Verenium Scores on BP Cellulosic Ethanol Pact (VRNM, BP)

We noticed Verenium Corp. (NASDAQ: VRNM) over at our "price/volume spike" this morning and realized what the cause was.  The company’s stock is gapping up significantly after announcing that it has secured a biofuel production pact with BP plc (NYSE: BP).   The pact will lead to cellulosic ethanol development and commercial production using non-food stocks and Verenium will receive $90 Million in funding from BP over the next 18 months. 

Of this $45 million will be available to Verenium in the next 12 monthsand upon closing it will receive $24.5 million.  Thereafter Vereniumwill receive $2.5 million per.  The companies are expected to negotiatea second phase contract for beyond the 18 months target dates.

We have still seen under 10,000 shares trade so far pre-market, but thelast trade showed a gain of 33% to $2.70 this morning.  The currentindications are slightly higher than that.

Its 52-week trading range is $1.05 to $6.95, so it isn’t as though thisis a low-volatility stock.  On average days it trades about 426,000shares, although the thin volume pre-market is high because it rarelytrades any in the pre-market and after-hours trading sessions.

Jon C. Ogg
August 6, 2008