Codexis Reports Second Quarter 2023 Financial Results

  • Company Recently Announced Enhanced Strategic Focus and Portfolio Prioritization
  • Anticipate Demonstrating Gram-Scale Synthesis of ECO Synthesis™ Technology for RNAi Therapeutics Production by End of Year
  • Projected Cash Runway to Mid-2026 Funds Important ECO Synthesis™ Milestones Through Commercialization

REDWOOD CITY, Calif., Aug. 03, 2023 (GLOBE NEWSWIRE) -- Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company, today announced financial results for the second quarter ended June 30, 2023, and provided a business update.

“We recently implemented pivotal changes as we further prioritized our portfolio based on where we believe our longstanding enzyme engineering expertise can drive the most significant and sustained value creation,” said Stephen Dilly, MBBS, PhD, President and Chief Executive Officer of Codexis. “After considering a range of the highest potential impact applications of our CodeEvolver® platform, we determined that our utmost priority is finalizing and working to bring to market our ECO Synthesis™ technology to enable commercial scale manufacture of RNAi therapeutics. Unlike our historical focus on one-to-one custom enzyme engineering projects, this platform has the potential to be broadly utilized by many customers to synthesize any siRNA, presenting an opportunity for Codexis to efficiently capture a meaningful share of this growing market. As a result of these strategic decisions, we have projected cash runway to mid-2026 and look forward to sharing further updates as we work to realize the potential value of the ECO Synthesis™ platform.”

Second Quarter and Recent Business Highlights

  • In May 2023, at the TIDES USA annual meeting, Codexis unveiled its proprietary Enzyme-Catalyzed Oligonucleotide (ECO) Synthesis™ technology platform designed to enable the commercial scale manufacture of RNA interference (RNAi) therapeutics, including small interfering RNA (siRNA). With over 450 RNAi therapies currently in clinical development, including more than 40 assets in Phase 2 and Phase 3 clinical trials targeting disease indications impacting millions of patients, demand for siRNA is projected to outpace current production capabilities in the coming years. Codexis’ ECO Synthesis™ technology is specifically engineered to address the scalability and sustainability challenges associated with traditional phosphoramidite chemistry methods by potentially enabling the manufacture of these therapeutics through an enzymatic route. The Company anticipates demonstrating gram-scale synthesis of the platform by the end of 2023.
  • In July 2023, the Company announced an update to its strategy to focus resources on programs with the strongest probability of creating significant value in the near-term and beyond. As part of this enhanced strategic focus, Codexis is prioritizing the advancement and commercialization of its ECO Synthesis™ technology platform and its highly complementary Pharmaceutical Manufacturing business. The Company also streamlined operations, including the discontinuation of investment in certain development programs, primarily in Biotherapeutics, consolidated operations to its headquarters and reduced headcount by approximately 25%. As a result of these actions, Codexis has extended its projected cash runway to mid-2026, including funding for key ECO Synthesis™ milestones through commercialization.

Key Upcoming Milestones

  • Codexis expects to demonstrate gram-scale synthesis with its ECO Synthesis™ technology platform by the end of 2023. This critical milestone provides a key point of technical validation to enable pre-commercial customer testing of the platform.
  • The Company anticipates that the ECO Synthesis™ technology platform will enter pre-commercial testing with select customers in 2024. Early customer feedback will provide valuable insights that will be taken into further process development in preparation for the planned commercial launch of the platform.
  • The Company anticipates making its double-stranded RNA (dsRNA) ligase available for customers in 2024. As Codexis’ market entry point in RNAi therapeutics production, the dsRNA ligase is designed to integrate with existing phosphoramidite chemistries to stitch together small, manufactured strands of RNA.

Second Quarter2023 Financial Highlights

  • Total revenues, excluding enzyme sales related to PAXLOVID™, increased by 46% to $21.3 million for second quarter 2023 compared to $14.6 million in second quarter 2022. Including enzyme sales related to PAXLOVID™, total revenues were $21.3 million in second quarter 2023 compared to $38.4 million in second quarter 2022. On a segment basis, $19.3 million in revenue was from the Performance Enzymes segment and $2.0 million was from Biotherapeutics in second quarter 2023.
  • Product revenues, excluding enzyme sales related to PAXLOVID™, increased by 2% to $11.0 million for second quarter 2023 compared to $10.9 million in second quarter 2022. Including enzyme sales related to PAXLOVID™, product revenues were $11.0 million in second quarter 2023 compared to $34.6 million in second quarter 2022.
  • R&D revenues for second quarter 2023 were $10.3 million compared to $3.8 million in second quarter 2022; the increase was primarily due to higher revenue from license and development agreements, which was partially offset by lower research and development fees from existing collaboration agreements being recognized in 2023 as compared to the same period in the prior year.
  • Product gross margin for second quarter 2023 was 71% compared to 67% in second quarter 2022; the increase was largely driven by variability in the product mix which was partially offset by revenue recognized with no related cost in the second quarter of 2023.
  • R&D expenses for second quarter 2023 were $17.3 million compared to $19.1 million in second quarter 2022; the decrease was primarily driven by a decrease in costs associated with lower headcount, lower lab supply costs, lower stock-based compensation costs and a decrease in outside services related to manufacturing and regulatory expenses.
  • Selling, General & Administrative expenses for second quarter 2023 were $13.4 million compared to $10.7 million in second quarter 2022; the increase was primarily due to headcount-related expenses and fees for outside services.
  • The net loss for second quarter 2023 was $11.5 million, or $0.17 per share, compared to a net loss of $2.6 million, or $0.04 per share, for second quarter 2022. Excluding enzyme sales related to PAXLOVID™, net loss for second quarter 2022 was $20.5 million, or $0.31 per share.
  • As of June 30, 2023, the Company had $92.1 million in cash and cash equivalents. Codexis expects its existing cash and cash equivalents will be sufficient to fund its planned operations to mid-2026.

