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.
