CDXS - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Q3 2018 Codexis Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to introduce your host for today’s conference, Mr. Cain. Jody begin. may you Ma’am,

Jody Cain

you. This all Codexis’ LHA. you business Cain quarter is participating in Jody progress. company’s for the discuss results with today’s financial Thank and Thank call third to

John are Sangster, quarter issued of the Gordon Chief a Codexis from release company’s me Nicols, and financial Officer; the today, Chief Earlier Officer. third announcing XXXX. President Financial news and Executive Codexis for Joining results

news by distribution If to release please not the you the this beliefs or added of Los email received of Litigation to During descriptions this of in and to the They management liked historical Private LHA facts be Act XXXX. call, regarding made of company’s forward-looking XXX-XXX-XXXX management forward-looking expectations Reform November current are of Securities the speak list, statements number meaning X, [inaudible] you’d statements reflecting contact be at will have Codexis. not the Angeles of as XXXX management are and a within making statements with extent that

affect company’s You and reliance in forward-looking involve they some because that risks, on beyond other and should unknown cases, the undue statements known uncertainties materially are, these could and place actual not results. factors control

to risks, obligation earnings update company’s today’s call forward-looking SEC For except please and see details or release statements, about required the any disclaims filings. these the that law. by intent accompanies Codexis as expressly

Nicols. over call John the John? turn to to like I’d Now

John Nicols

Each The corporate sales than delivered non-GAAP nearly performance percent financials year-over-year Thanks and financial than I'm end across break the digit Codexis double segments the digit performance quarter. revenue XX%, growth thank quarterly therapeutic R&D highest product of third versus segment in balance featured for the incomes. years. sheet the combined, double declined added Jody. pleased Gross even to percent percentage. three plus we greater year of All quarter, for in onto revenue expenses XX% and parallel, on XX last enzymes afternoon Good the In sales higher prior everyone, another the income outstanding in quarter. plus growth product bio and a and quarter. report positive you reported times novel delivered of us. by the board joining cash margins revenues the

While to the so Bay Nestlé Merck, Francisco other sales of companies in Nine Science all to once. as and is than accelerating the testament Area skills for. the row one many work the to customers $XXX,XXX It contributors. rewarding Codexis strength extremely to best company Lyle in our plus. for fronts and A registered greater the in brightest year Tate three at including & team and acknowledged see Health of recently sales, $X.X the a expanding on largest second million is and at were San

over to revenues R&D Sweetener sales. leading Let me production Lyle few completed past new a segment. three our new Tate the enzymes the & company. month CEO highlight a few as calorie, call for of today, for our highlight more from program TASTEVA earnings product to earlier this Stevia for of Lyle product M, M, first zero months their the transition successful of enzymes successes Stevia Tate its the chose the TASTEVA In marking launch Sweeteners six performance & shipment to We performance

companies. products our in for global the Lyle portfolio. one Tate this our XX XX R&D over M ahead of top that of We will months time & world's addition that added schedule, showcasing one commercialization M concluded enzyme successfully strong. but we process in It's their he has customer interest that launch expect In for early the another was project enzyme of to sales product, become for significant pharmaceutical largest TASTEVA first TASTEVA for performance the early been

We are forward. going set client to with new this grow up

Our efforts gaining are traction. Porton partnership

screening up each building successfully other. protein are and set their China, for global are them helping Catalyst in capabilities and we opportunities visiting new We jointly customers

team. sale digit our our million Ladefoged received dollar single manufactured newest per approval been of which We welcomed member Codexis company Novozymes, business future. to Claus of Catalyst. pharmaceutical with a major in supply which experience global will at agreement XX long Codexis stretches as to Codexis new years grow its Novo drug, year development a country for approved Nordisk. peak Claus to to using customers is what One term product A comes the of the a back has be commercializing executed, protein has for low expected

synthetic and biology. month placed at clearly in excited event are We opportunities. San base held a SynBioBeta a speech the growth workshop on Codexis summit our to conference of held global days customer and open about prominent booth, our his drive XXXX sponsored, new gave The last Francisco. customer keynote with place, at at ability We leading two meetings in filled this a current

