Achieves First Milestone Payment from GSK
Introduces 2015 financial guidance
-- Conference call begins at 4:30 p.m. Eastern time today --
REDWOOD CITY, Calif., March 3, 2015 (GLOBE NEWSWIRE) -- Codexis, Inc. (Nasdaq:CDXS), a leading developer of biocatalysts for the pharmaceutical and fine chemical industries, announces financial results for the fourth quarter and year ended December 31, 2014, and introduces financial guidance for 2015.
“I’m proud to report a strong finish to a year highlighted by significant business and financial progress,” said Codexis President and CEO John Nicols. “In December we received our first milestone payment under a non-exclusive licensing agreement with GSK that we announced last July. The technology transfer process is progressing well and we expect to receive an additional milestone and to initiate new projects in 2015.
“We met all of our financial guidance metrics for 2014. We grew revenues to more than $35 million, improved gross margin to 72% from 54% in the prior year and reported cash, cash equivalents and short-term investments at December 31, 2014 of $26.5 million compared with $25.1 million at December 31, 2013. We also continued to build momentum in the business by closing out the year with another quarter of significant R&D revenue growth, introducing our novel enzyme therapeutic candidate for PKU, and expanding our customer base in both the pharmaceuticals and food industries.
“We believe we are well positioned for another year of growth in 2015 and continued movement toward profitability,” added Nicols. “We have the ability to engineer novel proteins quickly and efficiently which helps our clients to manufacture their products more efficiently. We address a significant market opportunity with the ability to reduce costs for pharmaceutical clients and deliver value in many additional applications.”
Fourth Quarter Financial Highlights:
Total revenues for the quarter ended December 31, 2014 increased 49% to $14.2 million from $9.5 million for the fourth quarter of 2013. Revenues were comprised of $4.7 million in biocatalyst product sales, $7.8 million in biocatalyst research and development revenue, which included a $5.0 million milestone payment from the GSK licensing agreement, and $1.7 million from the revenue-sharing arrangement with Exela Pharma Sciences for sales of argatroban injectable drug. Total revenues in the fourth quarter of 2013 included biocatalyst product sales of $3 million to a major pharmaceutical customer.
Gross margin on total revenue for the fourth quarter of 2014 was 75% compared to 50% for the fourth quarter of 2013.
Research and development expenses for the fourth quarter of 2014 decreased by $3.8 million, or 43%, to $5.0 million, due primarily to a $1.6 million write down recorded in the fourth quarter of 2013 related to the winding down of the company’s biofuels business, and lower employee-related costs associated with the company’s restructuring implemented in late 2013. Selling, general and administrative expenses in the fourth quarter of 2014 decreased 11% to $5.1 million compared with the same period of 2013 due mainly to reductions in employee-related expenses and other discretionary expenses.
Net income for the fourth quarter of 2014 of $0.3 million, or $0.01 per basic and diluted share, compared favorably with a net loss of $9.8 million, or $0.26 per basic and diluted share, for the fourth quarter of 2013. Non-GAAP adjusted net income was $2.8 million, or $0.07 per basic and diluted share, a significant improvement from a non-GAAP adjusted net loss of $4.7 million, or $0.12 per basic and diluted share, reported for the fourth quarter of 2013.
Full Year 2014 Financial Highlights:
Total revenues for the year ended December 31, 2014 increased 11% from 2013 to $35.3 million, and included $13.1 million in biocatalyst product sales, $14.9 million in biocatalyst research and development revenue and $7.3 million from the revenue-sharing agreement with Exela. Total revenues in 2013 included biocatalyst product sales of $6.2 million to our customers who sold hepatitis C products.
Gross margin on total revenue for 2014 of 72% improved from 54% for 2013.
Research and development expenses for 2014 of $22.8 million decreased 28% from the prior year, resulting primarily from lower employee-related expenses associated with the company-wide restructuring implemented in late 2013, and decreased depreciation expense resulting from the disposal and impairment of certain equipment previously used in discontinued R&D activities. Selling, general and administrative expenses for 2014 decreased 18% to $21.9 million compared with 2013, due mainly to lower employee-related expenses, consulting and outside services.
The net loss for 2014 of $19.1 million, or $0.50 per basic and diluted share, compared favorably with a net loss of $41.3 million, or $1.08 per basic and diluted share, for 2013. The non-GAAP adjusted net loss for 2014 was $5.8 million, or $0.15 per basic and diluted share, a significant improvement over the adjusted non-GAAP net loss of $25 million, or $0.65 per basic and diluted share, in 2013.
Cash, cash equivalents and short-term investments at December 31, 2014 were $26.5 million, compared with $25.1 million as of December 31, 2013.
Financial Outlook
Codexis is introducing financial guidance for 2015, as follows:
- Total revenues of $39 million to $42 million, representing a 10% to 19% increase over 2014. This revenue guidance assumes recognizing a $6.5 million milestone related to the company’s non-exclusive licensing agreement with GSK expected towards the end of 2015.
- Continued gross margins as a percent of total sales in the range of 70% to 75%.
Non-GAAP Financial Measures
Consolidated financial information has been presented in accordance with GAAP as well as on a non-GAAP basis. On a non-GAAP basis, financial measures exclude non-cash items such as depreciation expense, amortization expense and stock-based compensation expense, as well as one-time non-cash impairment and change in fair value of assets held for use. Non-GAAP financial measures presented are: non-GAAP net income/loss, non-GAAP net income/loss per share, non-GAAP research and development expense and non-GAAP selling, general and administrative expense. Non-GAAP operating expenses exclude employee stock-based compensation expense, amortization of intangible assets, depreciation of fixed assets, the impairment of certain lab equipment used in research and development activities, a decrease in fair value of assets held for sale and the gain on sale of Codexis’ former Hungarian subsidiary.
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