

degumming increases oil yield by 1.5% to 2%. So the high price of soya oil increases our value proposition and reduces the payback period to the small capital investment required to use our product.

Moving to my second point, in addition to the growth, we believe we can achieve from our currently marketed products, we will generate a second wave of growth by commercializing the products in our late stage pipeline. One of Verenium’s core strength is our creativity when identifying and structuring relationships with partners.

Typically we work with partners either to identify high-value unmet needs for our market or to act as a distributor for our products, or both. Currently, we are taking the same approach for our pipeline products as we have in the past to identify partners who can accelerate the commercialization of our products. Given our focus on enzymes to provide efficiencies for the major global challenges of food and fuel production, the reception we are getting from potential partners has been highly favorable.

We offer not only a best-in-class technology suite, but also the track record to show we can bring products to market. In effect, our current nine commercial products not only provide an important source of near-term cash flow, but also an effective marketing tool for potential partnerships. For example, animal feed phytase is represent 10% of the $3 billion industrial enzymes market and Verenium created two of the four top performing phytase products currently sold.

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