Verenium 8-K Introduction to Verenium’s Strategy

Verenium’s 2012

Capital Markets Day

Introduction to Verenium’s Strategy

James Levine

President & CEO

October 9, 2012

Forward Looking Statements

Verenium,

the

Verenium

logo,

Industry,

Evolved.,

Fuelzyme

®

alpha-amylase,

Pyrolase

®

cellulase,

Pyrolase

®

HT,

Vereflow

TM

alpha-

amylase

and

Xylathin

®

xylanase

are

trademarks

of

Verenium.

All

other

company

names,

product

names

or

logos

in

this

presentation

are used for identification purposes only and may be trademarks of the respective companies with which they are associated.

2

Statements in this presentation that are not strictly historical are “forward-looking” and involve a high degree of risk and uncertainty.

These include, but are not limited to, statements related to Verenium’s technology, products and product candidates (including

Verenium’s ability to identify, develop and commercialize new products and product candidates, either independently or with

collaboration partners, and Verenium’s timetable for doing so), lines of business, markets (including market size and Verenium’s

ability to identify, develop and commercialize products to address those markets), operations (including Verenium’s ability to

successfully negotiate and enter into collaboration partnerships), capabilities, commercialization activities, customer adoption rates,

industry conditions, future financial performance, and near-term and longer-term growth and prospects. Such statements are only

predictions, and actual events or results may differ materially from those projected in such forward-looking statements. Factors that

could cause or contribute to the differences include, but are not limited to, risks associated with Verenium’s strategic focus,

technologies, products and product candidates (including Verenium’s ability to identify, develop and commercialize new products and

product candidates, either independently or with collaboration partners, and market demand for these product and product

candidates), dependence on patents and proprietary rights, protection and enforcement of its patents and proprietary rights, the

commercial prospects of the industries in which Verenium operates and sells products, Verenium’s dependence on manufacturing

and/or license agreements, its ability to achieve milestones under existing and future collaboration agreements, the ability of

Verenium and its partners to commercialize its technologies and products (including by obtaining any required regulatory approvals)

using Verenium’s technologies, the timing for launching any commercial products and projects, the ability of Verenium and its

collaborators to market and sell any products that it or they commercialize, the development or availability of competitive products or

technologies, the future ability of Verenium to enter into and/or maintain collaboration and joint venture agreements and licenses on a

timely basis or at all,  and risks and other uncertainties more fully described in Verenium’s filings with the Securities and Exchange

Commission, including, but not limited to, Verenium’s annual report on Form 10-K for the year ended December 31, 2011 and any

updates contained in its subsequently filed quarterly reports on Form 10-Q. These forward-looking statements speak only as of the

date hereof, and Verenium expressly disclaims any intent or obligation to update these forward-looking statements.

June 2011 Capital Markets Day:

Expected Milestones Through 2013

Accelerate growth in current 9

commercial products

Current

Product

Growth

Achieve 50%

of 2011 revenue from products /

partnerships other than Phyzyme

®

phytase

Product

Diversification

Advance manufacturing improvements

Develop approach for second site

manufacturing site

Manufacturing

Advance at least 3

products into the regulatory

phase of development

New Products

Complete at least 3

new product development /

distribution partnerships to advance the pipeline

Product

Pipeline

Enter 1-2

new markets, alone or through partners

New Market(s)

Complete 1

new collaboration to deploy our

technology outside of enzyme products

Technology

Address remaining debt

Financial

3

Target set before sale of Purifine

Animal Health increased

Grain processing decreased

Achieved

51%

revenue

from

non-

Planning complete and execution underway

Next-Gen Phytase: Animal Health & Nutrition

Pyrolase

®

HT: Oilfield Services

Novus International: Animal Health & Nutrition

Tate & Lyle: Food Ingredients

Oilfield Services: Accelerated  marketing

Lower priority

Convertible Note redeemed

Phyzyme®

phytase products in 2011

efforts for Pyrolase

®

cellulase

Defining Verenium:

Are We a “Clean Tech”

Company?

Harness renewable materials and

energy sources

Dramatically reduce the use of natural

resources

Cut or eliminate emissions and wastes

Are competitive with, if not superior to,

their conventional counterparts

Offer significant additional benefits

4

Wikipedia defines Clean Technology as Products, Services and

Processes that:

Defining Verenium:

We Don’t Face Clean Tech’s Risks

5

Early Stage Clean Tech’s

Perceived Risk Profile

Risks with Technology Development

Risks with Scale Up

Risks Reaching Materiality

Capital Intensity

Lengthy Path to Profitability

Dependence on a Single Product or

End Market

Verenium’s Lower Risk Profile

Proven technology platform with 10 products

commercially launched

Manufacture products at full commercial scale

Largest

product

–

Phyzyme®

phytase

–

captured

a

market leading share in a major enzymes market

Ability to scale manufacturing with current

fermentation assets

Project operating profitability in 2014 based on

current products and transparent pipeline

Currently serve three markets (Animal Nutrition,

Grain Processing, Oil & Gas) and more to come

Defining Our Industry: Industrial Enzymes Have

Broad Applicability in Our Everyday Lives

6

Defining Our Industry: Verenium’s Target

Markets for Industrial Enzymes

7

We Target Profitable and Growing Markets that Exist Today

Addressed by

Verenium’s

Current 8

Products

Source: Market size estimates based on Verenium internal estimates and L. Hepner & Associates Industrial Enzymes Report  published in February 2011.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2012

