Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company,
today announced financial results for the fourth quarter and fiscal
year ended December 31, 2023, and provided a business update.
“We are thrilled with how we closed out 2023,
and it’s quite clear that the strategic decisions we made last year
are translating into real momentum as we kick off 2024. We recently
executed asset purchases for our lead biotherapeutics asset,
CDX-7108, with Nestlé Health Science, and our newly engineered
dsDNA ligase with Roche. We also completed an out-licensing deal
with Aldevron for our Codex® HiCap RNA Polymerase to extend our
commercial reach into the growing mRNA-based therapeutics market.
Finally, we have made impressive technical progress with our ECO
Synthesis™ manufacturing platform since unveiling the technology
last spring, culminating in the demonstration of gram-scale
synthesis in December. In alignment with our prioritized strategy,
we’re driving value from non-core assets by putting them in the
hands of capable partners while we focus on unlocking the vast
potential of the ECO Synthesis™ manufacturing platform and
returning our foundational, revenue-generating Pharmaceutical
Manufacturing business to double-digit growth this year,” said
Stephen Dilly, MBBS, PhD, Chief Executive Officer of Codexis. “Our
recently announced non-dilutive financing with Innovatus further
strengthens our financial position by both buffering our cash
runway and providing capital to fund our planned ECO Synthesis™
Innovation Lab to further test the ECO Synthesis™ manufacturing
platform in a non-GMP setting. We look forward to several upcoming
milestones, including an important technical update at the TIDES
USA annual meeting in May, as well as initiating early access
customer testing of the ECO Synthesis™ manufacturing platform and
launching our dsRNA ligase program in the second half of this
year.”
Fourth Quarter and Recent Business
Highlights
- In November 2023
at the TIDES Europe annual meeting, Codexis presented a technical
update for its Enzyme-Catalyzed Oligonucleotide (ECO) Synthesis™
manufacturing platform, which is in development to enable the
commercial-scale production of ribonucleic acid interference (RNAi)
therapeutics using an enzymatic route of synthesis. The
presentation focused on the Company’s broader enzyme evolution and
process development efforts for both the iterative nucleotide
addition and the supply of critical nucleotide reagents. Driving
for high volumetric productivity, data highlighted multiple,
consecutive additions of 2’-modified RNA nucleotides to a growing
oligonucleotide sequence, achieving significant coupling
efficiencies with immobilized enzymes. Additionally,
proof-of-concept was presented for an enzymatic “one-pot, two-step”
phosphorylation cascade to manufacture nucleotide reagents for
supply with the ECO Synthesis™ manufacturing platform.
- In November
2023, Codexis announced the formation of its Strategic Advisory
Board (SAB) to guide the Company’s strategic direction and offer
valuable insights to inform the continued development of the ECO
Synthesis™ manufacturing platform. John Maraganore, PhD, founder
and former Chief Executive Officer of Alnylam Pharmaceuticals,
joined the SAB as its inaugural external member. In February 2024,
the Company announced the addition of Masad Damha, PhD, and Jim
Lalonde, PhD, to the SAB. Dr. Damha is the Distinguished James
McGill Professor at McGill University and his research has been
instrumental in the development of new therapeutic drugs based on
RNA targeting and gene editing. Dr. Lalonde is a consultant focused
on enzyme engineering and biotechnology companies and the former
Senior Vice President of Research and Development at Codexis, where
he oversaw the development of more than 50 enzymes for
biotherapeutics, drug manufacturing, nutrition and molecular
diagnostics applications.
- In December
2023, David Butler, PhD, Chief Technology Officer at Hongene
Biotech Corporation, joined Dr. Maraganore and Codexis leadership
for a virtual key opinion leader event focused on the ECO
Synthesis™ technology platform. Drs. Maraganore and Butler
discussed the growth of RNAi therapeutics as a modality, the
manufacturing landscape and the potential role of an enzymatic
route of synthesis to enable the commercial-scale production of
these therapeutics. A replay of the virtual event is accessible on
the Investor Relations section of the Company’s website, located
here.
