CDXS - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Q2 2019 Codexis Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions to how to participate will follow at that time. [Operator Instructions].

As a reminder, this conference call is being recorded.

to host like Mr. today's now would introduce for your conference, I Voss. Bruce Sir, you may begin.

Bruce Voss

Voss Thank presentation today's quarter with participating Bruce updated to note is This LHA. accompany posted has Investors Codexis' and progress. an to section that results codexis.com Codexis in snapshot you call discuss the financial call. second slide XXXX pipeline business Please on today's for all of

Nicols, Financial Joining Sangster, President Codexis me John and Gordon Chief are Officer; the Executive company's Officer. Chief and from

call, Securities this making To and August expectations number Act statements During historical made will management a as of regarding X, management meaning XXXX. of XXXX. descriptions statements facts of be forward-looking the reflecting within Codexis, by the of forward-looking not are of management the of Litigation beliefs statements extent that the are Private Reform they

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

about the that as quarterly call, this company's news as details these see the accompanies filings. well risks, SEC release For please

Codexis expressly forward-looking law. except update obligation disclaims or by required intent to as statements, any

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

John Nicols

thank Thanks, us. you Bruce. everyone, Good afternoon, and joining for

adding performance The our balance on-boarding Expanding new customer to solid of delivered second verticals, the quarter and critical very second on was Biotherapeutics we our in bolstering quarter. all in established molecular another in cash strengthening licensing for and XXXX. these network, advancing base, new manufacturing, diagnostics for continued critical free objectives pharma our as debt Codexis, this to out and very Novel talent, were productive industrial breaking other CodeEvolver deliver human installations our pipeline, sheet we against platform the commercializing

second Let for sales. details and in sales the the progress, walk product way led through you us with XX% Product to up me quarter. some our starting highlight were year-over-year now

sales. for were their active baseload Merck ingredient to sales enzyme product manufacturing in the Januvia seven-digit solid our a usual, As of for

addition, began its Drug over pharmaceutical registration in or following the sales quarter drug have XXXX generated launch, New with as NDA planned million acceptance they top XX $X we their product recent of Excitingly, manufacture of by the customer for batches Application in the another FDA.

eight world total, quarter the second last of over customers up five Performance purchased accelerating our manufacturing In customers the penetration $XXX,XXX reinforcing quarter, processes. the in products real of year, Enzymes from in in

FDA planned the was as filing with product clients out than leaders the generic meeting XXXX list Urovant were for each of overactive for clinical $XXX,XXX vibegron potential Lyle bladder. a lined a M NDA our companies Sciences in leading sales, top the Stevia for TASTEVA in sweeteners. for Rounding manufacturer with they more more supplies the for for product two early their among pharmaceutical batches up drugs, XX sales, & two customers of Performance their stage their Tate and of Enzymes pharma tasting better treatment

XX%, very quarter lifted to half first Product margins in came in margins the product strong XX%. a gross at which

prior year-over-year, were customer these in quarter larger R&D revenues events, down to Lyle spread two the the and Health from year-over-year for up Nestle quarter of R&D excluding predictably a these & industrial But due comps and revenues excess were Science. in over were XX% year large Tate and base.

Merck, in were XX the solid the is to way widening quarter. the platform revenues pharma ranks top two in deepening off upgrade and Health tech Nestle Science, transfer excellent and pharma the added R&D a the generated which start. Novartis, platform was by Six-digit adoption Merck’s to quarter And completed, licensee of manufacturing of clients. to was Novartis other plus CodeEvolver with in

food non-sweetener of under In great a the new applications. negotiated one quarter. last other These sales in top were to out generation since year, since in applications. biology materialize have new deliver excess pharma, and molecular better R&D are so broke projects with to combined in clients of and this with diagnostics Tate initiated with year it's projections these negotiation for -- see Outside in And new customer separate different & they later applications. enzymes diagnostic late that and molecular $XXX,XXX continued sequencing Lyle starting our two been revenues next ingredient under on applications, even R&D each significant molecular new we two targeting