2016

Not Addressed

Nutrition Enzymes

Detergent Enzymes

Baking Enzymes

Technical Enzymes

Oilfield Services

Feed Enzymes

Bioethanol Enzymes

VRNM Expects to

Address via:

•

Product Pipeline

•

Expansion

Pipeline

Verenium has a Track Record of Competing on Product Performance

Defining Our Industry: Major Players in the

Industrial Enzymes Market

8

Increasing Cost Competitiveness

Novozymes

DuPont

(Genencor)

DSM

BASF

AB

Enzymes

Verenium

Industrial Enzymes Core Capabilities:

Verenium has Demonstrated the Full Suite

Define

Unmet

Needs:

addressable

with

enzymes

Determine

Value

Proposition:

for

partners

and

customers

Verenium’s

Position:

Solid

track

record

of

launched

products

CONCEPTUALIZE

Products

Capabilities:

Discovery,

evolution,

expression

and

approval

of

optimized

enzyme

Verenium’s

Position:

Sustainable

competitive

advantage

via

unique

technology

CREATE

Products

Three

Steps:

Fermentation

+

Recovery

+

Formulation

Verenium’s

Position:

Global

scale

manufacturing

at

Fermic

MANUFACTURE

Products

Customized

Channel

Strategy:

Marketing

approach

based

on

end-market

dynamics

MARKET

Products

platform

9

Defining Our Business Model and Value

Proposition

Capabilities:

Discovery, evolution, expression and approval of optimized enzyme

Verenium’s

Position:

Sustainable

competitive

advantage

via

unique

technology

Product Pipeline

Expansion Pipeline

Demonstrates Commercial

Success

Path to $100M+ Revenue

Path to $200M+ Revenue

•

Cash Flow to Reinvest

–

$55M LTM Revenues

–

$21M LTM product gross profit

•

Demonstrated high value

–

Animal Health & Nutrition

success

–

Corn Bioethanol success

–

Asset Sale: Sold $7.5M revenue

products / candidates for $37M

•

Multiple 2013 product

launches in current end-

markets

•

Near Term: Revenue growth

and diversification

•

New Products for:

•

Current end-markets, AND

•

Baking

•

Sweeteners

•

Personal Care

•

Detergents

•

Near term: Validation from new

partnerships

CREATE

Products

10

Commercial Products

platform

Past & Present Partners Validate the Strength and

Uniqueness of Our Products and Technology

11

TECHNOLOGY SUITE

We developed enzymes

and discovery and evolution

technologies used in BP’s

cellulosic enzyme program

We created a unique

Phospholipase C product and

other enzymes for oilseed

processing

We developed novel enzymes for

the cost-effective production of a

proprietary product

ANIMAL HEALTH

We created one of the top

selling phytase products

(Phyzyme

®

phytase)

We created the high

performance Quantum

®

phytase

We are creating a next

generation suite of enzymes

GRAIN PROCESSING

Our unique enzyme will enable

creation of a novel product

Several major oilfield services

companies are evaluating our

high-performance products for

hydraulic fracturing

Reciprocal distribution for

enzyme products (Weiss

BioTech in Europe, Verenium in

the US) broadens our product

mix and geographic reach

All company and product names and logos are trademarks of their respective owners.

