Verenium CEO Discusses Q3 2010 Results – Earnings Call Transcript

Verenium Corporation ( VRNM)

Q3 2010 Earnings Call Transcript

November 9, 2010 5:00 pm ET

Executives

Kelly Lindenboom – VP, Corporate Communications

Carlos Riva – President and CEO

Janet Roemer – President and COO

Jamie Levine – EVP and CFO

Analysts

Rob Walker – Jefferies

Paul Resnick – Olympia Capital Markets

Presentation

Operator

Thank you for holding. Welcome to Verenium's third quarter 2010 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 third quarter 2010 conference call. I'm Kelly Lindenboom, Vice President of Corporate Communications. And with me today are Carlos Riva, our Chief Executive Officer; Janet Roemer, our Chief Operating Office; and Jamie Levine, our Chief Financial Officer.

The agenda for today's call is as follows. First, Carlos will provide some remarks on the company following the completion of the BP transaction in September. Then Janet will discuss key assets of our business operations, including each of the major industries, our enzymes currently served, as well as our manufacturing efforts and business development activities. Jamie will then summarize our financial results for the third quarter of 2010, and we will then open the call up for your questions.

Before we begin, I would like to advise you that this discussion will include forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve a high degree of risk and uncertainty and relate to matters such as our strategy, future operating plans, markets for our products, partnering, collaboration activities, public policy and financing activities, technical and business outlooks.

Such statements are only predictions, and actual events or 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, risks related to our IP partners, competitors, and regulatory and market forces.

Certain of these factors and others are more fully described in our filings with the SEC, including but not limited to our report on Form 10-Q for the quarter ended September 30, 2010, which was filed with the SEC today. These forward-looking statements speak only as of the date hereof and the company expressly disclaims any intent or obligation to update these forward-looking statements.

I will now turn the call over to Carlos.

Carlos Riva

Thanks, Kelly. Good afternoon, everyone, and thank you for joining us on today's call. Since our last quarterly earnings call, we have engineered a major transformation here at Verenium, returning our focus to our core enzyme business. As you are likely aware, in mid-July, we announced the transaction with BP, which subsequently closed in early September for the sale of our cellulosic biofuels business.

This is an important strategic win for several reasons. First, the transaction focuses the company’s efforts on the singular goal of discovering, developing, manufacturing and selling industrial enzymes to high-growth industries. In short, this is a return to our roots as an industrial enzyme company.

Secondly, we have now sold our capital intensive and higher risk cellulosic ethanol business to BP, thus dramatically reducing our cash needs, as Jamie will explain later in the call. Thirdly, the proceeds from this transaction provide us with a more stable platform for which to grow the business and address our outstanding debt obligations.

All of these factors taken together orient the company around two pillars for creating value for shareholders. First, our portfolio of commercial enzymes currently produced and sold to various industries; and second, our best-in-class for search and development capabilities supporting our pipeline of new enzyme products, which will support running future growth.

I’m pleased to report that despite the significant corporate organizational effort required to complete the BP transaction during the third quarter, we have continued to make steady progress in growing our enzymes business over this period. So notable recent highlights include, in September, we announced the launch of Deltazym, a highly active glucoamylase enzyme for the saccharification of liquefied starch in the fuel ethanol production process.

In October, we announced that we had licensed to Bunge a new lipase enzyme that creates enhanced health benefits when used in the production of edible oil products. This product is a result of a collaboration with Bunge, an event of the regulatory phase with some commercial development work being done in parallel.

We also announced the receipt of regulatory approval for the sale of purifying in China, which we see as a critical market. This now positions Verenium to sell Purifine PLC in all the major oilseed processing areas of the world, which include Argentina, Brazil, the United States, and China. And furthermore, we’ve announced the extension of our joint marketing agreement with Alfa Laval to further speed the adoption of our Purifine enzymatic degumming process.

Before I turn the call over to Janet for a more detailed review of the business, I would like to comment on two important strategic aspects of our business going forward, namely, our environmental profile and our biofuels business. With regards to our environmental profile, Verenium’s track record of growth for the last few years is built on our ability to design and then sell our enzyme products based on their high performance value-creating properties.

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