FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2013
SAN DIEGO, Calif., August 7, 2013 – Verenium Corporation (Nasdaq: VRNM), a leading industrial biotechnology company focused on the development and commercialization of high-performance enzymes, today reported operating highlights and financial results for the second quarter and six months ended June 30, 2013.
Since the beginning of 2013, the Company has made important progress on both operational and financial fronts. Recent accomplishments include:
Animal Health and Nutrition
• Introduced next-generation phytase enzyme product, CIBENZA ® PHYTAVERSE™, with partner Novus, International, Inc. (Novus). Novus and Verenium expect to launch this product in certain geographic regions in 2013.
• Selected the first lead enzyme candidate for a suite of non-starch polysaccharide (NSP) enzymes, also with partner Novus.
• Launched Deltazym ® APS protease for use in corn ethanol operations to reduce cost and chemical usage.
• Continued to demonstrate the operational and economic advantages of Fuelzyme ® alpha-amylase in several new field trials.
• Launched Pyrolase ® HT, a next-generation cellulase enzyme for use in hydraulic fracturing.
• Reestablished commercial sales to a Pyrolase ® cellulase customer in China.
• Entered into a short term, preliminary research collaboration with Colgate-Palmolive Company to research an innovative enzyme-based manufacturing process to potentially replace traditional chemical processes that are standard in the manufacturing of certain consumer products.
Revenues for the periods ended June 30, 2013 and 2012 were as follows (in thousands):
Three Months Ended
Six Months Ended
2013 2012 2013 2012
Animal health and nutrition
$ 8,061 $ 9,256 $ 15,987 $ 16,672
2,880 2,256 5,046 5,841
— — — 579
All other products
90 730 214 871
11,031 12,242 21,247 23,963
2,512 2,486 4,730 2,486
Collaborative and license
1,844 969 3,196 6,477
$ 15,387 $ 15,697 $ 29,173 $ 32,926
Total revenues for the six months ended June 30, 2013 decreased 11% to $29.2 million from $32.9 million in the prior year, due in large part to license revenue recorded in 2012 from DSM and Novus. Combined product and contract manufacturing revenue for the six months ended June 30, 2013 decreased 2% to $26.0 million from $26.4 million in the prior year.
Product revenue for the six months ended June 30, 2013 decreased 11% to $21.2 million from $24.0 million in the prior year, primarily attributed to a decline in Phyzyme ® XP phytase manufacturing revenue due to an increase in manufacturing volumes by DuPont, the Company’s marketing and distribution partner for Phyzyme ® XP phytase. Revenue associated with product manufactured at DuPont sites is recognized on a net basis equal to the royalty on operating profits received from DuPont, and excludes gross manufacturing revenue.
In addition, grain processing revenue declined during the first quarter of 2013 and was offset in part by an increase in grain processing revenue during the second quarter of 2013, indicative of improvements in corn ethanol market conditions and increased customer adoption of the Company’s Fuelzyme ® alpha-amylase enzyme.
The Company also reported lower revenue from its grain processing and oilseed processing product lines as a result of the sale of its Veretase ® alpha-amylase and Purifine ® PLC enzymes to DSM in March 2012. In conjunction with the sale to DSM, the Company entered into a supply agreement to continue to produce and sell Purifine ® PLC and Veretase ® alpha-amylase products to DSM at lower sales prices than prior periods when sold directly to end customers. Revenue from the DSM supply agreement is reported as contract manufacturing revenue