Codexis(US:CDXS)2025-05-14 21:30Financial 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]