Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company,
today announced that, in alignment with its previously announced
strategy to focus resources on programs with the strongest
probability of creating significant value in the near-term and
beyond, the Company intends to prioritize the advancement and
commercialization of its Enzyme-Catalyzed Oligonucleotide (ECO)
Synthesis™ platform and its highly complementary Pharmaceutical
Manufacturing business. As part of this enhanced strategic focus,
the Company is streamlining operations, including discontinuing
investment in certain development programs, primarily in
Biotherapeutics, consolidating operations to its headquarters and
reducing headcount by approximately 25%. Codexis had $92.1 million
in cash and cash equivalents as of June 30, 2023, and with these
changes expects that this balance will be sufficient to fund its
planned operations to mid-2026, providing the Company the
opportunity to deliver on critical milestones related to its ECO
Synthesis™ platform.
“As a result of our disciplined portfolio streamlining, Codexis
now reflects a built-to-win, focused organization with cash runway
to fuel our strategic priorities through mid-2026, including the
commercialization of our ECO Synthesis™ platform,” said Stephen
Dilly, MBBS, PhD, President and Chief Executive Officer of Codexis.
“By building upon our existing strength in enzyme engineering, we
believe we have identified a concentrated group of potential
high-impact programs where our enzymes and expertise can drive
meaningful differences for life science and pharmaceutical
customers. Our ECO Synthesis™ technology sits at the top of this
list, given its potential to create tremendous value for Codexis
and our customers by enabling commercial-scale manufacture of RNAi
therapeutics, a powerful, growing class of medicines being
developed to address difficult to treat diseases impacting millions
of patients.”
Kevin Norrett, Chief Operating Officer of Codexis, added, “As
late clinical stage RNAi therapeutic candidates advance toward
approval, we believe that current phosphoramidite chemistry methods
alone will be unable to sufficiently scale production to meet the
coming wave of anticipated demand. We believe Codexis is uniquely
positioned to design and bring to market an enzymatic solution that
addresses this challenge. We expect to demonstrate gram-scale
synthesis of our ECO Synthesis™ technology by the end of this year,
with a path toward our commercialization goal in 2025. Coupled with
an anticipated return to growth of product revenues in our
Pharmaceutical Manufacturing business next year, we remain
confident that we are on track and well-positioned to realize
significant value in the near term.”
Portfolio Updates
Life Sciences
- Codexis will prioritize its
resources to complete development and commercialization of its
proprietary ECO Synthesis™ platform, offering a suite of enzymes
and a process designed to enable scalable production 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. By enabling the
manufacture of these therapeutics through an enzymatic route,
Codexis’ ECO Synthesis™ technology is specifically engineered to
address the challenges with scalability and sustainability
associated with traditional phosphoramidite chemistry methods.
Codexis anticipates demonstrating gram-scale synthesis of the
platform by the end of 2023, providing a key point of technical
validation to enable select pre-commercial customer testing of the
platform to begin in 2024.
- The Company expects to make its
double-stranded RNA (dsRNA) ligase available to customers in 2024.
As Codexis’ market entry point in RNAi therapeutics production, the
dsRNA ligase integrates with existing phosphoramidite chemistries
to stitch together small, manufactured strands of RNA.
- The Company plans to focus on a
select group of highly differentiated enzymes engineered to address
complex, unmet needs for life science customers. This includes
Codexis’ newly engineered DNA ligase, designed to improve ligation
efficiency and potentially allow for increased sensitivity and more
accurate detection in oncology applications, and the
Codex® HiCap RNA polymerase, which reduces
unwanted double-stranded RNA contamination and increases mRNA
capping efficiency.
- The Company is actively exploring
options to drive value by potentially monetizing other assets
within its Life Sciences portfolio.
Pharmaceutical Manufacturing
- Codexis has a long history of
engineering increasingly complex biocatalysts for large
pharmaceutical customers, many of which are now advancing pipelines
of RNAi therapeutic candidates. As a result, the technology,
infrastructure and commercial reach of the Company’s Pharmaceutical
Manufacturing business is highly complementary to the ECO
Synthesis™ platform.
- Codexis will continue to collaborate
with customers on Pharmaceutical Manufacturing projects and expects
a return to growth of this business in 2024.
Biotherapeutics
- The Company will discontinue all
pre-clinical discovery work in Biotherapeutics, including inborn
errors of metabolism and gene therapy. This decision reflects
Codexis’ strategic focus on the most valuable applications of its
CodeEvolver® directed evolution platform and the prioritization of
opportunities that have the potential to generate revenue in the
next two to five years.
