Codexis Reports Third Quarter 2022 Financial Results
November 03 2022 - 4:05PM
Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company
enabling the promise of synthetic biology, today announced
financial results for the third quarter ended September 30,
2022 and provided a business update.
“In the last few months, the leadership team and I have been
working to refine Codexis’ strategy by assessing the markets where
Codexis and our proprietary CodeEvolver® platform have a clear
competitive advantage,” said Dr. Stephen Dilly, President and CEO
of Codexis. “We believe our evolved strategy will position the
Company nicely to drive long-term success and increased market
penetration by focusing our resources and concentrating our spend
on programs where we are positioned to win. I look forward to
sharing additional detail on the go-forward plan in the coming
months as we solidify our strategy to deliver value for Codexis
customers and shareholders.”
Key Business Highlights
- Product revenues decreased 2% to $28.0 million in the third
quarter of 2022. Excluding revenue from sales of CDX-616 used in
the manufacture of Pfizer’s COVID-19 therapeutic (PAXLOVID™) in
both periods, product revenues increased 53% to $15.1 million in
the third quarter of 2022, up from $9.9 million in the third
quarter of 2021. Revenues attributable to enzymes sales to Pfizer
for the manufacture of PAXLOVID™ were $12.9 million in the third
quarter of 2022 compared to $18.9 million last year.
- Executive Leadership Updates
- Dr. Stephen Dilly was appointed as the President and CEO of
Codexis. Dr. Dilly has more than three decades of executive
management experience in the biopharmaceutical industry, most
recently having served as President and CEO of Sierra Oncology
through its recent sale to GlaxoSmithKline for $1.9 billion.
- Kevin Norrett was appointed as the Chief Operating Officer of
Codexis. Mr. Norrett brings more than 20 years of experience across
commercial, business and corporate development, operations and
finance. He is responsible for driving the Company’s corporate
growth strategy, business development and operational
activities.
- Margaret Fitzgerald was appointed as General Counsel of
Codexis. Ms. Fitzgerald has almost two decades of legal experience
in the biotechnology field, with a background spanning complex
transactions, intellectual property and portfolio management, and
commercializing therapeutics.
- The Company announced the appointment of Rahul Singhvi, Sc.D.
to its Board of Directors. Currently the CEO of National
Resilience, a technology-focused biomanufacturing company, Dr.
Singhvi is a biotechnology industry veteran with more than 30 years
of research and development, operations and commercialization
expertise across several modalities including cell and gene
therapies, nucleic acids, vaccines and biologics.
- Codexis hosted its 2022 Protein Engineering Forum, bringing
over 100 top scientists and innovators together for two days of
presentations and networking events to facilitate the sharing of
insights and recent technological advancements throughout genomics,
nucleic acid synthesis and synthetic biology.
Third Quarter 2022
Financial Highlights
- Total revenues for the third quarter 2022 were $34.5 million, a
decrease of 6% from $36.8 million in the third quarter 2021. On a
segment basis, $31.1 million in revenue was from the Performance
Enzymes segment and $3.3 million was from Biotherapeutics.
- Product revenues for the third quarter 2022 were $28.0 million
compared to $28.7 million in the third quarter 2021; the decrease
was primarily driven by lower enzyme sales related to
PAXLOVID™.
- R&D revenues for the third quarter 2022 were $6.4 million
compared to $8.0 million in the third quarter 2021; the decrease
was driven by lower revenues from several of our large, existing
customers.
- Product gross margin for the third quarter 2022 was 65%
compared to 76% in the third quarter 2021. The decrease was largely
driven by changes in product mix, particularly the decline in sales
related to PAXLOVID, variations in prices for volume sold and
higher shipping costs.
- R&D expenses for the third quarter 2022 were $21.8 million
compared to $15.2 million in the third quarter 2021. The increase
was primarily driven by higher costs associated with increased
headcount and salaries as well as higher expenses for facilities
and outside services.
- Selling, General & Administrative expenses for the third
quarter 2022 were $13.5 million, compared to $13.4 million in the
third quarter 2021. SG&A expenses were flat, primarily, because
higher compensation-related expenses were offset by decreases in
legal costs.
- The net loss for the third quarter 2022 was $10.0 million, or
$0.15 per share, compared to a net income of $2.2 million, or $0.03
per share, for the third quarter 2021.
- As of September 30, 2022, the Company had $108.7 million
in cash and cash equivalents.
2022 Guidance
Codexis reiterated 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 at least 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
the Company’s 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 13732962.
