Lynne Brum - VP, Marketing and Corporate Communications Joe Shaulson - Director, President and CEO Johan van Walsem - COO Oli Peoples - Co-Founder and CFO Chuck Haaser - CAO

George D'Angelo - Jefferies JinMing Liu - Ardour Capital Investments

Good afternoon, and welcome to the Metabolix's Third Quarter 2014 Conference Call. Today's call is being recorded for Internet replay. You may access an archived version of the call on Metabolix's Web site at www.metabolix.com. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference call. I will now like to turn the call over to Ms. Lynne Brum, Metabolix's VP of Marketing and Corporate Communications. Please proceed, Ms. Brum.

Thank you, Gloria. Good afternoon, everyone and welcome to Metabolix's third quarter of 2014 conference call. If you do not have a copy of our third quarter news release, which was issued earlier this afternoon, one can be found on the Investor Relations section of metabolix.com. In addition, slides accompanying the presentation are available on Metabolix's Web site on the Events & Presentations page in the IR section. Please turn to Slide 2. Please note that as a part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. Investors are also cautioned that statements that are not strictly historical constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results to differ materially from those anticipated. These risks include risks and uncertainties detailed in Metabolix's filings with the Securities and Exchange Commission, including the earnings release filed this afternoon in the Company's most recent 10-K. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this conference call. Now we will turn to the agenda of our call today. Joe Shaulson, Our CEO will provide an update on the business discuss highlights for the quarter. Johan van Walsem, our COO will provide an update on commercial development and manufacturing. Then Joe Shaulson will review several financial items for the quarter. We will then open the call to Q&A and joining us will be Oli Peoples, Co-Founder and CFO and Chuck Haaser, our Chief Accounting Officer. With that, I would like to turn the call over to Joe Shaulson. Joe?

Thanks, Lynne. Hello, everyone and thanks for joining us today. Please turn to Slide 3. As discussed on prior calls, this year we have been focused on a core set of priorities shown in green on the slide. We made progress against all of these in the third quarter. We have also reevaluated our priorities and adopted a few changes highlighted in light blue on the slide with the goal of increasing our focus and reducing our cash burn rate. These changes include the decision to spinout our Crops program and to suspend for the time being, efforts in our Chemicals program. We believe that Metabolix and its shareholders will be best served with a more focused streamlined approach as we work to develop the market for performance additive solutions based on our PHA biopolymers. Please turn to Slide 4. Let's walk through the transition we are working on. When I joined Metabolix in January, the Company was pursuing three business areas: biopolymers, chemicals and crops. We also had about 100 employees and an annual operating cash burn rate of around $26 million. Now we are reshaping Metabolix by taking steps in the following areas to make it a more focused Company with a financial profile aligned to a narrower mission. We have reduced headcount. Today we have about 70 employees. We’ve gotten to this number through the recently completed sale of our German operations, a recent reorganization and reduction in force in our U.S. operations and some attrition earlier in 2014. We sold substantially all the assets of our wholly-owned German subsidiary, Metabolix GmbH to AKRO-PLASTIC GmbH, a German manufacturer of engineering plastic compounds. In the sale AKRO acquired the technology for the Mvera B5010 and 5011 film products, as well as inventory, contracts and the Mvera trademark. In addition, the former Metabolix GmbH employees and office space are now part of AKRO. With this sale we have turned away from selling compounded resins for compostable film applications. This allows us to focus on strategic applications where PHAs are used as performance additives. It also allows us to streamline our organization and eliminate approximately $2 million of operating costs in Europe. Despite this move Europe remains an important market for us in our target application spaces and we still see a role for our PHA biopolymer additives in bio-based, biodegradable and other films. We have suspended our efforts in our Chemicals program. We believe there is real value in this program, but for now we will concentrate our resources on the development of our Biopolymers business. We are working to spinout our Crops program. We've created valuable technology and IP in this area, including some leading-edge tools for improving crop yield. That said over the years the goals of the Crops program have diverged from the strategic targets in our Biopolymers business and we believe both activities would be best served by finding a mechanism for our Crops research to continue under a different ownership structure where we take a backseat to someone focused on Crops. In addition, we are establishing intermediate scale PHA manufacturing. Johan will address this area in a moment and we will continue to selectively enhance core capabilities aligned with our Biopolymers business. With the actions I've just outlined, the new Metabolix will be singularly focused on commercializing Biopolymers as performance additives. With this narrower mission, our organization and financial profile can be significantly reduced and we are targeting an organization of around 50 people and operational cash burn rate of about 15 million per year as the foundation on which to build out our Biopolymers business. Please turn to Slide 5. The new Metabolix will be a specialty Biopolymers Company focused on successfully executing a performance additive strategy in applications spaces that we think have the potential to make good use of our PHA biopolymer technology. These applications spaces include PVC processing aids, PLA modification, barrier coatings for paper and marine degradable micropowders and microbeads. As 2014 has progressed, we have concentrated on building a commercial pipeline of customers at all stages of development in these application areas. Please turn to Slide 6. Now I would like to recap several business highlights for the third quarter. Earlier this year we outlined the financing plan to raise $50 million to $60 million in 2014 and 2015. In August, we completed the initial $25 million of that funding. This was an important milestone, but we still need to raise additional funds in order to support operational and capital expenditures. As previously discussed, we also began our transition to a more focused company with a smaller financial profile. We have reduced headcount to around 70 people, we exited our German operation and we began working on spin out of our Crops program. During the quarter, we moved closer to our goal of establishing intermediate scale Biopolymer production in 2015. We have made good progress with the engineering study we talked about on our last earnings call and we believe we are on-track to sign a manufacturing agreement during the fourth quarter of 2014 for production startup in later 2015. We also continued to make tangible progress in our core biopolymer applications spaces. With the visibility we have on customer development and qualification efforts we expect to have our first performance additive customers converting from development to commercial sale in Q1 2015. And now I’ll turn the call over to Johan to discuss operations, Johan?