- In December
2023, Codexis achieved gram-scale synthesis with its ECO Synthesis™
technology platform, demonstrating the preparative-scale
manufacture of an oligonucleotide, composed of the modified
nucleotide building blocks typically used in ribonucleic acid (RNA)
therapeutics, under process-like conditions. Successful completion
of this technical milestone enables Codexis engineers to initiate a
comprehensive assessment of the purity profile for small
interference RNA (siRNA) developed with the ECO Synthesis™
manufacturing platform. Separately, data collected on
process-related parameters provides foundational information for
early models of the siRNA manufacturing process and allows the
Company to open conversations with early access customers on their
RNAi therapeutics manufacturing processes.
- In December
2023, the Company entered into an agreement with Aldevron, a global
leader in the custom development and manufacture of plasmid DNA,
RNA and proteins for the biotech industry, for the global exclusive
license to Codexis’ Codex® HiCap RNA Polymerase. Under the terms of
the deal, Aldevron will receive global manufacturing and
commercialization rights to the Codex® HiCap RNA Polymerase and
Codexis will receive payments for near-term technical milestones,
along with commercial milestones and sales-based royalties.
- In December
2023, Codexis and Nestlé Health Science entered into a purchase
agreement for CDX-7108, an investigational therapy for the
potential treatment of exocrine pancreatic insufficiency (EPI).
Under the terms of the agreement, Codexis will receive up to $45
million in potential milestone payments, including a $5 million
upfront payment received in January 2024, as well as high
single-digit net-sales-based royalties. Codexis will receive up to
an additional $5 million if Nestlé Health Science exercises an
option to purchase two additional early-stage enzymes being
developed for EPI.
- In February
2024, Codexis announced it had entered into a loan facility
agreement with an affiliate of Innovatus Capital Partners, LLC, for
up to $40 million. The non-dilutive capital reinforces the strength
of Codexis’ cash position, provides additional buffer on the
Company’s projected cash runway and enables the accelerated
development of certain elements of the ECO Synthesis™ manufacturing
platform, including the planned build-out of an ECO Synthesis™
Innovation Lab.
- In February
2024, the Company announced it had entered into an exclusive,
global license agreement with Roche for Codexis’ newly engineered
dsDNA ligase. Under the terms of the agreement, Codexis is eligible
to receive upfront and technical milestone payments. This deal
supersedes the prior exclusive license on the evolved T4 DNA
ligase.
Upcoming Milestones
- Codexis plans to
present a technical update on the ECO Synthesis™ manufacturing
platform at the TIDES USA annual meeting in May 2024. During the
event, the Company expects to highlight ECO Synthesis™ platform
data demonstrating the linear synthesis of a full-length
oligonucleotide strand composed of modified nucleotides and
representative of double-stranded siRNA therapeutics.
- Early access
customer testing of the ECO Synthesis™ manufacturing platform
remains on track to initiate in the second half of 2024. Feedback
from this program will provide valuable insights and could lead to
initial commercial licensing opportunities in 2025, ahead of an
anticipated full commercial launch of the platform in 2026.
- The Company
anticipates making its newly engineered, double-stranded RNA
(dsRNA) ligase, or ecoRNA™ ligase, program widely available for
customers in the second half of 2024. As part of Codexis’ initial
market entry into the RNAi therapeutics space, the ecoRNA™ ligase
program is designed to augment and improve traditional
phosphoramidite chemistry by stitching together small, manufactured
strands of RNA. In addition to enabling the more efficient use of
existing facilities, the ecoRNA™ ligase program provides an
opportunity to educate potential customers on the benefits of
incorporating enzymatic solutions as a complement to their current
manufacturing processes.
Fiscal Year
2023 Financial Highlights
- Total revenues,
excluding enzyme sales related to PAXLOVID™, decreased by 2% to
$62.0 million for fiscal year 2023 compared to $63.2 million for
fiscal year 2022. Including enzyme sales related to PAXLOVID™,
total revenues were $70.1 million for fiscal year 2023 compared to
$138.6 million for fiscal year 2022.
- Product
revenues, excluding enzyme sales related to PAXLOVID™, decreased by
16% to $34.8 million for fiscal year 2023 compared to $41.3 million
for fiscal year 2022. Including enzyme sales related to PAXLOVID™,
product revenues were $42.9 million for fiscal year 2023 compared
to $116.7 million for fiscal year 2022.
