Codexis(CDXS) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $21.5 million, including product revenue of$ 9.8 million and R&D revenue of $11.6 million [29] - Revenue for the year ended December 31, 2024, was$ 59.3 million, down from $62 million in the prior year [31] - The net loss for Q4 2024 was$ 10.4 million, compared to $15.3 million for Q4 2023, while the net loss for the year was$ 65.3 million, down from $84.4 million in the prior year [37] Business Line Data and Key Metrics Changes - The company has made significant progress in its Pharma Biocatalysis business, focusing on expanding its reach to mid-tier pharma and large biotech segments [12] - The ECO Synthesis platform is expected to achieve commercial liftoff in 2025, transitioning from development to commercial execution [11][10] - Product gross margin was 63% in Q4 2024, down from 71% in Q4 2023, and 56% for the year, compared to 63% the prior year [34] Market Data and Key Metrics Changes - The company is seeing increased customer engagement for its RNA ligase and ECO Synthesis platforms, with multiple feasibility studies completed with leading siRNA innovator companies [9] - The company aims to secure a CDMO scale-up partner in 2025 to facilitate larger scale manufacturing for clinical trials and commercial production [21] Company Strategy and Development Direction - The company is focused on repositioning for growth, with expectations for improved revenue growth in 2025 as its ligase and ECO services platform matures [32] - The strategy includes building a full-service development and manufacturing offering to capture the emerging drug innovator market [22] - The company plans to simplify its revenue guidance by providing a single annual revenue range encompassing the full scope of its business [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made over the past year, particularly in returning the pharma manufacturing business to a growth trajectory [6] - The company anticipates that 2025 will be a pivotal year for the ECO Synthesis platform, with significant revenue growth expected in the second half of the year [40] - Management highlighted the importance of demonstrating the utility of the ECO platform to drive adoption among large drug developers [45] Other Important Information - The company ended 2024 with$ 73.5 million in cash, cash equivalents, and short-term investments, expected to fund operations until achieving cash flow positivity by the end of 2026 [40] - The company is actively working on establishing a raw material supply chain, which is critical for customer adoption of its services [24] Q&A Session Summary Question: What will drive the value proposition in rare disease markets? - Management believes both validated platforms and successful case studies from larger indications will drive interest in rare disease markets [58] Question: How will the company communicate progress to the market? - The company will carefully balance communication of progress while maintaining confidentiality with partners [62] Question: Can you elaborate on the customer pipeline and revenue conversion? - The relationships with customers are multifaceted, and conversations often evolve from one service to another, making it difficult to categorize them neatly [71] Question: What are the expectations for gross margins in 2025? - The company aims to improve gross margins year-over-year and is actively working to retire lower-margin products [85] Question: How will the GMP facility impact cash flow guidance? - The GMP facility is still in planning phases, and more visibility on costs will be available in the summer [91] Question: Will the company consider alternative payment structures with cash-strapped innovators? - The company is open to sensible upfront payments in exchange for back-end economics, recognizing the financial constraints of smaller innovators [125]