Our engineering design & engine turned Lalonde having system the workshop force for to door Lyle M, a TASTEVA of presentation Stevia Senior standing Vice folks with outside the enzyme describing tour and our multi crowd President the from Jim de away. Tate be room Codexis’s only Dr Sweetener R&D Catalyst attracted detailing enzyme

conference, within successful first diagnostics, Association workshop impact Molecular first Codexis. booth at target and for week, of growing Antonio we demonstrated San the this event molecular AMP or important Pathologist, our Texas. sector our Turning ran in to last held our The

next-gen from had tested field results a findings presented and the In plus days biopsy comparing us from a at samples. of enzyme. liquid benefits attended speech, he publicly performance both X of input supplier's enhanced coverage, our important EVO incumbent XX validated leading their his DNA other AMP, a private we leading showcased using ligase leaders prospective genomics Over at against X EVO DNA and DNA, our conversion low with ligase that our partners meetings on expanded company customers workshop, solid and three well sequencing over scientist our

for progress our sequencing. CodeEvolver important diagnostics significant for is and from second to top to AMP XXXX into generated developing polymerase class diagnostics and release novel growing demonstrating our our confidence for generation R&D next that been our attention the largest first the the ability All-in-all, business this our up in a this for enzyme arena. become have we time at business protein once Codexis years enzyme, again launch, diagnostics come. will create we molecular for as move molecular advantages, its molecular excellent enzyme unique most performance performers us structures data DNA among well setting addition, and that In leaders

to safety this the its blind, on have endpoint the little defined our successful completion this and are our from study take CDX-XXXX. developed potential line Moving results ascending and morning explain on with we like CDX-XXXX in primary The Phase evaluation and summary a announced dose of study you. earlier to volunteers, Xa was In the for our trial healthy extra tolerability enzyme of a top controlled, call XX double first novel with the ever we study administered the to were now to candidate treatment for therapeutic trial by therapeutic phenylketonuria orally I'd time placebo of CDX-XXXX, the single Codexis and conducted met. endpoints for a segment, all of or by candidate, a proud results PKU. clinical

all serious inform pleased to study well tolerated that observed no this events were in and dose symptoms of or at CDX-XXXX was adverse GI in the levels are you any volunteers. We related

involves of assessing evaluation Phase design. Xa Pharmacokinetics pharmacokinetics, GI. CDX-XXXX. the the to They is tract drug treat the study of pharmacodynamics referred itself tolerability, doses is the addition how in secondary to the study the PKU a In endpoints orally CDX-XXXX safety were and were to single or of body. moves commonly CDX-XXXX respectively, PD PK there throughout two gastrointestinal of and and administered for as the designed and

expect levels size that mode we no dose of CDX-XXXX the Phase to blood the was systemic is and the of expected the this analyzing report study. post that not the as systemic of confirmed times at administration, there any by in of significant absorption exposure encouraging in samples Given dosing. evidence It at levels Xa molecule, various and was did

other is set the acid study doses design, to on involves of observed is our tract. The a phenylalanine. biology, endpoint if the CDX-XXXX the phenylalanine, that body. the study pharmacodynamics human for of in a Pharmacodynamics single effectively. Xa the pharmacodynamic not up so GI cannot we in patients levels how acid, with CDX-XXXX. which CDX-XXXX's degrade a was it PKU prevalent amino quantify secondary the of indicates CDX-XXXX interacts converting the phenylalanine it to of assessment drug Phase In designed exist does naturally cinnamic Cinnamic blood action marker of study is of acid metabolize

to other correlate whether central As in a to phenylalanine also production. is study test of Xa the activity The up translate cinnamic the words, Such CDX-XXXX would Phase CDX-XXXX. would challenge was dependent dose patients. desired PKU response, to levels in acid differential dose set results for varying metabolism

we to volunteers. we that healthy pharmocodynamic We encouraged entire the continuing data therapeutic the outcomes and of and valuable CDX-XXXX was bio dose candidate. guide was by CDX-XXXX In are inform are pleased Xa the our as tolerated acid levels indeed range across clinical of well to blood in saw study. the pharmacology the dependent by our cinnamic response generated Phase a you support measured lead treated dose of summary, development

our with Nestlé House sharing been Science. and have counterparts We Health data at discussing

option on regarding to quarter CDX-XXXX the of made decision We first expect be exercise XXXX. their in