The proteins and and in Codexis reaching diagnostic engineer applications finally these inflection value quarter are blossoming of points biology can molecular creating we food the markets for and the show them. that for

customer the note sales research here quarter, Codexis, in six-digit is customers a for revenues, of record with different XX we combining expansion the with generated company. second at the that I Capstoning the base products which

half our Second maintain year between we sales be than half higher full million. projected $XX $XX guidance are first as sales million and to revenue of

contributors half the of include of & our for TASTEVA phase and Novartis biology single-digit from Tate sales second of solid recognized backend the first half or expected from license, revenues GSK in growth Lyle molecular and diagnostics CodeEvolver license, dollar to CodeEvolver larger top applications. sales achievement New and milestone plus on the low growth sales significantly million of

for significant Nestle of today, on quarter, to move status for of we More is recently pipeline if lining our Biotherapeutics successful. preclinical readouts. Health a provide not the to Novel of goal positive therapy track be by partnerable plans. enzyme the X are achieving And for first at year-end. least these is patient Codexis the data proof-of-concept with on our pipeline there core in milestone of the lot specifics XXXX on our deliver XXXX progress to in segment, as several come though candidates that continued to nicely Science potential earned trials CDX-XXXX's generating and up at to programs phenylketonuria stage early well move In is including ahead a

to like posted Gordon, review I'd call XXXX our Before website. to updated to turning pipeline snapshot our Codexis over the today

XX we've due to X, this engine last needed, inactivity Slide on year, sweetener number during projects Beova. dropped overwhelmed to incontinence installations by commercial fruits see commercial past past nine list new the M the were that is no pipeline net The nine year. our projects the over to KYORIN's our the Tate year installations revenues for for over of ultimate when Lyle's Two can we added the urinary of four off can past from cycle drug & longer two years. margins. two new sales grew new projects R&D and the XX and you sustained TASTEVA As and generate this enzymes

past in across in years. two past of doubling XX parallel. our projects a over projects see number industries successfully and the shown the At of multiple three pipeline And from and Slide number our on level more expanding detailed pipeline Slide X, over increase on X, are you can years, a the to as the XX% applications we XX the of in

For to more increased verticals. number Similarly, performance projects Codexis number different example, XX III of XX three developed three enzyme over or across has last the Performance to we than have Enzymes. industrial II other years in doubled the late-stage Phase industries Phase the projects of

smartly these past great capacity, is Finally, over pipeline prospects in that economic pleased three I'm Notably, for rewards programs in self-funding which expanded doubled larger our is partner to have the that leverage projects. XX. sheet to of can number years to Codexis the generally the Codexis than from balance six note we invest to projects funded it here opportunities. our And has

was a million I'd other ownership like to the very without completed extend $XX position which Codexis that in Casdin placement a than expenses added equity to fees. Capital, with delighted to say I'm its standard thanks special legal to effectively in related private cost June this investment.

Gordon more on financial Let results. Gordon? QX now our me to the over turn call details provide to

Gordon Sangster

revenues Thanks, QX XXXX. $XX.X were John. XXXX million for second Total compared $XX.X with million, of of quarter in

segment Second the $XX.X quarter Biotherapeutics $X.X from revenue from Novel the Enzymes included segment. million million and of XXXX Performance

revenue demand the for the $X.X quarter products. million due Product enzymes $X.X increase pharmaceutical to branded both with generic to for XX% of for million XXXX increased by year second a ago, and from

$X.X $X.X million in versus XXXX R&D revenue QX million of for quarter XXXX. the second was

As was This by now transitioned revenue was for decrease revenue. a due product, the license to which sweetener & of conditional John prior their year's to in QX offset primarily recognition mentioned, to fee from product those software is the the partially decrease Tate services Lyle Merck.

