Yield10 Bioscience Inc (YTEN) 2015 Q4 法說會逐字稿

Greetings and welcome to the Metabolix year-end 2015 conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Lynne Brum. Thank you Ms. Brum, you may begin.

Thank you, Chris. Good afternoon, everyone and welcome to Metabolix's year-end 2015 conference call. Earlier this afternoon, we issued our year-end 2015 news release. In addition, we also issued a joint press release with CJ announcing an MOU for PHA manufacturing. Both announcements can be found in the investor relations section of Metabolix.com. Slides accompanying the presentation today are available on the events and presentations page in the IR section of our website.

I will also mention that we typically use our website, press releases, SEC filings, calls and webcasts to announce material information. In addition, some of the material we post to our blog and social media sites could be deemed material information and we encourage investors to periodically review the information we post on social media.

Please turn to slide 2. Please note that as part of our discussion today, management will be making forward-looking statements. These statements are not guarantees of future performance and therefore, you should not place undue reliance 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 and the Company's most recent 10-K. The Company undertakes no obligation to update any forward-looking statement in order to reflect events or circumstances that may arise after the date of this conference call.

Now we will turn to the agenda for our call today. Joe Shaulson, our CEO, will provide an update on our strategic business plans and discuss the role that our collaboration with CJ is expected to play in those plans. Johan van Walsem, our COO, will discuss some operational details and next steps relating to the implementation of our plans with CJ and will also provide an update on our commercial activities. Then Joe will discuss financial items for 2015 and review our current priorities.

For Q&A today, we will take questions from the analyst community and then we will address a few questions that have been raised by shareholders. Joining us when we open the call to Q&A will be Ollie Peoples, CSO and Co-Founder. With that, I'd like to turn the call over to Joe Shaulson. Joe.

Thanks, Lynne. Hello, everyone and thanks for joining us today. Let's get started on slide 3. Metabolix is an advanced biomaterials company with an extensive technology platform based around the family of naturally bio-based and biodegradable polymers called PHAs. With our fundamental knowledge of the underlying biotechnology, we make specialty PHAs with unique chemistries that allow them to be used as multifunctional avenues to improve performance and/or reduce costs in other material systems.

2015 was an important transition year for us, one in which we completed a comprehensive reshaping and repositioning of the Company around a new business model based on differentiated specialty PHAs like the amorphous PHA we are making today in our pilot plant. We have completed the pivot from a commodity mindset and are dedicating our resources to commercial and market development where we are leveraging the key properties of our amorphous PHA and other specialty PHA copolymers in target application areas like PVC and PLA modification with PHA performance additives, functional biodegradation with PHA resins and paper coatings with PHA latex and other PHA formulations.

Looking ahead, we are turning our attention to the next step, moving from our current pilot scale operation to a commercial scale specialty business. This involves ramping up and running our pilot operation at capacity in 2016 and using that material to continue building the base for a larger scale operation. It also involves accelerating our efforts to secure a first tranche of commercial scale capacity and today, we announced an important step in that direction in the form of an MOU with CJ that contemplates a 10 kiloton or 22 million pound commercial production unit for our PHAs at a CJ production facility in the United States.

Longer term, we have our eye on growth. As our specialty biopolymers business grows, we envision adding additional tranches of capacity to support the growth, translating commercial successes within and across customers and into adjacent application spaces and new geographies. We also see the potential for growth from new applications unlocked by the advanced next-generation PHA biopolymers we have in development.

With these big-picture comments on our strategy and longer-term vision, let's spend a few minutes putting today's announcement about the CJ collaboration in context. Please turn to slide 4. As shown in lighter blue, our current pilot scale business has several key features. We have successfully shifted to a specialty strategy enabled by our technology. We have demonstrated technology leadership with progressive advancements and innovations to our microbial strains, to our production processes and to our knowledge of target applications.

Our specialty biopolymers, including amorphous PHA, enable high-value applications and allow PHAs to move into new market spaces. And we have utilized legacy material and expanded our pilot capacity to support our commercial development efforts aimed at establishing the customer base for a commercial scale business.

