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Codexis Reports Second Quarter 2022 Financial Results

·15 min read
Codexis, Inc.
Codexis, Inc.

Total Revenue up 51% and Product Revenue up 135% YOY

2022 Total Revenue Guidance of $135M-$141M,
Including Product Revenues of $112M-$118M

REDWOOD CITY, Calif., Aug. 04, 2022 (GLOBE NEWSWIRE) -- Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company enabling the promise of synthetic biology, today announced financial results for the second quarter ended June 30, 2022 and provided a business update.

“We continue to make solid progress across Codexis’ many exciting growth drivers, and we are particularly pleased with the strength of our product revenue during the first half of 2022,” said John Nicols, President and CEO of Codexis. “We are encouraged by the robust product sales momentum seen in Codexis’ base of key customers in the sustainable manufacturing market, not only among our large pharmaceutical customers, but also within the food sector. In Life Science Tools, our collaborations with innovative partners like Molecular Assemblies, Inc. (MAI) and seqWell Inc. (seqWell) remain on track to leverage our CodeEvolver® platform in generating value for cutting-edge life science applications. We are also making steady advancements with our self-funded and customer-driven programs in the Biotherapeutics segment, where we are focused on harnessing the power of our platform as a drug discovery engine to build a high-value pipeline of oral biologic and gene therapy candidates.”

Mr. Nicols continued, “I am incredibly proud of what we have accomplished together over the past decade and believe our future is in excellent hands. We have built a highly responsive and strengthened organization, one that can quickly and reliably deliver enzymes to help our customers achieve their business objectives while also deftly adapting to meet new demands in an ever-changing business environment. As I take a step back to provide much needed support to my family, I am grateful to reflect on an incredibly fulfilling period leading this special company to new heights. I look forward to supporting Codexis as a Strategic Advisor and member of the Board, and I have no doubt that the business will continue to flourish under Stephen’s capable leadership.”

Key Performance Indicators and Recent Business Highlights

  • Product revenues increased 135% to $34.6 million in the second quarter, primarily driven by revenue from sales of CDX-616 used in the manufacture of PAXLOVID™, Pfizer’s COVID-19 therapeutic. Codexis previously announced the Company has entered into a multi-year agreement with Pfizer for the supply of a proprietary high-performance enzyme used to manufacture a critical intermediate for nirmatrelvir, an active pharmaceutical ingredient (API) in PAXLOVID™.

  • In the second quarter, Codexis had 18 customers who contributed over $100,000 in revenue, six of which contributed over $1 million in revenue.

  • MAI and Codexis announced the execution of a Commercial License and Enzyme Supply Agreement, enabling MAI to utilize Codexis’ evolved terminal deoxynucleotidyl transferase (TdT) enzyme in MAI’s Fully Enzymatic Synthesis™ (or FES™) technology. The companies previously announced the successful development of this proprietary, high performing enzyme to deliver unparalleled coupling efficiency and the ability to more rapidly synthesize longer DNA sequences with fewer errors. MAI plans to provide select companies and institutions with access to a Key Customer Program slated to begin later this year with a full commercial launch planned in 2023.

  • seqWell, a developer of transformative library preparation products for next generation sequencing applications, and Codexis announced a partnership and strategic investment. Codexis led seqWell’s Series C financing with a $5.0 million investment, and the companies plan to collaborate using Codexis’ CodeEvolver® platform for enzyme optimization in seqWell’s growing portfolio of genomics workflow and library preparation products.

  • The Company presented posters detailing three of its gene therapy programs at the American Society of Gene and Cell Therapy (ASGCT) 25th Annual Meeting in May. The pre-clinical data highlighted enzyme variants engineered with Codexis’ CodeEvolver® platform to offer potentially improved efficacy as compared to current enzymes when administered as transgenes in gene therapies for Hemophilia A, Fabry Disease, and Pompe Disease.

  • Merck and Codexis published a paper in the peer-reviewed journal Science, detailing the development of a suite of enzymes and their application for site-selective synthesis of insulin bioconjugates. The publication describes the development and optimization of enzymes using Codexis’ proprietary CodeEvolver® technology platform.

Recent Corporate News

  • The Board of Directors appointed Dr. Stephen Dilly, current Codexis Board member and biotechnology veteran, as the next President and CEO of Codexis, effective August 9, 2022. Dr. Dilly will succeed John Nicols, who will retire as President and CEO for family reasons after leading the Company’s transformation and subsequent growth for the last decade. Mr. Nicols will remain on Codexis’ Board through the annual meeting in June 2023 and will assume a new multi-year role as Strategic Advisor to provide ongoing support to the Company.

