Verenium Corp (NASDAQ:VRNM)

Growing portfolio of specialty enzyme products and unique technical and operational capabilities designed to enable the production of low-cost, biomass-derived sugars providing energy and food production solutions. Just completed sales of $37m assets to clear debt, and improved potential for possible future M&A.

If someone could explain to me exactly what the deal is with these convertible notes, and if the management somehow could give the market some long term guidance, I would be very happy to invest.

Verenium seems a bargain at $25.98M. Their technology platform seems exiting, the products they have developed seems good and the enzyme market is one of the most exiting I could think of, and I mean the accumulated deficit of approximately $630.0 million, Was that just money out the window?

But then again, if the company is as bad at selling their products as they are at selling the idea of investing in their shares to private investors as my self, maybe verenium shares are heading for 0.
Verenium just seems to be one of those companies that is not that investor friendly and where you ask yourself, are this really a public company?

I'm giving Verenium the green thumb in hope of that others will take a look at the company and sharing their views.

Alternative Energy, Oil eating enzymes

There should be a big technical re-bound after the 12-1 reverse split on Sep 10

BP and Verenium awesome "combination" Ethanol is already in the mix and there will be an increasing demand for it.

They seem to be more charmed than their stock is... its hard to say what rabbits might come out of their hat next - but it seems they've staved off bankruptcy for the time being -

This stock just posted .40 cents a share loss in earnings, on the same day that its pumping itself for a more than 64% gain, I'll ride this stock up, but I will let it be known that in a year I will ride this bomb down as a bear and laughing all the way to the bank!

renovar lo renovable

Good sector, undervalued, solid science behind company

will be driven by speculation for 12-24 mo on signed energy bill that has specific targets for cellulosic ethanol...after that???

Some may wonder if this company is just one of those alternative energy stocks pretending to know what they are doing.
Can you realistically expect a company with such a small market capital to provide real energy solutions?
But IMHO Verenium is a serious player in the biofuel business.

First, this company has real solid science.
I went to the company website "publications" section.
Their scientists have published in respected, peer-reviewed scientific journals such as Current Opinions in Chemical Biology.
As a biologist I know only scientific leaders in a field get invited to write articles for "Current Opinions" series of journals.
Generally these authors are academic researchers, and it is extremely rare for industrial researchers to write a review for high-caliber scientific journals.

Second, this company has burned $500M of cash over the years on R&D.
All that money spent translates to a lot of valuable knowledge as well as patents.
If some other large chemical company wants to get into this field, they will have to pay a good price to get the know-how.

Third, the company is a leader in this sector.
Its demonstration-scale pilot plant is the first in the US.
In 2008, it first won a DOE grant (out of four recipients) for its technology, and then a second grant (out of 2 recipients) for its pilot plant development.
DOE certainly has high scientific standards for handing out research grants.
DOE is not like some venture capital investor that could be blinded by fancy PowerPoint presentations.
Moreover, it has licensed its technology to Japanese companies.
The Japanese have built a pilot plant in Japan and is building a commercial plant in Thailand.
All these are signs that its technology is working at least as well as its competitors.

Fourth, I don't see big oil companies competing in the cellulosic ethanol field.
The bottom line is, making cellulosic ethanol requires enzyme engineering.
Big oil companies don't do R&D with enzymes.
Big chemical companies don't do much enzyme engineering, either. That's why DuPont just announced a $140M project to develop cellulosic ethanol.
That $140M is what DuPont is going to spend, compared to the $500M that VRNM already spent.
The advantage of VRNM is that it was a merger of an enzyme company and an ethanol company.
It can produce enzymes on the site of the ethanol plant.
These enzymes are protein catalysts produced in microorganisms, and the fresher they are the better.
This is why on-site enzyme production is good.

I don't know if VRNM can make cellulosic ethanol cost-effectively.
I don't if anyone will in the near future.
But there is an urgent need (say in 10 years) to try to develop this technology, and for sure capital is going to pour into this field.
And IMHO VRNM's know-how is very valuable from this perspective, and I believe, it is worth far beyond its current market capital at <$100M.

Push pilot plant into production, superior technology to other ethanol production mechanisms, likely near-terms strength in oil prices, stock at 52-week low.

I promised myself I was going to stick to value investing and not buy any more lottery tickets, but I like my odds here:

VRNM: specialty enzymes and biofuels segments

Biofuels:
Fact: U.S. renewable fuel standard requires 16 billion gallons cellulosic ethanol (cell-eth) by 2022; 1 billion by 2013; 100 million by 2010
current ethanol price ~$2.50/gallon
the newly passed farm bill gives cellulosic ethanol producers $1/gal subsidy, plus loan guarantees for cell-eth plant construction
No one has been able to cost effectively produce cell-eth on a commercial scale yet, but VRNM has done it in the lab and in a 50,000 gal/yr pilot plant. They're just starting up their 1.4 million gal/yr demonstration plant to perfect their methods for their first commercial scale project next year.
VRNM estimates its costs at first gen plants will be ~$1.39/gal (not including subsidies or financing costs); lower for later plants
It's planning on building ~10 commercial scale 30 million gallon per year plants once it's technology is proven at the 1.4 million gal/yr plant it just completed.
30 million gallons x ($1.20/gal profit + $1/gal subsidy) = ~$66 million/year
State and local governments are competing with incentives to get one of the first commercial scale cell-eth plants in their area
Multiple large energy & agriculture companies are negotiating to partner with VRNM (VRNM says they 'drive' the negotiations & they want control of each plant)

Specialty enzyme:
Revenue has more than doubled (5.4 mil in Q1 '07 to 11.2 mil in Q1 '08) in the past year, almost all of this from their first product- an enzyme used in animal feed. Two new products, one for improving yields in corn ethanol plants, the other for improving yields for plant-derived oils (soybean, etc.), are just being introduced to the market.
enzyme business alone estimated at ~$200 mil in >5 but < 10 years

These look like some very big opportunities for a company with a $134 million market cap.

Director Michael Zak has bought over $3.5 million worth of VRNM over the last 2 months at ~$3/share
Current price ~$2.10

Risks:
they're in debt and they'll run out of money before the end of this year unless they can raise more. But seriously, this is an alternative energy play. Everyone- the government, corporations, individual investors- everyone is looking to get in on commodities and alt. energy.
Also, it's possible that their technology won't scale well to commercial scale, but since this is more of an engineering problem than a science problem, it's very likely they'll succeed.

Farm bill passed by senate and house has a cellulosic biofuels production tax credit for $1.01 per gallon through 12/31/12. Alrhough Bush has said he would veto this bill, passed with enough votes that appears veto proof. Risk is that he holds another bill hostage such as petroleum reserves bill. If Bush signs farm bill, outperform.

I think in the long run the company has the right idea but the rate at which they are losing money is just horrid.

From Jim Jubak's article: "Profit from a stupid energy policy." Testing it out here to pick winners and losers, before promoting changes to my real $$$ portfolio.

Daggnabit! This was meant to be an underperform pick. There is (in my mind) nothing worse than the combination of ethanol and ethanol bad news. GRRRR! I'm going to lose my butt on this before my 7 days are up and I can sell this thing.

Player in cellulosic ethanol, better as it allows use of most if not all parts of corn. Will gain traction over the next few years, or be buyout target for larger oil company.

enzymes are in the forefront of research into alternative fuels. This company is ahead of the game. The market is poised to take off. i dont see it happening in '08 but it will happen.