Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company,
today announced financial results for the first quarter ended March
31, 2024, and provided a business update.
“We are off to a strong start this year with our
first quarter financial results, and we are on track to deliver
full year product revenue growth of at least ten percent. We have
also added flexibility to our projected cash runway through our
debt financing deal with Innovatus. In addition to these positive
financial indicators, we recently secured our first large pharma
order for an engineered double-stranded RNA ligase. Together, these
transactions have further strengthened our path to positive cash
flow,” said Stephen Dilly, MBBS, PhD, Chief Executive Officer of
Codexis. “We are in the final stages of enzymatically synthesizing
a full-length oligonucleotide and expect to achieve this historic
result by TIDES USA later this month. We are already receiving
significant meeting interest from potential customers and partners
to discuss enzymatic synthesis, and our dsRNA ligase is in early
access customer testing with a host of other prospective customers.
Finally, we remain on track to engage multiple early access
customers for the ECO Synthesis™ platform in the second half of
this year.”
First Quarter and Recent Business
Highlights
- In March 2024,
the Company received a low-to-mid-single-digit million-dollar order
for its double-stranded RNA (dsRNA) ligase from a top tier
pharmaceutical company. This significant transaction reinforces the
increasing need from customers to enzymatically join separate RNA
fragments via a ligation step.
- 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 flexibility 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 Sequencing Solutions, Inc. for
Codexis’ newly engineered dsDNA ligase. Under the terms of the
agreement, Codexis is eligible to receive a total of mid-single
digit million dollars in upfront and technical milestone
payments.
- In April 2024,
Codexis completed an asset purchase agreement to sell its
Homocystinuria (HCU) and Maple Syrup Urine Disease (MSUD)
compounds. Codexis is eligible to receive development milestone
payments and future royalties on net sales.
- Three leading
experts in oligonucleotide research, development and
commercialization have joined Codexis’ Strategic Advisory Board
(SAB) since the first of the year. Masad Damha, PhD, Distinguished
James McGill Professor at McGill University; Jim Lalonde, PhD,
biotechnology consultant for start-up companies in enzyme
engineering and former Senior Vice President of Research and
Development at Codexis; and Carole Cobb, MBA, biotechnology
consultant and former Chief Operating Officer at GreenLight
Biosciences, will collaborate with inaugural external member John
Maraganore, PhD, Founder and Former Chief Executive Officer at
Alnylam Pharmaceuticals. The SAB held its first meeting at the end
of April.
Upcoming Milestones
- Codexis is
finalizing the enzymatic synthesis of a full-length oligonucleotide
with its ECO Synthesis™ manufacturing platform, which it expects to
complete and present at the TIDES USA annual meeting being held May
14-17, 2024, in Boston.
- The Company
continues to build upon its capability in dsRNA ligation with the
launch of its ligase screening service at the TIDES USA meeting and
the anticipated launch of its ligase kits in the second half of
2024. As part of Codexis’ initial market entry into the RNAi
therapeutics space, the dsRNA 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 chemical synthesis with
the potential to reduce overall costs, the dsRNA ligase provides an
opportunity to educate potential customers on the benefits of
incorporating enzymatic solutions as a complement to their current
manufacturing processes.
- Codexis expects
to substantially complete the build-out of its ECO Synthesis™
Innovation Lab by the end of 2024. In addition to providing a
strong basis for partnering discussions and early access customer
shared development programs, this facility will enable Codexis to
demonstrate its RNA ligation capabilities and test new nucleotide
modifications and conjugation modalities; develop tech transfer
protocols and ensure flexibility with a small-scale footprint; and
allow the Company to model scalability into full-scale GMP
manufacturing.
- Early access
customer testing of the full ECO Synthesis™ manufacturing platform
remains on track to begin in the second half of 2024. Customer
feedback will provide valuable insights and the Company expects it
to lead to potential commercial licensing opportunities in the
second half of 2025, ahead of an anticipated full commercial launch
of the platform in 2026.