2023 Financial Guidance

Codexis reiterated its 2023 financial guidance issued on July 20, 2023, as follows:

  • Product revenues are expected to be in the range of $30 million to $35 million, excluding enzyme sales related to PAXLOVID™.
  • R&D revenues are expected to be in the range of $21 million to $24 million.
  • Gross margin on product revenue is expected to be in the range of 55% to 65%.

About Codexis

Codexis is a leading enzyme engineering company leveraging its proprietary CodeEvolver® technology platform to discover, develop and enhance novel, high-performance enzymes and other classes of proteins. Codexis enzymes solve for real-world challenges associated with small molecule pharmaceuticals manufacturing and nucleic acid synthesis, and the Company is currently developing its proprietary ECO Synthesis™ platform to enable the scaled manufacture of RNAi therapeutics through an enzymatic route. Codexis’ unique enzymes can drive improvements such as higher yields, reduced energy usage and waste generation, improved efficiency in manufacturing and greater sensitivity in genomic and diagnostic applications. For more information, visit https://www.codexis.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “suggest,” “target,” “on track,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. To the extent that statements contained in this press release are not descriptions of historical facts, they are forward-looking statements reflecting the current beliefs and expectations of management, including but not limited to statements regarding whether Codexis will be able to, and the timing of it demonstrating gram-scale synthesis of its ECO Synthesis™ technology by the end of 2023 and the subsequent expected launch; Codexis’ expectations regarding 2023 total revenues, R&D revenues and gross margin on product revenue, as well as its ability to fund planned operations through the end of 2026; the potential of the ECO Synthesis™ platform, including its ability to be broadly utilized, and it providing an opportunity for Codexis to efficiently capture meaningful market share; future demand for siRNA; and Codexis’ expectations regarding the ECO Synthesis™ platform entering pre-commercial testing in 2024 and making the dsRNA ligase available for customers in 2024. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Codexis’ control and that could materially affect actual results. Factors that could materially affect actual results include, among others: Codexis’ dependence on its licensees and collaborators; if any of its collaborators terminate their development programs under their respective license agreements with Codexis; Codexis may need additional capital in the future in order to expand its business; if Codexis is unable to successfully develop new technology such as its ECO Synthesis™ platform and dsRNA; Codexis dependence on a limited number of products and customers, and potential adverse effects to Codexis’ business if its customers’ products are not received well in the markets; if Codexis is unable to develop and commercialize new products for its target markets; if competitors and potential competitors who have greater resources and experience than Codexis develop products and technologies that make Codexis’ products and technologies obsolete; if Codexis is unable to accurately forecast financial and operational performance; and market and economic conditions may negatively impact Codexis business, financial condition and share price. Additional information about factors that could materially affect actual results can be found in Codexis’ Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 27, 2023 and in Codexis’ Quarterly Report on Form 10-Q filed with the SEC on or about the date hereof, including under the caption “Risk Factors,” and in Codexis’ other periodic reports filed with the SEC. Codexis expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law. Codexis’ results for the quarter June 30, 2023 are not necessarily indicative of our operating results for any future periods.

For More Information

Investor Contact
Carrie McKim
(336) 608-9706
ir@codexis.com

Media Contact
Lauren Musto
(781) 572-1147
media@codexis.com

 
 
Codexis, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In Thousands, Except Per Share Amounts)
 
  Three Months Ended June 30,   Six Months Ended June 30,
    2023       2022       2023       2022  
Revenues:              
Product revenue $ 11,048     $ 34,645     $ 19,412     $ 65,335  
Research and development revenue   10,275       3,761       14,893       8,411  
Total revenues   21,323       38,406       34,305       73,746  
Costs and operating expenses:              
Cost of product revenue   3,178       11,270       7,698       19,791  
Research and development   17,334       19,089       33,988       38,590  
Selling, general and administrative   13,365       10,656       28,765       26,360  
Restructuring charges   72             145        
Total costs and operating expenses   33,949       41,015       70,596       84,741  
Loss from operations   (12,626 )     (2,609 )     (36,291 )     (10,995 )
Interest income   1,121       140       2,209       182  
Other expense, net   (9 )     (63 )     (33 )     (66 )
Loss before income taxes   (11,514 )     (2,532 )     (34,115 )     (10,879 )
Provision for income taxes   9       108       25       117  
Net loss $ (11,523 )   $ (2,640 )   $ (34,140 )   $ (10,996 )
               