Our announcement with CJ today relates to an important strategic collaboration. The MOU contemplates that CJ will fund, build and operate a 10 kiloton PHA production unit at their commercial fermentation facility in Fort Dodge, Iowa. It calls for us to continue developing the market for specialty PHAs, to buy the materials produced at Fort Dodge and to sell the product to our commercial customers for use in end applications. And it also calls for us to define with CJ a framework for potential longer-term expansion of the collaboration to larger scale PHA production and related commercial activities.

During the second quarter, we will be working with CJ to complete definitive agreements for the collaboration. We expect our relationship with CJ to be transformational as it provides a path forward for us to move our specialty biopolymers business to commercial scale and positions the Company for longer-term growth.

The move to commercial scale will require a multi-faceted effort in commercial development and R&D supported by our amorphous PHA pilot plant. We are seeing traction in commercial development with initial customer conversions for PHA additives and growth in functional biodegradation. For 2016, we remain focused on converting additional customers, building the commercial development pipeline, running our pilot plant and advancing our specialty PHA technology.

Please turn to slide 5. Before we take a closer look at our target applications and commercial development programs, I think it's important to spend a few minutes on the core science that underpins our specialties business model because you can't build a specialties business unless you have specialty products, materials with unique or differentiated properties that add real value in the applications where they are used.

We are doing this today with our amorphous PHA and other specialty PHA copolymers. We are able to do it because of our core knowledge of the microbial genetics that produce PHAs. With this knowledge, we can use biology to produce polymers with unique property combinations not readily achievable through chemical synthesis. Specifically, we can control constituent monomers, polymer structure and molecular weight as key factors to design biopolymers with the right material properties and functionality, and this enables our specialties business model. But that's not enough. In our specialty industrial applications, you also need the fermentation and recovery expertise to efficiently and consistently produce high-quality biopolymers.

Then, of course, you can't stand still. You have to continue to work on advancements in the technology, not just higher yields and throughput, but new, more advanced PHAs that have the potential to unlock new market opportunities. Our R&D organization is among the best. They are experts in microbial engineering, fermentation and biopolymer recovery and the capabilities they bring to the table are an important part of our specialty strategy.

So that's how we make our PHAs special. Now let's spend a few minutes talking about how they add value and use. Please turn to slide 6. As I mentioned earlier, our commercial development efforts are focused in four areas -- PVC modification, PLA modification, functional biodegradation and paper coating. Two of these are conceptually similar, PVC modification and PLA modification. In both instances, we are adding a small amount of PHA to the bulk PVC or PLA resin in order to improve performance, reduce cost, make products more sustainable or address some other customer need. Sometimes our PHAs deliver more than one of these benefits in the same application. This multi-functional aspect of our PHA additives can get really interesting in cases where we are able to help a customer improve product performance while also reducing total system cost.

In functional biodegradation, we are targeting applications where the customer knows their product will be used in the environment and they want to have biodegradation in the environment as an alternative to collecting the product for disposal after use. Here, our PHAs may be the primary resins and they are chosen for their broad biodegradability profile, broader than other materials, especially in the natural environment where they will biodegrade in soil, freshwater, saltwater and sediment, not to mention home composting, industrial composting and anaerobic digestion.

Paper coating is a bit further back in development, but we think there's an inherent synergy between PHA and paper, particularly when it comes to paper that needs to be coated to provide moisture or grease protection or to achieve a particular look and feel for use in packaging. Today, this is usually done with polyethylene or wax coatings and the coated paper may no longer be recyclable or biodegradable. We think PHAs are a really good fit here and can provide the benefits of a coating while preserving inherent attributes of the paper like recyclability and biodegradability.

I will now hand the call over to Johan to take us through some additional operational details around the CJ collaboration and to comment on our commercial activities.

