Codexis, Inc. Q1 FY2026 earnings call

Codexis generates manufacturing solutions using biocatalytic enzymes. Over the last three years, it has developed the Ecosynthesis Manufacturing Platform for RNA medicine production. The small molecule biocatalysis business remains important. The number of RNA medicines in development is growing rapidly. Our Ecosynthesis platform has over 50 opportunities in the sales pipeline with 40 individual companies. We will present new data on ecosynthesis technology at the TIDES conference. We are operationalizing the Ecosynthesis platform through scaling and improving process control. Our customers are interested in stereoisomer control for their products. The small molecule biocatalysis business is stable and profitable with 13 commercially approved products supported.

Total revenues were $15.2 million for the first quarter of 2026 compared to $7.5 million in the first quarter of 2025. The increase was primarily due to revenue from the Merck Technology Transfer Agreement executed in the fourth quarter of 2025, which has now been fully recognized. Product gross margin was 71% for the first quarter of 2026, which compares to 55% for the first quarter of 2025. The increase was primarily driven by product mix and sales declines in several low-margin products that were replaced with more profitable product sales. Research and development expenses for the first quarter of 2026 were 11.4 million compared to 12.9 million in the first quarter of 2025, largely driven by lower eligible costs that were partially offset by higher employee-related costs and higher use of outside services. Selling general and administrative expenses were 9.8 million in the first quarter of 2026 compared to 12.4 million in the prior year period. The decrease was primarily due to lower employee-related costs due to the lower headcount, lower stock-based compensation expenses, and lower consultant fees and outside services. Net loss for the first quarter of 2026 was 8.7 million compared to the loss of 20.7 million for the first quarter of 2025. Codexis ended the first quarter with $65.1 million in cash cash equivalents, and short-term investments, which compares to $78.2 million at the end of 2025. We expect our current cash will be sufficient to fund our planned operations and capital expenditures through the end of 2027.

We reiterate our revenue guidance and expect 2026 revenue in the range of $72 million to $76 million. Like the quarterly trends we saw last year, we expect 2026 revenue to be more heavily weighted towards the second half of 2026 versus the first half.

Challenges in scaling the platform from 100 gram scale to 500 gram by year end, including normal process development challenges like control of temperature, flow rates etc. during scale-up.

Q: Preview of stereochemistry data at TIES and follow-up on efficacy data.

A: We'll show stereo control at both ends of siRNA molecule, have data on potential improved activity and existing literature supports stereocontrol benefits.

Q: Risks in scaling platform from 100 gram to 500 gram by year end and de-risked aspects.

A: Skilled process development team, normal process challenges like temperature etc. control, delivering higher quality products.

Q: Merck enzyme revenue and FDA engagement on Ecosynthesis platform.

A: Working with Merck on supply chain, planning briefing book for FDA interaction, engaged in Emerging Technologies Program and working on AMT designation for faster review.

Q: CDMO partnership update and licensing deal.

A: CDMO partnerships going well, commercial discussions in progress, multiple licensing discussions ongoing.

Q: Sales funnel breakdown and technical feasibility.

A: Conversations cover large pharma to stealth companies, programs from early stage to commercial, open to various uses of platform, working on improving productivity and throughput