Verenium Corporation Jefferies 2013 Global Industrials Conference August 12, James Levine Chief Executive Officer

Transcription

1 Verenium Corporation Jefferies 2013 Global Industrials Conference August 12, 2013 James Levine Chief Executive Officer

2 Verenium, the Verenium logo, Industry, Evolved., Fuelzyme, Pyrolase, Eradicake, Luminase, Cottonase, and Xylathin are trademarks or registered trademarks of Verenium. Deltazym is a registered product of WeissBioTech GmbH and is distributed in the United States by Verenium. All other company names, product names or logos in this presentation are used for identification purposes only and may be trademarks of the respective companies with which they are associated Verenium Corporation 2 Forward Looking Statements Statements in this presentation that are not strictly historical are forward-looking and involve a high degree of risk and uncertainty. These include, but are not limited to, statements related to Verenium s technology, products and product candidates (including Verenium s Expansion Pipeline and Verenium s ability to identify, develop and commercialize new products and product candidates, either independently or with collaboration partners, and Verenium s timetable for doing so, and the expected benefits offered or to be offered by Verenium s products or product candidates), lines of business, markets (including market size and expected new markets and market penetration and Verenium s ability to identify, develop and commercialize products to address and effectively compete in those markets), operations (including Verenium s ability to successfully negotiate and enter into collaboration partnerships, and the expected or potential benefits to Verenium of its existing partnership arrangements), capabilities (including the sufficiency of Verenium s manufacturing capabilities to meet anticipated potential growth), commercialization activities (including targeted new product launches), customer adoption rates, industry conditions and trends, pricing impacts, future financial performance, capital requirements, near-term and longer-term growth and prospects, the extent of the potential dilutive effect of a recent financing and the impact of such financing on Verenium s financial statements, Verenium s product revenue profile in the medium term and its ability to achieve certain milestones projected to drive profitability (and Verenium s timetable for doing so). Such statements are only predictions, and actual events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to the differences include, but are not limited to, risks associated with Verenium s strategic focus, technologies, products and product candidates (including Verenium s ability to identify, develop and commercialize new products and product candidates, either independently or with collaboration partners, and market demand for these product and product candidates), dependence on patents and proprietary rights, protection and enforcement of its patents and proprietary rights, the commercial prospects of the industries in which Verenium operates and sells products, Verenium s dependence on manufacturing and/or license agreements, its ability to achieve milestones under existing and future collaboration agreements, the ability of Verenium and its partners to commercialize its technologies and products (including by obtaining any required regulatory approvals) using Verenium s technologies, the timing for launching any commercial products and projects, the ability of Verenium and its collaborators to market and sell any products that it or they commercialize, the development or availability of competitive products or technologies, the future ability of Verenium to enter into and/or maintain collaboration and joint venture agreements and licenses on a timely basis or at all, and risks and other uncertainties more fully described in Verenium s filings with the Securities and Exchange Commission, including, but not limited to, Verenium s annual report on Form 10-K for the year ended December 31, 2012 and any updates contained in its subsequently filed quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date hereof, and Verenium expressly disclaims any intent or obligation to update these forward-looking statements.

3 3 Defining Our Industry: Industrial Enzymes Have Broad Applicability in Our Everyday Lives

4 Industrial Enzymes: Profitable, Growing Markets Today, New Markets Emerging Margins of market leader Gross Margins>55% EBIT Margins >20% New Enzyme Markets 2013 Verenium Corporation Source: Market size estimates based on Verenium internal estimates and L. Hepner & Associates Industrial Enzymes Report published in March

5 Increasing Degree of Product Differentiation 5 Defining Our Industry: Major Players in the Industrial Enzymes Market Verenium has a Track Record of Competing on Product Performance Verenium AB Enzymes Novozymes DSM DuPont (Genencor) BASF Increasing Cost Competitiveness Circle size represents estimated relative revenue value