Pipeline Update

Codexis published its annual pipeline snapshot as of June 30, 2022, which is available on the Presentations page of the Company’s investor relations website. Highlights include:

  • Total Number of Programs: The total number of commercial products and pipeline programs as of June 30, 2022 increased by over 20% to 94 from 78 a year ago.

  • Commercial Products by Market: Codexis had 22 commercial products as of June 30, 2022 (up from 17 a year ago), with 14 in Pharma Manufacturing (up from 12), and 8 in Food and Life Science Tools (up from 5).

  • Pre-Commercial Products by Market: The Company had 72 pre-commercial programs as of June 30, 2022 (up from 61 a year ago), with 23 in late-stage Pharma Manufacturing (down from 24 a year ago); 25 in Life Science Tools, Food & Industrials (up from 19); and 24 in Biotherapeutics (up from 18).

  • Partnered Versus Self-Funded Programs: As of June 30, 2022, 46 of Codexis’ pre-commercial programs were partnered (up from 45 a year ago) and 26 were self-funded (up from 16).

Second Quarter 2022 Financial Highlights

  • Total revenues for the second quarter 2022 were $38.4 million, an increase of 51% from $25.5 million in the second quarter 2021. On a segment basis, $36.5 million in revenue was from the Performance Enzymes segment and $1.9 million was from Biotherapeutics.

  • Product revenues for the second quarter 2022 were $34.6 million compared to $14.7 million in the second quarter 2021; the increase was largely due to higher enzyme sales to Pfizer for PAXLOVID™ as well as strong sales to other key pharma manufacturing customers including Urovant Sciences.

  • R&D revenues for the second quarter 2022 were $3.8 million compared to $10.7 million in the second quarter 2021; the decrease was driven by a mix of fewer new deals being signed in 2022 and lower-than-anticipated revenue from existing customers.

  • Product gross margin for the second quarter 2022 was 67% compared to 71% in the second quarter 2021. The decrease was driven by changes in product mix, variations in prices per volume sold, and higher shipping costs.

  • R&D expenses for the second quarter 2022 were $19.1 million compared to $12.8 million in the second quarter 2021. The increase was primarily driven by increases in costs associated with higher headcount and salaries, as well as higher expenses for facilities, outside services, and lab supplies.

  • Selling, General & Administrative expenses for the second quarter 2022 were $10.7 million, compared to $12.8 million in the second quarter 2021. The decrease was primarily driven by a decrease in legal fees due to the settlement of a trademark dispute and lower allocable expenses, partially offset by an increase in costs associated with a higher headcount and higher outside services.

  • The net loss for the second quarter 2022 was $2.6 million, or $0.04 per share, compared to a net loss of $4.3 million, or $0.07 per share, for the second quarter 2021.

  • As of June 30, 2022, the Company had $90.1 million in cash and cash equivalents, not including the $25.9 million retainer fee payment from Pfizer.

2022 Guidance

Codexis reiterates its financial guidance for 2022 issued on July 14, 2022, as follows:

  • Total revenues are expected to be in the range of $135 million to $141 million.

  • Product revenues are expected to be in the range of $112 million to $118 million, including approximately $75 million from Pfizer.

  • Gross margin on product revenue is expected to be in the range of 65% to 70%.

In addition, Codexis expects that its existing cash and cash equivalents, combined with the Company’s future expectations for product revenues, R&D revenues, and expense management will be sufficient to fund its planned operations through the end of 2024.

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 Company website. The conference call dial-in numbers are 877-705-2976 for domestic callers and 201-689-8798 for international callers, and the passcode is 13730777.

A 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 www.codexis.com for 30 days, beginning approximately two hours after the completion of the call.

About Codexis

Codexis is a leading enzyme engineering company leveraging its proprietary CodeEvolver® platform to discover and develop novel, high performance enzymes and biotherapeutics. Codexis enzymes have applications in the sustainable manufacturing of pharmaceuticals, food, and industrial products; in the creation of the next generation of life science tools; and as gene therapy and oral enzyme therapies. The Company’s unique performance enzymes drive improvements such as: reduced energy usage, waste generation and capital requirements; higher yields; higher fidelity diagnostics; and more efficacious therapeutics. Codexis enzymes enable the promise of synthetic biology to improve the health of people and the planet. For more information, visit www.codexis.com.

