May 7, 2012

Metabolix update

As mentioned in the previous post, Metabolix management seems to be handling the company well after the Telles joint venture break-up with Archer Daniels Midland (ADM) early this year.
Before its first quarter 2012 earnings was announced on April 26 , the company has been putting out several press releases below:
  • Metabolix Awarded Two U.S. Patents for Technology to Produce Biobased Polymers and Industrial Chemicals
  • Metabolix and Ball Horticultural and Floral Plant Growers Launch New Mirel-based SoilWrap Biodegradable Plant Container
  • Metabolix Opens First European Office
The company reported during its earnings conference call that it has been able to provide customers with access to Metabolix's PHA (polyhydroxyalkanoate) product inventory currently at more than 5m lbs. The company also said that it has narrowed the potential PHA production partners to four sites.
Other milestones included pilot-scale (up to 60,000 liter or 15,000 gallon) production of C4 chemical specifically GBL (gamma butyrolactone) and lab-scale biobased acrylic acid. GBL by the way is an intermediate to producing butanediol (BDO).
"In the first quarter we produced densified biomass polylactic acid, a key C3 chemical and we expect to sample it to perspective customers beginning in the second quarter. The sampling process is a key step along the path toward securing industry partnerships." - Metabolix
The company said it has also been able to demonstrate that its switchgrass PHB techology can function in sugarcane. 
Metabolix said it expects to end 2012 with a cash and investment balance of $48m-50m. However, the company is expecting further restructuring such as reduced head count and consolidation of its two facilities in Massachusetts.
Still, Jefferies & Company analyst Laurence Alexander lowered its price target for Metabolix from $3.50 to $3.15/share stating that the company's specific plans on production timing are still unclear.
"Apart from goals of $48-$50m in cash on hand at year-end and entering 2013 with a cash burn of ~$24m, Metabolix remains wary of giving sufficient financial details to assess the relative importance of the different announcements. We expect the shares to remain range-bound until the announcements have more context--either directly, through financial disclosures, or indirectly, through partnerships that provide some sketch of a framework for Metabolix's ability to capture value created by its unique technology positions."

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