Codexis Reports Second Quarter 2023 Financial Results
August 03 2023 - 3:05PM
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 Quarter 2023
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 ContactCarrie McKim(336)
608-9706ir@codexis.com
Media ContactLauren Musto(781)
572-1147media@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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