OILFIELD SERVICES

•

Joined Verenium in 1997 as a Senior Scientist and has held a

variety of R&D positions with the Company

•

Previously pursued research fellowships at Scripps Research

Institute in La Jolla, CA and Amherst College

David Weiner, VP of R&D Strategy,

Innovation & Partnerships

The Management Team that Will Execute

12

•

Joined Verenium in April 2009 as Executive Vice President

and Chief Financial Officer

•

Former senior energy & healthcare investment banker at

Goldman Sachs and Lehman Brothers

James Levine, President & CEO

•

Joined Verenium in March 2008 as Executive Vice President

of the Specialty Enzymes Business Unit

•

Former executive positions with BP, including chief executive

of a $1.7 billion North American chemical business

Janet Roemer, Executive VP & COO

•

Joined Verenium in 2005 as Chief Accounting Officer

•

20 years in financial management and advisory roles

•

Senior level financial management roles for six publicly-traded

companies

Jeffrey Black, Senior VP & CFO

•

Joined Verenium in August 2010

•

Former Vice President of Manufacturing at Vical Incorporated

and Vice President of Process Engineering and

Manufacturing at Universal Molecular Biosystems; previous

experience at Gilead Sciences, Baxter International and

DuPont

Kevin Bracken, VP of Manufacturing

•

Joined Verenium in 2002, serving in a variety of R&D  and

technology development roles

•

Over 19 years postgraduate experience in structural biology,

biophysics and structure-function analysis as well as

genomics

Mark Wall, VP of R&D Operations

•

Joined Verenium in August 2006 as Associate Director of

Business Development responsible for supporting the

commercialization strategy

•

Former Managing Director at Trident Partners LLC and

consultant at Bain & Company

Ken Barrett, VP of BD & Strategy

•

Joined Verenium in November 2010

•

Former General Counsel at Kintera, Inc. and Director of

Strategic Transactions at Vivendi Universal; pervious

experience with Cooley LLP, Latham & Watkins LLP and

Rogers & Wells LLP

Alex Fitzpatrick, Senior VP & General Counsel

Commercial Products

Pipeline Products

Manufacturing

Janet Roemer

Chief Operating Officer

October 9, 2012

Industrial Enzymes: Profitable, Growing Markets

Today, New Markets Emerging

14

Margins of market leader

Gross Margins>55%

EBIT Margins >20%

Source: Verenium/L.Hepner & Associates.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2012

2014

2016

Oilfield

Services

Sweetener

Enzymes

Technical

Enzymes

Nutrition

Enzymes

Feed

Enzymes

Detergent

Enzymes

Dairy

Enzymes

Bioethanol

Enzymes

New

Enzyme

Markets

ANIMAL HEALTH AND NUTRITION

Lead Product,  $350M+ Market

Verenium’s Unique Lead Commercial Products

Market-Validated with $55M in LTM Revenue

Addressing $1B Opportunity

15

GRAIN PROCESSING

$400M+ Market

OILFIELD SERVICES

Up to $270M* Combined Market In

Hydraulic Fracturing & Filter Cake

Removal

Source: Verenium/L. Hepner & Associates

*Total estimated market for all enzyme and chemical breakers.

Verenium’s Product Pipeline

Path to Revenue Growth and Operating Profitability

16

Product Candidate

Potential Market

Size (2016)*

Estimated

Launch

Target Market

Position

Next-Gen Phytase

$400

-

450M

2013

-

2015

Major

(1)

NSP Cocktail

(Non Starch Polysaccharides)

$200

-

250M

2013

-

2015

Major

Next-Gen Gluco-Amylase

$200

-

250M

2013

-

2014

Specialty

(2)

Process Enhancer

$15M

2012

-

2013

Major

Process Enhancer

$10M

2013 -

2014

Major

Starch Modifier

$5M

2013

Exclusive

(3)

Hyper-Thermostable Guar Breaker

Up to $250M

*

2012

Specialty

Next-Gen Guar Breaker

Up to $250M

*

2013

Specialty

Animal Health & Nutrition Enzymes

Grain Processing Enzymes

Oilfield Services Enzymes

Source: Verenium/L. Hepner & Associates.

*Total estimated market for all enzyme and chemical breakers

(1)

We define Major market position as 20-30% targeted market penetration at maturity

(2)

We define Specialty market position as 5-10% targeted market penetration at maturity

(3)

We define Exclusive market position as 100% targeted market penetration at maturity due to limitedcompetition

ANIMAL HEALTH AND NUTRITION

Lead Product,  $350M+ Market

Verenium’s Unique Lead Commercial Products

17

0

100

200

300

400

500

600

700

800

900

1000

2011

2016

ROW

Asia

N America

Europe

0

50

100

150

200

250

300

350

400

450

2012

2014

2016

Phytase

NSP

Animal Health and Nutrition Enzymes

Large and Growing Market

$M Growth by Feed Enzyme Type

Source:

Vernium /L.

Hepner

Associates

Source: BCC

Research 2012

$M Growth by Region

•

Nearly $600m growing to >

$700M by 2016

•

Growing in all regions

•

Enzymes proven to increase

options for feed formulation

•

Improve

efficiency

–

feed

conversion

•

Faster animal growth, better

health, more uniform production

•

Potential for additional

enzymes, new target species

18

Phytase Enzymes Growth is Due to Numerous

Advantages over Inorganic Phosphorus

Enzymes release phosphorus naturally

occurring in grains but bound up in phytate

Provide additional value by releasing other

essential nutrients complexed by phytate

Sustainable alternative to a mined product

Safeguards the environment –

reduced

phosphorus in animal waste

Biodegradable

19

Phytase Enzymes Growth is Due to Numerous

Advantages over Inorganic Phosphorus

Sustainable alternative to a mined product

Safeguards the environment –

reduced

Phosphorus in waste

Biodegradable

Minute quantities relative to inorganic

phosphate

20

Provide additional nutritional value by

releasing minerals and protein complexed

by phytate

Enzymes releases Phosphorus naturally

occurring in grains but bound up in phytate

21

BACTERIAL

PHYTASE

-

DIFFERENTIATED

FROM FUNGAL PHYTASES

MULTIPLE MANUFACTURING SITES

DUPONT MARKETING

•

More active in the digestive tract

•

Active longer

•

Lower dose, higher feed conversion ratio

•

Global manufacturing

•

Efficient supply chain

•

Broad product portfolio

•

Expertise in animal nutrition

•

Global presence

Phyzyme Phytase –

Differentiated,

Category-Leading Product

Verenium’s Partnership with Novus International

To Access Global Markets with New Products

STRONG COMPANY:  Sales over $1B

STRONG PARENTS:  Mitsui and Nippon Soda

ESTABLISHED, GLOBAL MARKET REACH:

COMPLEMENTARY SCIENTIFIC SKILLS: 

DEVELOPMENT AND COMMERCIALIZATION OF

•

Next Generation Phytase

•

Non Starch Polysaccharide (NSP) cocktail of 3

enzymes

22

More than 800 employee serving more than

2500 customers in over 100 countries.