Thank you, Joe. To follow Joe's discussion of our strategic direction, I will now discuss some operational aspects of the CJ collaboration and how we move forward from here. Please turn to slide 7. As Joe said, we have entered into a MOU with CJ Cheiljedang for a strategic collaboration aimed at manufacturing and commercialization of metabolic specialty PHAs. CJ Cheiljedang is a $12 billion Korean-based food, feed and bioscience company. CJ Bio is the business unit that operates fermentation plants around the world.

As part of the collaboration outlined in the MOU, it is contemplated that CJ will fund, build and operate a 10 kiloton production unit for our specialty PHAs based on Metabolix technology. This capacity will be located at the fermentation plant CJ owns in Fort Dodge, Iowa. In 2015, CJ and Metabolix teams worked together closely to complete a comprehensive feasibility assessment of CJ's Fort Dodge facility as a potential site for specialty PHA production. We expect that the initial focus of production will be our amorphous PHA material.

I will add that CJ brought to bear an impressive all-around capability to complete this analysis in just a few months and that kind of capability was one of the key reasons we sought to secure our first tranche of commercial capacity with a partner.

The Fort Dodge site opened about two years ago as part of CJ's strategy to expand its global microbial fermentation footprint into the US. The plan is part of a 49-acre biorefinery complex and is served by a corn wet mill operated by Cargill. Our strategic interests are aligned with CJ's strategic plan to diversify their product portfolio. Our specialty PHAs and their differentiated positioning as performance additives represent a very good fit with CJ's plan for further expansion of their biochemical portfolio.

Under the planned collaboration, Metabolix will be responsible for the commercial development, marketing and sales of the PHA materials to customers and we will be focused in our target application spaces of PVC and PLA modification, functional biodegradation and paper coating. We believe this path to commercial production will be very well-received by our customers.

As the next step, we will be focused with CJ on completing the definitive agreements for the collaboration. In parallel, we are continuing to work with the technical and engineering teams to finalize the project plans with the goal of having the PHA production unit up and running in about 18 to 24 months.

Please turn to slide 8. With the visibility we now have on implementing commercial production, we are sharpening our focus on target application spaces and the value proposition our specialty PHA materials deliver in customer end products. The table on slide 8 shows the broad portfolio of commercial opportunities we have for our PHA materials across four commercial areas of focus.

Our amorphous PHA is a unique multifunctional additive for PVC based on exceptional miscibility between the two molecules that result in better processing and in better performance properties, as well as the ability to incorporate more fillers or recycled PVC into PVC formulations. We are working in flooring and other construction materials, as well as roofing membranes. We are also working on PVC foam, which is widely used in packaging.

Our amorphous PHA also acts as a performance modifier for PLA. The common themes around this category are sustainable packaging and organic waste diversion, although we also have some efforts in the personal care space with non-wovens, wet wipes. And we are working on clear packaging films and thermoform sheets and modified PLA. PHA allows our customers to maintain combustibility and bio content of their existing PLA products while improving ductility and toughness, as well as processing characteristics to better meet product performance requirements.

In functional biodegradation, we see a much broader and diverse range of applications. The reason that PHA is such an appealing product for functional biodegradation is that it has a very broad biodegradability profile that can be targeted to applications in a broad range of natural environments, including soil, freshwater and marine settings. Finally, in paper coating, we are targeting packaging and foodservice items where customers are looking for the benefits of the coating, but need to preserve the recyclability of the paper substrate.

Please turn to slide 9 where we will describe several customer highlights. We have been very active in flexible PVC for some time and we were happy to report that we converted our first PVC flooring customer in the fourth quarter where the commercial orders shipped to a company called Sterling Brands. Sterling Brands makes protective PVC floor runners and floor mats that are sold in major home improvement stores. They are using our amorphous PHA to improve product performance and to reduce costs.