Thank you, Joe. Please turn to Slide 7. We are making good progress on the commercial front to validate our vision of creating a specialty polymer business based on PHA. As Joe mentioned, we have narrowed our focus to PHA biopolymers full performance additives. Within this area, there are four key target application spaces, PVC processing aids, PLA modification, barrier coatings for paper and marine degradable micropowders and microbeads. Our tonnage-scale trials of PVC Processing Aids have shown promising results thus far, a significant step in the commercialization of our products in PVC applications. The goal of these trials is to work closely with our customers to produce finished products on their commercial converting equipment. Our leading PVC application uses PHA to enhance the performance properties of highly fold rigid PVC profiles used in construction. The project is currently underway are aimed at validating all the internal processing steps, in addition to producing finished commercial products that will be subjected to third-party testing as required for the construction industry. In flexible PVC again working closely with partner companies we have also recently demonstrated the utility of our low TG rubber as a process aid in applications such as wiring cable and edge binding where it improves the processing and surface finish. Last month at Vinyltec a leading industry conference focused on PVC, we presented additional scientific data demonstrating the performance of our PHA as a modifier for PVC. Specifically, we presented data showing that PVC modified by our PHA additives exhibits equal or better performance versus incumbent high molecular weight ethylene copolymer resins in formulations designed to limit migration of plasticizers from PVC. Migration of plasticizer compromises the performance of both the PVC itself and other materials in contact with PVC. Improved permanence is especially important in more demanding applications when PVC is exposed to heat, moisture or chemicals such as lubricating oils. We will continue to develop PHA as a value-added performance additive for these applications. As ADDCOM, a conference held in Barcelona focused on polymer additives and compounds, we presented scientific data showing that our PHA materials can significantly improve the physical properties and feasibility of PLA. This shows that our PHA has the potential to broaden the application range for PLA in foams, sheaths fibers and fibers and molded pots. PHA improves the productivity of PLA with additional benefits for processing and material properties. A common problem related to the brittleness of PLA is the generation of sharp edges during cutting and trimming or breakage of parts. PHA significantly reduces this problem. We also continue to see interest from customers that need to improve the flexibility of PLA foams to improve properties such as resistance to tare, less noise generation and better folding characteristics. In these applications, we are providing PHA as a performance additive in addition to technical support, but are no longer producing finished foam compounds for commercial sale. This approach is consistent with our performance additive business strategy and the recent sale of our German operations that was focused on producing fully compounded compostable foam resins. We are also seeing significant interest in PLA non-woven fibers where PHA improves the hand and feel of the fibers. In both PVC and PLA modification several customers are now well advanced with the commercial validation of initial applications. Depending on the complexity of the product design and final application, the service life and other external requirements such as third-party testing, these phased rollouts at our customers typically have nine to 15 month duration. We expect lead projects in both PVC and PLA to convert to commercial sales early in 2015 based on our current understanding of progress to-date. In addition, we continue to manage a pipeline of new customers and similar applications, as well as a variety of new applications. In addition our PVC and PLA additives, we are also developing new products and applications that utilize the unique bio-based and biodegradable properties of our PHA materials. In the area of creating barrier coatings with our PHA, market feedback has enabled us to broaden our thinking about how we utilize our technology to create solutions for customers. We are developing latex coatings, as well as additional PHA formulations and application methods for paper coatings. Applications in this space are at the earlier stage of the development cycle, but the results have been promising. Another area of commercial interest for us is creating PHA in micropowders for cosmetic and personal care applications. Growing public, regulatory and NGO concern about the use of polyolefin microbeads that ultimately pollutes streams, lakes and oceans as caused branch owners and formulators to seek potential replacements. Our PHA material is unique and that is going to make the feel and performance of polyolefin microbeads, but certainly it is rapidly degradable and waste water treatment systems and furthermore marine degradable it can offer a compelling alternative to conventional microbeads. We will continue to sample our product and seek commercial customers in this area. Now please turn to Slide 8. We remain on-track to have biopolymer production up and running in late 2015. We have completed the initial technology transfer and process definition phase of the preliminary engineering study for the retrofit of an existing contract manufacturing facility. We are now working on finalizing a detailed capital and operating cost budget and definitive construction and commissioning schedule before the end of this year. We remain on-track to sign a contract manufacturing agreement at this facility during the fourth quarter. I will now turn the call back to Joe Shaulson for the financial review. Joe?