6 6 Defining Our Value Proposition: High-Performance Enzymes Transform Industrial Processes Replacing Expensive Chemistry with Efficient Biology ANIMAL HEALTH GRAIN PROCESSING OILFIELD SERVICES Expensive, Non-renewable Chemistry Mined Dicalcium Phosphate added to diet ph adjusted with Ammonia & Sulfuric Acid Ammonium Persulfate used as guar breaker Efficient, Cheaper, Greener Biology

7 7 Verenium s Business Model Proven Technology Platform: Provides Unique Sustainable Competitive Advantage Commercial Products Product Pipeline Expansion Pipeline Cash Flow to Reinvest $49M FY 2012 Revenues $17M 2012 product gross profit Demonstrated high value Animal Health & Nutrition success Corn Bioethanol success Asset Sale: Sold $7.5M revenue products / candidates for $37M Demonstrates Commercial Success Multiple 2013 product launches in current endmarkets Near Term: Revenue growth and diversification Path to $100M+ Revenue New Products for: Current end-markets, AND Baking Sweeteners Personal Care Detergents Near term: Validation from new partnerships Path to $200M+ Revenue

8 Commercial Products

9 9 Foundation of Technology Starts With Nature, A Key Differentiator for Verenium Biodiversity samples collected from extreme environments around the globe Thermal Hot Spring Warm Volcanic Mud Geothermal Vents Our biodiversity agreements conform to the 1992 Convention on Biological Diversity

10 Verenium s Unique Lead Commercial Products Market-Validated with $57M in 2012 Total Revenue Addressing $1B Opportunity 2013 Verenium Corporation ANIMAL HEALTH AND NUTRITION Lead Product, $350M+ Market GRAIN PROCESSING $350+ Market OILFIELD SERVICES Up to $270M* Combined Market In Hydraulic Fracturing & Filter Cake Removal Source: Verenium/L. Hepner & Associates *Total estimated market for all enzyme and chemical breakers.

11 11 Phyzyme XP Phytase Differentiated, Category-Leading Product BACTERIAL PHYTASE - DIFFERENTIATED FROM FUNGAL PHYTASES More active in the digestive tract Active longer Lower dose, higher feed conversion ratio MULTIPLE MANUFACTURING SITES Global manufacturing Efficient supply chain DUPONT MARKETING Broad product portfolio Expertise in animal nutrition Global presence

12 12 Phytase Enzymes Growth is Due to Numerous Advantages over Inorganic Phosphorus Enzymes release phosphorus naturally occurring in grains but bound up in phytate Provide additional value by releasing other essential nutrients complexed by phytate Sustainable alternative to a mined product Safeguards the environment reduced phosphorus in animal waste Biodegradable

13 13 Three High Performance Commercial Products for Grain Processing LIQUEFACTION SACCHARIFICATION & FERMENTATION FERMENTATION & OIL RECOVERY Unique enzyme with multidimensional value proposition $100M+ market Highly active and effective enzyme $225M market Efficient enzyme with multidimensional value proposition $15M+ market

14 14 Fuelzyme Alpha-Amylase is Differentiated from the Competition by Nature Itself From a Different Branch on the Phylogenetic Tree of Life Different Mode of Action Produces More Uniform Substrate Most α-amylases Thermococcus Fuelzyme R Superior thermostability, broader ph range & more specific mode of action

15 15 Field Data Demonstrates Value Delivered by Fuelzyme Alpha-Amylase Estimated annualized savings from 2012 trials of Fuelzyme Alpha-Amylase in U.S. ethanol plants* LIQUEFACTION SACCHARIFICATION & FERMENTATION CHEMICAL USAGE Enzyme Dose reduction Alpha-Amylase Average Savings $150k High Savings $260k Enzyme Dose reduction Glucoamylase Average Savings $120k High Savings $240k Ammonia/Urea (Net nitrogen savings) Average Savings $230k High Savings $290k Total annualized savings per plant between $260k and $550k *Estimated annual savings are dependent on and can vary by individual plant characteristics such as plant size, design and operating conditions.

