Metabolix, Inc. - Publications - Metabolix Press Releases

Cambridge, Massachusetts. Metabolix, Inc. (NASDAQ: MBLX) today reported financial results for the three and nine months ended September 30, 2006. The Company reported a net loss of $4.2 million for the third quarter of 2006 and $8.6 million for the nine months ended September 30, 2006 as compared to a net loss of $1.9 million and $5.3 million for the comparable periods in 2005, respectively.

In November 2006, the Company completed its initial public offering (IPO) raising net proceeds of approximately $99.5 million, including the exercise of the underwriters over allotment option, and an additional $7.5 million in a private placement of shares purchased by Archer Daniels Midland Company (ADM) at the time of the IPO. Accordingly, as of November 30, 2006, the Company's cash and marketable securities totaled $122.7 million. Proceeds from the offering will be used primarily for investments in equipment for pilot manufacturing and commercial formulation of Bioplastic, pre-commercial manufacturing and marketing activities with ADM, as well as for further research and development for the Company's switchgrass and other programs.

James Barber, CEO commented, "We continue to make significant strides in the commercialization of Bioplastic and look forward to continued progress on the construction of our manufacturing facility with Archer Daniels Midland." Mr. Barber further commented, "The entire management team and Board of Directors are pleased with the successful completion of our IPO. The company is now well positioned to fund its research programs and the commercialization of Bioplastic."

Third Quarter/Nine Month 2006 Review

Metabolix reported net cash provided by operating activities of $0.2 million for the third quarter 2006, which compares to net cash used in operating activities of $(0.6) million for the comparable quarter in 2005. For the nine months ended September 30, 2006 net cash used in operating activities decreased to $(2.7) million from $(3.3) million in 2005. Metabolix currently manages its operating activities with an emphasis on their impact on cash. For the three months and nine months ended September 30, 2006 the reduction in net cash used in operating activities was due to an increase in collaborative partner payments received from Archer Daniels Midland Company which offset the Company's increasing expenditures for pilot manufacturing, sales and marketing activities related to the commercialization of Bioplastic and for general administrative activities. Payments received from ADM are presently recorded as deferred revenue for GAAP purposes. Revenue for the third quarter of 2006 was $0.4 million as compared to $0.6 million in third quarter 2005. The decrease was primarily attributable to a reduction in government grant revenue. Collaborative partner payments totaled $3.3 million for the quarter, all of which was recorded as deferred revenue. For the nine months ended September 30, 2006 revenue increased to $4.2 million from $2.1 million for the same period of the prior year. The increase in revenues from 2005 was primarily the result of recognizing $2.5 million of previously deferred revenue upon the termination of the Company's joint development arrangement with BP in the first quarter of 2006. During the nine month period ended September 30, 2006, the Company received $6.4 million in collaborative partner payments that were recorded as deferred revenue.

Total operating expenses in the third quarter of 2006 were $4.9 million as compared to $2.5 million in third quarter 2005. For the nine months ended September 30, 2006 total operating expenses increased to $13.4 million from $7.4 million in the nine months ended September 30, 2005. The increase in operating expenses was due to an increase in research and development as well as general and administrative activities. In addition, the Company had stock compensation expense of $0.4 million and $1.2 million in the third quarter and nine months 2006, respectively, due in part to the implementation of FAS 123R in 2006.

Research and development expenses were $2.8 million and $7.5 million for the three and nine months ended September 30, 2006, respectively, up from $1.3 million and $4.1 million for the comparable periods in 2005. An increase in the pilot production of Bioplastic material for customer and product development activities and increased personnel were the primary drivers for the increase in research and development expense.

General and administrative expenses were $2.0 million and $5.8 million in the three and nine months ended September 30, 2006, respectively, up from $1.2 million and $3.3 million for the comparable periods in 2005. General and administrative expenses increased primarily due to expenses related to the addition of personnel for the Company's sales and marketing initiatives as well as administrative initiatives to support expanding commercialization activities, including requirements associated with being a public company.

The Company reported a net loss of $4.2 million for the third quarter of 2006 and $8.6 million for the nine months ended September 30, 2006 as compared to a net loss of $1.9 million and $5.4 million for the comparable periods in 2005, respectively. On a per share basis, the net loss in the third quarter 2006 was $1.41 compared to $0.65 in the prior year period. For the nine month period, the Company reported a net loss per share of $2.86 as compared to a net loss per share of $1.78 for the first nine months of 2005. The per share figures above do not reflect the Company's initial public offering, which occurred in the fourth quarter and resulted in the conversion of preferred stock into 9,992,041common shares.

Thomas Auchincloss, CFO commented, "We benefited from the initiation of support payments from ADM this quarter and generated positive net cash flow from operating activities. As we are expanding our pilot manufacturing and sales and marketing activities to commercialize Bioplastic, as well as our research and development, we expect that these expenditures will exceed our payments from collaborative partners in future quarters."

Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forwardlooking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release which are not strictly historical statements, including, without limitation, statements regarding commencement and completion of construction on the commercial manufacturing facility, actual manufacturing capacity of the commercial manufacturing facility, manufacturing plans and performance including the timing of commencement of commercial production of Bioplastic, commercial viability of Bioplastic, current or future financial performance and position, management's strategy, plans and objectives for future operations, product development, present and future research and development, regulatory approval and intellectual property, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, including, without limitation, risks associated with: our dependence on our collaborative partner for construction of the commercial manufacturing facility, ADM's ability to complete construction of the commercial manufacturing facility on time and on budget, the ability of Metabolix and ADM to successfully manufacture Bioplastic at commercial scale and in a timely and economic manner, the success of collaborative arrangement with ADM, the market acceptance of our products, our ability to compete with petrochemical-based plastics, fuels and chemicals, our ability to generate future revenues, our expectation of incurring continued losses, the success of our research and development programs, our ability to develop and successfully commercialize Bioplastic, our ability to obtain required regulatory approvals, our ability to obtain, maintain and protect intellectual property rights for our products, our limited sales and manufacturing capabilities, our ability to hire and retain skilled personnel, and other risks detailed in Metabolix' filings with the Securities and Exchange Commission, including the Registration Statement on Form S-1 which was declared effective on November 9, 2006. Metabolix assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

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Investor Relations Contact:
Integrated Corporate Relations
Kathleen Heaney (203) 803-3585
ir@metabolix.com