Thanks, Johan. I would first like to comment on our finance organization. In connection with the reorganization and the reduction in force in our U.S. operations, Joe Hill, our CFO will be leaving the Company effective December 3rd. The Board has appointed Chuck Haaser who has been our Controller since 2008 as our new Chief Accounting Officer. We have no immediate plans to replace the CFO position. Chuck will lead our finance and accounting organization and I will work together with Chuck and the rest of the executive team to lead our financing efforts and the continued execution of our business plans. Please start the Slide 9. There are four main items related to our financials that I would like to discuss today. The first item is our balance sheet. We ended the third quarter, with $25.5 million of cash reflecting the proceeds of our recent private placement. Earlier this year, we talked about our plan to raise $50 million to $60 million during 2014 and '15. In August, we closed on the first phase of that financing raising 25 million and we will require significant additional financing to fund our operations and the capital needed to build our business. In that regard, we continue to consider the timing structure and vehicles for future financing and note that it may be accomplished in stages. At the same time, as we discussed earlier in the call, we are taking a variety of steps to focus the business and carefully manage our cash resources. Also of note on the balance sheet is our capitalization. We issued 50 million shares of common stock in the financing and these are included in our weighted average share calculation for the third quarter and year-to-date periods. We also issued 50,000 shares of preferred stock which converted into an additional 50 million shares of common stock at the end of October. So our current capitalization is about 135 million shares of common stock and no preferred stock. The second item is discontinued operations. With the sale of the assets of our German operations to AKRO-PLASTIC, the operating results for this business are now presented in discontinued operations. This presentation separates the results of our former German operations from the results of the rest of our business which are reflected in continuing operations. In connection with the wind down of the German operations and the sale of related assets to AKRO, we reported a third quarter loss on assets held for sale of approximately $900,000. Turning to product revenues, in our P&L product revenues associated with our German operations have been reclassified into discontinued operations. These revenues were associated with our efforts to sell fully compounded resins for compostable film and bag applications. Although this has represented a significant portion of our product revenue, these sales were not profitable and we have shifted our focus to performance additive applications for our PHA biopolymers. With the transition in our business focus, it will take some time for our product revenue line to build significantly as we continue working to convert performance additive customers from the products and application development phase to recurring commercial sales. We are supporting the transition with select inventory purchase from the Telles JV until product is available from our planned intermediate scale manufacturing facility. We recorded an additional $700,000 inventory write-down and continuing operations for the quarter in connection with this transition. The next item to discuss is restructuring. We have recently completed the restructuring of our U.S. organization to reflect the narrowing of our strategic focus to performance additives. As part of the restructuring, we reduced staffing to the level we believe appropriate to support the successful implementation of our current business strategy, with the focus on rightsizing our biopolymers operation and supporting functions. In connection with the staff reductions, we expect to take a restructuring charge of approximately $700,000 during the fourth quarter of 2014 related to post-employment benefits for affected staff. As we discussed earlier, this is part of a broader program to reshape Metabolix into a more focused company with a significantly lower operating cash burn rate. To that end, we have provided a target of $15 million for purposes of comparing to our historical operating cash burn rate which was for example, about $26 million 2013. The $15 million target is not guidance for our 2015 cash usage and does not include any capital expenditures for establishing intermediate scale manufacturing. Rather it’s an annualized operating cash run rate that we hope to achieve by the end of 2015 assuming the spinout of our Crops program. Please refer to the earnings release we made available earlier today for our third quarter and year-to-date condensed consolidated financial statements and related commentary. With that I’ll wrap-up the financial review and open the call for analyst questions, operator?