Net loss per share, basic and diluted $ (0.17 )   $ (0.04 )   $ (0.51 )   $ (0.17 )
Weighted average common stock shares used in computing net loss per share, basic and diluted   67,573       65,288       66,756       65,193  
               
Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
 
  June 30, 2023   December 31, 2022
Assets      
Current assets:      
Cash and cash equivalents $ 92,093     $ 113,984  
Restricted cash, current   524       521  
Financial assets:      
Accounts receivable   8,806       31,904  
Contract assets   2,248       2,116  
Unbilled receivables   10,691       7,016  
Total financial assets   21,745       41,036  
Less: allowances   (133 )     (163 )
Total financial assets, net   21,612       40,873  
Inventories   2,052       2,029  
Prepaid expenses and other current assets   3,763       5,487  
Total current assets   120,044       162,894  
Restricted cash   1,530       1,521  
Investment in non-marketable equity securities   21,378       20,510  
Right-of-use assets - Operating leases, net   36,745       39,263  
Property and equipment, net   23,325       22,614  
Goodwill   3,241       3,241  
Other non-current assets   498       350  
Total assets $ 206,761     $ 250,393  
       
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable $ 4,042     $ 3,246  
Accrued compensation   8,538       11,453  
Other accrued liabilities   7,001       15,279  
Current portion of lease obligations - Operating leases   5,626       5,360  
Deferred revenue   10,529       13,728  
Total current liabilities   35,736       49,066  
Deferred revenue, net of current portion   10,110       16,881  
Long-term lease obligations - Operating leases   35,379       38,278  
Other long-term liabilities   1,405       1,371  
Total liabilities   82,630       105,596  
       
Stockholders' equity:      
Common stock   6       6  
Additional paid-in capital   579,555       566,081  
Accumulated deficit   (455,430 )     (421,290 )
Total stockholders' equity   124,131       144,797  
Total liabilities and stockholders' equity $ 206,761     $ 250,393  
               
Codexis, Inc.
Segmented Information
(Unaudited)
(In Thousands)
 
  Three Months Ended June 30, 2023   Three Months Ended June 30, 2022
  Performance Enzymes   Novel Biotherapeutics   Total   Performance Enzymes   Novel Biotherapeutics   Total
Revenues:                      
Product revenue $ 11,048     $     $ 11,048     $ 34,645     $     $ 34,645  
Research and development revenue   8,260       2,015       10,275       1,885       1,876       3,761  
Total revenues   19,308       2,015       21,323       36,530       1,876       38,406  
Costs and operating expenses:                      
Cost of product revenue   3,178             3,178       11,270             11,270  
Research and development(1)   7,856       8,240       16,096       6,929       11,078       18,007  
Selling, general and administrative(1)   2,032       191       2,223       3,876       680       4,556  
Restructuring charges         72       72                    
Total segment costs and operating expenses   13,066       8,503       21,569       22,075       11,758       33,833  
Income (loss) from operations $ 6,242     $ (6,488 )     (246 )   $ 14,455     $ (9,882 )     4,573  
Corporate costs(2)           (9,788 )             (5,789 )
Unallocated depreciation and amortization           (1,480 )             (1,316 )
Loss before income taxes         $ (11,514 )           $ (2,532 )
  Six Months Ended June 30, 2023   Six Months Ended June 30, 2022
  Performance Enzymes   Novel Biotherapeutics   Total   Performance Enzymes   Novel Biotherapeutics   Total
Revenues:                      
Product revenue $ 19,412     $     $ 19,412     $ 65,335     $     $ 65,335  
Research and development revenue   9,382       5,511       14,893       4,294       4,117       8,411  
Total revenues   28,794       5,511       34,305       69,629       4,117       73,746  
Costs and operating expenses:                      
Cost of product revenue   7,698             7,698       19,791             19,791  
Research and development(1)   15,955       15,552       31,507       13,051       23,424       36,475  
Selling, general and administrative(1)   4,830       1,142       5,972       7,416       1,400       8,816  
Restructuring charges         145       145                    
Total segment costs and operating expenses   28,483       16,839       45,322       40,258       24,824       65,082  
Income (loss) from operations $ 311     $ (11,328 )     (11,017 )   $ 29,371     $ (20,707 )     8,664  
Corporate costs(2)           (20,152 )             (16,994 )
Unallocated depreciation and amortization           (2,946 )             (2,549 )
Loss before income taxes         $ (34,115 )           $ (10,879 )
                       

(1) Research and development expenses and selling, general and administrative expenses exclude depreciation and amortization of finance leases.
(2) Corporate costs include unallocated selling, general and administrative expense, interest income, and other expense, net.


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