- Codexis is planning to discontinue
its 50/50 development support of CDX-7108 and is in active
negotiations with its partner, Nestlé Health Science S.A., to
advance the program. CDX-7108 is being developed for the treatment
of exocrine pancreatic insufficiency (EPI).
- The Company is actively exploring
options to drive value by potentially monetizing other assets
within its Biotherapeutics portfolio.
Organizational Updates
- To align with the Company’s
portfolio updates, Codexis is reducing its headcount by
approximately 25%. The Company expects the majority of these
changes will be complete by September 30, 2023, and estimates it
will begin to realize associated savings in the fourth quarter of
this year.
- Codexis will consolidate operations
from its San Carlos, CA facility to its headquarters in Redwood
City, CA. The move is expected to occur during the second half of
2023.
- As a result of these changes, the
Company expects to reduce annual expenses by approximately $15
million in R&D and $5 million in Selling, General and
Administrative, as well as avoid a significant ramp-up in expenses
related to Biotherapeutics.
Select, Preliminary Unaudited Financial Results for the
Second Quarter of 2023 and Updated Financial Guidance
Based on preliminary unaudited financial information, Codexis
expects to report the following financial results for the second
quarter of 2023. The Company has not yet completed the preparation
of its financial statements for the three and six months ended June
30, 2023, and as a result, final reported results may differ
materially from the preliminary results presented herein.
Additionally, the Company’s independent registered public
accountants may identify items that could cause the final reported
results to be materially different from the preliminary financial
estimates presented herein.
- Total revenues are expected to be in the range of $21 million
to $22 million, which includes product revenues in the range of $11
million to $12 million and R&D revenues of approximately $10
million.
- As of June 30, 2023, the Company had cash and cash equivalents
of $92.1 million.
Codexis is updating its 2023 financial guidance, as follows:
- Codexis is reiterating its 2023 product revenue and gross
margin guidance as outlined in the Company’s first quarter earnings
release issued on May 4, 2023. Specifically, product revenues are
expected to be in the range of $30 million to $35 million and gross
margin on product revenue is expected to be in the range of 55% to
65%; both metrics exclude enzyme sales related to PAXLOVID®.
- R&D revenues are now expected to be in the range of $21
million to $24 million, compared to previous guidance of $28
million to $33 million. The change is the result of the workforce
reduction and reduced R&D expenses subject to reimbursement
related to the discontinuation of the Company’s Biotherapeutics
programs.
- As of June 30, 2023, the Company had
an estimated $92.1 million in cash and cash equivalents. Codexis
expects the portfolio prioritization, operational streamlining and
reduction in workforce to significantly reduce the Company’s annual
cash burn rate for its planned operations, extending cash runway
into mid-2026 and funding critical upcoming milestones for its
priority programs.
The Company intends to report its full financial results for the
second quarter of 2023 on Thursday, August 3, 2023, following the
close of market. The Company will not be conducting a conference
call in conjunction with this financial results release.
For an updated corporate presentation as of July 20, 2023, visit
the Codexis Investor Relations
website, www.codexis.com/investors.
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 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 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® 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 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 Codexis’ having sufficient cash for its
planned operations through mid-2026 and whether that will be
sufficient for it to delivery on critical milestones; Codexis
expectations that its Pharmaceutical Manufacturing business will
return to growth in 2024; the potential of Codexis’ ECO Synthesis™
platform to create tremendous value for Codexis and our customers
by enabling commercial-scale manufacture of RNAi therapeutics;
whether Codexis is able to demonstrate gram-scale synthesis of its
ECO Synthesis™ technology by the end of 2023, with a path toward
commercialization in 2025; the timing of when dsRNA ligase will be
available to customers and its commercial launch; whether any new
product opportunities will be able to generate revenue in the next
two to five years; the savings Codexis may realize as a result of
its organizational updates; and Codexis’ expectations regarding
2023 total revenues, product revenues, R&D revenue and gross
margin on product revenue. 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; 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; 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 for the year ended December 31, 2022 filed with the
Securities and Exchange Commission (“SEC”) on February 27, 2023 and
in Codexis’ Quarterly Report on Form 10-Q for the quarter ended
March 31, 2023 filed with the SEC on May 4, 2023, 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’ estimated results for the quarter ended
June 30, 2023 are not necessarily indicative of its 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
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