Animal Nutrition focus complements Verenium’s

15 years experience in feed enzymes

FOUR ENZYMES

Pipeline Products For Animal Health

and Nutrition –

Verenium/Novus Partnership

23

Upside potential in subcategories beyond poultry and pigs, e.g.

aquaculture, pet food, ruminants

To Address a Broader Market Opportunity

Source: Verenium/L.Hepner & Associates.

Verenium’s

Products Today

Market

Opportunity

2012

Pipeline Products

Launch Targets

2013-2015

Market

Opportunity

2016

Phytase: Phyzyme

$350M

New Phytase

$430M

NSP Enzyme:

No Product

$230M

New NSP Enzymes

$290M

$580M

$720M

Protein consumption grows with GDP

Poultry favored source of protein

Continued geographic market penetration

Substitute for non-sustainable inorganic phosphorus

Benefits from increasing dosage

LONG -TERM TRENDS FAVOR ENZYME GROWTH

Long-Term Trends Favor Phytase Growth

Short-Term Challenges from High Grain Prices

24

SHORT-

TERM DYNAMICS OF HIGH FEED COST

Animal producers challenged by high feed prices

reduce flocks in response

Verenium’s Strategy to Accelerate Growth

25

VERENIUM STRATEGY IN ANIMAL

HEALTH & NUTRITION

Maximize  Phyzyme gross margin through

COGS reduction and global optimization of

manufacturing

Launch next generation Phytase and NSP

enzymes  -  Novus partnership

Pursue additional feed enzyme opportunities

Support the DuPont partnership - ensure

Phyzyme Phytase supply

Verenium’s Unique Lead Commercial Products

GRAIN PROCESSING

$400M+ Market

26

Grain Processing Enzymes

Moderate Growth, Large Market

$M Addressable Market

Source: Verenium  estimates, excludes estimates of

cellulosic enzymes, includes estimates

of market for new

enzymes for process enhancement

Source: BCC Research 2012,

includes estimates for cellulosic

enzymes

$M Growth by Region

0

100

200

300

400

500

600

2012

2014

2016

Process Enhancing

Enzymes

Current Enzymes

0

100

200

300

400

500

600

700

800

900

1000

2011

2016

ROW

Asia

N America

Europe

Three High Performance Commercial Products

for Grain Processing

28

SLURRY PREPARATION

LIQUEFACTION

SACCHARIFICATION

& FERMENTATION

Increases throughput in

cereal-based ethanol plants

(wheat, barley, rye –

northern climates)

$10M market

Unique enzyme with

multidimensional value

proposition

$200M market

Highly active and effective

enzyme

$200M market

Fuelzyme Alpha-Amylase is Differentiated from

the Competition by Nature Itself

Superior thermostability, broader pH range & more specific mode of action

29

From a Different Branch on the

Phylogenetic Tree of Life

Different Mode of Action

Produces More Uniform Substrate

Most

a-amylases

Thermococcus

Fuelzyme R

Field Data Demonstrates Value Delivered by

Fuelzyme

®

Alpha-Amylase

30

LIQUEFACTION

SACCHARIFICATION

& FERMENTATION

CHEMICAL USAGE

Enzyme Dose reduction –

Alpha-Amylase

Average Savings

$148k

High Savings

$259k

Enzyme Dose reduction –

Glucoamylase

Average Savings

$103k

High Savings

$148k

Ammonia/Urea

Average Savings

$183k

High Savings

$266k

Data from 5 trials of Fuelzyme

®

Alpha-Amylase at U.S. ethanol plants in 2012

Customer Testimonials Highlight Fuelzyme’s

Plant-Specific Advantages

31

“Fuelzyme works well at a broad pH range; I am not as

concerned about pH fluctuations as I would be with other

alphas.”

–

Process Engineer

OPERATING FLEXIBILITY

CHEMICAL SAVINGS

“We have run Fuelzyme for 6 months and immediately

realized significant savings by eliminating a truckload of

sulfuric acid a week shortly after we began using

Fuelzyme.”

–Operations Manager

SAFETY AND ENVIRONMENT

“Without Fuelzyme, it would have been far more

challenging to start up the plant given concerns on the use

of ammonia and sulfuric acid by local Hazmat officials.”

–

Plant General Manager

“Having a broad pH alpha is really 

nice…to have control about what

you want to do is great…Fuelzyme

saved the day at this plant.”

