Codexis(US:CDXS)2024-05-03 00:24Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were $17.1 million, a 32% increase from $13 million in the prior year [50] - Product revenues increased by 14% to $9.6 million in Q1 2024, compared to $8.4 million in Q1 2023 [50] - R&D revenues rose to $7.5 million in Q1 2024 from $4.6 million last year, driven by a $6 million license agreement with Roche [40] Business Line Data and Key Metrics Changes - Product gross margin improved to 49% in Q1 2024, up from 46% in Q1 2023 [40] - Approximately 5% of Q1 2024 product revenue came from enzyme supply and other commercially approved products, while 19% was from generics [59] - The concentration of product sales from the top three commercial pharma products decreased from 72% in Q1 2023 to 37% in Q1 2024, indicating progress in diversifying the revenue base [41][65] Market Data and Key Metrics Changes - The company is currently supplying enzymes for about 12 named programs in Phase 2 and Phase 3, and for 16 commercial drugs [65] - The company expects to recognize a large customized double-stranded RNA ligase order by the end of the year, contributing to future revenues [60] Company Strategy and Development Direction - The company is focused on expanding its customer base and filling its pipeline to sustain future annual double-digit product revenue growth throughout the decade [27] - Plans for the ECO Synthesis Innovation Lab are on track, expected to be largely built out by the end of the year, which will enhance manufacturing capabilities [11] - The company aims to offer a completely enzymatic process with enzymatically synthesized raw materials, supporting the transition to large-scale GMP manufacturing [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reiterating full-year 2024 guidance, expecting at least 10% year-on-year growth in product revenue [4] - The company anticipates Q2 to be the lowest quarter of the year, with a strong second half expected [52] - Management highlighted increasing customer interest in enzymatic approaches to reduce manufacturing costs and overcome challenges in synthesizing longer RNA constructs [35] Other Important Information - The company ended Q1 2024 with cash and cash equivalents of $85 million, expected to fund operations through positive cash flow anticipated around the end of 2026 [61] - R&D expenses for Q1 2024 were $11.2 million, down from $16.7 million last year, reflecting cost control measures [58] Q&A Session Summary Question: Progress of pharma manufacturing customers - The company is currently supplying enzymes for about 12 named programs in Phase 2 and Phase 3, with a goal to expand to around 67 customers [65] Question: Details on the double-stranded RNA ligase order - The order came from an existing customized program, and the customer found the company's ligation enzyme significantly better than their previous choice [92] Question: Updates on life science enzymes - The company is exploring potential out-licensing opportunities with remaining life science enzymes, with progress expected in the current quarter [63] Question: Expectations for the new ligase screening service - The screening service is designed to provide customers with superior enzymes, and the company anticipates it will lead to additional orders as customers scale up [110]