Metabolix's CEO Presents At The Jefferies 2012 Global Industrial And A&D Conference (Transcript)

Metabolix, Inc. (MBLX)

Jefferies 2012 Global Industrial and A&D Conference

August 08, 2012 04:00 am ET


Rick Eno - President and CEO, Director


Lucy Watson - Jefferies & Company


Good afternoon. I am Lucy Watson. I work in, Chemicals & Clean Tech Equity Research for Jefferies & Company. My pleasure to introduce, Rick Eno, the CEO of Metabolix.

Rick Eno

Thank you very much, Lucy, and it's a pleasure to be here at the Jefferies Global Industrial and Aerospace Conference.

We're a little different than a lot of the other companies you've met over the course of the day. Metabolix is an early-stage technology company, game-changing technology, very well positioned in the fields of renewable chemicals and renewable materials, which I'll take you into today, lots of potential, very evolving dynamic company making great progress. I'd like to provide you with some of those highlights today.

First, I'll point you to our Safe Harbor statement. There'll be numerous comments I may make that could be forward-looking, and please refer to our Form 10-Q and recently Form 10-K as well.

I am now on page three, the Metabolix division. Metabolix is focused on commercializing solutions that are clean, sustainable and that underscore economically viable for the world in plastics, chemicals and energy.

It's an early and one of the leaders of industrial biotechnology that has been recognized for numerous awards over the years. Innovation awards, bioplastic awards, green chemistry awards and most recently recognized by the World Economic Forum in Davos as a Technology Pioneer, very game-changing technology, which I'll now bring you into how we are aiming to commercialize that technology.

The technology that we have over 700 patents in is in areas called PHAs, otherwise known as polyhydroxyalkanoates, and these are natural storage molecules, and I'd like to describe it. Just as the human body stores energy in the form of fat, plants and microbes store energy in the form of these PHAs, and what we have managed to do is to figure out how to produce these PHAs at commercially viable quantities and really have started to make great progress in a wide range of end-use applications for these PHAs.

We produce them in two ways. In the left-hand-side, you can see a fermentation and at the end of a fermentation cycle over 80% by way of a microbe these PHAs [by way]. On the right-hand-side, because these are naturally occurring materials, we could also produce them directly in the leaf tissue of crops which offers a game-changing approach for production of chemicals and plastics.

We manage the company all around these PHA capabilities in three platforms. From going from left to right, they are in order of timing towards commercialization.

First is a family of bioplastics, which we call Mirel and these are biopolymers which can be molded into parts flow into bags, turned into phones, and I'll get into the details in a few minutes, but it's been proving technical at commercial scale. Just recently, we announced the Letter of Intent to introduce manufacturing of these materials with a company called Antibioticos, and we are aiming for production in 2013, as we bring these materials to market.

The second platform is an industrial chemicals platform, and this is a bit different and that the materials we produce here are the same chemicals that you find the market today except they are produced by renewable sources instead of petroleum based, so these cases either is what they call drop in chemicals, and here we've got a series of families working in all based on the same competency for the Mirel family of materials and we've announced the relationship with the company called CJ BIO, a Korean industrial biotechnology company.

Finally, our crop technology is longer term, primarily funded by government grants and this is continuing to increase the expression of PHAs in crops themselves, and here we are fortunate to have a very substantial department of energy grant that funds much of that work and really making good technical progress on that as well.

Now moving forward, I'll talk a bit about each of these platforms peeling back a little bit, getting you into some of the details, what we're doing first beginning with Mirel, the bioplastic family.

Just a bit of history for those of you that aren't familiar with Metabolix. This is a family of materials that in July 2006, we had struck a commercial alliance with Archer Daniels Midland. In December 2010, the plants at Archer Daniels Midland built started up and through about January 2012, together we grew the market to the point where we had about 57 customers, 26 repeat buyers as we gated as customers began to move to adopt the material all around the world in fact and really significantly de-risk the technology.

In January of this year, ADM chose not to continue with the relationship and retained the manufacturing plant. We at Metabolix, we retained all the intellectual property, we purchased the inventory and we took control of the business as of March of this year.

In April of this year, we announced our first sale of inventory. In July of this year, we announced the manufacturing partner with the target for production next year, so we have now taken control of the business and are launching under the Metabolix name having understood the markets and customers extremely well and there's a numerous years of commercial experience which we'll bring in to bear with our own launch.

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