Codexis (CDXS) Conference Call Summary - May 22, 2025 Company Overview - **Company**: Codexis (CDXS) - **Industry**: Biotechnology, specifically focusing on siRNA (small interfering RNA) technology and enzymatic synthesis for genomic medicines Key Points and Arguments Industry Trends - **Surge in Demand for siRNA Therapeutics**: There is a recognized increase in demand for siRNA therapeutics, with significant interest in innovative manufacturing solutions [5][6] - **Shift Towards Enzymatic Synthesis**: The industry is moving towards enzymatic synthesis methods, which are seen as necessary to meet the scalability and purity requirements for siRNA production [6][18] Codexis Technology and Developments - **Ecosynthesis Technology**: Codexis' Ecosynthesis platform is positioned as a timely solution to the limitations of traditional solid-phase chemistry, with advancements in scalability and cost-effectiveness [10][18] - **Validation from Industry Leaders**: Codexis received external validation from major oligonucleotide manufacturers, highlighting the effectiveness of its double-stranded RNA ligase [6][7] - **Machine Learning Tool**: A newly developed machine learning tool aids customers in optimizing RNA fragment designs, demonstrating superior performance in identifying effective solutions [12][41] Customer Engagement and Market Position - **Increased Customer Interest**: There has been a notable shift in customer engagement, with decision-makers in process development now actively exploring Codexis' enzymatic solutions [17][18] - **Growing Customer Base**: The number of substantive discussions with potential customers has increased significantly, from single digits to over 20 prospects [20] - **Innovation Lab Capacity**: Codexis aims to fill its Eco Innovation Lab capacity with multiple customers, focusing on a diverse range of products [35][36] Competitive Landscape - **Leadership in Enzymatic Technology**: Codexis is recognized as a leader in enzymatic technology for siRNA manufacturing, with expectations to maintain this position through continued advancements [21][18] Future Outlook - **Partnerships and Collaborations**: Codexis is on track to sign a GMP scale-up partnership and anticipates selling its Eco Innovation Labs capacity by year-end [20] - **Focus on Stereochemistry Control**: The ability to control stereochemistry in siRNA production is seen as a significant advantage, allowing for the development of more effective therapeutic candidates [31][52] Additional Important Insights - **Transition from Proof of Concept to Production**: Codexis is moving from demonstrating proof of concept to establishing a practical production platform, emphasizing the importance of cycle times in manufacturing [27][28] - **Impact of Stereochemistry on Efficacy**: The control of stereochemistry is crucial for ensuring the activity and effectiveness of siRNA therapeutics, with implications for both existing and new products [50][52] This summary encapsulates the key discussions and insights from the Codexis conference call, highlighting the company's strategic positioning within the biotechnology industry and its advancements in siRNA technology.

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $7.5 million, a decrease from $17.1 million in Q1 2024, primarily due to a one-time agreement with Roche and variability in large customer orders [23][24] - Product gross margin improved to 55% in Q1 2025 from 49% in Q1 2024, driven by a shift towards more profitable products [25] - The net loss for Q1 2025 was $20.7 million, compared to $11.5 million in Q1 2024 [26] - The company reiterated its 2025 revenue guidance range of $64 million to $68 million, with expectations for a revenue ramp in the second half of the year [26][27] Business Line Data and Key Metrics Changes - In Pharma Biocatalysis, the product mix is changing, leading to margin improvements, with new customers particularly in the mid-tier pharma segment [6] - The double-stranded RNA ligase business is growing, with the first order delivered to a large pharma customer in Q1 and additional orders expected [7] Market Data and Key Metrics Changes - The siRNA field is evolving positively, with recent FDA approvals for siRNA therapeutics indicating growing demand [9][10] - There is increasing pressure on companies to onshore production, which benefits the company's Ecosynthesis technology by offering scalability and reduced capital expenditure [10] Company Strategy and Development Direction - The company is focusing on the Ecosynthesis platform, which is expected to enable larger batch sizes, faster production, and lower costs compared to traditional methods [28] - The strategy includes developing an enzymatic supply of raw materials to diversify input sources and reduce dependence on foreign supply chains [10][11] - The company is positioning itself to capitalize on the growing demand for RNA-based therapeutics and is working on establishing a GMP manufacturing facility [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2025 guidance, citing significant commercial interest across businesses and a strong cash position [25][27] - The current macro environment presents challenges, but several external factors could favor the company's Ecosynthesis platform [8][9] - The management emphasized that execution is now the focus, with a clear path to demonstrating the technology's effectiveness to customers [35] Other Important Information - The company plans to host a public investor conference call on May 22 to discuss presentations from the Tides USA meeting [21] - The management highlighted the importance of machine learning capabilities in enzyme engineering and manufacturing processes [63][66] Q&A Session Summary Question: What will it take for small and large siRNA drug innovators to engage earlier? - The company noted that CDMOs have a lower barrier to acceptance and are more likely to adopt new processes quickly, which will help validate the technology for larger innovators [32][34] Question: Can you elaborate on the second half revenue ramp? - The revenue ramp is expected to come from new contracts with Ecosynthesis, with negotiations taking time [36][37] Question: What are the assumptions behind the cash flow positivity guidance for 2026? - The guidance is based on organic pipeline evolution and does not include the GMP facility, which is seen as an accelerator for revenue [39][40] Question: Will the ligase orders lead to repeat customers? - The company expects each large pharma customer to become a repeat customer, with a shorter timeline to peak orders compared to traditional manufacturing [48][50] Question: What is the significance of the three CDMO collaborators? - Each CDMO has had success with the ligase technology, and they are building platforms to service multiple customers, enhancing scalability [54][56] Question: How will machine learning be integrated into the business? - The company has been leveraging machine learning for enzyme engineering and manufacturing, with successful applications already demonstrated [63][66]