PVC flooring is a key focus area for us and we have a number of additional projects underway with leading PVC flooring companies. Looking beyond flooring, we have a lot of activity in flexible PVC with projects in wire and cable, roofing membranes and PVC films. As in flooring, we are leveraging the enhanced toughness, improved performance, as well as formulation and processing benefits imported by amorphous PHA in these flexible PVC applications. It will come as no surprise that we see flexible PVC as a very important area for us as we move to commercial scale.

We also have activity in rigid PVC and wood polymer composites where high levels of fillers are used to provide the desired mechanical properties such as stiffness and strength of the finished product. We have generated and presented extensive data on the use of PHA and the benefits that can be gained with PHA in highly filled PVC systems. This is a very active and promising area for us and we think another area that is very important for the move from pilot scale to commercial scale.

In PLA, we have numerous projects underway in thermoformed sheets, clear packaging forms and non-wovens. One of the common themes in this category is sustainable packaging, particularly for consumer goods and foodservice items where combustibility is often a desired end-of-life treatment. In fact, our commercial team will be in Orlando tomorrow for the kickoff of the Innovation Takes Root Conference showcasing the advantages of PHA and modifiers bring to the PLA.

The portfolio and functional biodegradation is very broad with applications ranging from denitrification pellets used in water treatment, lubricating compounds used in railroad MRO, ingredients for personal care products, as well as foams, pots and other items used in agriculture and horticulture. The common theme is the customers' need for the products that biodegrade in the natural environment.

In functional biodegradation, we were pleased to conclude a distribution agreement at the end of last year with Kolar Filtration for denitrification pellets that are used in aquarium water treatment. In addition to this initial application, Kolar is working actively to expand the market opportunity into applications such as commercial fish farming where there is need for simple and robust denitrification solutions enabled by PHA.

In paper coating, we're working to develop solutions for packaging and foodservice applications where a coating is required for moisture or grease resistance, for a particular look and feel to the paper or even as an adhesive to hold layers of paper together. The critical unmet customer need is the ability to mine inherent attributes of the paper like recyclability or combustibility.

The takeaways that we are working with our customers to develop a diverse range of solutions based on our specialty PHAs and are driving to develop the market, bolt-on portfolio of commercial opportunities and convert customers in a way that is well-matched to our plan for commercial production. I hope what I've outlined today gives you a sense of how we are approaching our next steps with CJ and what we are doing to bolster markets for our Mirel specialty biopolymers. I would like to acknowledge the energy and resources our customers have committed to these projects. I look forward to sharing more progress on the commercial front in our next call. Joe, back to you.

Thanks, Johan. Please turn to slide 10 and we will touch on a few financial highlights. Starting with the balance sheet, we used $22.5 million of cash in 2015, consistent with our previous estimates of approximately $23 million. We finished the year with $12.3 million of cash and we currently have $20 million of availability under our equity facility with Aspire Capital. As we previously indicated, we view the equity line as a complement to other forms of financing and we expect to pursue additional financing consistent with our cash needs and our plans to develop and grow the business.

Now turning to 2016, we estimate that total cash usage for the year will be approximately $25 million. The anticipated increase in cash usage for 2016 is due primarily to the planned operation of our pilot plant throughout the year, several headcount additions to support commercialization of our biopolymers and some nonrecurring costs associated with the relocation of our Cambridge operations to our new facility in Woburn, Mass this summer.

In continuing operations, we reported a net loss of $23.7 million, or $0.95 per share, which is approximately $3.1 million better than 2014. We reported a net loss of $5.9 million or $0.22 per share for fourth-quarter 2015. Product revenue from continuing operations was $619,000 for the full-year 2015. On our third-quarter call, we said that we expected to see product revenue growth in the fourth quarter and into 2016 as converted customers scale up and we continue working to bring on new commercial programs.

While fourth-quarter product revenue was similar to third quarter, we did in fact see growth in product shipments driven largely by an increase in functional biodegradation and by initial contribution from conversion of a PVC flooring customer. Fourth-quarter product shipments of almost $400,000 were a meaningful increase over the prior quarters of 2015. Our license revenue from Tepha for medical applications of PHA continued to grow in 2015 and reached nearly $600,000 for the year. For more details on our financial results, please refer to the earnings release we made available earlier today.

