Codexis Reports First Quarter 2023 Financial Results
05 May 2023 - 6:05AM
Codexis, Inc. (NASDAQ: CDXS), a leading enzyme engineering company,
today announced financial results for the first quarter ended March
31, 2023, and provided a business update.
“We had a productive first quarter as we continued to execute
our strategy, building upon the strong foundation of our
Pharmaceutical Manufacturing business and identifying and focusing
on the highest value opportunities in Life Sciences and
Biotherapeutics. This includes encouraging interim Phase 1 clinical
data for CDX-7108 for patients with exocrine pancreatic
insufficiency and the pre-commercial availability of our newly
engineered DNA ligase for next-generation sequencing, where we are
seeing high inbound customer interest in the ongoing sampling and
testing,” said Stephen Dilly, MBBS, PhD, President and Chief
Executive Officer of Codexis. “Our top priorities for this year are
preparing for the Phase 2 clinical trial initiation of CDX-7108
with our partner, Nestlé Health Science, and the continued planned
build-out of our RNAi synthesis platform. On that front, we are on
track with our development work to support siRNA manufacturing and
are excited to highlight our progress at the TIDES USA annual
meeting next week. The enzymatic solution we are refining has the
potential to lower costs and increase efficiencies throughout the
manufacturing scale-up for pharmaceutical companies. With more than
300 RNAi therapeutics currently in development, we see this as a
significant opportunity and plan to share more detail on our
growing capabilities in the space throughout the year.”
First Quarter and Recent Business
Highlights
- Codexis announced interim results from the Phase 1 clinical
trial of CDX-7108, which is being co-developed with Nestlé Health
Science S.A., for the treatment of exocrine pancreatic
insufficiency (EPI). Data from five subjects with EPI in the
proof-of-concept arm indicated improved lipid absorption when
patients are administered CDX-7108 versus placebo. Importantly, no
safety issues were noted in the 48 healthy subjects that
participated in the single ascending dose and multiple ascending
dose portion of the study. Based on these encouraging data, Codexis
and Nestlé expect to file an Investigational New Drug (IND)
application for CDX-7108 by the end of 2023, with the Phase 2
clinical trial initiation anticipated in the first half of
2024.
- In February 2023, at the Advances in Genome Biology and
Technology (AGBT) General Meeting, Codexis announced the
pre-commercial availability of its newly engineered DNA ligase for
next-generation sequencing, or NGS. This DNA ligase was
specifically engineered to improve ligation efficiency, potentially
allowing for increased sensitivity and more accurate detection in
disease indications where samples are small and signals are weak.
The Company continues to see high levels of engagement and
pre-commercial interest from customers who are currently sampling
and testing the enzyme. For additional details, please see the
white paper available
at https://www.codexis.com/resources/detail/11503/a-ligase-with-superior-ligation-efficiency.
- In April 2023,
Codexis announced a pre-conference workshop at the 2023 TIDES USA
annual meeting to highlight the role of an enzymatic approach to
support nucleic acid-based therapeutics manufacturing. The workshop
will be held live and virtually on Sunday, May 7, 2023, from 12:30
pm – 1:30 pm PT.
First Quarter 2023 Financial Highlights
- Total revenues for first quarter 2023 were $13.0 million
compared to $14.0 million in the prior year, excluding enzyme sales
related to PAXLOVID™ of $0 and $21.3 million in each period,
respectively. This represents an 8% decrease compared to first
quarter 2022. Including these enzyme sales, first quarter 2023
total revenues were down 63% compared to $35.3 million in the prior
year. On a segment basis, $9.5 million in revenue was from the
Performance Enzymes segment and $3.5 million was from
Biotherapeutics in first quarter 2023.
- Product revenues for first quarter 2023 were $8.4 million
compared to $9.4 million in the prior year, excluding first quarter
2022 enzyme sales related to PAXLOVID™ and representing a decrease
of 11%. Including these enzyme sales, product revenues were down
73% from $30.7 million in first quarter 2022.
- R&D revenues for first quarter 2023 were $4.6 million
compared to $4.7 million in first quarter 2022; R&D revenues
were flat, primarily due to higher revenue from Nestlé, offset by
lower research and development fees from existing collaboration
agreements.
- Product gross margin for first quarter 2023 was 46% compared to
72% in first quarter 2022; the decrease was largely driven by
variability in the product mix and reflects the volume of lower
margin products sold during first quarter 2023.
- R&D expenses for first quarter 2023 were $16.7 million
compared to $19.5 million in first quarter 2022; the decrease was
primarily driven by reduced costs associated with lower headcount,
decreases in outside services related to Chemistry, Manufacturing
and Controls (“CMC”) and regulatory expenses, lower stock-based
compensation costs and lower lab supply costs.
- Selling, General & Administrative expenses for first
quarter 2023 were $15.4 million compared to $15.7 million in first
quarter 2022; the decrease was primarily due to lower legal fees
and lower stock-based compensation costs, partially offset by
higher payroll-based expenses and higher outside and temporary
services.
