Dear Mr. Berko:

Dear L.P.:

Metabolix Inc. (MBLX-$14.29) is a bioscience company that has developed a proprietary microbial fermentation system that produces a group of polymers known as polyhydroxyalkanoates (PHA), which I think is an Icelandic word meaning “a lot of water and yellow oats.”

MBLX, a stepchild cast off by the Massachusetts Institute of Technology, has developed a plastic that is durable, resists extreme heat and is 100 percent biodegradable. Tests show that “stuff and things” made from PHA will completely decompose in soil or water after several months. In fact, plastic toys, bottles, utensils, etc., can be so pure that they can be used as compost for your flowers or vegetable garden.

MBLX will begin shipping PHA, now known by the commercial name of Mirel, from its plant in Clinton, Iowa, to Newell Rubbermaid Inc. (NWL-$16.50) in several months. Though the cost of the green pellets is about twice as much ($2.45 a pound) as comparable non-biodegradable plastic, NWL will begin using it in its Paper Mate pens. The pens use very little plastic, but NWL will reduce its gross profit margins by 2 percent to keep its prices stable.

As MBLX’s volume increases and costs decline, it may not be long until we’re using Mirel plastic in throwaway plates, utensils, cups and soon in larger commercial products. MBLX has joint ventured its future with Decatur, Ill.-based Archer-Daniels-Midland Co. (ADM-$28.71), a $70 billion revenue company.

Metabolix is a small-cap ($385 million) company that opened its doors in 1992 and still makes its home in Cambridge, Mass. It went public in late 2006 at $15 per share, and a year later, just before the meltdown, MBLX stock traded as high as $30. MBLX has 110 employees and produced 2008 revenues of $700,000, doubled them to $1.4 million in 2009, anticipates $4.4 million this year and projects revenues of $13.4 million in 2011.

MBLX doesn’t expect to be profitable until 2012 or 2013, but expects revenues to continue their upward climb as enthusiasm for the Green Revolution begins to reach the boardrooms of American industry.

The company has 27 million outstanding shares, 2 million of which are held by insiders. Six million shares are owned by institutions such as BlackRock, Fidelity, Alger and Putnam, to name a few.

Piper Jaffray, Cantor Fitzgerald and Jeffries have analysts who have published reports on Metabolix.

I believe MBLX looks like a good long-term, speculative buy and would fit well in a wisely managed, aggressive growth portfolio. So I applaud your broker’s recommendation of 600 shares. Give him a gold star and treat him to lunch in the executive dining room at McDonald’s.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. ©2010 Creators.com