Please turn to slide 11. In 2015, we created Yield10 Bioscience as a way to separately resource and commercialize our innovations in crop science, which are now focused on producing step-change improvements in crop yield. The team has been focused on continuing to advance the science while actively engaging in discussions with potential collaborators and investors.

Aligned with this activity, last month, we announced the formation of a scientific advisory board for Yield10 with the appointment of its first two numbers -- Dr. Danny Schnell, Professor and Chair of the Department of Plant Biology at Michigan State University and Dr. Michael Lassner, former Vice President of Trait Discovery at DuPont-Pioneer. We have been working with Danny Schnell in a collaborative program for over three years and he has made key contributions to a technology platform we call the Crop Smart Carbon Grid. Mike Lassner brings not only a strong crop science background, but extensive commercial experience. We are delighted to have them both on the SAB to help further develop the technology and commercial strategy for Yield10.

In 2016, we will be focused on expanding our network of collaborators, advancing the technology by deploying it into commercially important food crops, doing field trials and continuing to engage with industry players and potential investors around spinout scenarios for Yield10.

Please turn to slide 12. I will conclude today with a quick review of some of our important accomplishments from 2015 and some thoughts on key priorities for 2016. Key business goals for 2015 included completing our pilot plant expansion and advancing commercial developments in our target application spaces. We made excellent progress in both areas.

On the commercial front, we officially launched our amorphous PHA biopolymer and saw initial small-scale customer conversions using this innovative new material as a performance additive for PVC and PLA. At the end of the year, we were pleased to ship our first commercial order of amorphous PHA additive for use in PVC flooring.

Earlier in the year, we entered into a global distribution agreement for PHA pellets used in denitrification-based water treatment and we ended the year with a nice increase in product shipments driven by functional biodegradation applications.

In pilot manufacturing, we successfully completed the capital improvements in our recovery plan, secured an expanded supply of fermentation broth, obtained EPA clearance for commercial manufacturing of our new amorphous PHA material and began ramping up our pilot operation to nameplate capacity. Rounding out our lookback at 2015, we raised capital, launched Yield10 Bioscience and continued to secure our innovations with patent award and new patent filings.

Please turn to slide 13. We've accomplished a lot with the reshaping of the Company around our specialty biomaterial strategy. Now we are turning our attention to the transition from pilot scale to commercial scale, completing our strategic collaboration agreement with CJ, which is expected to secure our first 10 kilotons of commercial scale production capacity, is a clear priority for us in 2016.

We also need to continue converting customers, growing commercial sales and building our portfolio of customer development projects. To support commercial sales and development, we are ramping up our pilot plant and plan to run it at capacity this year. While doing this, we will continue working to complete the Yield10 spinout and secure the capital we need to fund our business plans.

Our team is focused. We are executing our strategic plan and achieving milestones. We are working to become a successful specialty biomaterials company and to build value with the Yield10 crop technologies. And we expect 2016 will be a transformational year as we work with CJ on our strategic collaboration, support construction of the PHA production unit at Fort Dodge, continue developing the market for our specialty PHA biopolymers and provide clarity around the spinout of Yield10. With that, I will wrap up and open the call to questions.

(Operator Instructions). Amit Dayal, Rodman & Renshaw.

Thank you. Good afternoon, guys. Congratulations on the MOU with CJ. Just talking about capacity utilization, etc., can you give us some sort of a timeline for ramping up the internal pilot facility capacity that you have? Do we expect to get to full utilization levels for this before the end of the year?

Yes, we do. So our plan is to ramp up capacity there, run it at full capacity for most of the year, to use that material for our commercial development programs because, at the end of the day, what we are trying to do is build that base for the commercial scale operation and so at the same time we are doing that, we will be focused on our collaboration with CJ, working with them to see the construction of the pilot plant get underway and working towards bringing that capacity online within the 18 to 24 month timeframe that Johan mentioned. All of which is driven by one goal, which is to build a commercial scale, commercially successful specialty biopolymers business and we sort of need all the pieces that I talked about to come together to do that -- pilot production, commercial development, commercial scale production, research and development to continue moving the ball down the field there.