                                                                          — Plant Manager

•

Improved enzyme targeted at a large ($200M+)

segment

NEXT GEN GLUCO AMYLASE

PROCESS ENHANCING ENZYMES

STARCH MODIFIER

•

Unique mode of action enables our partner to

create a new product

Verenium’s Pipeline Products for Grain Processing

Well Positioned to Industry Trends

32

•

Two high value “accessory” enzymes to improve

efficiency, 2012-2014 launch

LONG-TERM TRENDS

SHORT-TERM DYNAMICS OF HIGH OIL & CORN COST

Grain Processing

Long-Term Trend Toward Biorefinery Model

Short-Term Impact of Commodity Pricing

33

Leaders are innovating, adopting new process

technologies

Biorefinery

–

multiple

feed

stocks,

multiple

products

Upside from potential move to E15 and higher blends

Advanced biofuels initiatives

Industry consolidation and integration

Reduced gasoline demand and the E10 blend wall

Plants reducing rates, some temporary shutdowns

Ripe for innovation:  adopting new technologies

that reduce cost

Verenium’s Grain Processing Strategy

Grow through Share Gain and New Products

34

•

Variety of offers to encourage field trials

•

Document sources of value creation and price to

share value

•

Technical reviews to add value to relationships

•

Continual improvement in manufacturing to reduce

COGS

VERENIUM GRAIN PROCESSING STRATEGY

Grow in the US by market share gain

Grow through innovation (Product Pipeline)

Corporate account focus

Multidimensional value proposition

Evaluate and leverage Fuelzyme’s unique

performance with new process technologies

Grow  internationally through partners

KEY TACTICS

Verenium’s Unique Lead Commercial Products

35

OILFIELD SERVICES

Up to $270M* Combined Market In

Hydraulic Fracturing & Filter Cake

Removal

“All

of

the

Above”

Energy

Strategy

Requires

Unconventional Drilling and Stimulation Techniques to

Unlock 100 Year Supply of Natural Gas and Significant

New Sources of Oil

Horizontal drilling technology

Generally deeper than conventional wells

Impermeable,

hard

rock

–

impedes

flow

Wide range of pH and temperature conditions

Water, chemical usage, and especially “fracking”

techniques subject of public concern and debate

Image Source: www.therightscoop.com

36

Oilfield Services

Cellulase Enzyme for Hydraulic Fracturing

37

Superior economics relative to chemicals used in

the process

Reduces chemical breakers, safe for workers

Providing Favorable Performance and Environmental Benefits

PERFORMANCE

Smoother controllable break, improved well

productivity

ECONOMICS

ENVIRONMENTAL

Before

enzyme is inactive

guar is viscous

After

enzyme is active

guar is “broken”

Verenium Pipeline Product for Oilfield Services

Hyper-Thermostable Guar Breaker, “Pyrolase

®

HT”

•

Evolved from Pyrolase

®

cellulase for

higher

temperature

wells

–

up

to

225F

•

Announced EPA approval July 25

th

•

Paper to be presented at Society of

Petroleum Engineers Oct 9.

•

“Well conductivity”

benefit from

Pyrolase

®

HT–

significant new

element of the value proposition

•

MTA/sample agreements for technical

evaluation with four additional service

companies

38

Performance data included in the SPE paper. Due to its

specificity, “Mannanase”

(Pyrolase

®

HT)  leaves far less

residue than the leading chemical breaker (APS –

Ammonium persulfate), predicting higher conductivity

(flow) of oil and gas.

0%

10%

20%

30%

40%

50%

60%

70%

80 ppt guar, 5

ppt APS

80 ppt guar, 200

ppm Man

30 ppt crosslink

guar, 7 ppt

encap APS

30 ppt crosslink

guar, 200 ppm

Man

30 ppt crosslink

guar, 200 ppm

Man + 7 ppt

encap APS

30 ppt crosslink

guar, 400 ppm

Man

Conductivity Results

180

F, 3000 psi closure stress, 20/40 Ottawa  Sand

APS = ammonium persulfate, Man = Mannanase

°

©2012 SPE. Reproduced with permission of the copyright owner. Further reproduction

prohibited without permission.

Verenium’s Strategy

Drive Major US Service Company Adoption

39

VERENIUM OILFIELD SERVICES STRATEGY

Dedicated sales manager to achieve lab

approvals, field trials and conversion to sales

Presenting paper at SPE, co-authored with a

leading oilfield services company

Advertising in trade press to raise awareness

Launch

of

Pyrolase

®

HT

is

a

high

priority:

additional efforts in regulatory, bioprocess

development, formulation, QC assay, and scale

up. Targeting launch in 4Q12

New pipeline project initiated for high pH variant

Manufacturing

High Value, Novel Enzymes; Low Cost,

Well Established Industrial Scale Process

41

Industrial scale

modern process based

on

ancient technology

More product specific,

advanced equipment

and materials

Enabling shelf life

and usability

FERMENTATION

RECOVERY

FORMULATION

AND PACKAGING

INVESTMENT PROGRAM TO INCREASE

THROUGHPUT AND REDUCE UNIT COST

•

Improve yields

•

Upgrade equipment

•

Faster turnaround time

•

Improve recovery capability

PARTNERSHIP WITH FERMIC IN MEXICO

CITY

•

Partnership reduces our risk

•

Low capital requirements

•

Economies of a brownfield site

SIGNIFICANT CAPACITY

•

Dedicated fermentation capacity

•

World

class

scale

–

low

cost

per

kg

Verenium’s Manufacturing Strategy

42

Capital-Light with Attractive Margins

Improvement Example –

Fuelzyme Alpha-Amylase

Better Yields, and Consistency, COGS

•

Upgrades to fermentation and recovery to

improve yields of Verenium products

•

Process improvements

•

Fermic upgrades to utilities, infrastructure,

overall plant capacity

43

1

3

5

7

9

11

13

15

17

19

21

23

25

27

29

31

33

35

37

39

2012 Fuelzyme Yield

Rolling 10 batch average

Fuelzyme manufacturing performance has

been

improving in terms of batch yields,

consistency and COGS

Manufacturing Pilot Plant in San Diego

New Capability for Continuous Improvement

•

•

Existing

Products:

