Metabolix, Inc. Reports Third Quarter and Nine Month 2006 Financial Results

Business Wire, Dec 11, 2006

CAMBRIDGE, Mass. -- 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 Natural Plastic, 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 Natural Plastic 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 Natural Plastic."

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 Natural Plastic 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 Natural Plastic 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.