Wednesday, August 6, 2008

Verenium takes $90M funding from BP for joint venture

By Mass High Tech Staff

Cambridge-based cellulosic ethanol technology developer Verenium Corp. has landed $90 million in funding through a strategic alliance with worldwide energy giant BP PLC.

Under terms of the agreement, BP will pay $90 million over the next 18 months for rights to current and future cellulosic ethanol technology held within the partnership. The deal comes in two parts: $45 million will be paid in three installments over the next year for “broad access to Verenium’s (Nasdaq: VRNM) cellulosic ethanol technology platform, production facilities and employee scientific knowledge and expertise,” according to the company.

In addition, BP will pay $2.5 million per month to co-fund Verenium’s scientific and technical initiatives within the cellulosic ethanol field.

As part of the arrangement, the companies have formed a Special Purpose Entity, equally owned by BP and Verenium. The SPE will license existing intellectual property from each company and own jointly-developed intellectual property. All intellectual property owned prior to the formation of the SPE will be retained by each respective company, officials said.

Beyond thee initial 18-month phase of the relationship, the two companies expect to negotiate a second phase of the relationship focused on the development of a Joint Venture to accelerate the commercial deployment of the technologies developed. The details of the proposed joint venture have yet to be negotiated.

While the primary and initial focus of the venture will be on facilities jointly owned by BP and Verenium in the United States, the SPE technologies may also be licensable to third-party commercial projects.

Verenium was formed in June 2006 through the merger of Cambridge-based Celunol Corp. and California enzyme maker Diversa Corp., a publicly traded company. For 2007, the company reported $46.2 million in revenue, with a $108 million loss.