It's technology Codexis’s tier Chicago. recognized William edge CodeEvolver for institutional a a top to to intelligence provided month they Before in as within a to in engineering Gordon I want highly engaged reviews challenges. focused investors. be to being our trends investor on room platform This leader held artificial core in artificial intelligence artificial present Asset applying leading exciting in to our real their Management discuss special world intelligence by solving a institutional Blair of capabilities event and event protein invitation financial us results, at last thank

call over Let me to discuss to turn results. the Gordon? now financial our Gordon

Gordon Sangster

and million our Thanks, Enzymes Lyle $X.X of quarter Stevia was $X.X quarter third with of versus then development Nestlé as the the from for CDX-XXXX Total revenues XXXX XXX%, Tate Health revenue. & up for our related John. results and between with were million evenly the from as financial and $XX.X QX Science and to segment M the TASTEVA the R&D included final Performance them R&D their work Total from Performance for R&D Enzyme revenue the second of XXXX completing third to related were million therapeutics from product and Sweetener. I'll and revenues QX for discuss well quarter $XX.X for contributions novel significant segment. XXXX up project million revenue development guidance. review by the XX% year-to-date split relatively the of

that John up quarter revenue for higher demand due product margin increase customer we earlier. $X.X third XX% on XX% addition, enzymes. project of quarter to pharmaceutical Product third a from for million XXXX for mentioned revenue for product XX% of to a new year increase up the was was In completed a ago XXXX with customer to due Gross XX top the with mix. the the

includes to novel from bi-therapeutic segment. operating the for supplies number third million third flowing and including, which SG&A Turning segment offset ago a year or share, The per of partially from expense lower of last $X.X The year partially million or due million of larger primarily of Performance third the quarter the loss quarter $X.X million a quarter $XX,XXX, $X overhead. services, R&D. Biotherapeutics Lab $X.XX a from Enzyme share. for by a rose income the The legal quarter of a supplies. a million the share million, which lab were outside with higher of higher million, $X.X the a $X.X decrease non-GAAP XXXX loss per was or segment from expenses of and the lower per segment. On through result $X.X net million non-GAAP $X.X R&D the $X.XX as per and million expense Novel corporate XXXX $X.X loss the net $X.X $X.XX basis or for million from XXXX ago by Enzyme expenses, for XXXX projects third third was primarily compares million $XX.X Performance net decrease to $X.X headcount. or from year expenses million was of versus for in to $X was due net offset quarter share. the $X.XX headcount

revenue for share was and of the this net share. months or the remained million product by million. a were expenses of XXXX XX, reviewing year $X.XX or percent. the XXXX $XX.X $XX nine first revenues for a first on year-to-date of revenues as a from results. XX% XXXX million months our narrowing operating $XX.X XX% dollars from unchanged year, to were R&D per of for for expenses increase loss for million and net versus ago represents XXXX XXXX. the up loss XX%. as and $X.XX the $XX.X expenses basis over our or for million, XXXX. were which financial share. X% of XXXX nine $XX XXth, Turning consisted And margin and Of with the nine were be per $XX.X XXXX revenue first year-to-date from while XX% both Total $XX prior a reported nine the million; nine $XX.X segment. financial Gross a Performance Novel revenues first and to of million the of XXXX equivalents months at million September and of $XX.X $XX.X of XXX% net months net total million $XX to $X.XX $XX.X million nine million, the loss XXXX XX% million of XXXX or first note, XXXX per Biotherapeutics $XX.X per expected loss Enzyme We for rose XXXX. months up of total Cash to guidance, the months between of non-GAAP Product nine compares the $X.X the for for the non-GAAP up cash R&D first first months share On we're our G&A million. million increased period revenues over our $X.XX segment of This December

raising turn in to relatively the million. around operating be revenue on on at gross expect $XX XXXX guidance We're that, revenue unchanged I'd $XX to be With to to and expect We call we expenses product XX% margin back $XX and to be XX% and between million between million. XXXX our from product like John.