Forward-Looking Statements

To the extent that statements contained in this press release are not descriptions of historical facts regarding Codexis, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, Codexis’ expectations regarding sales of its proprietary enzymes to key customers in the sustainable manufacturing market, its collaborations with innovative partners like MAI and seqWell in life science applications, advancements and developments in our biotherapeutics segment, our updated financial guidance on 2022 total revenues, product revenues and gross margin on product revenues, and our expected availability of funds to support planned future operations. 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: we are dependent on a limited number of customers, including Pfizer; we are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products, we or our customers may not be able to obtain regulatory approval for the use of our products in food and food ingredients, if required; our biotherapeutic programs are early stage, highly regulated and expensive; our ability to obtain additional development partners for the programs, to advance our product candidates to clinical trials and to ultimately receive regulatory approvals is highly uncertain; the regulatory approval processes of the U.S. Food and Drug Administration and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are unable to obtain or maintain regulatory approval for our products and product candidates, our business will be substantially harmed; results of preclinical studies and early clinical trials of product candidates may not be predictive of results of later studies or trials; our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval; if any of our product candidates do not work as intended or cause undesirable side effects, it could hinder or prevent receipt of regulatory approval or realization of commercial potential for them or our other product candidates and could substantially harm our business; and even if we obtain regulatory approval for any products that we develop alone or with collaborators, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense. 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, 2022 and in Codexis’ Quarterly Report on Form 10-Q filed with the SEC on May 9, 2022, 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.

Investor Relations Contact:

Argot Partners
Brendan Strong/Carrie McKim
(212) 600-1902
Codexis@argotpartners.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,

 

2022

 

2021

 

2022

 

2021

Revenues:

 

 

 

 

 

 

 

Product revenue

$

34,645

 

 

$

14,717

 

 

$

65,335

 

 

$

24,943

 

Research and development revenue

 

3,761

 

 

 

10,736

 

 

 

8,411

 

 

 

18,542

 

Total revenues

 

38,406

 

 

 

25,453

 

 

 

73,746

 

 

 

43,485

 

Costs and operating expenses:

 

 

 

 

 

 

 

Cost of product revenue

 

11,270

 

 

 

4,318

 

 

 

19,791

 

 

 

8,536

 

Research and development

 

19,089

 

 

 

12,826

 

 

 

38,590

 

 

 

24,397

 

Selling, general and administrative

 

10,656

 

 

 

12,795

 

 

 

26,360

 

 

 

24,193

 

Total costs and operating expenses

 

41,015

 

 

 

29,939

 

 

 

84,741

 

 

 

57,126

 

Loss from operations

 

(2,609

)

 

 

(4,486

)

 

 

(10,995

)

 

 

(13,641

)

Interest income

 

140

 

 

 

206

 

 

 

182

 

 

 

382

 

Other income (expense), net

 

(63

)

 

 

23

 

 

 

(66

)

 

 

(63

)

Loss before income taxes

 

(2,532

)

 

 

(4,257

)

 

 

(10,879

)

 

 

(13,322

)

Provision for income taxes

 

108

 

 

 

8

 

 

 

117

 

 

 

11

 

Net loss

$

(2,640

)

 

$

(4,265

)

 

$

(10,996

)

 

$

(13,333

)

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(0.04

)

 

$

(0.07

)

 

$

(0.17

)

 

$

(0.21

)

 

 

 

 

 

 

 

 

Weighted average common stock shares used in computing net loss per share, basic and diluted

 

65,288

 

 

 

64,434

 

 

 

65,193

 

 

 

64,363

 

 

 

 

 

 

 

 

 


 

Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)

 

 

 

 

 

June 30, 2022

 

December 31, 2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

90,113

 

 

$

116,797

 

Restricted cash, current

 

546

 

 

 

579

 

Financial assets:

 

 

 

Accounts receivable

 

29,200

 

 

 

24,953

 

Contract assets

 

11,287

 

 

 

4,557

 

Unbilled receivables

 

8,543

 

 

 

8,558

 

Total financial assets

 

49,030

 

 

 

38,068

 

Less: allowances

 

(109

)

 

 

(416

)

Total financial assets, net

 

48,921

 

 

 

37,652

 

Inventories

 

1,718

 

 

 

1,160

 

Prepaid expenses and other current assets

 

3,985

 

 

 

5,700

 

Total current assets

 

145,283

 

 

 

161,888

 

Restricted cash

 

1,520

 

 

 

1,519

 

Investment in non-marketable equity securities

 

19,302

 

 

 

14,002

 

Right-of-use assets - Operating leases, net

 

41,706

 

 

 

44,095

 

Right-of-use assets - Finance leases, net

 

 

 

 

17

 

Property and equipment, net

 

23,694

 

 

 

21,345

 

Goodwill

 

3,241

 

 

 

3,241

 

Other non-current assets

 

224

 

 

 

276

 

Total assets

$

234,970

 

 

$

246,383

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,015

 

 

$

2,995

 

Accrued compensation

 

7,732

 

 

 

11,119

 

Other accrued liabilities

 

12,934

 

 

 

12,578

 

Current portion of lease obligations - Operating leases

 