- R&D revenues
for fiscal year 2023 were $27.2 million compared to $21.9 million
for fiscal year 2022; the increase was primarily due to higher
license fees from Pfizer and Nestlé, offset by lower R&D fees
from existing collaboration agreements.
- Product gross
margin, excluding enzyme sales related to PAXLOVID™, was 63% for
fiscal year 2023 compared to 52% for fiscal year 2022. The increase
was largely due to deferred product revenue with no related costs
in 2023 that was recognized due to the planned termination of an
enzyme supply agreement with a food and feed customer, partially
offset by variability in the product mix. Including enzyme sales
related to PAXLOVID™, product gross margin for fiscal year 2023 was
70% compared to 67% for fiscal year 2022.
- R&D expenses
for fiscal year 2023 were $58.9 million compared to $80.1 million
for fiscal year 2022; the decrease was primarily driven by a
decrease in costs associated with lower headcount, a decrease in
outside services related to manufacturing and regulatory expense,
lower lab supplies expense, and a decrease in lease costs due to
assignment of the San Carlos facility lease.
- Selling, General
& Administrative expenses for fiscal year 2023 were $53.3
million compared to $52.2 million for fiscal year 2022; the
increase was primarily due to higher payroll-based expenses and
higher fees for outside services, partially offset by lower
stock-based compensation costs.
- The net loss for
fiscal year 2023 was $76.2 million, or $1.12 per share, compared to
a net loss of $33.6 million, or $0.51 per share, for the fiscal
year 2022. Excluding enzyme sales related to PAXLOVID™, net loss
for the fiscal year 2023 would have been $84.4 million, or $1.24
per share. Further excluding all charges related to the
restructuring and non-cash impairment charges, net loss for fiscal
year 2023 was $50.8 million, or $0.74 per share.
- As of December
31, 2023, the Company had pro forma cash and cash equivalents of
$70.1 million, including cash and cash equivalents of approximately
$65.1 million as of December 31, 2023, and a $5.0 million upfront
payment received in January 2024 related to the recent Nestlé
transaction. In addition, the Company retained approximately $29.2
million in net proceeds from a previously announced debt financing
in February 2024.
Fourth Quarter
2023 Financial Highlights
- Total revenues,
excluding enzyme sales related to PAXLOVID™, increased by 42% to
$18.4 million for fourth quarter 2023 compared to $13.0 million in
fourth quarter 2022. Including enzyme sales related to PAXLOVID™,
total revenues were $26.6 million in fourth quarter 2023 compared
to $30.4 million in fourth quarter 2022.
- Product
revenues, excluding enzyme sales related to PAXLOVID™, increased by
69% to $9.9 million for fourth quarter 2023 compared to $5.9
million in fourth quarter 2022. Including enzyme sales related to
PAXLOVID™, product revenues were $18.1 million in fourth quarter
2023 compared to $23.3 million in fourth quarter 2022.
- R&D revenues
for fourth quarter 2023 were $8.5 million compared to $7.1 million
in fourth quarter 2022; the increase was primarily due to higher
license fees, offset by lower R&D fees from existing
collaboration agreements.
- Product gross
margin, excluding enzyme sales related to PAXLOVID™, was 71% for
fourth quarter 2023 compared to 44% in fourth quarter 2022. The
increase was largely due to increased sales of higher margin
products. Including enzyme sales related to PAXLOVID™, product
gross margin for fourth quarter 2023 was 84% compared to 64% in
fourth quarter 2022.
- R&D expenses
for fourth quarter 2023 were $11.2 million compared to $19.7
million in fourth quarter 2022; the decrease was primarily driven
by a decrease in costs associated with lower headcount, a decrease
in outside services related to manufacturing and regulatory
expenses and lower lab supply.
- Selling, General
& Administrative expenses for fourth quarter 2023 were $12.2
million compared to $12.3 million in fourth quarter 2022; the
decrease was primarily due to lower payroll-based expenses and
stock-based compensation costs.
- The net loss for
fourth quarter 2023 was $7.2 million, or $0.10 per share, compared
to a net loss of $12.6 million, or $0.19 per share, for fourth
quarter 2022. Excluding enzyme sales related to PAXLOVID™, net loss
for fourth quarter 2023 would have been $15.3 million, or $0.22 per
share.