from million margin R&D $X.X revenue the included million to up from XX% Enzymes for year the XXXX increase Performance due XX% with a segment product mix. of ago, quarter and from of Gross and $X.X the for segment. second XXXX quarter second product Novel was Biotherapeutics the revenue the

occupancy headcount, $X.X outside Biotherapeutics from segment, the partially and the in period R&D expenses, operating expenses XXXX segments. and from million due million, to lab related $X.X Turning costs, million expenses $X.X million second were in supplies, Novel quarter the and included primarily increase services. the The Performance to operating Enzymes of expenses $X.X of higher lower relates by from year was prior to allocation offset for

portion were the in segment from expenses Novel $X the associated to of Biotherapeutics depreciation segment the and SG&A increase which overhead costs million lower in compensation. million, offset partially $X.X included with $X.X QX in a million million facilities and headcount, year corporate million included $X.X $X.X is XXXX was primarily ago Performance by Enzymes and and in were The which stock an due from remaining expense. increase from

per with $X.X a million of a stock-based loss or $X.XX non-GAAP XXXX second per The loss ago and On for of depreciation compensation loss year $X.XX for net quarter net XXXX the loss compares adjusted adjusted or $X.XX for of share. per quarter share. of million basis quarter or versus net of the million which was non-GAAP $X expense, second share, the share a net or the per $X.XX second $X.X was million excluding XXXX a $X.X non-cash

half the of tracks this Novel XXXX segment. against of we from total guidance year-to-date split of first Performance from Enzymes the million, R&D XX% XX%, first revenues the second the This $X.X consisted million with from the segment the to half and million the of million revenues financial up first revenues half. year, $XX.X and announced $XX.X for earlier year results, XXXX. and were between were the the the half for slightly Biotherapeutics Turning well $X.X

were Gross net compares SG&A increase product XXXX a year $XX.X margin million. of on reported ago $XX.X from ago half $X.XX first an of from was of or with product the of million of $X.XX million for the per We per share, XXXX due a six were XX% and or for expenses the first first expenses $X.X XX% XXXX months mix. loss R&D period revenues million for half share. $XX.X year to which

XXXX non-GAAP for loss XX, million This $XX $XX $XX.X the June versus net XXXX for share. first of million of increase December proceeds $X.XX or in million, $X.XX six includes up non-GAAP as is On were or we the first XX, of share basis, from completed per placement cash $X.X the private XXXX. net and half months $X.X Cash was of loss a equivalents as XXXX million June. from million per

Today, financial we on our XXXX call were guidance we March. affirming in introduced the conference

$XX year and XX% total growth XX% to expect between revenues million, We million which be represent XXXX. $XX for the over of to

XX% to of revenues fall expect in in QX. to XX% half second and the We QX fall

$XX expect to product million We sales $XX to from range million.

sales for XXXX financial gross expect to all months against the product I'm on And of be report approximately well and expenses to be metrics. XX%. We operating total tracking six between these $XX we XX% million. to expect first we're margin pleased

call to I'll turn that, the With John. back

John Nicols

thank heartfelt joined releases analysts investors press have Thanks, us company to and of for included issued as Gordon. Gordon's you me the personally I from read this we to you deep at the want afternoon, of since retire. all and years CFO I'm and Gordon, plan five us tandem sure a add Codexis, ago. all announcement from which have you our the all done for particularly of

the Codexis all will be in retirement. your best colleagues and at missed, You your wish you

the XXth. of experience, Taylor which CFO of we welcome Abaxis, Zoetis. new time, effective more to XX leadership as part same Codexis most our Ross of now is At healthcare recently than financial August brings as Ross CFO, years

markets background, grow and to will capital in Given Codexis am continue seamlessly industry confident he experience help to his I extensive equity succeed. and step

effectively. to up end and look to Additionally, add across a significant facilitate strengths set the approach, get arrival of speed expand value markets August. of his diverse businesses a and impactful transition Ross's and as to and forward help growing through set analytical quickly we industry We position him and partnerships. strategic significant across and refined him Gordon will the of to sectors

