Metabolix’s net cash used for operating activities during the first quarter of 2009 was $8.6 million, which compares to net cash used of $4.5 million for the comparable quarter in 2008. Unrestricted cash and short-term investments at March 31, 2009 totaled $82.3 million. The company has no long-term debt.
First Quarter 2009 Financial Overview:
Metabolix used $8.6 million of cash in operating activities for the first quarter 2009, which compares to net cash used of $4.5 million for the comparable quarter in 2008. The company presently manages its finances with an emphasis on cash flow. The increase in cash used for operating activities during the three months ended March 31, 2009 as compared to the respective period in 2008 was primarily due to the timing of quarterly support and pre-commercial cost sharing payments received from Archer Daniels Midland company (ADM), in addition to a lower yield on investments and changes in working capital. The company expects its net cash used in operating activities to decrease from this level in the next two quarters as it receives quarterly support and pre-commercial cost-sharing payments from ADM, partially offset by costs to expand its operations in advance of the full commercialization of Mirel bioplastics and for the development of its longer term technology platforms.
The company did not receive any quarterly support or pre-commercial cost-sharing payments from ADM during the first quarter of 2009. During the first quarter of 2008 the company received $2.5 million in payments from ADM. These payments, when received, are recorded as long-term deferred revenue on the company’s balance sheet.
Total revenue in the first quarter of 2009 was $0.3 million, which included revenue recognized from delivery of Mirel sample product (included in research and development revenue), license fee and royalties, and government research grants. This compared to $0.4 million in the same period of 2008. The year-over-year decrease in quarterly revenue was primarily attributed to lower sample product revenue and lower grant revenue as a result of a decrease in billable activity related to the Strategic Environmental Research Development Program grant that expired in February 2009.
For the three months ended March 31, 2009, total operating expenses were $9.7 million as compared to $10.0 million for the comparable quarter in 2008. The majority of the year-over-year decrease in quarterly expenses related to lower selling, general and administrative expenses as a result of reduced consulting and employee compensation expenses partially offset by increased spending on research and development. The increased research and development expense during the quarter was primarily due to the hiring of additional personnel needed to support the company’s pre-commercial manufacturing processes for Mirel and microbial and plant research programs partially offset by lower pre-commercial manufacturing costs.
Business Update:
Construction of Commercial Manufacturing Facility:
Metabolix is commercializing Mirel bioplastics through its joint venture with ADM known as Telles. ADM is responsible for construction of the commercial manufacturing facility located in Clinton, Iowa. ADM recently completed a detailed review of the project, which was conducted to improve construction productivity and to better optimize remaining costs to bring the facility online. Based on input from ADM, Metabolix is now anticipating mechanical completion of the initial phase of the Clinton facility in September through November and start of commercial production in December of 2009.
Rick Eno, Metabolix chief executive officer, said, This quarter, our partner ADM made significant progress towards completion of the manufacturing facility for our first commercial product, Mirel bioplastics. Demand remains very strong for the product, and the two new Vincotte certifications that we recently received validate the compostability of Mirel resins in both home and industrial composting facilities. We look forward to being able to begin meeting the strong market need for this product by year-end.