Right. And in regards to CJ, is it too early to get into what level of pricing you are going to buy the supply from them at, etc.?

Yes, it is. It's too early to get into the economic terms of that deal and I'm not sure that we would ever get to the point where we actually disclose unit type pricing in the deal with CJ.

Got it. Just in general, has there been any pricing pressure for PHA or what are you seeing in terms of the pricing per pound in the market at this point?

Our focus is on pricing for value and fortunately, in most of the applications where we are working, we are targeting additive type applications and in additive-type applications, the pricing dynamic is different than it is in bulk plastic applications. I think it would be naive to say that the competitive environment doesn't matter and many of the things that are out there and are used as additives in plastics are petroleum-based and clearly oil prices have come down pretty significantly. That's caused dramatic changes in the bulk resin markets, but maybe less dramatic changes in the additive markets that we are pursuing.

Amit, I would add to that that as we develop our value proposition, especially in PVC, that being a multifunctional additive, we often reformulate and allow some cost savings. Clearly, the formulation cost is a function of all materials going into the formulation, so it's not like a commodity drop in chemical that we produce where it's direct head-to-head competition, but we have to be cognizant of the environment and we're clearly targeting applications where we deliver compelling value in the current scenario.

Understood. I guess lastly before I get back in queue, on this Yield10 initiative, you are setting up the Scientific Advisory Board. What does this really mean in terms of spinning out this whole effort? Could you give us some sense of what this step in that whole process implies and does it result in any additional cost, etc., for the Company? Just some color on how we are going about all of this.

Sure. I mean fundamentally what the Scientific Advisory Board is about is harnessing the capabilities and minds and experience of people who have been at this for a long time and have a lot to contribute ultimately to the success of an operation like Yield10. So we are very pleased that we've been able to bring these folks onboard.

In the case of Dr. Schnell, it's somebody that we've been working with in an academic collaboration for a long time. In the case of Mike Lassner, it's an opportunity to work with somebody who's an industry veteran with invaluable experience for Yield10. And the reason for doing it is to build value within Yield10. It's to maximize the opportunity and chances for the successful conversion of these really interesting technologies into a really interesting business.

And notwithstanding the fact that we are planning to spin the Yield10 business out, we still want the business to be valuable and we want to position it to be successfully spun out and we think to best do that, we benefit from the capabilities that people like Dr. Lassner and Dr. Schnell bring to the table. Ollie, any thoughts to add to that?

No, I think Joe summed it pretty well. Essentially what we are doing is we are essentially securing a relationship we've had with Danny for a number of years and by bringing someday with the experience both on the science and technology background, but also on the commercial side and the business relationships that we can access through basically Mike Lassner, it strengthens our ability to position this for a successful spinoff and value to our shareholders.

Got it. Thank you. That's all I have. I will get back in queue.

At this time, I'd now like to turn the conference back over to Ms. Brum.

Thank you, Chris. And thank you, Amit. If you have further questions, you can come back in the queue as we finish this section of the call. So here, we have three questions that have been submitted by shareholders and the first one is for Johan. Now that Metabolix is on a path to reach commercial scale, how is the commercial team approaching market development?

Thanks, Lynne. Working closely with customers, we have sharpened our value proposition and offering of amorphous PHA in several key segments -- flexible PVC, (inaudible) PVC systems and also PLA. Going forward, we intend to focus on these market segments where we bring unique benefits that are well-matched with unmet customer needs. So given the increased availability of amorphous PHA from our pilot plant, we intend to expand the number of qualified customer prospects in these key segments with the goal of building a robust pipeline and baseload demand for the commercial capacity. The timing to fully qualify a new customer is actually well-matched with the projected timing to bring the new capacity online and we will be focused on ensuring a smooth transition for customers.