•

Pipeline

Products:

44

–

40L

and

500L

fermenters

with

recovery,

product

storage

–

Controls

integrated

with

data

historian

–

Process

improvement

studies

to

drive

down

COGS

–

Expedites

troubleshooting

–

Facilitates

process

development

and

scale

up

to

commercial

production

–

Make

test

article

for

tox

and

safety

studies

State of the art commencing operation in 4Q

Q&A

R&D Overview and

Outlook

David Weiner, Ph.D.

Vice President, R&D Strategy &

Partnerships

October 9, 2012

Proven, Cutting-Edge Technologies =

Differentiated Products

47

Verenium’s Unique Suite of Technologies

48

Provides Powerful Competitive Advantage

Enzyme Discovery

Ultra-high Throughput

Screening

DirectEvolution®

Technologies

Applications

Expression &

Scale-up

Enzyme Discovery

TRADITIONAL

APPROACH

VERENIUM

APPROACH

CULTURE

MICROBES

EXTRACT

MICROBIAL

DNA

Clone

Environmental DNA library

High throughput

enzyme screens

Verenium approach is direct,

bypassing need for culturing

FASTER, COMPREHENSIVE,

CAPTURES NATURE’S DIVERSITY

Clone

Screen

Typical culturing

methods access

<0.1% of

biodiversity

49

Unparalleled Global Biodiversity Access

All agreements conform to the Convention on Biological Diversity

50

Unprecedented Biodiversity

•

Over 2000 eDNA libraries

•

Encompass the genomes from over 1 million

organisms

•

Billions of genes, billions of potential new enzymes

51

Ultra-High Throughput Screening

Versatile Robotic Systems

52

Ultra-high Throughput

Screening

Advanced Automation Technologies

•

Cutting edge, proprietary

•

Flexible platform

•

Increased efficiencies, greater

reproducibility

•

Customized 400,000-well microtiter plates

•

Throughput up to one billion/day

•

Unprecedented screening of molecular

diversity

•

Dramatically reduces equipment and

operator time

53

ROBOTIC SCREENING SYSTEMS

GIGAMATRIX

®

PLATFORM

•

Screened Verenium’s extensive

environmental DNA libraries

•

Discovered multiple candidates

•

Applications work identified ideal enzyme

for fracturing

•

Scaled-up & commercialized as

Pyrolase

®

cellulase

Verenium Proprietary & Confidential

Development of Pyrolase

®

Cellulase

54

Capturing The Best From Nature

Increased temperature range and pH

while maintaining unique

performance properties of parent

enzyme

Improving The Best From Nature

Development of Pyrolase

®

HT

55

(~185

o

F)

(~225

o

F)

Evolving The Best From Nature

DirectEvolution

®

Technologies

DirectEvolution®

Technologies

56

Powerful Suite of DirectEvolution

®

Technologies

Diversify

Screen

Combine

variants

Repeat if

needed

57

Best variant

Starting

Enzyme

Enzyme

variant

library

Improved

variants

Powerful Suite of DirectEvolution

®

Technologies

Verenium’s Competitive Advantage

58

Better starting points

from Nature

Proprietary

combinatorial

assembly methods

Proprietary

mutagenesis methods

& in silico design

Advanced automated

screening

Starting

Enzyme

Enzyme

variant

library

Improved

variants

Best variant

DirectEvolution

®

Technologies

Temperature

pH performance

Solvent tolerance

Substrate specificity

Binding affinity (Km)

Enzyme turnover (kcat)

Relief of inhibition

59

MANUFACTURING ROBUSTNESS

PROCESS PERFORMANCE

Expression levels

Improved recovery

Enhanced shelf-life

Protein quality

folding, resistance to degradation,

control of glycosylation

Proven Capabilities For Targeted Industrial Applications

Developing Solutions To Real World Problems

Applications Science

Applications

60

Focusing on Solutions to Real World Problems

Better Enzymes For Better Processes

ANIMAL HEALTH

OILFIELD SERVICES

Several major

oilfield service

companies

TM

61

SPECIFICATION

OF IDEAL ENZYME

IDENTIFY

MARKET NEED

ENZYME

DISCOVERY

HIGH

THROUGHPUT

SCREENING

ENZYME

EVOLUTION

GRAIN PROCESSING

Applications Development

The value of an idea lies

in the using of it

--

Thomas Alva Edison (1879)