First Quarter
2024 Financial Highlights
- Total revenues
increased by 32% to $17.1 million for first quarter 2024 compared
to $13.0 million in first quarter 2023.
- Product revenues
increased by 14% to $9.6 million for first quarter 2024 compared to
$8.4 million in first quarter 2023.
- R&D revenues
for first quarter 2024 were $7.5 million compared to $4.6 million
in first quarter 2023; the increase was primarily due to the
recognition of $6.0 million related to the agreement with Roche for
an exclusive, global license for the Company’s newly engineered
double-stranded DNA ligase. First quarter 2023 R&D revenues
included $3.5 million related to Biotherapeutics programs that the
Company previously announced it was discontinuing.
- Product gross
margin was 49% for first quarter 2024 compared to 46% in first
quarter 2023. The improvement in gross margin was largely due to
variability in the product mix.
- R&D expenses
for first quarter 2024 were $11.2 million compared to $16.7 million
in first quarter 2023; the decrease was primarily driven by a
decrease in costs associated with lower headcount, a decrease in
outside services related to Chemistry, Manufacturing and Controls
and regulatory expenses, a decrease in lease costs due to the
assignment of the Company’s San Carlos facility lease during the
fourth quarter of 2023 and lower lab supply costs.
- Selling, General
& Administrative expenses for first quarter 2024 were $12.9
million compared to $15.4 million in first quarter 2023; the
decrease was primarily due to a decrease in costs associated with
lower headcount, a decrease in consulting and outside services and
lower marketing and advertising costs, partially offset by higher
non-cash stock-based compensation expense.
- The net loss for
first quarter 2024 was $11.5 million, or $0.16 per share, compared
to a net loss of $22.6 million, or $0.34 per share, for first
quarter 2023.
- As of March 31,
2024, the Company had $85.5 million in cash, cash equivalents and
investments. Codexis expects its existing cash, cash equivalents
and investments will be sufficient to fund its planned operations
through positive cash flow, expected around the end of 2026.
2024 Financial
Guidance
Codexis reiterated its 2024 financial guidance
issued on February 28, 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™.
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 multiple customers in 2024,
entering into initial commercial licensing opportunities in 2025
and the subsequent expected full commercial launch in 2026; whether
Codexis will be able to, and the timing of it substantially
completing, the build-out of its planned ECO Synthesis™ Innovation
Lab; 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 dsRNA ligase kits will launch
in the second half of 2024 and the potential of such dsRNA ligase
to, among other things, augment and improve traditional
phosphoramidite chemistry, enable more efficient use of existing
manufacturing infrastructure and reduce overall costs; potential
receipt by Codexis of certain milestone payments pursuant to its
recent global license agreement with Roche; its asset purchase
agreement for Codexis’ HCU and MSUD compounds; the anticipated use
of proceeds under Codexis’ new loan facility with Innovatus; 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 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 ligase;
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 filed with the Securities and Exchange Commission (SEC)
on February 28, 2024 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 ended March 31,
2024, 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 March 31, |
