"This is an exciting and critical time for Verenium. We continue to make considerable progress toward developing and financing commercially-viable, next-generation cellulosic ethanol which we believe is an important component of America's future energy mix," said Carlos A. Riva, President and Chief Executive Officer of Verenium. "I am very encouraged by the increasing third-party support for alternative energy solutions - particularly from the federal government with DOE-sponsored grants and loan guarantees, which are vital catalysts for enabling commercial projects to come online quickly."

Company Highlights and Accomplishments

Since the beginning of 2009, Verenium has made significant progress and achieved several important milestones, including:

Corporate

-- Continued to implement aggressive expense management initiatives to

decrease operating expenses and conserve cash;

-- Amended its 8 percent Senior Convertible Notes due April 1, 2012 to

modify certain terms of the notes, an important step towards simplifying

and improving Verenium's capital structure; and

-- Announced key hires and shifts in management to lead the Company to the

next phase of development, including the appointment of James E. Levine

as Executive Vice President and Chief Financial Officer, and the

consolidation the Company's R&D organization to include the

Jennings, LA, pilot and demonstration-scale facilities under Gregory

Powers, Executive Vice President of Research and Development.

Biofuels Business

-- Vercipia, the Company's joint venture with BP, entered the due

diligence phase of the U.S. Department of Energy's Title XVII Loan

Guarantee Program for its first commercial cellulosic ethanol project in

Highlands County, Florida; and

-- Continued the optimization process at the 1.4 million-gallon- per-year

demonstration-scale plant in Jennings, LA, including:

-- Operated the plant on both sugarcane bagasse and energy cane

feedstocks; and

-- Scale-up of on-site enzyme production continued with reproducible

levels of enzyme expression on target with development plans.

Specialty Enzymes Business

-- Key products Phyzyme(R) XP and Fuelzyme(R)-LF have been impacted by

challenging economic and market conditions but continue to maintain

market share;

-- Purifine((R)) has gained traction at commercial-scale and has a strong

pipeline of customer candidates, however, customer adoption rates and

resulting sales have been slower to ramp than expected;

-- Launched Veretase((TM)) alpha-amylase, a high-performance enzyme that

improves the economics and efficiency of the sweetener and beverage

alcohol production markets; and

-- Executed a successful inventory management strategy as a cash management

initiative.

Financial Position

-- Ended the second quarter with unrestricted cash totaling $14.8 million,

of which $4.9 million was held by Vercipia, the Company's joint

venture with BP;

-- Subsequent to June 30, 2009, received a payment of $14 million from BP

as part of the Galaxy Biofuels Joint Development Agreement;

-- Reduced specialty enzyme product inventory to appropriate levels,

reducing working capital and conserving cash; this had a negative impact

on reported product dollar gross margin as unused manufacturing capacity

was expensed rather than being allocated to inventory; and

-- Increased gross operating expenses, reflecting current investment in the

development of cellulosic ethanol technology, however, net of BP's

share of these expenses, Verenium's pro forma net operating

expenses were lower than the second quarter of 2008.

"During the first half of the year Verenium took some important first steps to simplify and address our capital structure, including amending the terms of the outstanding 8 percent convertible notes that would have restricted the Company's future growth. In the near- term we will continue to manage expenses aggressively and will take the actions necessary to build an appropriate capital structure to support our strategy to be a leader in the commercialization of cellulosic ethanol and specialty enzymes," said James E. Levine, Executive Vice President and Chief Financial Officer.

Financial Results

Total revenues for the second quarter and six months ended June 30, 2009 were $16.3 million and $30.7 million, respectively, compared to $18.3 million and $33.5 million for the same periods in the prior year, with product revenues representing more than 60 percent of total revenues in both periods.

Product revenues for the second quarter and six months ended June 30, 2009 were $10.5 million and $21.1 million, respectively, compared to $13.4 million and $24.6 million for same periods in the prior year, representing a decrease of 22 percent for the second quarter and 14 percent decrease for the six months ended June 30, 2009, reflecting the impact of the current economic recession. Gross sales of Phyzyme, the Company's phytase for the animal feed industry sold to Danisco Animal Nutrition, increased during the first half of 2009, as compared to 2008. However, reported Phyzyme revenue in the second quarter of 2009 and six months ended June 30, 2009 was lower than reported revenue for the same period in 2008 due to a larger percentage of Phyzyme being manufactured by Danisco, for which the Company only recognizes the net profit share component in revenue pursuant to current accounting rules. The decrease in product revenue also reflects the Company's discontinuation of its Bayovac- SRS and Quantum product lines during early 2008. The decrease in product revenue from these sources was offset in part by an increase in revenue from Fuelzyme, the Company's alpha amylase for corn ethanol.

Product gross margin decreased in the second quarter of 2009, versus the same period in the prior year, due primarily to a strategic decision to reduce inventory, resulting in lower production volumes and a related decrease in fixed capacity utilization. This decision achieved the benefits of bringing inventory to an appropriate level and conserving cash, but had a negative impact on product gross margin as the fixed manufacturing costs associated with unused capacity were expensed in the quarter rather than being allocated to inventory.