- Excluding all
non-cash impairment charges, net income for fourth quarter 2023 was
$1.1 million, or $0.02 per share.
2024 Financial
Guidance
Codexis is introducing financial guidance for
2024, as follows:
- Product revenues
are expected to be in the range of $38 million to $42 million,
excluding revenue related to PAXLOVID™.
- R&D revenues
are expected to be in the range of $18 million to $22 million.
- Gross margin on
product revenue is expected to be in the range of 58% to 63%,
excluding revenue related to PAXLOVID™.
- In addition,
Codexis expects that its existing cash and cash equivalents will be
sufficient to fund its planned operations through positive cash
flow, expected around the end of 2026.
Conference Call and Webcast
Codexis will hold a conference call and webcast
today beginning at 4:30 p.m. ET. A live webcast and slide
presentation to accompany the conference call will be
available on the Investors section of the Company website
at www.codexis.com/investors. The conference call dial-in
numbers are 877-705-2976 for domestic callers and 201- 689-8798 for
international callers.
A telephone recording of the call will be
available for 48 hours beginning approximately two hours after the
completion of the call by dialing 877-660-6853 for domestic callers
or 201-612-7415 for international callers. Please use the passcode
13726635 to access the recording. A webcast replay will be
available on the Investors section of the Company
website for 90 days, beginning approximately two hours after
the completion of the call.
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. The Company is currently
developing its proprietary ECO Synthesis™ manufacturing 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 anticipated milestones, including product
launches, technical milestones, data releases and public
announcements related thereto; whether Codexis will be able to, and
the timing of it entering pre-commercial testing of its ECO
Synthesis™ manufacturing platform with select customers in 2024,
entering into initial commercial licensing opportunities in 2025
and the subsequent expected commercial launch in 2026; Codexis’
expectations regarding 2024 product revenues, R&D revenues and
gross margin on product revenue, as well as its ability to fund
planned operations through the end of 2026; Codexis’ ability to
achieve positive cash flow around the end of 2026; Codexis’
expectation that its newly engineered double-stranded ecoRNA™
ligase program will be widely available for customers in 2024 and
the potential of its ecoRNA™ ligase program to, among other things,
improve traditional phosphoramidite chemistry and enable more
efficient use of existing manufacturing infrastructure; Codexis’
expectation that its Pharmaceutical Manufacturing business will
return to growth in 2024; the anticipated use of proceeds under
Codexis’ new loan facility with Innovatus, including the planned
ECO Synthesis™ Innovation Lab; the potential of the ECO Synthesis™
manufacturing platform, including its ability to be broadly
utilized and to enable commercial-scale manufacture of RNAi
therapeutics through an enzymatic route; and expectations regarding
future demand for siRNA and dsRNA. 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™ manufacturing
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; Codexis’ ability to comply with debt
covenants under its loan facility; 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 that
will be filed with the Securities and Exchange Commission (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 and year ended December 31, 2023,
are not necessarily indicative of our operating results for any
future periods.
For More InformationInvestor ContactCarrie
McKim(336) 608-9706ir@codexis.com
Media ContactLauren Musto(650) 421-8205media@codexis.com
Codexis, Inc.Condensed