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first comes from the line of Laurence Alexander with Jefferies. Please proceed with your question. George D'Angelo: This is actually George D'Angelo on for Laurence. Have there been any further interests in licensing any of your IP for pharmaceutical usage?

This is actually George D'Angelo on for Laurence. Have there been any further interests in licensing any of your IP for pharmaceutical usage?

So that’s not been a focus area of ours. So we have really been concentrating on building out the Biopolymers business. George D'Angelo: And would it be possible to generate incremental revenue by licensing out or sharing some of the operational earnings that you had working with different customers over the years specifically with regard to blending your products in various plastic?

And would it be possible to generate incremental revenue by licensing out or sharing some of the operational earnings that you had working with different customers over the years specifically with regard to blending your products in various plastic?

So our focus right now is on building the additives business and in our vision going forward the additives business means producing the additive, doing the product and application development work that’s necessary to enable customers to use the additive in their application and that’s the way we think we can capture the most value from our PHA technology. That having been said I will never rule out alternative approaches to business and we enter into all of our commercial discussions with an open mind.

Thank you. Our next comes from the line of JinMing Liu with Ardour Capital. Please proceed with your question.

So regarding your sales of your European operation to AKRO is there still any supplier application from you to AKRO going forward for latest fall back division and that’s it there is no more collaboration between you and AKRO? Ardour Capital Investments: So regarding your sales of your European operation to AKRO is there still any supplier application from you to AKRO going forward for latest fall back division and that’s it there is no more collaboration between you and AKRO?

So I would say, what there is, is the anticipation of an ongoing relationship it’s not necessarily contractual in nature but we still see the European market as a place where our products are useful and we still see the film and bag area as a place where our PHA additives are useful. And our strategy is really to shift away from supplying the fully compounded resins and instead partnering with the compounder like AKRO to bring those products to market. So we do envision having a continuing relationship with AKRO.

And JinMing we actually have a particular product line where AKRO has good distribution in the EU that they are distributing parts outside of the sale it’s actually ongoing moral business. So they are very competent company and one of our potential channel partners for more products.