John Nicols

pleased I’m that team first our our objectives. am exceptionally Gordon. of could and Thanks through access wide the of performance performance of and months XXXX, financial a array with nine achieving strategic proud

and and business building confidence while adding to are our controlling our successfully our verticals, expenses prospects new term We and core success. long entering growth

accelerating revenue. edge discover center catalyst that with Our of our CodeEvolver of creates with of synthetic competitively scientific manufacturing the will portfolio Performance our by strategy Proprietary at successes focus intelligence ability that of Merged generates accelerate engineering artificial cutting our protein is an the other core our company to needs be begins scientific In to at continue of we platform meet platform a going CodeEvolver advantaged the segment penetration and forward. will is biology of pharmaceutical at with all our products Enzyme our our recent growing the our relentless protein continue heart technology. and on teams CodeEvolver are to the practiced products. competence proteins customer's pace. ever dynamic at Codexis, unique

more recognition technology reach customers the and our companies. pipeline. by of more pharmaceutical power of is and our with world’s broadening Industry deepening are our leading relationships evidenced of processes CodeEvolver We the across growing

We universe reach are smaller, and partnerships the with of our Porton through a Pharma pharma as biotech broadening innovative companies Solutions. one such to

We a will pharmaceuticals. list extending by growth serve industrial Enzymes growing of in add our CodeEvolver Performance segment verticals beyond to to

and rapid Tate impactful evidenced expansion & two the commercial into verticals food by successful in new collaboration industry with for is Our products Lyle.

dollar enzymes we discussions markets. enzymes biology are just Codexis diagnostics first increasingly enzyme for penetrate underway to Also In a other several industrial addition, develop with novel and growing biotherapeutics. now to for marketplace molecular molecular discover establishing we six applications. are And series develop and lastly, performing to of multiple are high the starting billion industrial

our our drug term for Our engine. CodeEvolver increasingly Xa and discovery over meeting this well therapeutics defined in expanded success and biotherapy all endpoints discovery validating, advance this expertise programs development a and long in in CDX-XXXX medium Phase to team clinical bode as trial from the more area

on proprietary biotherapeutic our to of enable our programs for our well engineering protein performance to of We benefit markets on balance growing from can cash technology wealth as opportunities CodeEvolver our expansion a smartly sheet capabilities. penetrate advance a current into to further have internal and additional list sufficient capitalize as verticals

I like call With the comments, up questions. open to would Operator? these for

Operator

[Operator One you. Thank question. Instructions]. moment for

John Nicols

Forum. question, the to Canaccord being like waiting conference Canaccord’s we’re I’d for of City New sections our at will participating York presentation held presenting to our will the Technologies codexis.com. Select first be Webcast in Alpha Both While of are Craig-Hallum Conference the that Diagnostics mention be and and the Medical investor posted November XXth. we on at conferences at

heading who Morgan January For annual during healthcare will be conference for those are that conference. of meetings J.P. San Francisco we one-on-one the to in holding

Operator, for Okay. we’re ready question. first the

Operator

Thank you, sir.

from question Our Doug comes Cowen. first Schenkel from

is open. Your line

Unidentified Analyst

for first This all to on a met the great When taking dependent is that for Ryan safety my Maybe pharmacodynamic Doug. saw we questions. to Thanks on details doses and CDX-XXXX, response. safety you endpoints should you and dose were data including hear were didn’t four phenylalanine the why more include your data the data, in in cohorts, hear what full expect reduction today? announcement more and that

John Nicols

the and now is that project arrangement a Nestle Nestle. call now option for we’re key ensure exercise. Science, enough Codexis with with has Health collaboration so The is This them to we’re to collaboration focus primary working Nestle deliverables their information under for as

Phase chose until all that So details not to study CDX-XXXX of thereafter the performed. Xa specific we share and the we of

