Verenium Corporation (
Q2 2011 Earnings Call
August 9, 2011 5:00 PM ET
Kelly Lindenboom – VP, Corporate Communications
James Levine – President and CEO
Janet Roemer – COO and EVP, Specialty Enzymes Business Unit
Jeffrey Black – CFO, SVP and Chief Accounting Officer
Laurence Alexander – Jefferies
Previous Statements by VRNM
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» Verenium Corporation Q2 2010 Earnings Call Transcript
Thank you for holding. Welcome to Verenium’s Second 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.
Thank you for joining Verenium’s second 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 COO, and Jeff Black, our CFO.
The agenda for today’s call is as follows: First, Jamie will give an update on the first year – first half of the year followed by an outlook for the remainder of 2011. Janet will then discuss commercial operations including Q1 product performance. Jeff will then summarize our financial results for the first half 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, but not limited to our reported on Form 10-K for the year ended December 31st, 2010. These forward-looking statements speak only to the date hereof.
I will now turn the call over to Jamie.
Thanks, Kelly and good afternoon everyone and thanks for joining us on our second quarter earnings call. I’d like to begin today’s call by giving a quick recap of the strategy we laid out at our Analyst and Investor Day in June and then, I’ll discuss some of the milestones we’ve achieved in the first half of the year that demonstrate we are indeed successfully executing against our business plan. And finally, I’ll end with some thoughts on our current market valuation.
Our Analyst and Investor Day was an important opportunity for us to provide a detailed view of where the company is today and our plan to realize transformational growth over the next several years. Finally, we laid out the milestones against which stakeholders can judge our execution of that plan and which will position us to become a major industrial enzymes player in a market currently dominated by two players.
So, to summarize the Capital Markets Day, in the industrial biotech space, Verenium has it all. We have the leading product development technology and we have proof of that claim through a portfolio of top-performing products. We have a deep pipeline of new products, attracting industry leading partners and finally, our resources are targeted at multiple, fast growing and highly profitable markets that exist today.
Looking at each component of that vision, I’ll start with our market. In the last 12 months, we had 53 million of product sales into end markets that we estimate at over $1 billion, which is only a fraction of the $3 billion market for industrial enzymes which is projected to grow to nearly 4.4 billion by 2015. What’s more of that growth it’s being catalyzed by significant worldwide trends of first meeting food needs for growing populations.
Second, meeting demand for transportation fuels and third, the need to achieve these objectives while reducing our impact on the environment. Importantly for Verenium and our current and prospective partners and customers, enzymes address all these needs head on.
Moving next to our suite of commercial products, the 53 million in sales I mentioned earlier has significant opportunity for near-term growth given our success and penetration, the animal health and nutrition and grain processing markets and our success in creating the oilseed processing market for enzymes.
Over the next two to three years, we expect our current products to be the primary growth driver as several of them including Fuelzyme alpha-amylase and Purifine PLC are in the early stages of their launch and are gaining significant traction in their market. It’s primarily through the acceleration of sales in these products and the others in our current commercial offering that we expect to achieve breakeven from operations in the late 2013 timeframe, a critical turning point for Verenium.
Driving growth beyond our current products is our deep pipeline of product candidates, which represent what we are characterizing, is medium-term growth opportunity that allows us to meet our goal of continuing to grow and diversify our revenue base over the 2013 to 2015 time horizon. While our commercial products are critical to our near-term success, our pipeline is equally as important to our mid and longer-term growth and success.
A mainstay of our strategy for developing and commercializing our pipeline is aligning with partners who bring complementary resources and capabilities to our team. Our goal with these partnerships is to share equally in the development costs and profits, similar to our current agreement with Danisco and the partnership we just announced with Novus, both in the animal health and nutrition area. This financial model provides significant benefit to Verenium over the product lifecycle.