Metabolix, Inc. (NASDAQ: MBLX) has set itself on a path to transformation. First, the company has announced that it is selling its biopolymer business to a South Korean food company called CJ CheilJedang Corporation for $10 million. The transaction is expected to close next month, subject to customary closing conditions.
What is Metabolix selling?
Metabolix, Inc. (NASDAQ: MBLX) is particularly selling patents and laboratory equipment of its biopolymer business. The assets being sold include the microbial strain platform that has been used to develop the company’s fermentation-based products.
Metabolix has already received $2 million from CJ in connection with the sale of biopolymer assets. The balance of $8 million will be released up the closing of the transaction in mid-September.
Besides buying Metabolix’s biopolymer business, CJ has also entered an agreement to sublease space at Metabolix’s plant in Woburn, Massachusetts. However, the financial terms of the subleasing deal weren’t disclosed.
Transformation of the business
After offloading the biopolymer business, the second thing that Metabolix, Inc. (NASDAQ: MBLX) intends to do as part of its transformation is rebranding. The company plans to change its name to Yield10 Bioscience in the coming months. CEO Joseph Shaulson said that the sale of biopolymer operation will enable them to gain more footing in their core business and hopefully generate more value for shareholders.
The CEO added that the focus of the management team at Metabolix is on developing disruptive technologies that help to improve crop yield.
Lean corporate structure
Metabolix, Inc. (NASDAQ: MBLX)’s transformation will see the company have a lean corporate structure once the pending transactions are completed. For instance, the restructured company will only have about 20 staff and its annual cash burn is expected to drop to the vicinity of $5 million.
Financial results – Metabolix, Inc. (NASDAQ: MBLX)
Metabolix, Inc. (NASDAQ:MBLX) generated revenue of less than $2.6 million in 2015, down 7% from the previous year. It logged a loss of $23.7 million in 2015, which was slightly better than a loss of $29.5 million in the prior year.