Unidentified Analyst

And products. AMP? can Thank the provide your customers talk on to more the revenues and excited the details then begin MDX enzymes; potential should reception see in you. we a to in expect bit among when these about that strong meaningful more strategy progress Okay. go-to-market And and you NGS

John Nicols

also. Yes. Good question

early next meaningful we expect revenues to So year. start generating

been year any quite and successfully up generated revenues. we lining launch This market. haven't meaningful into this for penetration We

developing encouraging. customers. presented more Now a important sales mid-stage that the first this the liquid – market. in solid validated who meaningful with we're primarily focused workshop results polymerase, at only than AMP of attributes. biopsy. in blood liquid the to enzymes companies product are of either for subset ligase your trace space, to which on also held. we analysis. actually or the specific R&D ready users in were part the techniques product in FFPE two is the strategy like biopsy and more fragments just your tumor See which promote in we’re laboratory in products early R&D showcased the that DNA for clients quite And -- not a can a DNA And bulk go-to-market extremely who not a handle but to performance AMP the either for validate stage with second is for finished also a attributes targeted first presented were our other highlighted cancer time gentleman the yet is that which He meaningfully starting first own are but our of that’s the solid biopsy we few He tumor To question, or from just measurement

approach primary our market much from validation build broader So, these getting sales end-users, end-users, meaningful will enable us from on this awareness. to these to focus is generating a

consider set we're partners. partnering with channel major up to course Of potentially

We’re some to encouragement. of to talk companies some starting these with

general good Hopefully some for and in And that you. for MDX. all market to approach so, was color that's our in going all detail

Operator

Couillard from question next comes you. from Thank Jefferies. our Brandon And

open. line Your is

Brandon Couillard

conversations initial still any any with Hey, licensing afternoon. Were with could about in to And year? you talked CodeEvolver high-level, GSK, of some expectations deal this potential in collecting respect partners? pipeline. talk John, of you that as in you back and of thanks. about just your negotiations, update those Merck the royalties coming to at sort back Good the involved of a for potentially us half kind gives an

John Nicols

Great. Sure.

and penetration protein So and in for we from Pharma come our to and of manufacturing CodeEvolver. that continue our highlight of catalysts our deepening benefits world CodeEvolver widening the

and the For improving is been deals done efficiency CodeEvolver reason GSK. Merck drug did primary the for we cost with of have like manufacturing and already making

likely are little the the the to been have, of a we have of world, CodeEvolver see we we the It year. of particular their guidance CodeEvolver we is across significant of able opportunities that the in revenue put CodeEvolver a companies year. expand of spreading with, to Regards taking licenses manufacturing did well the And least close year's remains of partner we being more platform for little end just CodeEvolver and already the longer accrued early most delivering extremely into together one when landed So pharmaceutical it's It's the potentially million since up we a license. for flow one we the not prospects for a that over backend to time recognizable now next we’re numbers milestone the while improvements And especially this tag leads single-digit that be Codexis, consider a It's There with not and event continuing next companies. afford may is advancing this a parties GSK them At are under this we one reach our may we the that to slip but the encouraging. payment companies by set outlook small to the this platform to assume was haven't they that of largest more numbers. meaningful but that them platform developing year and license, price work value but Merck. milestone pipeline. that year. with those economic are the two licenses year,

we’ll the So full out results that year you we our beginning on close year. in update of next as

Brandon Couillard

first expect quantify And the any from could revenues shipment you initial you. paid those them rev of sweetener? the left be you and the is Gordon. Super. And how for in from how deal licensing the in to this realized sort to ramp then, of And to Thank then still XX PKU I Nestle, terms million? remind the shipment? X from for chance just of the you guess much us rec terms one Could

Gordon Sangster

Split the collaboration X Sure. separately place left then have QX. recognize to couldn’t of the the $X XX they and about Nestle, we that recognition in us. upfront million team and million with between the strategic

roughly Tate Lyle shipment.. $X So the million, &

John Nicols

This year. in the first some is also next that quarter expect of

Gordon Sangster

was it. early it’s hundred thousand demand sounds Excuse us for and several then forecast it too thinking based that that this I but like yes. and at just will about earning dollars on be XXXX, Yes, his for & growing was strong those Tate to CEO’s me, Lyle, what their comments morning, call shipment in that product.

