Metabolix, Inc. (NASDAQ:MBLX) Investor Presentation Yield10 Bioscience becoming the Core Business Presentation to Investors October 20, 2016
Safe Harbor Statement* The statements made by Metabolix, Inc. (the Company, we, our or us ) herein regarding the Company and its business may be forwardlooking in nature and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe the Company s future plans, projections, strategies and expectations, including statements regarding future results of operations and financial position, business strategy, prospective products and technologies, timing and likelihood of success, and objectives of the Company for the future, and are based on certain assumptions and involve a number of risks and uncertainties, many of which are beyond the control of the Company, including, but not limited to, the risks detailed in the Company s Annual Report on Form 10-K for the year ended December 31, 2015), the Company s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 and other reports filed by the Company with the Securities and Exchange Commission (the SEC ). Forward-looking statements include all statements which are not historical facts, and can generally be identified by terms such as anticipates, believes, could, estimates, intends, may, plans, projects, should, will, would, or the negative of those terms and similar expressions. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and may be beyond the Company s control, you should not rely on these statements as predictions of future events. Actual results could differ materially from those projected due to our history of losses, lack of market acceptance of our products and technologies, the complexity of technology development and relevant regulatory processes, market competition, changes in the local and national economies, and various other factors. All forward-looking statements contained herein speak only as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements, whether to reflect new information, events or circumstances after the date hereof or otherwise, except as may be required by law. *Under the Private Securities Litigation Reform Act of 1995 2
Company Overview Metabolix, Inc. is a biotechnology company that is shifting its core focus to its Yield10 Bioscience business, which is working to produce step-change improvements in crop yield to enhance global food security Headquartered in Woburn, MA Oilseeds center of excellence in Saskatoon, Canada Based on 10+ years of Metabolix crop science research Launched as Yield10 Bioscience in September 2015 Planning to rebrand as Yield10 Bioscience Yield10 is bringing the extensive expertise and track record of Metabolix in optimizing the flow of carbon in living systems to the agriculture sector with a focus on increasing yield in key row crops Impressive track record of biotechnology innovation -- more than 350 patents issued on legacy biopolymer inventions 10 recent patent applications for increased crop yield (IP foundation for Yield10) Initial development targets are canola, soybean and corn Additional market opportunities include licensing or partnering in other crops, such as cotton, alfalfa, sorghum, rice, potato, sugarcane and sugarbeet 3
Metabolix Strategic Restructuring Metabolix is implementing a plan under which Yield10 Bioscience will become the core business Biopolymer operations, including pilot manufacturing, have been wound down Residual biopolymer IP and assets sold to CJ CheilJedang for a total purchase price of $10M Strategic restructuring nearly complete Current headcount is 29 Cash position at September 30, 2016 approximately $9.7 million, which is expected to take the Company into late 2017 Overview Biopolymers / Crop Science Specialty PHAs PHA in Plants ~70 employees Crop Science Breakthrough technology for Crop Yield ~20 employees Annual Net Cash Burn ~$25M ~$5M 80% reduction in annual cash burn 4
Key Executives & Scientific Advisory Board Oliver Peoples, Ph.D. (Olly) President & CEO Kristi Snell, Ph.D. VP Research & CSO Charles Haaser VP, Finance & CAO Lynne Brum VP, Planning & Communications Michael Lassner, Ph.D. Former VP of Trait Discovery Dupont Pioneer Danny Schnell, Ph.D. Chair, Department of Plant Biology, Michigan State University Heike Sederoff, Ph.D. Professor of Plant and Molecular Biology, North Carolina State University 5 Founder and CSO of Metabolix, Dr. Peoples is an experienced entrepreneur and biotechnology executive with over 30 years of experience in science and technology innovation, intellectual property development, fund raising and partnerships Olly initiated the Metabolix crop science program over a decade ago and more recently spearheaded the development of Yield10 s research and business focus VP of Research and Biotechnology at Metabolix with over 20 years of experience and industry recognized expertise in metabolic engineering of plants and microbes for the production of novel products and increased plant yield Following her post-doctoral research at MIT on metabolic engineering, Dr. Snell joined Metabolix in 1997 where she has led the plant science research program since its inception Joined Metabolix in 2008 as corporate controller and was named chief accounting officer in 2014 Has more than 30 years of senior accounting management and executive experience with public technology-based companies Strong professional background includes technical accounting, SEC financial reporting, Sarbanes-Oxley and tax compliance Joined Metabolix in 2011 as vice president marketing and corporate communications Has more than 25 years experience in the life science industry including roles in corporate communications, investor relations, financial