Metabolix Q2 results show commercial progress in PHA products
Sustainable solutions for the plastics and chemicals industries were topics of discussion released in Metabolix Inc.’s second quarter 2014 financial results. Joe Shaulson, president and CEO of the company, began by referencing a private placement agreement for $25 million of new equity financing with Jack Schuler, Oracle Investment Management, Birchview Capital, members of the board and executive team members, as well as other investors. “Even if the financing is completed as planned, we will during 2015 require significant additional financing to continue to fund our operations to support our capital needs,” said Joe Hill, chief financial officer of MBLX.
The additional financing is contingent upon obtaining a financial viability exception for the transition from NASDAQ. According to information released by Metabolix, NASDAQ granted its request for the exception on Aug. 8, and the company intends to close the transaction on or about Aug. 22. “We plan to use this capital towards building an intermediate scale specialty polymers business based on our PHA biopolymer additives that will serve as the foundation for our longer range plans and our future growth,” Shaulson said.
The polyhydroxyalkanoate (PHA) biopolymer production facility is expected to be up and running in 2015 once financing is secured. “We will be ready to move forward with the preliminary engineering study and implementation planning for the retrofit of an existing contract manufacturing facility, we have targeted for commercial PHA production,” Shaulson said.
Beyond plans for a PHA manufacturing facility, the company made progress operationally with key customers ramping up commercial-scale trails of PHA biopolymer products. “We are intensifying product and application development and are working very closely with our customers,” said Johan Van Walsem chief operating officer with Metabolix.
This year Metabolix. placed emphasis on the improvements PHA can bring to PVC and polylactic acid (PLA), the leading biobased combustible bioplastic. “We have shown that PHA improves the softness and flexibility of PLA, while maintaining bio content and combustibility,” Van Walsem said. “We are working with several customers, who are developing applications in foam, fibers and injection molded pots and two of our customers have reached the commercial stage and have launched commercial products based on PLA, PHA this year.”
The PHA also enables the production of biobased and marine degradable micropowders and microbeads, which can provide the texture needed for microbeads used in cosmetics and other personal care items. To this end, cosmetic companies are showing interest according to Van Walsem.
PHA latex coatings for paper and cardboard were also mentioned as making progress. "We are excited about the ongoing testing and development work in this application phase," Van Walsem said.
The financial results showed Metabolixbringing in $1.2 million in total revenue for the second quarter of 2014, compared with $1.7 million for the second quarter of 2013. The revenue consisted primarily of revenue from product sales and government grants. Biopolymer product orders of $600,000 million were shipped and billed during the quarter, compared with $800,000 million in product revenue recognized during the second quarter of 2013. Cost of product revenue was $800,000 million during the quarter ending June 30, compared with $1.2 million for the comparable period in 2013.
Overall, the company reported a net loss of $7.2 million, or 21 cents per share, this quarter compared with a net loss of $7.9 million, or 23 cents per share, during the second quarter of 2013.
The company spent $4.5 million in the second quarter of 2014 on research and development, compared with $4.9 million for the same period in 2013. The selling general and administrative expenses were $200,000 million lower in the second quarter of 2014, at $3.2 million from $3.4 million in the same quarter of 2013.
The second quarter of 2014 ended with $5.5 million in unrestricted cash and cash equivalents compared to $31.7 million in 2013. The Company’s net cash used in operating activities during the second quarter of 2014 was $4.9 million, compared with $5.8 million in second quarter 2013.