- The net loss for first quarter 2023 was $22.6 million, or $0.34
per share, compared to a net loss of $8.4 million, or $0.13 per
share, for first quarter 2022. Excluding enzyme sales related to
PAXLOVID™, net loss for first quarter 2022 was $25.3 million, or
$0.39 per share.
- As of March 31, 2023, the Company had $102.8 million in cash
and cash equivalents.
2023 Financial Guidance
Codexis provided an update to its 2023 financial guidance issued
on February 23, 2023.
- The Company reiterated its 2023 total revenue guidance range of
$63 million to $68 million, excluding enzyme sales related to
PAXLOVID™, with adjustments to the mix of product revenues versus
R&D revenues.
- Product revenues are now expected to be in the range of $30
million to $35 million, excluding enzyme sales related to
PAXLOVID™, compared to previous guidance of $35 million to $40
million. The change reflects variability in timing of orders of
enzyme from a large customer that previously built pre-launch
inventory of a recently approved pharmaceutical product.
- R&D revenues are now expected to be in the range of $28
million to $33 million, compared to previous guidance of $25
million to $30 million. The change is related to Pfizer applying a
portion of its existing retainer fee toward a license to develop
future new product candidates unrelated to PAXLOVID™. As a result,
the Company expects to recognize $5.0 million as non-cash R&D
revenue in the second quarter 2023.
- Codexis updated its 2023 guidance for gross margin on product
revenue, which is now expected to be in the range of 55% to 65%,
excluding enzyme sales related to PAXLOVID™. This shift is driven
by variability in the product mix, including an increased volume of
lower margin products sold during the first quarter of this
year.
- Finally, Codexis expects that its existing cash and cash
equivalents will be sufficient to fund its planned operations
through the end of 2024.
For an updated corporate presentation as of May 4, 2023, visit
the Codexis Investor Relations website,
www.codexis.com/investors.
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,
nucleic acid synthesis and genomic sequencing, and – as
biotherapeutic candidates – they have the potential to treat
challenging diseases. Codexis’ unique enzymes can drive
improvements such as higher yields, reduced energy usage and waste
generation, improved efficiency in manufacturing, greater
sensitivity in genomic and diagnostic applications and potentially
more efficacious therapeutics. 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 anticipated milestones such as timing of data
from clinical trials being publicly released, as well as timing of
initiating clinical trials and potential interactions with
regulators; the potential of Codexis’ enzymatic solutions to lower
costs and increase efficiencies, and whether such solutions will
represent a significant opportunity for Codexis; Codexis’
expectations regarding 2023 total revenues, product revenues and
gross margin on product revenue, as well as its ability to fund
planned operations through the end of 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; Codexis’ biotherapeutic programs
being early stage, highly regulated and expensive; 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 may be unable to obtain regulatory approval for its product
candidates given the lengthy, time consuming and inherently
unpredictable nature of such approval processes; clinical trials
are difficult to design and implement, expensive, time-consuming
and involve an uncertain outcome; results of preclinical studies,
early clinical trials of product candidates and interim results
from ongoing clinical trials may not be predictive of results of
later studies or trials; Codexis may not be able to maintain orphan
drug designations for certain of our product candidates, and may be
unable to maintain the benefits associated with orphan drug
designation; even if Codexis obtains regulatory approval for any
products that it develop alone or with collaborators, such products
will remain subject to ongoing regulatory requirements; 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; 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 March 31, 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 March 31, |
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
Product revenue |
$ |
8,364 |
|
|
$ |
30,690 |
|
Research and development revenue |
|
4,618 |
|
|
|
4,650 |
|
Total revenues |
|
12,982 |
|
|
|
35,340 |
|
Costs and operating