planning and corporate development Has more than 30 years of commercial research and development experience in agricultural biotechnology Held research leadership positions at Dupont Pioneer, including VP of trait discovery Prior to that, he served as VP of research at Maxygen and Verdia to exploit their DNA shuffling platform for crop improvement Currently a Professor and Chair of the Department of Plant Biology at Michigan State University During a collaborative project with MBLX, he and his team discovered the seed yield trait C3003 Previously served in the Department of Biochemistry and Molecular Biology at UMass-Amherst where he was Director of the Plant Biology Graduate Program and Head of the Department of Biochemistry Professor in the Department of Plant and Molecular Biology and Chair of the Systems and Synthetic Biology Cluster in Plant Metabolic Engineering at North Carolina State University Dr. Sederoff s recent research has focused on the study of plant systems and synthetic biology, where she has used metabolic engineering methods to increase carbon assimilation and allocation in an oilseed crop (C3004 and C3005 traits) and in model plant species including marine algae
The Unmet Need Increasing Inherent Crop Yield is Essential to Address Global Food Security Global population growth from 7 billion to 9.6 billion by 2050 driving need for >70% increase in food production Stress tolerance traits are very important for global food security BUT alone cannot double crop yield Current successes focus on reducing yield loss, not on enhancing yield The simple fact is we need to build better plants Historical Industry Successes Protect Crop Yield Performance Focus on Reducing Yield Loss Biotic Stress Traits Herbicide Tolerance Pest Resistance Abiotic Stress Traits Drought Tolerance, Salinity, Flooding, Heat Gen 1 Traits Unmet Need Yield10 Bioscience Focus on Enhancing Yield Gen 2 Traits Increase Yield Gen 3 Traits (Gen1+Gen2) 2013 2015 2016 Gen 2 Traits Abiotic Stress Started in 1996 444 million acres in 2015 Current GMO seed business ~$20 billion (Philips McDougal, 2015) Emerging traits, R&D activity ~$10 billion opportunity Total global seed business ~$53 billion in 2014, growing to ~$92 billion in 2020 (Markets and Markets, 2015) Yield10 is developing breakthrough technology to fundamentally increase inherent crop yield Multi-billion dollar market opportunity based on Introduction of new yield traits and global growth in planted acreage to support food production 6
Yield 10 Approach Fundamentally increasing crop yield is a complex two step carbon optimization problem 1) Increase the rate of carbon fixation in crops having the C3 (e.g. soybean) and C4 (e.g. corn) photosynthesis systems 2) Directing the increased fixed carbon to the harvested part of the plant, mostly seed Robust plants with targeted carbon deposition CO 2 Biomass Fix more carbon per acre or unit input Enhanced Carbon Capture Photosynthesis (Source) Plant Central Metabolism Seed Yield Starch or oil Nutrition Industrial Products Carbon fixed in products (Sink) Enhanced Carbon Capture >>>> Targeted Carbon Deposition 7 The Yield10 technology platform leverages advanced metabolic engineering systems and proprietary transcriptome network analysis to enhance carbon capture and control metabolic pathways driving crop yield
Technology Platforms Yield10 applies its Smart Carbon Grid for Crops and T3 Technology Platforms to the complex and challenging goal of producing step change improvements in crop yield The Smart Carbon Grid for Crops The T3 Platform Yield10 leverages microbial diversity to eliminate bottlenecks in plant carbon metabolism using its Smart Carbon Grid for Crops metabolic engineering platform to improve carbon capture and conversion efficiency to seed Yield10 uses advanced transcriptome network analysis in its T3 Platform to identify global regulator genes to control complex global regulatory networks and gene cascades and achieve step change improvements in crop yield 8
Smart Carbon Grid for Crops Innovative Approach to Increasing Seed Yield in C3 Crops (vast majority of food consumed by humans, e.g., canola, soybean, rice, wheat, potato, cotton, alfalfa) Enhance photosynthesis (carbon capture) CO 2 Shift carbon distribution from biomass to seed ~5-20% potential yield increase C3004 trait C3003 trait Sugar Seed (Food) + Biomass + CO 2 CO 2 Reduce photorespiration ~35% potential yield increase Improve carbon efficiency of central metabolism ~30-50% potential yield increase C3005, C3006 traits 9
T3 Platform Transcriptome Targeted Traits Identify Gene(s), Gene Combinations and Gene Networks to Enable Step Changes in Crop Yield Early approaches in the sector were largely analog involving years of laboratory/greenhouse research The digital T3 approach identifies Global Transcription Factor (GTF) genes that control complex regulatory networks Gene targets identified using T3 are tested in our high throughput switchgrass model 1 st Gen Traits WT +C4001 +C4002 +C4003 e.g. C4001 Transgenic line 4 Photosynthesis Chlorophyll Carotenoids 144% of control 141% of control Central Metabolism Soluble sugars Leaf starch 138% of control 160% of control Molecular Analysis of High Yield Lines 2 nd Gen Traits 71 transcription factor targets 21 TFs downregulated Three validated experimentally Traits C4004, C4005 and C4006 Total dry biomass 140% of control Greater than 40% increase in carbon fixation and biomass yield achieved 10
Trait Development Process Indicative Development Timeline for C3003 Trait Discovery Crop Transformation Greenhouse Testing Fast Field Testing Large Scale Field Trials Camelina C3003 2017 Soybean C3003 Canola C3003/C3004 Canola C3003 2018 2019 2020 Commercial value increases and risk decreases as we progress through field validation, with numerous options for value capture along the way Rice C3003 TBD 11