So if I understand correctly once you set up your production capacity you may continue to supply AKRO with your PHA? Ardour Capital Investments: So if I understand correctly once you set up your production capacity you may continue to supply AKRO with your PHA?

That’s correct, very likely. For them to use further in compounding et cetera.

On the same end Metabolix had collaboration with Samsung Fine Chemicals. Is there early contractual obligation left with that collaboration? Ardour Capital Investments: On the same end Metabolix had collaboration with Samsung Fine Chemicals. Is there early contractual obligation left with that collaboration?

No.

Okay, that simple. Ardour Capital Investments: Okay, that simple.

So, fundamentally it was a memorandum of agreement to sort of work together in the space and we did work together using some Samsung materials in the product lines that we sold to AKRO, but now that we've sort of moved away from the compounded resins, the Samsung products that went into those resins are not of interest to us.

For the new capacity, while you are setting up, is there still a with annualized production capacity around 10,000 metric tonnes? Ardour Capital Investments: For the new capacity, while you are setting up, is there still a with annualized production capacity around 10,000 metric tonnes?

It's 2,500 to 5,000 tonnes is what we've talked about.

So, on the CapEx numbers, they are with us right now or… Ardour Capital Investments: So, on the CapEx numbers, they are with us right now or…

We still -- what we want to do is get through the manufacturing study and have a good firm numbers and an understanding with our manufacturing partner for how those numbers are going to be, who is going to pay, what component of the investment and how the investment is going to be made and charged before we try to give it any guidance on what the CapEx numbers might be.

So going forward you guys will focus 100% on the additive business. So can you share with us or any color you can give us about the economics of additive business? What's the unit price you will sell for the PVC market for example? Ardour Capital Investments: So going forward you guys will focus 100% on the additive business. So can you share with us or any color you can give us about the economics of additive business? What's the unit price you will sell for the PVC market for example?

Yes. So I wouldn't, I probably would express it instead as a range of around $3 to $5 for the typical applications in the application spaces that we are pursuing. It doesn't mean that every application fits within that range but I think that's pretty typical.

But for just for the new additive applications, I understand that you guys have different subsets of PHA. So for PLA, PVC all these different applications, do you need to produce different subsets of PHA? Ardour Capital Investments: But for just for the new additive applications, I understand that you guys have different subsets of PHA. So for PLA, PVC all these different applications, do you need to produce different subsets of PHA?

So we will have a range of products. But I guess the one area where I would guide you there is that it will be a narrower range of products than the one that was than the range that was produced in Telles base where everyone of the applications that was being pursued was based on essentially 100% PHA and we were trying to use, we were trying to make products for a very wide range of processing technologies which required different material behaviors and different PHA constructions.

Lastly, is there any information you can share with us regarding how many customers you guys are actively working with on the new additive business? Ardour Capital Investments: Lastly, is there any information you can share with us regarding how many customers you guys are actively working with on the new additive business?

We are not sharing information like that at this time. What I would just reiterate is that we've got a robust pipeline in each of the different application spaces at various stages of development. And what I would instead focus on is what are we able to convert into commercial sales in the coming quarters, because that's ultimately where the rubber meets the road.

Lastly, your current inventory, I assume well it’s at 100% are for the polymer additive business. Will that be enough for to last year Q-on-Q a commercial production begins next year? Ardour Capital Investments: Lastly, your current inventory, I assume well it’s at 100% are for the polymer additive business. Will that be enough for to last year Q-on-Q a commercial production begins next year?

So in some respects I hope not. In other respects I hope so. But what we have been doing is strategically managing that inventory so that we can put it to the best possible use during this transition period. There are products in our product range that we will be producing in the new manufacturing facility for which we do not have any inventory other than a small amount that we've produced in our pilot facility, so to the extent that those applications were to mature before our facility is up and running. We would have some delay in getting out of the gates because we don't have the capacity to supply them.

Thank you. At this time, we have reached the end of the Q&A session. I will now turn the call over to management for any closing additional remarks.

I just wanted to thank everyone. I wish you a good night and look forward to talking again next quarter. Good night.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.