Codexis Reports Third Quarter 2022 Financial Results

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

REDWOOD CITY, Calif., Nov. 03, 2022 (GLOBE NEWSWIRE) -- 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 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 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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