2016 Fast Field Testing in Camelina 2016 Multi-Site Fast Field Testing of Novel Traits in Camelina; Harvest Expected Fall 2016 Build robust system for rapid field testing of novel strategies and traits Using camelina platform as a proxy for oilseed and other C3 crops --- rapid genetic transformation, fast growth cycle time, ability to bulk up seeds quickly, agronomic performance suitable for field testing Use results and molecular analysis to guide further development and next round of field tests Trait Technology Target C3003 (In-licensed) Improve carbon capture from C3 photosynthesis C3004 (In-licensed) C3005 A, B (In-licensed) Partition more carbon from leaf, stem, etc. (biomass) to seed Recapture carbon lost as C0 2 from cellular metabolism Planted May 2016 C3006 (In-house) Recapture carbon lost as C0 2 by seed metabolism July 2016 Link to a White House OSTP Fact Sheet here. 12
Traits in Development As a result of over 4 years investment in fundamental crop research projects, we have a number of yield traits under development for applications in major food crops; Opportunities exist for licensing and/or partnerships Smart Grid T3 Platform Trait C3003 (1 st Gen) C3004 (2 nd Gen) C3005/6 (1 st Gen) C4001 (1 st Gen) C4002 (1 st Gen) C4003 (1 st Gen) C4004 (2 nd Gen) C4005 (2 nd Gen) C4006 (2 nd Gen) Biological Mechanism Reduce photorespiration Value GMO Editing Status Seed yield Water use + No Greenhouse data, Initial third party field studies Carbon partitioning Seed yield + + Third party data Increased carbon conversion efficiency Global regulator gene Photosynthesis Global regulator gene Photosynthesis Global regulator gene Photosynthesis Current Activity Next Steps Camelina field testing Canola and soybean in development Camelina field testing, editing underway Oil content, Seed yield + No Greenhouse data Camelina field testing All oilseeds Licensing/Partnering Opportunities alfalfa, cotton, potato, rice, wheat, sugarbeet and potentially corn Corn?, cotton, potato, rice, wheat, sugarbeet Yield + + Greenhouse data Corn transformation Forage, all major crops Yield + + Greenhouse data Corn transformation Forage, all major crops Yield + + Greenhouse data Corn transformation Forage, all major crops Regulator gene Yield + + Greenhouse data Corn transformation All major crops Regulator gene Drought + + Greenhouse data Corn transformation All major crops Regulator gene Drought + + Greenhouse data Corn transformation All major crops 22 additional targets for genome editing have been identified and will undergo validation with potential for IP 13
Yield10 Strategy Building and Capturing Value from Yield10 Technologies Rapidly move traits validated in model systems into major food crops Establish key proof points, including multi-site field trials Leverage Fast Field Testing in model systems to guide further development and testing Continue to screen and develop additional traits or trait improvements in model crop systems Camelina for C3 photosynthetic crops (canola, soybean, wheat, rice, etc.) Switchgrass for C4 photosynthetic crops (corn, sugarcane, sorghum, millet, etc.) Evaluate all available options to build and capture value Government and NGO grants Ag industry partnerships License individual traits or platforms for use in specific crops Develop and commercialize select seed lines M&A Continue to build the intellectual property portfolio around Yield10 innovations 14
Value Creation Opportunity Yield10 Seeks to Participate in Incremental Value Created by Yield10 Technologies Example of potential value creation opportunity in U.S. soybean Approximately 84 million acres planted in the U.S.* 10 bushel/acre increase in yield Average price approximately $10.00 per bushel Approximately $8.4 billion of potential value creation *Source: USDA Acreage Report 6/30/16 15
Upcoming Milestones Yield10 is working to progress its yield enhancement technologies and build collaborations Leverage academic collaborations to access breakthrough crop science Progress Fast Field Testing platform development and trials in Camelina Complete field tests, harvest seed, collect and analyze data and refine testing platform and protocols Continue to deploy technology into camelina, canola, soybean and corn lines Use Fast Field Testing results to guide go/no-go decisions on row crop transformation activities Plan and initiate additional Fast Field Tests for 2017 growing season Leverage Smart Carbon Grid for Crops and T3 Platform technologies to identify additional trait leads Secure Ag industry collaborations and additional grants Publication of technical papers on key technologies Continue to build intellectual property portfolio 16
Investment Considerations is Aligned with compelling megatrends Global population growth from 7 billion to 9.6 billion by 2050 driving need for >70% increase in food production over the same period Growing pressure on water and land resources, issues with intensive agriculture developing Breakthrough technology for improved crop yield Novel yield trait technologies for both C3 and C4 photosynthetic crops Foundation IP in place (owned/in-licensed) Staff and research facilities in place creates Large addressable market opportunity Crop R&D $4 billion Total Seed $53 billion Global food $4 trillion enables Numerous opportunities for value capture Licensing and/or funded development projects with strategic partners Commercialize seed lines for select crops 17
Metabolix, Inc. (NASDAQ:MBLX) 19 Presidential Way Woburn, MA 01801