16 All of the Above Energy Strategy Requires Unconventional Drilling and Stimulation Techniques to Unlock 100 Year Supply of Natural Gas and Significant New Sources of Oil 2013 Verenium Corporation 16 Horizontal drilling technology Generally deeper than conventional wells Impermeable, hard rock impedes flow Wide range of ph and temperature conditions Water, chemical usage, and especially fracking techniques subject of public concern and debate Image Source:

17 17 Oilfield Services Cellulase Enzyme for Hydraulic Fracturing Providing Favorable Performance and Environmental Benefits Before enzyme is inactive guar is viscous After enzyme is active guar is broken PERFORMANCE Smoother controllable break, improved well productivity ECONOMICS Superior economics relative to chemicals used in the process ENVIRONMENTAL Reduces chemical breakers, safe for workers

18 Pipeline Products & Expansion Pipeline

19 19 Verenium s Product Pipeline Path to Revenue Growth and Operating Profitability Product Candidate Potential Market Size (2016)* Estimated Launch** Target Market Position Animal Health & Nutrition Enzymes Cibenza Phytaverse TM $ M Major (1) NSP Cocktail (Non Starch Polysaccharides) 250M Major Grain Processing Enzymes Next-Gen Gluco-Amylase $ M Specialty (2) Process Enhancer $2M Major Starch Modifier $5M 2013 Exclusive (3) Oilfield Services Enzymes Next-Gen Guar Breaker Up to $250M * 2014 Specialty Source: Verenium/L. Hepner & Associates. *Total estimated market for all enzyme and chemical breakers, only a portion of which is currently addressed by enzymes **Date ranges indicate estimated launch for different geographical regions (1) We define Major market position as 20-30% targeted market penetration at maturity (2) We define Specialty market position as 5-10% targeted market penetration at maturity (3) We define Exclusive market position as 100% targeted market penetration at maturity due to limited competition

20 20 Verenium s Expansion Pipeline: Targeted Markets New Products for Current Markets ANIMAL HEALTH GRAIN PROCESSING OILFIELD SERVICES BAKING New Products for New Markets SWEETENERS PERSONAL CARE DETERGENTS /CLEANERS

21 21 Verenium as a Preferred Collaboration Partner in Industrial Enzymes OUR TECHNOLOGY Industry leading technology for discovering and evolving enzymes OUR FULL SUITE OF CAPABILITIES From enzyme discovery, evolution, expression through to commercial scale manufacturing OUR TRACK RECORD Demonstrated ability to produce high-performance products in competitive fields OUR PARTNERING HISTORY Successful past collaboration partnerships give us insight into what works well OUR SMALL SIZE AND FLEXIBILITY Gives us flexibility to structure collaboration partnerships to achieve success OUR SCARCITY The alternatives to Verenium s capabilities are limited and of a completely different scale and business model

22 22 Verenium s Partnership with Novus International To Access Global Markets with New Products STRONG COMPANY: Sales over $1B STRONG PARENTS: Mitsui and Nippon Soda ESTABLISHED, GLOBAL MARKET REACH: More than 800 employee serving more than 2500 customers in over 100 countries. COMPLEMENTARY SCIENTIFIC SKILLS: Animal Nutrition focus complements Verenium s 15+ years experience in feed enzymes DEVELOPMENT AND COMMERCIALIZATION OF FOUR ENZYMES Next Generation Phytase CIBENZA PHYTAVERSE TM Non Starch Polysaccharide (NSP) cocktail of 3 enzymes

