Metabolix, Inc. (NASDAQ: MBLX), a bioscience company focused on developing clean, sustainable solutions for plastics, chemicals and energy, today announced that the Archer Daniels Midland Company (ADM) has given notice of termination of the Telles, LLC joint venture for PHA bioplastics. The effective date of the termination will be February 8, 2012. Metabolix will hold a webcast conference call for investors today at 5:00 pm EST.
Telles was established as a joint venture between Metabolix and ADM in July 2006. The joint venture sells PHA-based bioplastics, including Mirel and Mvera, in the US, Europe and other countries.
ADM recently undertook a strategic review of its business investments and activities and made the decision to focus resources outside of Telles. As the basis for the decision, ADM indicated that the projected financial returns from the alliance were too uncertain. After the termination, ADM will retain its manufacturing plant in Clinton, Iowa that has been producing Mirel resins for Telles.
All Metabolix technology that was used in the joint venture, including intellectual property rights, will revert solely to Metabolix. In addition, Metabolix will have no ongoing obligation under the ledger account which was funded by ADM to finance the Clinton plant and certain Telles operating costs.
“Clearly, we are disappointed by ADM’s decision to withdraw from Telles. While this is a setback, we remain committed to successfully commercializing PHA bioplastics. Over the past few years, we now have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model,” said Richard Eno, Chief Executive Officer of Metabolix. He continued, “We sincerely thank our customers, distributors, and partners for their interest in developing PHA-based solutions to address a growing market need for bioplastics. We will be evaluating alternate plans for commercialization and clearly wish to supply this growing market in the future.” Richard Eno added, “Most of all, I would like to express my appreciation for the efforts put forth by the Telles and ADM Polymer teams, who have demonstrated the commercialization of PHA bioplastics at world scale.”
Metabolix is currently conducting a strategic review of its business priorities and plans for 2012. The Company plans to continue focus on development of renewable industrial chemicals and noted that it has continued to make good forward progress and remains in ongoing discussions with potential partners. In light of the Telles termination, Metabolix plans to retain a core team in its bioplastics group to provide continuity with the technology and market. Due to the termination of the agreement with ADM, Metabolix is now free to open discussions with alternative manufacturing and commercialization partners for PHA bioplastics.
In conjunction with a shift in priorities for 2012, Metabolix will restructure its bioplastics business and downsize operations with details being finalized. Metabolix ended 2011 with an unaudited cash and investment balance in excess of $78 million. In 2012 the Company currently expects to take restructuring charges of approximately $2 to $3 million, resulting in estimated cash usage in 2012 between $23 and $28 million. Metabolix currently expects to end 2012 with cash and investment balances between $50 and $55 million. Metabolix is committed to effectively managing its cash resources while creating significant value from its core technology platforms. The Company will report 2011 year end financial results and will discuss plans for 2012 during its year end earnings call on March 6, 2012.
Conference Call Information
Richard Eno, the Company’s President and CEO, Joseph Hill, CFO, and Oliver Peoples, Co-founder and CSO, will host a conference call on Thursday, January 12, 2012 at 5:00 p.m. (Eastern) to discuss the content of this announcement. The Company will also answer questions from the investment community. To participate, dial toll-free 1-888- 500-6974 or 1-719-457-2707 (international). The pass code is 4086939. The conference call will also be webcast and can be accessed from the Company’s website at www.metabolix.com in the investor relations section.
To listen to a telephonic replay of the conference call, dial toll-free 1-877-870-5176 or 1- 858-384-5517 (international) and enter pass code 4086939. The replay will be available beginning at 8:00 p.m. (Eastern) on Thursday, January 12, 2012 and will last through 11:59 p.m. (Eastern) January 26, 2012. In addition, the webcast will be archived on the Company’s website in the investor relations section.
Founded in 1992, Metabolix, Inc. is an innovation-driven bioscience company focused on providing sustainable solutions for the world’s needs for plastics, chemicals and energy. The Company is taking a systems approach, from gene to end product, integrating sophisticated biotechnology with advanced industrial practice. Metabolix is developing biosourced industrial chemicals and plastics, as well as a proprietary platform technology for co-producing plastics, chemicals and energy, from crops such as switchgrass, oilseeds and sugarcane.
For more information, please visit www.metabolix.com. (MBLX-E)
Keith Giannini, Schwartz MSL, (781) 684-0770, [email protected]
James Palczynski, ICR, (203) 682-8229, [email protected]
Source: Metabolix, press release, 2012-01-12.