CODEXIS, INC. Q3 FY2024 earnings call

• Strengthened balance sheet with $31 million net proceeds from ATM. - Hired Georgia Erbez as CFO and Allison Moore as CTO to strengthen executive leadership. - Delivered strong revenue growth in pharma manufacturing, initiated technical collaborations on ECO Synthesis platform, and completed divestiture of legacy genomics enzyme portfolio. - Path to profitability by end of 2026 based on pharma manufacturing revenue growth and ligase orders. - $31 million from ATM will be used for in-house enzyme production, downstream purification, and kilogram scale facility for ECO Synthesis. - Commercial strategy focuses on pharma manufacturing revenue growth, ligase follow-on orders, and ECO Synthesis Innovation Lab development. - Upcoming milestones include TIDES Europe presentations, completion of ECO Synthesis Innovation Lab, and potential GMP scale-up partnership.

Total revenues for the third quarter of 2024 were $12.8 million, including product revenue of $11.2 million and R&D revenue of $1.7 million. This compared to total revenue of $9.3 million in Q3 2023, with product revenue $5.4 million and R&D revenue $3.9 million. Product gross margin was 61% in Q3 2024, up from 58% in Q3 2023, driven by product mix. R&D expenses in Q3 2024 were $11.5 million, down 16% year-over-year, with a slight increase expected as ECO Synthesis Innovation Lab ramps up. SG&A expenses were $13.6 million in Q3 2024, up from $12.3 million in Q3 2023 due to increased consulting and outside services.

• Reiterates guidance with revenue expected to fall in current analyst estimate range for 2024. - Strong cash position with $90 million to fund operations through profitability into 2027.

Known and unknown risks, uncertainties, and factors beyond Codexis' control that could materially affect actual results, as outlined in forward-looking statements and SEC filings.

Q: About key parameters for ECO Synthesis success A: Stefan Lutz stated the two key parameters are overall yield of full length product and the impurity or quality of the material (impurity profile).

Q: Partnership details and disclosure A: Kevin Norrett mentioned collaborations vary by partner, focusing on moving projects from proof of concept to revenue-generating development projects in the ECO Innovation Lab.

Q: Paxlovid color A: Stephen Dilly stated they are not assuming anything regarding Paxlovid.

Q: ECO Synthesis technical collaboration details A: Kevin Norrett said it depends, with types including straight-up development contracts and joint development collaborations with milestones and royalties.

Q: RNA building blocks why and revenue A: Stephen Dilly mentioned reasons include quality, environmental impact, and potential cost benefits; Kevin Norrett and Georgia Erbez discussed it as part of ECO Synthesis, focusing on cost competitiveness.

Q: Customer perception change A: Stephen Dilly noted a sea change in perception due to deeper customer interactions, with Codexis considered a leader in enzymatic synthesis of RNA constructs