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 2022
total revenues, product revenues and gross margin on product
revenue, its ability to fund planned operations through the end of
2024, and the ability of its evolved strategy to drive long-term
success and increased market penetration to deliver value for
Codexis customers and shareholders. 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; 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. 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 August 5, 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 PartnersBrendan Strong/Carrie McKim(212)
600-1902Codexis@argotpartners.com
Codexis, Inc.Condensed
Consolidated Statements of
Operations(Unaudited)(In
Thousands, Except Per Share Amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenues: |
|
|
|
|
|
|
|
Product revenue |
$ |
28,042 |
|
|
$ |
28,731 |
|
$ |
93,376 |
|
|
$ |
53,674 |
|
Research and development revenue |
|
6,428 |
|
|
|
8,038 |
|
|
14,839 |
|
|
|
26,579 |
|
Total revenues |
|
34,470 |
|
|
|
36,769 |
|
|
108,215 |
|
|
|
80,253 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
Cost of product revenue |
|
9,786 |
|
|
|
6,867 |
|
|
29,577 |
|
|
|
15,403 |
|
Research and development |
|
21,821 |
|
|
|
15,165 |
|
|
60,410 |
|
|
|
39,562 |
|
Selling, general and administrative |
|
13,499 |
|
|
|
13,407 |
|
|
39,859 |
|
|
|
37,600 |
|
Total costs and operating
expenses |
|
45,106 |
|
|
|
35,439 |
|
|
129,846 |
|
|
|
92,565 |
|
Income (loss) from
operations |
|
(10,636 |
) |
|
|
1,330 |
|
|
(21,631 |
) |
|
|
(12,312 |
) |
Interest income |
|
436 |
|
|
|
41 |
|
|
618 |
|
|
|
424 |
|
Other income, net |
|
216 |
|
|
|
983 |
|
|
150 |
|
|
|
920 |
|
Income (loss) before income
taxes |
|
(9,984 |
) |
|
|
2,354 |
|
|
(20,863 |
) |
|
|
(10,968 |
) |
Provision for income
taxes |
|
8 |
|
|
|
110 |
|
|
125 |
|
|
|
121 |
|
Net income (loss) |
$ |
(9,992 |
) |
|
$ |
2,244 |
|
$ |
(20,988 |
) |
|
$ |
(11,089 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share,
basic |
$ |
(0.15 |
) |
|
$ |
0.03 |
|
$ |
(0.32 |
) |
|
$ |
(0.17 |
) |
Net income (loss) per share,
diluted |
$ |
(0.15 |
) |
|
$ |
0.03 |
|
$ |
(0.32 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
Weighted average common stock
shares used in computing net income (loss) per share, basic |
|
65,426 |
|
|
|
64,628 |
|
|
65,271 |
|
|
|
64,452 |
|
Weighted average common stock
shares used in computing net income (loss) per share, diluted |
|
65,426 |
|
|
|
67,741 |
|
|
65,271 |
|
|
|
64,452 |
|
|
|
|
|
|
|
|
|
Codexis, Inc.Condensed
Consolidated Balance
Sheets(Unaudited)(In
Thousands)
|
September 30, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
108,689 |
|
|
$ |
116,797 |
|
Restricted cash, current |
|
528 |
|
|
|
579 |
|
Financial assets: |
|
|
|
Accounts receivable |
|
16,527 |
|
|
|
24,953 |
|
Contract assets |
|
5,867 |
|
|
|
4,557 |
|
Unbilled receivables |
|
7,490 |
|
|
|
8,558 |
|
Total financial assets |
|
29,884 |
|
|
|
38,068 |
|
Less: allowances |
|
(109 |
) |
|
|
(416 |
) |
Total financial assets, net |
|
29,775 |
|
|
|
37,652 |
|
Inventories |
|
1,623 |
|
|
|
1,160 |
|
Prepaid expenses and other current assets |
|
5,382 |
|
|
|
5,700 |
|
Total current assets |
|
145,997 |
|
|
|
161,888 |
|
Restricted cash |
|
1,520 |
|
|
|
1,519 |
|
Investment in non-marketable
equity securities |
|
20,510 |
|
|
|
14,002 |
|
Right-of-use assets -
Operating leases, net |
|
40,493 |
|
|
|
44,095 |
|
Right-of-use assets - Finance
leases, net |
|
— |
|
|
|
17 |
|
Property and equipment,
net |
|
23,319 |
|
|
|
21,345 |
|
Goodwill |
|
3,241 |
|
|
|
3,241 |
|
Other non-current assets |
|
208 |
|
|
|
276 |
|
Total assets |
$ |
235,288 |
|
|
$ |
246,383 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
2,621 |
|
|
$ |
2,995 |
|
Accrued compensation |
|
9,463 |
|
|
|
11,119 |
|
