Codexis(US:CDXS)2021-02-28 15:04Financial Data and Key Metrics Changes - Total revenues for Q4 2020 were $21.0 million, up 12.8% year-over-year, with $16.7 million from Performance Enzymes and $4.3 million from Novel Biotherapeutics [38] - Product revenue for Q4 2020 was $12.2 million, a 150% increase from $4.9 million in the prior year, marking the highest quarterly product revenue [39] - Gross margin on product revenue for Q4 2020 was 52.0%, compared to 30.2% in Q4 2019, attributed to a favorable product mix [39] - Total revenues for fiscal 2020 were $69.1 million, a 1% increase from 2019, with $48.1 million from Performance Enzymes and $21.0 million from Novel Biotherapeutics [42] - Product revenues for fiscal 2020 were $30.2 million, up 3% from 2019, with a gross margin of 54.5%, up from 46.9% in 2019 [43][44] Business Line Data and Key Metrics Changes - Performance Enzymes segment generated $16.7 million in Q4 2020, compared to $17.1 million in Q4 2019, while Novel Biotherapeutics increased from $1.6 million to $4.3 million in the same period [38] - The Performance Enzymes segment faced challenges due to COVID-19, impacting R&D service revenues, while Novel Biotherapeutics benefited from Takeda's upfront payment and R&D services [42] - The company had 15 sustainable manufacturing customers contributing over $100,000 in average quarterly revenue in 2020, up from 13 in 2019 [11] Market Data and Key Metrics Changes - The company is expanding into the life science tools market, generating $3.6 million in revenue in 2020, with expectations for growth in 2021 [23][72] - The partnership with Tate & Lyle in the food sector is expected to drive significant growth, with enzymes for sweeteners showing promising results [19][107] Company Strategy and Development Direction - Codexis aims to leverage its enzyme engineering capabilities to penetrate multiple markets, including sustainable manufacturing, life science tools, and biotherapeutics [9][30] - The company plans to expand its R&D capacity by increasing the number of enzyme discovery teams from 16 to approximately 25 by 2022 [88] - Codexis is focusing on self-funded R&D in life science tools and biotherapeutics, aiming to retain more value from successful enzyme developments [92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth of 19% to 23% in 2021, driven primarily by the Performance Enzymes segment [46] - The company anticipates product sales between $36 million and $39 million in 2021, with gross margins expected to remain strong at 54% to 58% [48] - Management highlighted the potential for significant growth in the life science tools market and the biotherapeutics pipeline, with multiple catalysts expected to drive growth [52][100] Other Important Information - Codexis completed a follow-on offering in December 2020, raising $81 million, resulting in a cash balance of $149.1 million, positioning the company well for growth opportunities [45] - The company is set to occupy a new facility in Q4 2021, which will enhance its R&D capabilities [50] Q&A Session Summary Question: Can you break down the components of product revenue growth in 2021? - Management indicated growth will come from stable sales to Merck for Januvia, increased demand from recent customers like Allergan and Urovant, and new sales in the life science tools market [58][60] Question: What is the expected revenue ramp for life sciences in 2021? - Management expects significant growth from recently launched products, particularly DNA and RNA polymerases, with sales anticipated to be stronger in the second half of the year [70][72] Question: What are the clinical milestones expected in the Biotherapeutics segment? - The initiation of the first clinical trial for CDX-7108 is expected in Q3 2021, with additional data to be shared as it becomes available [99][100] Question: What proportion of current product revenues comes from the food segment? - Management noted that the food sector is growing, particularly through the partnership with Tate & Lyle, which is expected to contribute significantly to revenue [107]