23 Past & Present Partners Validate the Strength and Uniqueness of Our Products and Technology TECHNOLOGY SUITE ANIMAL HEALTH GRAIN PROCESSING OILFIELD SERVICES TM We developed enzymes and discovery and evolution technologies used in BP s cellulosic enzyme program We are creating a next generation suite of enzymes Our unique enzyme will enable creation of a novel product TM We created a unique Phospholipase C product and other enzymes for oilseed processing TM We created one of the top selling phytase products (Phyzyme XP phytase) Reciprocal distribution for enzyme products (Weiss BioTech in Europe, Verenium in the US) broadens our product mix and geographic reach Several major oilfield services companies are evaluating our high-performance products for hydraulic fracturing TM We developed novel enzymes for the cost-effective production of a proprietary product We created the high performance Quantum phytase 2013 Verenium Corporation All company and product names and logos are trademarks of their respective owners. 23

24 Technology Platform

25 25 Enzyme Discovery

26 26 Unique Discovery and Development Process Flexible Discovery Process For Finding High-Performance Enzymes More time TIME TO COMMERCIALIZATION Less time Development Options NEW DISCOVERY & EVOLUTION Leverages over 2000 edna libraries Unprecedented biodiversity (>million genomes) VERENIUM ENZYME COLLECTION (4,000+) Leverages previous discovery & evolution programs CURRENT PRODUCT ADJACENCY Leverages existing products to new applications Examples include Xylathin xylanase & Eradicake TM alphaamylase

27 Manufacturing

28 28 Verenium s Manufacturing Approach Laboratory to commercial-scale capabilities Manufacturing partnership with Fermic World-scale fermentation capacity Decades of fermentation expertise Lowers capital requirements Advantageous location with access to Atlantic and Pacific Three Dedicated 190,000 L Fermenters Fermic, Mexico City 40 L 500 L 0.5 L 0.5 L 10 L COMMERCIAL SCALE PILOT PLANT LAB SCALE Note: L = Liter

29 29 High Value, Novel Enzymes; Low Cost, Well Established Industrial Scale Process FERMENTATION RECOVERY FORMULATION AND PACKAGING Industrial scale modern process based on ancient technology More product specific, advanced equipment and materials Enabling shelf life and usability

30 Financial Results

31 31 Financial Results Statements of Operations ($M) 1H H 2013 FY 2012 Revenues $32.9 $29.2 $57.2 Product & contract manufacturing gross profit Product & contract manufacturing gross margin $9.2 $9.6 $ % 37% 34% Research & development $7.0 $10.3 $15.1 % of total revenue 21% 35% 26% Sales, general & administrative $10.2 $10.0 $19.6 % of total revenue 31% 34% 34% 2013 Guidance Adjusted EBITDA* $(0.5) $(5.1) $(7.6) $(10) - $(12) Capital Expenditures $7.2 $0.3 $10.0 $3 - $4 * Adjusted EBITDA represent non-gaap financial information and adjusts for non-cash, nonrecurring and other items the Company believes necessary to provide a more consistent measure of financial performance.

32 32 Priority Financial Themes Cost Management / Path to Profitability Achieve appropriate levels of R&D and SG&A spend as we continue to align the core business to pure-play enzymes and position ourselves for future growth R&D growth will come primarily from investment in pipeline SG&A growth will come primarily from sales & marketing Medium-term vision: financial metrics in line with our peers / competitors Product gross profit of 40%+ Operating expenses at 25%-30% of revenue Achieve operating profitability in 2014

33 / 2013* Milestones To Drive Profitability Current Product Growth Product Diversification Product Pipeline Expansion Pipeline Combined product revenue growth from Grain Processing and Oilfield Services of 25% Achieve greater than 50% of 2013 revenue from products other than Phyzyme XP phytase Launch at least 3 pipeline candidates into current or new industrial enzyme markets in 2013 Complete at least 3 new product development/distribution partnerships Manufacturing Drive COGS reductions to achieve product gross margins of 40%+ Financial Implement partnerships or financing to fund capital needs to 2014 operating profitability * As announced at Verenium s Capital Markets Day in October 2012

34