So as an example, we have leveraged our early success in PVC flooring in our first customer conversion to expand our development effort with several leading PVC flooring companies, targeting specific needs that can be fulfilled with our amorphous PHA. So, yes, we view the transition from pilot to commercial scale as critical and I believe we are working on the right types of projects and targeting the right types of customers to be successful in this endeavor.

Great. Thank you, Johan. And now, Joe, the next question goes to you. Can you provide us a little more information about Metabolix moving its headquarters to Woburn?

Sure. So we are excited about the move to Woburn. Most importantly, it's going to provide us with a way to consolidate our team into a single facility and we expect that this will provide us with tangible organizational benefits. We were fortunate enough just recently to be able to take all of our employees, all our Massachusetts-based employees, out to the site a couple weeks ago, give some tours of the site and we had a lot of positive feedback on the space.

From a customer-facing perspective, the move to Woburn allows us to expand our biopolymers application development lab and this is very important as we continue to support a range of customer development projects and build that baseload for a commercial scale business.

Finally, I would just mention that an added benefit from the move is enabling us to significantly reduce facilities-related leasing and operating costs starting in 2017 once we are fully consolidated. For now, we are focused on managing the costs associated with the relocation and making it as seamless as possible to our people and to our customers.

Thanks, Joe. And Ollie, this question is posed to you on Yield10. Can you tell us a little bit more about the collaboration with Danny Schnell, as well as the patent application that was recently published on transcription factors as part of the Yield10 technology platform?

So as Joe and I mentioned earlier, basically, Danny joined our SAB. This is a progression in the relationship we've had on for the last several years. I go back to his position at UMass Amherst. The technology that came from there is really based on an analogy to the power Smart Grid. We are establishing as part of this program a technology platform around improving efficiency with which plants convert carbon, which is fixed initially by photosynthesis and which is ultimately deposited in the seed and that's the dominant factor in essentially crop yield.

In plants, over two-thirds of the carbon that's fixed initially during photosynthesis is lost through metabolic inefficiencies, so we are developing a technology we call the Crop Smart Carbon Grid based on the over 30 years of metabolic engineering experience and we are seeking to reduce the amount of these metabolic inefficiencies and direct more carbon to the seed. Professor Schnell discovered the lead gene in this effort, C3003, and it appears to be a very exciting new development in C3 photosynthesis.

In another demonstration of the capabilities of this platform, we have demonstrated a significant improvement in oil content, the primary economic driver for oilseeds in camelina plants grown in greenhouses and look forward to moving that into field trials in 2016.

In addition to this work, we've been working on a second element to our technology platform for Yield10, which is our T3 Platform. This work has been described extensively in published patent applications and this is a proprietary computational process for genomic analysis focused on global transcription factors or genes, or master switches in plants, which upregulate multiple gene cascades in complex metabolic pathways, (inaudible) switchgrass and already high-yielding crop and have demonstrated increases over 40% in carbon capture from photosynthesis. So we are moving ahead in 2016 with Yield10 with our R&D objectives and we will continue to also focus on advancing the technology platform, generating greenhouse and field trial data, forming collaborations and identifying investors.

Great. Thank you, Ollie. And Chris, I will turn it back to you if we have additional questions.

(Operator Instructions).

So, Chris, I think we will wrap up the call.

Okay, if there are no further questions at this time --

Chris, we have one more statement, please.

I get to make a concluding remark. So I just wanted to say thank you to all of my colleagues at Metabolix. We talked about some pretty significant 2015 accomplishments. We've got plenty of work to keep us busy in 2016, but the things that we talked about today including the collaboration with CJ are things that wouldn't have been possible without the hard work and dedication of these people. And also I wanted to thank our customers and our stockholders for your continuing support because we can't do it without you guys either. I look forward to talking with everybody again next quarter. Have a good evening.

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your time and participation today. You may disconnect your lines at this time and have a wonderful rest of your day.