expenses: |
|
|
|
Cost of product revenue |
|
4,521 |
|
|
|
8,521 |
|
Research and development |
|
16,655 |
|
|
|
19,500 |
|
Selling, general and administrative |
|
15,399 |
|
|
|
15,705 |
|
Restructuring charges |
|
72 |
|
|
|
— |
|
Total costs and operating
expenses |
|
36,647 |
|
|
|
43,726 |
|
Loss from operations |
|
(23,665 |
) |
|
|
(8,386 |
) |
Interest income |
|
1,089 |
|
|
|
42 |
|
Other expense, net |
|
(25 |
) |
|
|
(3 |
) |
Loss before income taxes |
|
(22,601 |
) |
|
|
(8,347 |
) |
Provision for income
taxes |
|
16 |
|
|
|
9 |
|
Net loss |
$ |
(22,617 |
) |
|
$ |
(8,356 |
) |
|
|
|
|
Net loss per share, basic and
diluted |
$ |
(0.34 |
) |
|
$ |
(0.13 |
) |
Weighted average common stock
shares used in computing net loss per share, basic and diluted |
|
65,931 |
|
|
|
65,096 |
|
Codexis, Inc.Condensed Consolidated
Balance Sheets(Unaudited)(In
Thousands) |
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
102,831 |
|
|
$ |
113,984 |
|
Restricted cash, current |
|
525 |
|
|
|
521 |
|
Financial assets: |
|
|
|
Accounts receivable |
|
9,934 |
|
|
|
31,904 |
|
Contract assets |
|
2,449 |
|
|
|
2,116 |
|
Unbilled receivables |
|
7,797 |
|
|
|
7,016 |
|
Total financial assets |
|
20,180 |
|
|
|
41,036 |
|
Less: allowances |
|
(163 |
) |
|
|
(163 |
) |
Total financial assets, net |
|
20,017 |
|
|
|
40,873 |
|
Inventories |
|
1,996 |
|
|
|
2,029 |
|
Prepaid expenses and other current assets |
|
4,585 |
|
|
|
5,487 |
|
Total current assets |
|
129,954 |
|
|
|
162,894 |
|
Restricted cash |
|
1,526 |
|
|
|
1,521 |
|
Investment in non-marketable
equity securities |
|
21,310 |
|
|
|
20,510 |
|
Right-of-use assets -
Operating leases, net |
|
38,013 |
|
|
|
39,263 |
|
Property and equipment,
net |
|
23,609 |
|
|
|
22,614 |
|
Goodwill |
|
3,241 |
|
|
|
3,241 |
|
Other non-current assets |
|
415 |
|
|
|
350 |
|
Total assets |
$ |
218,068 |
|
|
$ |
250,393 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
4,494 |
|
|
$ |
3,246 |
|
Accrued compensation |
|
6,611 |
|
|
|
11,453 |
|
Other accrued liabilities |
|
8,340 |
|
|
|
15,279 |
|
Current portion of lease obligations - Operating leases |
|
5,492 |
|
|
|
5,360 |
|
Deferred revenue |
|
13,374 |
|
|
|
13,728 |
|
Total current liabilities |
|
38,311 |
|
|
|
49,066 |
|
Deferred revenue, net of
current portion |
|
15,508 |
|
|
|
16,881 |
|
Long-term lease obligations -
Operating leases |
|
36,845 |
|
|
|
38,278 |
|
Other long-term
liabilities |
|
1,388 |
|
|
|
1,371 |
|
Total liabilities |
|
92,052 |
|
|
|
105,596 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
569,917 |
|
|
|
566,081 |
|
Accumulated deficit |
|
(443,907 |
) |
|
|
(421,290 |
) |
Total stockholders' equity |
|
126,016 |
|
|
|
144,797 |
|
Total liabilities and stockholders' equity |
$ |
218,068 |
|
|
$ |
250,393 |
|
|
|
|
|
Codexis, Inc.Segmented
Information(Unaudited)(In
Thousands) |
|
|
|
|
|
Three Months Ended March 31, 2023 |
|
Three Months Ended March 31, 2022 |
|
Performance Enzymes |
|
Novel Biotherapeutics |
|
Total |
|
Performance Enzymes |
|
Novel Biotherapeutics |
|
Total |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
$ |
8,364 |
|
|
$ |
— |
|
|
$ |
8,364 |
|
|
$ |
30,690 |
|
$ |
— |
|
|
$ |
30,690 |
|
Research and development revenue |
|
1,122 |
|
|
|
3,496 |
|
|
|
4,618 |
|
|
|
2,409 |
|
|
2,241 |
|
|
|
4,650 |
|
Total revenues |
|
9,486 |
|
|
|
3,496 |
|
|
|
12,982 |
|
|
|
33,099 |
|
|
2,241 |
|
|
|
35,340 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
4,521 |
|
|
|
— |
|
|
|
4,521 |
|
|
|
8,521 |
|
|
— |
|
|
|
8,521 |
|
Research and development(1) |
|
8,099 |
|
|
|
7,312 |
|
|
|
15,411 |
|
|
|
6,122 |
|
|
12,346 |
|
|
|
18,468 |
|
Selling, general and administrative(1) |
|
2,798 |
|
|
|
951 |
|
|
|
3,749 |
|
|
|
3,541 |
|
|
720 |
|
|
|
4,261 |
|
Restructuring charges |
|
— |
|
|
|
72 |
|
|
|
72 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Total segment costs and
operating expenses |
|
15,418 |
|
|
|
8,335 |
|
|
|
23,753 |
|
|
|
18,184 |
|
|
13,066 |
|
|
|
31,250 |
|
Income (loss) from
operations |
$ |
(5,932 |
) |
|
$ |
(4,839 |
) |
|
|
(10,771 |
) |
|
$ |
14,915 |
|
$ |
(10,825 |
) |
|
|
4,090 |
|
Corporate costs(2) |
|
|
|
|
|
(10,364 |
) |
|
|
|
|
|
|
(11,205 |
) |
Unallocated depreciation and
amortization |
|
|
|
|
|
(1,466 |
) |
|
|
|
|
|
|
(1,232 |
) |
Loss before income taxes |
|
|
|
|
$ |
(22,601 |
) |
|
|
|
|
|
$ |
(8,347 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(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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