UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) December 11, 2006

METABOLIX, INC.
(Exact Name of Registrant as Specified in Its Charter)

 

DELAWARE
(State or Other Jurisdiction of Incorporation)

 

 

(617) 492-0505
(Registrant’s Telephone Number, Including Area Code)

 

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
SIGNATURES
INDEX TO EXHIBITS
EXHIBIT 99.1

 

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Item 2.02 Results Of Operations And Financial Condition.

     On December 11, 2006, Metabolix, Inc. issued a press release announcing the financial results for its third quarter and the nine month period ended September 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1. This information, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit No.		Description
99.1		Press Release dated December 11, 2006.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

			METABOLIX, INC.
Date	December 11, 2006		By:	/s/ Thomas G. Auchincloss, Jr.
				Thomas G. Auchincloss, Jr.
				Chief Financial Officer

 

 

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INDEX TO EXHIBITS

Exhibit No.		Description
99.1		Press Release dated December 11, 2006.

 

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE
Metabolix, Inc. 21 Erie Street Cambridge, MA 02139 (617) 492-0505 www.metabolix.com
Investor Relations Contact: Kathleen Heaney Integrated Corporate Relations (203) 803-3585 ir@metabolix.com		Media Contact: Jackie Kolek Integrated Corporate Relations 203-682-8200

 

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

 

Cambridge, Massachusetts, December 11, 2006. 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.”

 

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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.

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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 Natural Plastic, 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 forward-looking 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 Natural Plastic, commercial viability of Natural Plastic, 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 Natural Plastic 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 Natural Plastic, 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

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information contained in this press release or with respect to the announcements described herein.

 

About Metabolix

Founded in 1992, Metabolix, Inc. is developing and commercializing environmentally sustainable and totally biodegradable Natural Plastic as a clean alternative to petroleum-based plastics. The Company is taking a systems approach, from gene to end product, to integrate sophisticated biotechnology with current industrial practice to produce plastics, fuels and chemicals from renewable resources.  In addition to its microbial fermentation platform for production of Natural Plastic, Metabolix is also developing a proprietary platform technology for co-producing, in non-food plant crops such as switchgrass, Natural Plastic and biomass for biofuels such as ethanol and for chemical products. For more information, please visit www.metabolix.com.     (MBLX-G)

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METABOLIX, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share amounts)

		Three Months Ended September 30,						Nine Months Ended September 30,
		2006			2005			2006			2005
Revenue
Research and development revenue		$	2		—			$	2,505		32
License fee and royalty revenue from related party		38			58			227			192
Grant revenue		383			507			1,501			1,850
Total revenue		423			565			4,233			2,074
Operating expenses
Research and development expenses, including cost of revenue		2,842			1,281			7,512			4,105
General and administrative expenses		2,031			1,245			5,846			3,323
Total operating expenses		4,873			2,526			13,358			7,428
Loss from operations		(4,450		)	(1,961		)	(9,125		)	(5,354		)
Other income (expense)
Interest income		225			22			567			67
Interest expense		(5		)	(3		)	(7		)	(15		)
Net loss		$	(4,230	)	(1,942		)	$	(8,565	)	(5,302		)
Net loss per share
Basic and Diluted		$	(1.41	)	$	(0.65	)	$	(2.86	)	$	(1.78	)
Number of shares used in per share calculations
Basic and Diluted		3,009,146			2,976,440			2,995,033			2,974,452

 

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METABOLIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share amounts)

		September 30,			December 31,
		2006			2005
Assets
Current Assets
Cash and cash equivalents		$	6,185		$	1,835
Short-term investments		9,140			1,339
Restricted cash		498			496
Accounts receivable		—			30
Unbilled receivable		181			431
Other current assets		245			124
Total current assets		16,249			4,255
Property and equipment, net		3,445			3,005
Other assets		1,690			65
Total assets		$	21,384		$	7,325
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
Current Liabilities
Accounts payable		$	962		$	1,299
Accrued expenses		1,605			831
Advances on financing from investors		—			615
Current portion of capital lease obligations		—			63
Current portion of deferred rent		165			165
Total current liabilities		2,732			2,973
Deferred rent		1,089			1,213
Long-term deferred revenue		9,622			5,621
Other long-term liabilities		71			67
Total liabilities		13,514			9,874
Commitments and contingencies
Redeemable convertible preferred stock		61,442			44,009
Stockholders’ Deficit
Common stock ($0.01 par value per share); 26,500,000 and 23,000,000 shares authorized at September 30, 2006 and December 31, 2005, respectively; 2,077,299 and 1,812,828 shares issued at September 30, 2006 and December 31, 2005, respectively; 2,066,675 and 1,802,204 shares outstanding at September 30, 2006 and December 31, 2005, respectively		21			18
Treasury stock (at cost); 10,624 shares at 2006 and 2005		(35		)	(35		)
Additional paid-in capital		5,270			3,634
Deferred compensation		(95		)	—
Other comprehensive income		7			—
Accumulated deficit		(58,740		)	(50,175		)
Total stockholders’ deficit		(53,572		)	(46,558		)
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit		$	21,384		$	7,325

 

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METABOLIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

		Nine Months Ended September 30,
		2006			2005
Cash flows from operating activities
Net loss		$	(8,565	)	$	(5,302	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		693			198
Stock-based compensation		1,211			4
Changes in operating assets and liabilities:
Accounts receivable		30			17
Unbilled receivable		250			115
Other current assets		(121		)	(83		)
Accounts payable		(488		)	(176		)
Accrued expenses		430			514
Deferred rent		(124		)	(124		)
Deferred revenue		4,001			1,570
Net cash used in operating activities		(2,683		)	(3,267		)
Cash flows from investing activities
Purchase of property and equipment		(1,133		)	(489		)
Restricted cash		(2		)	2
Proceeds from maturity of short-term investments		17,505			—
Purchase of short-term investments		(25,299		)	—
Net cash used in investing activities		(8,929		)	(487		)
Cash flows from financing activities
Principal payments for capitalized lease obligations		(63		)	(92		)
Payments on convertible promissory note		—			(300		)
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs		16,819			4,829
Proceeds from options exercised		29			12
Proceeds from warrants exercised		303			—
Deferred initial public offering costs		(1,126		)	—
Net cash provided by financing activities		15,962			4,449
Net increase in cash and cash equivalents		4,350			695
Cash and cash equivalents at beginning of period		1,835			3,152
Cash and cash equivalents at end of period		$	6,185		$	3,847

 

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