If there’s one company that’s been making the headlines one way or another this year, it’s Metabolix, a bioscience company founded in 1992 and which has since that time developed into one of the driving forces behind the commercial exploitation of PHA polymers in the U.S.
However, while all companies run into rough patches, Metabolix started off 2012 with a bombshell, when it announced that its commercial alliance with agricultural company Archer Daniels Midland Co. had ended, in part because of uncertain financial projections for the business. News of the breakup came as a relative surprise, all the more so because of the glowing predictions for the future of bioplastics in recent market reports. This was a market people were entering, not exiting. The market held its breath and wondered what was next to come.
Richard Eno, Metabolix CEO and president.
In March, Metabolix reported a net loss of $38.8 million or $1.24 per share for 2011, as compared to a net loss of $38.8 million or $1.45 per share for 2010. Also, around $3.0 million was paid in a transfer of rights and assets that included all product inventory and compounding raw materials, all product certifications, approvals and trademarks, and pilot plant equipment located outside of ADM’s Clinton plant.
This meant that more than 5 million lb of PHA biopolymer inventory was transferred to Metabolix, who also retained exclusive rights to all Metabolix PHA technology and associated intellectual property.
As a result, the company reported total revenue in the first quarter of 2012 of $39.3 million, compared to $0.3 million for the comparable quarter in 2011. And while the first quarter revenue consisted primarily of $38.9 million in deferred revenue (recognized as a result of the termination of the Telles joint venture), the quarter-over-quarter increase in revenue also reflected an increase in government research grant revenue, a decrease in license fee and royalty revenue, and initial revenue from Metabolix sales of PHA biopolymer inventory – of which the company now has over 5 million lb, or presumably enough to supply core customers with PHA biopolymer until new inventory becomes available.
Hence, reporting a net income of $28.8 million or $0.84 per share for the first quarter of 2012—compared to a net loss of $9.6 million or $0.36 per share for the first quarter of 2011—Metabolix looks to be regaining its bounce, and to be intent on intensifying its investment and activities to develop and commercialize biobased industrial chemicals.
One sign of this is the recently announced promotion of Max Senechal to vice president, biobased chemicals and his appointment to the executive management team. Senechal is responsible for the commercialization of Metabolix’s biobased industrial chemicals program, which includes the production of cost-effective, “drop-in” replacements for petroleum-based industrial chemicals. He will coordinate critical technical milestones and development of the customer base globally.
The company also recently opened a European office in Cologne, Germany. “Europe is a key market for us because it’s one of the top consumers of bioplastics globally, and many of our existing customers are based there. The office will enable Metabolix to directly access the European market for biopolymers and will serve as a coordination point for our regional initiatives in renewable chemicals,” said Richard P. Eno, president and CEO of Metabolix.
“The new office marks the first expansion for Metabolix outside of the U.S. and will coordinate business development, customer service and technical support to business partners and biopolymer customers based in Europe. Strategic alliances are integral to our biobased chemicals program, and we look forward to forming alliances to bring our biobased chemicals into commercial production.”
Asked about the two U.S. patents granted to enable the novel and efficient production of biobased polymers and industrial chemicals on the basis of genetic engineering, and whether Europe was ready for this, he went on to say:
“The technologies we use increase production of PHAs, but PHAs themselves are natural and come from living organisms. The European market has demonstrated increased interest in bioplastics over the years. There’s a true commitment there to reduce the use of traditional petroleum-based plastics.”
All told, never a dull moment for Metabolix, whose first quarter was one for the books. It’s a company to watch. It’ll be interesting to see what comes next.