Other accrued liabilities |
|
12,992 |
|
|
|
12,578 |
|
Current portion of lease obligations - Operating leases |
|
5,230 |
|
|
|
4,093 |
|
Deferred revenue |
|
1,602 |
|
|
|
2,586 |
|
Total current liabilities |
|
31,908 |
|
|
|
33,371 |
|
Deferred revenue, net of
current portion |
|
8,238 |
|
|
|
3,749 |
|
Long-term lease obligations -
Operating leases |
|
39,655 |
|
|
|
43,561 |
|
Other long-term
liabilities |
|
1,356 |
|
|
|
1,311 |
|
Total liabilities |
|
81,157 |
|
|
|
81,992 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
562,811 |
|
|
|
552,083 |
|
Accumulated deficit |
|
(408,686 |
) |
|
|
(387,698 |
) |
Total stockholders' equity |
|
154,131 |
|
|
|
164,391 |
|
Total liabilities and stockholders' equity |
$ |
235,288 |
|
|
$ |
246,383 |
|
Codexis, Inc.Segmented
Information(Unaudited)(In
Thousands)
|
Three Months Ended September 30, 2022 |
|
Three Months Ended September 30, 2021 |
|
Performance Enzymes |
|
Novel Biotherapeutics |
|
Total |
|
Performance Enzymes |
|
Novel Biotherapeutics |
|
Total |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
$ |
28,042 |
|
$ |
— |
|
|
$ |
28,042 |
|
|
$ |
28,731 |
|
$ |
— |
|
|
$ |
28,731 |
|
Research and development revenue |
|
3,104 |
|
|
3,324 |
|
|
|
6,428 |
|
|
|
3,853 |
|
|
4,185 |
|
|
|
8,038 |
|
Total revenues |
|
31,146 |
|
|
3,324 |
|
|
|
34,470 |
|
|
|
32,584 |
|
|
4,185 |
|
|
|
36,769 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
9,786 |
|
|
— |
|
|
|
9,786 |
|
|
|
6,867 |
|
|
— |
|
|
|
6,867 |
|
Research and development(1) |
|
6,782 |
|
|
13,855 |
|
|
|
20,637 |
|
|
|
5,670 |
|
|
8,850 |
|
|
|
14,520 |
|
Selling, general and administrative(1) |
|
3,791 |
|
|
888 |
|
|
|
4,679 |
|
|
|
3,306 |
|
|
831 |
|
|
|
4,137 |
|
Total segment costs and
operating expenses |
|
20,359 |
|
|
14,743 |
|
|
|
35,102 |
|
|
|
15,843 |
|
|
9,681 |
|
|
|
25,524 |
|
Income (loss) from
operations |
$ |
10,787 |
|
$ |
(11,419 |
) |
|
|
(632 |
) |
|
$ |
16,741 |
|
$ |
(5,496 |
) |
|
|
11,245 |
|
Corporate costs(2) |
|
|
|
|
|
(7,947 |
) |
|
|
|
|
|
|
(8,097 |
) |
Unallocated depreciation and
amortization |
|
|
|
|
|
(1,405 |
) |
|
|
|
|
|
|
(794 |
) |
Income (loss) before income
taxes |
|
|
|
|
$ |
(9,984 |
) |
|
|
|
|
|
$ |
2,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, net.
|
Nine Months Ended September 30, 2022 |
|
Nine Months Ended September 30, 2021 |
|
Performance Enzymes |
|
Novel Biotherapeutics |
|
Total |
|
Performance Enzymes |
|
Novel Biotherapeutics |
|
Total |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
$ |
93,376 |
|
$ |
— |
|
|
$ |
93,376 |
|
|
$ |
53,674 |
|
$ |
— |
|
|
$ |
53,674 |
|
Research and development revenue |
|
7,398 |
|
|
7,441 |
|
|
|
14,839 |
|
|
|
14,723 |
|
|
11,856 |
|
|
|
26,579 |
|
Total revenues |
|
100,774 |
|
|
7,441 |
|
|
|
108,215 |
|
|
|
68,397 |
|
|
11,856 |
|
|
|
80,253 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
29,577 |
|
|
— |
|
|
|
29,577 |
|
|
|
15,403 |
|
|
— |
|
|
|
15,403 |
|
Research and development(1) |
|
19,833 |
|
|
37,279 |
|
|
|
57,112 |
|
|
|
17,172 |
|
|
20,649 |
|
|
|
37,821 |
|
Selling, general and administrative(1) |
|
11,208 |
|
|
2,288 |
|
|
|
13,496 |
|
|
|
9,294 |
|
|
2,052 |
|
|
|
11,346 |
|
Total segment costs and
operating expenses |
|
60,618 |
|
|
39,567 |
|
|
|
100,185 |
|
|
|
41,869 |
|
|
22,701 |
|
|
|
64,570 |
|
Income (loss) from
operations |
$ |
40,156 |
|
$ |
(32,126 |
) |
|
|
8,030 |
|
|
$ |
26,528 |
|
$ |
(10,845 |
) |
|
|
15,683 |
|
Corporate costs(2) |
|
|
|
|
|
(24,940 |
) |
|
|
|
|
|
|
(24,431 |
) |
Unallocated depreciation and
amortization |
|
|
|
|
|
(3,953 |
) |
|
|
|
|
|
|
(2,220 |
) |
Loss before income taxes |
|
|
|
|
$ |
(20,863 |
) |
|
|
|
|
|
$ |
(10,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(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, net.
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