Rapid identification and validation of new

product concepts

Support for industrial trials & driving

product implementations

Testing of product candidates in real

world applications

62

Driving Down The Cost Of Goods

Expression & Scale-up

Expression &

Scale-up

63

System Selection

Heterologous Expression

Commercial systems

Optimization

•

Gene optimization

•

Host engineering

•

High-throughput screening

•

Bacteria

•

Fungi

64

Iterative Fermentation

Improvements

Gene Expression & Scale-Up

Pilot Plant

R&D Expression

•

Spans

L to 10L scale

•

Develop & optimize

expression systems

•

Scope fermentation conditions

•

40L to 500L scale

•

Develop & optimize

commercial processes

•

Produce material for

regulatory & accelerate

product launches

•

World class scale –

3X

190,000L

•

Efficient processes

•

Continuous improvement

Commercial Scale

65

Gene Expression & Scale-Up

Commercial Scale

R&D Expression

Scale-up / Scale-down

Iterative loops drive continuous

process improvements

Bridging Innovation to Profits

66

Pilot Plant

Flexible Discovery Process For Finding High-Performance Enzymes

Unique Discovery and Development Process

Development Options

•

Leverages existing

products to new

applications

•

Examples include

Xylathin

®

xylanase &

Vereflow

alpha-

amylase

VERENIUM ENZYME

COLLECTION

NEW DISCOVERY &

EVOLUTION

CURRENT PRODUCT

ADJACENCY

•

Leverages over 2000

eDNA libraries

•

Unprecedented

biodiversity (>million

genomes)

TIME TO COMMERCIALIZATION

More time

Less time

67

TM

Unique Discovery and Development Process

Development Options

VERENIUM ENZYME

COLLECTION

NEW DISCOVERY &

EVOLUTION

CURRENT PRODUCT

ADJACENCY

TIME TO COMMERCIALIZATION

More time

Less time

Leverages previous

discovery & evolution

programs

Flexible Discovery Process For Finding High-Performance Enzymes

68

$4

Billion

Enzyme

Market

Opportunity

Verenium’s Enzyme Collection

4,000+ Unique Proprietary Enzymes For Future Products

Betamannosidases

Cellobiohydrolases

Cellulases

Fucosidases

Galactanases

Glucanases

Mannanases

Pectinases

Pullulanases

Xylanases

Nitrilases

Phosphatases

Proteases

Amidases (primary)

Amidases (secondary)

Dehalogenases

Epoxide hydrolases

Esterases

Lipases

Phospholipases

Alphafucosidases

Alphagalactosidases

Alphaglucoronidases

Amylases

Arabinofuranosidases

Betaglucosidases

Isomerases

Aldolases

Ammonia-lyases

Ammonia-lyases (Tryptophanases)

C-O-lyases

C-O-lyases (Pectate lyases)

Dehydratases

Miscellaneous lyases

Catalases

Dehydrogenases

Oxidases

Transaminases

Bioethanol &

Sweeteners

Animal Health &

Nutrition

Nutrition

Tech-

nical

Other

Detergents

Dairy

69

$4

Billion

Enzyme

Market

Opportunity

Verenium’s Enzyme Collection

4,000+ Unique Proprietary Enzymes For Future Products

Betamannosidases

Cellobiohydrolases

Cellulases

Fucosidases

Galactanases

Glucanases

Mannanases

Pectinases

Pullulanases

Xylanases

Nitrilases

Phosphatases

Proteases

Amidases (primary)

Amidases (secondary)

Dehalogenases

Epoxide hydrolases

Esterases

Lipases

Phospholipases

Alphafucosidases

Alphagalactosidases

Alphaglucoronidases

Amylases

Arabinofuranosidases

Betaglucosidases

Isomerases

Aldolases

Ammonia-lyases

Ammonia-lyases (Tryptophanases)

C-O-lyases

C-O-lyases (Pectate lyases)

Dehydratases

Miscellaneous lyases

Catalases

Dehydrogenases

Oxidases

Transaminases

Bioethanol &

Sweeteners

Animal Health &

Nutrition

Nutrition

Tech-

nical

Other

Detergents

Dairy

70

Starch-based Products in Our Daily Lives

Syrups &

Sweeteners

Texturizers &

thickeners

Personal

care

Pharmaceutical

Animal health

& nutrition

Ethanol

Industrial

71

Archaeal

-amylase

Bacterial

-amylase

G4-amylase

Bacterial

-amylase

Maltosyltransferase

Bacterial

-amylase

Maltogenic amylase

Isoamylase

Diversity of Verenium Starch-Active Enzymes

72

Verenium’s proprietary enzymes

Verenium’s proprietary enzymes

Other (commercial and public domain)

Verenium Amylases

Unique enzymes, functionalities

Operate over wide range of conditions

New toolbox to create new products

G2 amylase

G4 amylase

Isoamylase

(debranching)

73

Verenium’s Expansion Pipeline: Targeted Markets

ANIMAL HEALTH

OILFIELD SERVICES

GRAIN PROCESSING

BAKING

PERSONAL CARE

SWEETENERS

DETERGENTS /CLEANERS

New Products for Current Markets

New Products for New Markets

74

Intellectual Property Portfolio

*Includes owned and in-licensed patents

369 granted, 353 pending (722 total)*

352

163

68

61

78

Substantial Protection For Our Technology And Our Products

75

Discovery

Evolution

Other

Product

Pipeline & Expansion

Pipeline

Since July 2011:

13 US patents issued

20 new patent filings & IDFs

High Performance

Enzymes

For A Sustainable

Economy

Proven, best-in-class discovery &

evolution technologies

RAPID ACCESS TO UNIQUE ENZYMES

Extensive applications & product

development expertise

SUPERIOR PRODUCTS

Track record of successful product

commercialization & partnerships

PATH TO PROFITS

76

Achieving Our

Financial Goals

Jeffrey Black

Chief Financial Officer

October 9, 2012

Financial Overview

Historical Financial Performance

Medium Term Financial Profile

Priority Financial Themes

78

Cost control / path to profitability

Near-term capital requirements

Financial Overview

Major Accomplishments

What have we accomplished over last

12 months?

Maintained operating expense run rate while

increasing level of investment in new product

development and commercialization efforts

Two quarters of operating income

Eliminated our debt and secured incremental

financing / capital to strengthen our balance

sheet

79

Improved Overall Financial Profile

Historical Revenue ($M)

Strong Historical Revenue and Margin Performance

80

Medium-Term Product Revenue Profile

Animal Health & Nutrition

Grain Processing

Oilfield Services

Other

Diversifying the Revenue Base

Today

Product Revenue = $50M+

Medium-Term

Product Revenue = $100M+

81

15%

22%

63%

10%

20%

40%

30%

Historical Operating Expenses ($M)

Targeted Investments in R&D and Sales & Marketing; Holding the Line on G&A

* Excludes transaction-related gains and / or fees.

82

Priority Financial Themes

Cost Management / Path to Profitability

Achieve appropriate levels of R&D and SG&A

spend as we continue to align the core business to

pure-play enzymes and position ourselves for

future growth

•

R&D growth will come primarily from investment in pipeline

•

SG&A growth will come primarily from sales & marketing

Medium-term  vision:  financial metrics in line with

our peers / competitors

•

Product gross profit of 45%+

•

Operating expenses at 25%-30% of revenue

Achieve operating profitability in 2014

83

Prior Financial Themes

Verenium Capital Requirements

Source of Funds

Timing

Purpose

84

•

Working capital line

•

Partnership funding

•

Debt or equity raise

Phase I

(up to $10M now)

•

Cash to execute on

business milestones

•

Fund operations to

profitability in 2014

Phase II

(Next 12 months)

Funding Our Operations to Positive Cash-Flow

Conclusion

James Levine

President & CEO

October 9, 2012

Verenium’s Green Business Model

86

ENVIRONMENTAL

Our products are good for the environment

CUSTOMER COST SAVINGS

Our products save customers money

VERENIUM PROFITABILITY

Our products generate attractive gross margins

Green 2

Green 1

Green 3

The Basis for Verenium’s Success:

We Are Driving Improvements –

Today!

87

ANIMAL HEALTH

Ammonium

Persulfate

used

as guar breaker

OILFIELD SERVICES

GRAIN PROCESSING

pH adjusted with

Ammonia

&

Sulfuric Acid

Mined

Dicalcium

Phosphate

added to diet

Replacing Expensive Chemistry with Efficient Biology

Expensive,

Non-renewable

Chemistry

Efficient,

Cheaper,

Greener

Biology

Verenium’s Expansion Pipeline:

Applying Our Technology More Broadly

88

OILFIELD SERVICES

GRAIN PROCESSING

New Products for Current Markets

New Products for New Markets

OILFIELD SERVICES

GRAIN PROCESSING

BAKING

PERSONAL CARE

SWEETENERS

DETERGENTS/CLEANERS

ANIMAL HEALTH

The Diversified Company We Are Building

89

Product

Pipeline and

Current

Commercial

Products

$2.5B+ market

opportunity from new

potential products for:

•

Animal Health &

Nutrition

•

Oilfield Services

•

Grain Processing

•

Detergents & Cleaners

•

Syrups & Sweeteners

•

Personal Care

•

Baking

Expansion

Pipeline

Up to $1.4B 

market

opportunity

Up to $1B

current market

opportunity

Current

Commercial

Products

Medium-Term Potential Revenue

2012 Revenue

2012 / 2013 Milestones To Drive Profitability

Combined product revenue growth from Grain Processing and

Oilfield Services of 25%

Current Product

Growth

Complete at least 3

new product development/distribution

partnerships to enhance the Product Pipeline

Expansion Pipeline

Launch at least 3

pipeline candidates into current or new industrial

enzyme markets in 2013

Product Pipeline

Achieve

greater

than

50%

of

2013

revenue

from

products

other

than

Phyzyme

®

phytase

Product

Diversification

Implement partnerships or financing to fund capital needs to 2014

operating profitability

Financial

COGS reductions to achieve 40%+ product gross margins

Manufacturing

90

Through our unique access to nature’s ever-evolving

biodiversity,

we

create

eco-friendly

enzyme

products

that

improve

performance

and

lower

costs

for

today’s

global industries

91

Verenium is “Industry, Evolved.”