5,103

 

 

 

4,093

 

Deferred revenue

 

2,230

 

 

 

2,586

 

Total current liabilities

 

30,014

 

 

 

33,371

 

Deferred revenue, net of current portion

 

3,151

 

 

 

3,749

 

Long-term lease obligations - Operating leases

 

41,006

 

 

 

43,561

 

Other long-term liabilities

 

1,340

 

 

 

1,311

 

Total liabilities

 

75,511

 

 

 

81,992

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

 

6

 

 

 

6

 

Additional paid-in capital

 

558,147

 

 

 

552,083

 

Accumulated deficit

 

(398,694

)

 

 

(387,698

)

Total stockholders' equity

 

159,459

 

 

 

164,391

 

Total liabilities and stockholders' equity

$

234,970

 

 

$

246,383

 

 

 

 

 


 

Codexis, Inc.
Segmented Information
(Unaudited)
(In Thousands)

 

 

 

 

 

Three Months Ended June 30, 2022

 

Three Months Ended June 30, 2021

 

Performance
Enzymes

 

Novel
Biotherapeutics

 

Total

 

Performance
Enzymes

 

Novel
Biotherapeutics

 

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Product revenue

$

34,645

 

$

 

 

$

34,645

 

 

$

14,717

 

$

 

 

$

14,717

 

Research and development revenue

 

1,885

 

 

1,876

 

 

 

3,761

 

 

 

6,868

 

 

3,868

 

 

 

10,736

 

Total revenues

 

36,530

 

 

1,876

 

 

 

38,406

 

 

 

21,585

 

 

3,868

 

 

 

25,453

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

11,270

 

 

 

 

 

11,270

 

 

 

4,318

 

 

 

 

 

4,318

 

Research and development(1)

 

6,929

 

 

11,078

 

 

 

18,007

 

 

 

5,057

 

 

7,194

 

 

 

12,251

 

Selling, general and administrative(1)

 

3,876

 

 

680

 

 

 

4,556

 

 

 

3,170

 

 

620

 

 

 

3,790

 

Total segment costs and operating expenses

 

22,075

 

 

11,758

 

 

 

33,833

 

 

 

12,545

 

 

7,814

 

 

 

20,359

 

Income (loss) from operations

$

14,455

 

$

(9,882

)

 

 

4,573

 

 

$

9,040

 

$

(3,946

)

 

 

5,094

 

Corporate costs(2)

 

 

 

 

 

(5,789

)

 

 

 

 

 

 

(8,610

)

Unallocated depreciation and amortization

 

 

 

 

 

(1,316

)

 

 

 

 

 

 

(741

)

Loss before income taxes

 

 

 

 

$

(2,532

)

 

 

 

 

 

$

(4,257

)

 

 

 

 

 

 

 

 

 

 

 

 

(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 income (expense), net.

 

Six Months Ended June 30, 2022

 

Six Months Ended June 30, 2021

 

Performance
Enzymes

 

Novel
Biotherapeutics

 

Total

 

Performance
Enzymes

 

Novel
Biotherapeutics

 

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Product revenue

$

65,335

 

$

 

 

$

65,335

 

 

$

24,943

 

$

 

 

$

24,943

 

Research and development revenue

 

4,294

 

 

4,117

 

 

 

8,411

 

 

 

10,872

 

 

7,670

 

 

 

18,542

 

Total revenues

 

69,629

 

 

4,117

 

 

 

73,746

 

 

 

35,815

 

 

7,670

 

 

 

43,485

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

19,791

 

 

 

 

 

19,791

 

 

 

8,536

 

 

 

 

 

8,536

 

Research and development(1)

 

13,051

 

 

23,424

 

 

 

36,475

 

 

 

11,502

 

 

11,799

 

 

 

23,301

 

Selling, general and administrative(1)

 

7,416

 

 

1,400

 

 

 

8,816

 

 

 

5,988

 

 

1,221

 

 

 

7,209

 

Total segment costs and operating expenses

 

40,258

 

 

24,824

 

 

 

65,082

 

 

 

26,026

 

 

13,020

 

 

 

39,046

 

Income (loss) from operations

$

29,371

 

$

(20,707

)

 

 

8,664

 

 

$

9,789

 

$

(5,350

)

 

 

4,439

 

Corporate costs(2)

 

 

 

 

 

(16,994

)

 

 

 

 

 

 

(16,335

)

Unallocated depreciation and amortization

 

 

 

 

 

(2,549

)

 

 

 

 

 

 

(1,426

)

Loss before income taxes

 

 

 

 

$

(10,879

)

 

 

 

 

 

$

(13,322

)

 

 

 

 

 

 

 

 

 

 

 

 

(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 income (expense), net.