Consolidated Statements of
Operations(unaudited)(In
Thousands, Except Per Share Amounts)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
Product revenue |
$ |
18,099 |
|
|
$ |
23,300 |
|
|
$ |
42,906 |
|
|
$ |
116,676 |
|
Research and development revenue |
|
8,462 |
|
|
|
7,075 |
|
|
|
27,237 |
|
|
|
21,914 |
|
Total revenues |
|
26,561 |
|
|
|
30,375 |
|
|
|
70,143 |
|
|
|
138,590 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
Cost of product revenue |
|
2,861 |
|
|
|
8,456 |
|
|
|
12,809 |
|
|
|
38,033 |
|
Research and development |
|
11,234 |
|
|
|
19,689 |
|
|
|
58,885 |
|
|
|
80,099 |
|
Selling, general and administrative |
|
12,184 |
|
|
|
12,314 |
|
|
|
53,250 |
|
|
|
52,172 |
|
Restructuring charges |
|
— |
|
|
|
3,167 |
|
|
|
3,284 |
|
|
|
3,167 |
|
Asset impairment and other charges |
|
— |
|
|
|
— |
|
|
|
9,984 |
|
|
|
— |
|
Total costs and operating
expenses |
|
26,279 |
|
|
|
43,626 |
|
|
|
138,212 |
|
|
|
173,471 |
|
Loss from operations |
|
282 |
|
|
|
(13,251 |
) |
|
|
(68,069 |
) |
|
|
(34,881 |
) |
Interest income |
|
906 |
|
|
|
823 |
|
|
|
4,172 |
|
|
|
1,441 |
|
Other income (expense),
net |
|
(8,345 |
) |
|
|
(26 |
) |
|
|
(12,274 |
) |
|
|
124 |
|
Loss before income taxes |
|
(7,157 |
) |
|
|
(12,454 |
) |
|
|
(76,171 |
) |
|
|
(33,316 |
) |
Provision for income
taxes |
|
35 |
|
|
|
151 |
|
|
|
69 |
|
|
|
276 |
|
Net loss |
$ |
(7,192 |
) |
|
$ |
(12,605 |
) |
|
$ |
(76,240 |
) |
|
$ |
(33,592 |
) |
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
$ |
(0.10 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.12 |
) |
|
$ |
(0.51 |
) |
Weighted average common stock
shares used in computing net loss per share, basic and diluted |
|
69,500 |
|
|
|
65,558 |
|
|
|
68,131 |
|
|
|
65,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Codexis, Inc.Condensed
Consolidated Balance
Sheets(unaudited)(In
Thousands)
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
65,116 |
|
|
$ |
113,984 |
|
Restricted cash, current |
|
519 |
|
|
|
521 |
|
Financial assets: |
|
|
|
Accounts receivable |
|
10,036 |
|
|
|
31,904 |
|
Contract assets |
|
815 |
|
|
|
2,116 |
|
Unbilled receivables |
|
9,142 |
|
|
|
7,016 |
|
Total financial assets |
|
19,993 |
|
|
|
41,036 |
|
Less: allowances |
|
(65 |
) |
|
|
(163 |
) |
Total financial assets, net |
|
19,928 |
|
|
|
40,873 |
|
Inventories |
|
2,685 |
|
|
|
2,029 |
|
Prepaid expenses and other current assets |
|
5,218 |
|
|
|
5,487 |
|
Total current assets |
|
93,466 |
|
|
|
162,894 |
|
Restricted cash |
|
1,062 |
|
|
|
1,521 |
|
Investment in non-marketable
equity securities |
|
9,700 |
|
|
|
20,510 |
|
Right-of-use assets -
Operating leases, net |
|
13,137 |
|
|
|
39,263 |
|
Property and equipment,
net |
|
15,487 |
|
|
|
22,614 |
|
Goodwill |
|
2,463 |
|
|
|
3,241 |
|
Other non-current assets |
|
1,246 |
|
|
|
350 |
|
Total assets |
$ |
136,561 |
|
|
$ |
250,393 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
5,947 |
|
|
$ |
3,246 |
|
Accrued compensation |
|
11,246 |
|
|
|
11,453 |
|
Other accrued liabilities |
|
4,735 |
|
|
|
15,279 |
|
Current portion of lease obligations - Operating leases |
|
3,781 |
|
|
|
5,360 |
|
Deferred revenue |
|
10,121 |
|
|
|
13,728 |
|
Total current liabilities |
|
35,830 |
|
|
|
49,066 |
|
Deferred revenue, net of
current portion |
|
640 |
|
|
|
16,881 |
|
Long-term lease obligations -
Operating leases |
|
12,243 |
|
|
|
38,278 |
|
Other long-term
liabilities |
|
1,233 |
|
|
|
1,371 |
|
Total liabilities |
|
49,946 |
|
|
|
105,596 |
|
Stockholders’ equity: |
|
|
|
Common stock |
|
7 |
|
|
|
6 |
|
Additional paid-in
capital |
|
584,138 |
|
|
|
566,081 |
|
Accumulated deficit |
|
(497,530 |
) |
|
|
(421,290 |
) |
Total stockholders’ equity |
|
86,615 |
|
|
|
144,797 |
|
Total liabilities and stockholders’ equity |
$ |
136,561 |
|
|
$ |
250,393 |
|
|
|
|
|
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