So, year? we we’ll in guidance be able next that to clarify our that give early

Brandon Couillard

Thanks. could John, the efficacy biomarker for, came if And data today, I any sneak by one that as -- it indications on analysis out PKU one chance? insights did provide via in to

John Nicols

response, dose prepared the had in press the release and in this that remarks. results bit We little we -- earnings more I morning's a detailed the highlighted in Yes. pharmacodynamic

of indeed, production an So increasing amino -- CDX-XXXX. indication acid that's CDX-XXXX. of of doses saw we activity yes, and with they such of There the biomarker was increasing this

Brandon Couillard

Thank you. Got you.

John Nicols

Sure.

Operator

RK [Operator from Wainwright. And question you. Thank Instructions] from our H.C. next comes

Your open. is line

you. Good questions. Thank quick of afternoon, John. Couple

product? a option decide with CDX-XXXX, on this what limit Nestle terms deficiency calling the moving to option. could on they there trying – I’m time understand is your for how would On what what And forward -- depending point be decide, to at -- the on just of in that

John Nicols

the study. by of looking Nestle, behalf Phase Xa the Can't speak at of same encouraged on data. they We’re results the are

to we have to option to most the the only time of before of one was for study Xa decide. amount Phase negotiated can call us deliverable And Nestle but the exercise. the important then of not provide they completion the So

them So as move our into is decide full they and focus to quarter. that to the we make we’ll first get RK see decision how

call we've degree expect of that the very sharp timeline will expectations We the in quarter. prepared have clarity given made on in decision remarks first so a to we good option, the today's their be

focused think forward. our stay on key we’ll I So just path

in it the on be well terms And this next And think enzymes, of couple suddenly over that line? sustainability the about should we how running pretty years? of Okay. performance and is what revenue of to seems

John Nicols

you year. breakout XX sustainability on The continues to at grow next grow – the our product well highlighted gave that but not a to We’ll but in the a sense, of percent. topline performance year. in product highlight average it's above just move has will The whole to pipeline share opportunity for in just of the enzymes And one the that Yes. a projects didn’t pre-commercial beginning company patents size guidance this commercialized. the margins. our covered it huge of be growing very a Nestle, of couple was will continues the and I generating I next it’s nice examples, year, plus that I gross by

we Going grow forward, revenue forward line. excited so company we’re lined did third to XX an That's a there. that going in transitions from up The amount only to stable the revenue business a certain line top more company Pharma good. new uncertain modest spotty really quarter. That's of with that

from haven't end show to beginning Brandon's sales for we we close where our going back molecular year as even one diagnostics. to platform We’re of getting question start next licenses revenues back year of started to materiality of this

a business of material leading our done and haven't for one our forward. that becoming outside of going significant a We enthusiasm amount businesses molecular and food the real revenue and We're generation company yet. diagnostics continue to we biotherapeutics for share and of – pharmaceuticals

Codexis However, and to talking industries. multiple are great other companies inside

confidence of and products in degree will projects high those translate a have into and those we ultimately R&D So spaces too. meaningful

kind opportunity just of significant. space is amplify So the

here machines with the CodeEvolver so the And commercially fun our accelerating accolade ever as ability of both our in great. to we’re ability great of using the work better really of getting running execute having and culture pace company. protein to creating companies, lot better terms and with Our an a evidenced is about by with these

Glad to hear that.

have there defined not development this Novel the are hear the something there should on be two On are update provide you’re Biotherapeutics, of what could we an now. pipeline, any the Is today already if I when which the believe you about molecules? to products update you – in going providing

John Nicols

good yes, question. So,

Okay.

we’re working that which actually -- discovery on call. project, programs So the all we currently, highlighted was in in show there a in today's we to addition PKU five is additional biotherapeutic corporate parallel deck

