Verenium an BP, whose 18 month cellulosic ethanol joint development agreement signed in August 2008 was set to expire, extended the agreement by one month to March 1, 2010. BP will pay Verenium $2,500,000 as part of the extension. The most important portion of Verenium's short press release, was the disclosure that the one month extension is intended give BP and Verenium the additional time required to "negotiate the terms of a multi-year extension of their collaboration program".
A multi-year extension of the collaboration agreement will certainly help remove some of the simmering doubts that have kept the share price of Verenium depressed and should be a catalyst to future share appreciation. The two companies continue to await word from the DOE regarding their application for financing of their proposed 36 million gallon Highlands, Florida cellulosic ethanol plant scheduled to break ground this year. Many investors in Verenium expected the DOE financing would have been in place by the end of 2009. This delay, beyond market expectations, has certainly weighed on Verenium's share price over the last six months.
As I noted in my entry on January 5, 201o with VRNM was selling at $4.80, : "Verenium...Is This Dog Ready to Start Barking?", VRNM has been the single dog of the handful of stocks profiled on this blog since its inception. I also made the case that it seemed that a turnaround could be imminent. The news today represents one small, but important step in a turnaround that could certainly lead VRNM to new 52 week highs.
As always, do your own due diligence.
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