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
Product revenue |
$ |
9,551 |
|
|
$ |
8,364 |
|
Research and development revenue |
|
7,522 |
|
|
|
4,618 |
|
Total revenues |
|
17,073 |
|
|
|
12,982 |
|
Costs and operating
expenses: |
|
|
|
Cost of product revenue |
|
4,855 |
|
|
|
4,521 |
|
Research and development |
|
11,246 |
|
|
|
16,655 |
|
Selling, general and administrative |
|
12,860 |
|
|
|
15,399 |
|
Restructuring charges |
|
— |
|
|
|
72 |
|
Total costs and operating
expenses |
|
28,961 |
|
|
|
36,647 |
|
Loss from operations |
|
(11,888 |
) |
|
|
(23,665 |
) |
Interest income |
|
909 |
|
|
|
1,089 |
|
Other expense, net |
|
(516 |
) |
|
|
(25 |
) |
Loss before income taxes |
|
(11,495 |
) |
|
|
(22,601 |
) |
Provision for income
taxes |
|
10 |
|
|
|
16 |
|
Net loss |
$ |
(11,505 |
) |
|
$ |
(22,617 |
) |
|
|
|
|
Net loss per share, basic and
diluted |
$ |
(0.16 |
) |
|
$ |
(0.34 |
) |
Weighted average common stock
shares used in computing net loss per share, basic and diluted |
|
69,854 |
|
|
|
65,931 |
|
|
|
|
|
|
|
|
|
Codexis, Inc.Condensed
Consolidated Statements of Comprehensive
Loss(Unaudited)(In
Thousands)
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Net loss |
$ |
(11,505 |
) |
|
$ |
(22,617 |
) |
Other comprehensive loss: |
|
|
|
Unrealized loss on available-for-sale short-term investments, net
of tax |
|
(16 |
) |
|
|
— |
|
Comprehensive loss |
$ |
(11,521 |
) |
|
$ |
(22,617 |
) |
|
|
|
|
Codexis, Inc.Condensed
Consolidated Balance
Sheets(Unaudited)(In
Thousands)
|
March 31, 2024 |
|
December 31, 2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
58,046 |
|
|
$ |
65,116 |
|
Restricted cash, current |
|
518 |
|
|
|
519 |
|
Short-term investments |
|
27,469 |
|
|
|
— |
|
Financial assets: |
|
|
|
Accounts receivable |
|
6,240 |
|
|
|
10,036 |
|
Contract assets |
|
2,571 |
|
|
|
815 |
|
Unbilled receivables |
|
5,459 |
|
|
|
9,142 |
|
Total financial assets |
|
14,270 |
|
|
|
19,993 |
|
Less: allowances |
|
(65 |
) |
|
|
(65 |
) |
Total financial assets, net |
|
14,205 |
|
|
|
19,928 |
|
Inventories |
|
2,441 |
|
|
|
2,685 |
|
Prepaid expenses and other current assets |
|
5,269 |
|
|
|
5,218 |
|
Total current assets |
|
107,948 |
|
|
|
93,466 |
|
Restricted cash |
|
1,062 |
|
|
|
1,062 |
|
Investment in non-marketable
equity securities |
|
9,700 |
|
|
|
9,700 |
|
Right-of-use assets -
Operating leases, net |
|
12,364 |
|
|
|
13,137 |
|
Property and equipment,
net |
|
14,668 |
|
|
|
15,487 |
|
Goodwill |
|
2,463 |
|
|
|
2,463 |
|
Other non-current assets |
|
1,354 |
|
|
|
1,246 |
|
Total assets |
$ |
149,559 |
|
|
$ |
136,561 |
|
Liabilities and
Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
3,465 |
|
|
$ |
5,947 |
|
Accrued compensation |
|
6,502 |
|
|
|
11,246 |
|
Other accrued liabilities |
|
5,374 |
|
|
|
4,735 |
|
Current portion of lease obligations - Operating leases |
|
3,879 |
|
|
|
3,781 |
|
Deferred revenue |
|
9,860 |
|
|
|
10,121 |
|
Total current liabilities |
|
29,080 |
|
|
|
35,830 |
|
Deferred revenue, net of
current portion |
|
630 |
|
|
|
640 |
|
Long-term lease obligations -
Operating leases |
|
11,232 |
|
|
|
12,243 |
|
Long-term debt |
|
28,102 |
|
|
|
— |
|
Other long-term
liabilities |
|
1,248 |
|
|
|
1,233 |
|
Total liabilities |
|
70,292 |
|
|
|
49,946 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
588,311 |
|
|
|
584,138 |
|
Accumulated other comprehensive income |
|
(16 |
) |
|
|
— |
|
Accumulated deficit |
|
(509,035 |
) |
|
|
(497,530 |
) |
Total stockholders' equity |
|
79,267 |
|
|
|
86,615 |
|
Total liabilities and stockholders' equity |
$ |
149,559 |
|
|
$ |
136,561 |
|
|
|
|
|
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