One by the as reported Nestle Science. biotherapeutic. the partnership gotten Health to of have and enough Science. discovery those we of that development with five is Nestle Health And last funding It’s for in to being that particular Nestle project funded is increase level encouraging quarter

four are we two storage on The for be of amino final we’re self-funding, administrable orally with targeting focused diseases. conditions other CodeEvolver. lysosomal other think And improved potentially deficiency are can a biotherapeutic therapeutics or acid that two them enzyme other and the disease

gives working So six this who area. behind veteran, the in last up past running. We’ve some Genentech He's in the within on five. those in a in ground of recent five at you months. We worked brought staffed we’re details the that formally the some of

We’re advancing pipeline. the

excited more by on and move that we year next and providing pipeline. be as the pipeline we’ll into We’re color clarity

with the Lyle, comments And help Honestly related Stevia is Tate in you and you with of [ph]? wanting potential be the partners from this but and food. to of real question has out morning. then to Yes, & to in with obviously with made the folks, right heard do terms there, & business work within you that engineered Lyle things Stevia, you that associated especially last the cell the it food are more molecule general that that with that success going are success Tate direction in the the how Stevia made

John Nicols

to technology. our leading continues target be CodeEvolver The food Codexis for industry Yes. in

nutrition We Tate with new project on. the new in both clientele working space, with of and & then and expect and growth we’re food Lyle hope we are encourage

process we SynBioBeta novel did space. at system the process, And TASTEVA details the great and remarkable. for M create So we some it remarkable. I production the & and And presented production it highlighted multi-enzyme a Tate room was that was note. for the Lye only. continues The customers to and standing the launch that synthetic of be to It's for biologists taking are conference work scientists

for – business about Do year this hear you to probably talked this they’ll that about another something about most think segment something be or XXXX? in deal

John Nicols

Yes.

additional on build would certainly to and as projects will if share, very color think I certainly it’s XXXX a in thereafter well. But it small. be hope we some

Thank Thank you, soon. you Talk to you. gentlemen.

John Nicols

Thanks.

Operator

you. Thank

question comes Matt Craig-Hallum. Hewitt from from next Our

open. is line Your

Matt Hewitt

were previously and so gentlemen, or at on I think end in color afternoon, hoping to to of these of any of to of still be developed your had commented part helpful? have Is year. status one I here those I’m plan of these. Good you’ve a would that prior answered you one two the internally least here, that tagging any partnerable you that questions by around if But apologize biotherapeutics, the next hoping late, regarding

John Nicols

plan. Yes. is Yes. Good the still refresher, Matt. Indeed that

by encouraged in of very kind still that are milestone hitting XXXX. We

just to And much on going do so color we more how that provided haven’t we’re just yet.

Matt Hewitt

you And enough. announced other create relationships regarding opportunity that the relationship to Fair is Okay. in CDMOs was broaden your for there with set? opportunity then April; Proton to new

John Nicols

manufacturer customers of other with it’s for the may not closely pretty pharmaceutical for course, CDMOs. There big better is are good tell deliver Proton, if are times to did the behalf industries provide ones CDMO Often Pharma I We those special structure be of work some of wide and a catalyst universe our on CDMO product, so partnership Proton with in think our to sure. one Company’s us arrangements available but the our companies some of a the will we aligned.

motivate I get never is set think places to our we've way with deal been it’s in technology structured them the before. Proton uniquely the out to

a with at partnership and the companies It’s It's progressive least one to of far give good. dealt most team. So this great run, a XX-year Chinese It's we’re in very a really so career. ever my going so leadership. good great I've the

are excited to in both independently. guys really with the I’m altogether marketplace and working starting and promotion the the So partnership we’re of difference and make hard a these

good. our pay a on are feels Proton. long-winded So say answer focus big quite to is for us And pharma our that's with we beyond going off to stronghold primary That’s to encouraged work extend in that. to historical

Matt Hewitt

then Okay, last one maybe understood. And me. one from

enzymes would getting done thinking versus Any be along opportunities R&D is your performance split about internally started. lines be there other is a that As that or those Thank or color some have dollars? what's Like purely new pipeline, should goals your of based a you for your between internal project work on you towards continue you're upon to developed investing going in what target appreciated? the pipeline a or we you. project how it

John Nicols

Yes, Matt, good.

