Metabolix outlines new strategic plan in Q3 investor call

By Erin Voegele | November 07, 2014

Metabolix Inc. has released third quarter financial results and reported it is implementing a strategic plan to reshape the company into an operation more focused on specialty biopolymers.

"We are managing our financial profile, while we work to build market demand for our PHA performance additive products. We also are on track to have manufacturing up and running in late 2015 to support an intermediate-scale biopolymers business that will serve as the foundation for our longer-range plans and the future growth of our business,” said Joseph Shaulson, president and CEO of Metabolix.

In connection with the shift in focus, Metabolix indicated its board of directors has approved a plan to discontinue operations of the company’s wholly owned German subsidiary, Metabolix GmbH. The assets of the subsidiary have been sold to a German company that manufactures engineering plastic compounds.

In October, the company implemented a restructuring to reflect a narrow strategic focus on PHA biopolymers as performance additives and to modify staffing to a level necessary to support the successful implementation of its new business strategy. According to Metabolix, the scope of the restructuring also reflects a decision to suspend work on the company’s chemicals program. During an investor call, Shaulson also spoke about the company’s decision to spin out its crops program. Regarding staff cuts, the company has reduced the number of employees from 100 to 70 since the beginning of the year.

Johan van Walsem, chief operating officer of Metabolix, explained the company is targeting four key application spaces for its PHA biopolymer, including PVC processing aids, PLA modification, barrier coatings for paper, and margin degradable micropowders and micobeads. He also noted the company is on track to have biopolymer production up and running in late 2015. The preliminary engineering study for the retrofit of an existing contract manufacturing facility is complete, he said, and the company is finalizing construction and commissioning schedule. We are on track to sign a contract manufacturing agreement during the fourth quarter, van Walsem added.

Metabolix reported a net loss from continuing operations of $6.7 million, or 12 cents per share, during the third quarter, compared to a net loss of $6.5 million, or 9 cents per share, during the same period of last year. The company closed on a $25 million private placement of equity financing during the quarter. As a result, an additional 50 million shares of common stock were issues and are included in the weighted average share and loss per share calculations.

Total revenue from continuing operations was $600,000 for the quarter, consistent with the revenue reported for the same period of last year. According to Metabolix, the revenue consisted primarily of revenue from product sales and government grants. The company realized $100,000 in product revenue during the quarter, up from $39,000 during the same period of last year. Research and development expenses for continuing operations were $4.1 million, down from $4.5 million during the third quarter of 2013.