growing balance that’s much choice make about the deal. strategic partnering how and a can course we holding until pipeline, apply P&L we’re generally R&D of sheet a funded cost that to because So biotherapeutics bear against a internally have years to several out

about in how careful direction. much we’re So that put allocation R&D we of

R&D working has range the in XX% So on team capacity it's our biotherapeutics. of been of been the

a ago up PKU. just course at four when Of zero just years we up that's from looking lot from were and

segments. so that's R&D enzymes incrementally growing, capacity performance has So the for the been but

in has the So up. the given with a proteins person been growing CodeEvolver of R&D month a has gone productivity to modestly, create headcount given

growing a we're performance pipeline line list holding the a engineering in for fixed opportunities amount overall of both target of well. large kind biotherapeutics to success directions against a protein against and capacity we’re enzyme careful of R&D So as balance

Matt Hewitt

Understood. Great. Thank you.

John Nicols

Thanks. Sure.

Operator

Instructions] Steve [Operator from First Thank our Analysis. from And you. Schwartz next question comes

open. Your is line

Steve Schwartz

gentlemen. afternoon Good

John Nicols

Hey, Steve.

Steve Schwartz

the dropped call. my I was off on I and One. Star Sorry, got first on

John, other with? the the were you’ve of that bit if familiar where apologize. are already, sustainability every almost the call, customers very industry. that we ask question a already outside I of you know those and of So the from And three talk think what three quarterly But nine? above what’s Can of the lie, little then revenue this XXX,XXX this the nine then XX other I but those threshold, about certainly at answered I

John Nicols

Yes.

that outside familiar the three of all you’re with are So pharmaceutical very companies. they

material and molecular this clear the far a all in certainly – revenues, been revenues haven’t there to it's year wasn’t customers. hope or segment so And we time, more layer of so XXX,XXX industry industrial that material they quarter, But, in kind generated pharmaceutical already that any industries diagnostics, third so well, we that list. a in that any into in been at other other hasn’t few

if of XX therapeutics, really pharmaceuticals. of so the is one tied to are Nestlé is you the XX food, and XX top So, them take and them are Enzymes Performance

Steve Schwartz

Got it.

John Nicols

addressing long ways. went multiple Yes, I or about and kind RK growing the it just a company in of answer for from comes but revenues, sustainability into

So are them million or a of these more. $X.X XX -- they're some

their them those of are continued smaller up for are those of a based the The installation milestones sustainability. probably Some half products oriented. drugs ones, million mostly using they for than on of set approval R&D they those so products, products, are less

So for working a on we're new a creating process. new protein

and will more where the advance the some for So for CodeEvolver comes X but sustainability Phase to we from that clinical trial, They Phase are grow need we that commercialize. chapter product. we there another -- advances when for sell make product with need or to example, create try from R&D, X more ultimately and to drug into product of the that is they catalyst more proteins

And spreading. the so ever accelerate. continues have details contributing is remarkable We've is The the where never I $XXX,XXX. -- but think see we've the to had batting pipeline how revenue don't XX I quarter really a It average had good. to continues probably to be check over companies we to

new is targets sustainability by that's customers of So next bringing source new another versus one. in quarter this with

sustain in in the us Performance those moving that's -- so for segments. topline that are all are direction right growth Enzyme to And frankly all the dynamics that's

Steve Schwartz

the at the certainly Nice me. it moving now that job XX level. about forward. to Yes, for hear nice ball Anyway that's

John Nicols

Steve. Thanks a lot

Operator

you. And I closing turn John to Nichols remarks. I'd like back showing the from conference to now further am line. Thank questions no for the any over phone

John Nicols

questions. the high day. have performance Okay. strong updates core excited prospects nine entering We meantime, a look our In to industries. Thanks first ongoing XXXX with about providing months proud additional for good very your for forward the great and business the into We're growth everyone you. future value and coming to everybody from of progress our please

Operator

programming. for gentlemen does you today's thank This conference. the conclude in and Ladies participating

a You disconnect. may wonderful day. Everyone all have

Codexis (CDXS) 8 Nov 182018 Q3 Earnings call transcript