Now longer by close let call me objectives this our strategic highlighting usual to like our growth. near term drive and

technology. platform a focus with protein CodeEvolver strategy our relentless business begins on Our engineering

delighted customer are verticals. garnering that increased spans XX from our pharma the with and base We growing global recognition multiple top companies technology by is

proteins core accelerating artificial proteins. a to competencies cutting biology CodeEvolver scientific customer rapidly edge other at teams of powerful are that Novel’s constantly discover Together by our creates Proprietary synthetic that at ever meet dynamic ability platform the with Codexis, needs intelligence an pace. at the practiced performing is high improving

parallel continuous process In monetize to are our accelerating proteins. business improvements ability those

affirming of synthetic segment CodeEvolver unparalleled. are generating growth are biology capabilities belief the revenue We high the our that in

of We highlighting our capabilities will of is Pauling Chemical Frances Engineering, Institute and guest company-sponsored Technology. who Linus in Dr. in I'm thrilled Biochemistry the to at be be of Bioengineering engineering protein scientific platform our Arnold, the symposium CodeEvolver speaker announce California a will October. the Professor

pioneering her directed that may work Prize the Dr. evolution Nobel the enzymes. in for chemistry recall Arnold received You of XXXX in

building our protein been commercialization and and discovery business steadily relentlessly. We have

pipeline a list of expansion group product updated our over customers shows growing parallel a broadening Our industries. across of

to Biotherapeutics, validating we XXXX. cash million CodeEvolver Novel CodeEvolver at two talented well featuring quarter to further the are our differentiated, sheet versatility we extremely significantly value high we programs growth a positioned variety With balance in opportunities afforded by drugs ability our of least of of close, be on at strengthened status our and capitalize more will new than the patentable bringing In year by $XX end team to create partnerable technology. and Codexis are

overview, With open call the to to like Operator? I questions. that would up

Operator

Thank you. [Operator Instructions].

with comes Jefferies. question Couillard Our first from Brandon

Your line open. is now

John Nicols

I'd I like jumps this you alert before waiting, Hey, -- while apologize, our conference we're schedule of to on investment busy fall. Brandon

the XXth our being through York being through held October New Conference Stifel XX of being at Cantor Conference will in in will these Global and and at November through held presenting Healthcare presentations XX X held November the Stephens Investors York, XX the Fitzgerald Conference We in XXXX be Healthcare section being XXth. Conference X be New the posted York, codexis.com. New Craig-Hallum Investment November in of held the conferences finally, Webcast to Nashville

first Okay, question. the operator we are for ready

Operator

line your is Couillard, open. Brandon now

Brandon Couillard

off, Gordon best. working had you First you, wish retirement, it’s were with a you no I considering but been pleasure the idea

Gordon Sangster

Thanks Brandon. lot a

Brandon Couillard

extent would diagnostics could, customer the the you're on be -- segment. it if John, great more and you get to two would partnered new detail the to molecular willing love able some in to programs

and potential timelines and generating becoming on application the these of what for product sort size set I you elaborate could of If kind much the bigger guess is endeavors? perhaps of the opportunity the maybe revenue

John Nicols

Sure. Yes.

continue with We are are our really two we're that The that for happy see the now that sequencing which and strengthen many in needed we platform with right have over targeting application, generation -- and secured times workflows. enzymes that that These above these new next two CodeEvolver talked past. we are we engineering to are particular the new these projects enzymes about clients. strong not

than than excited, partnership with could is are We're or diagnostics after. one one with of both other this newer of next-gen not niche familiar in well. and targets great applicability of them of using reaction. genomic These In these could a polymerase diagnostic R&D biology. project be all this potential more targeting working words, very more biomarker the the other more They is one customized, of progress one leaders and targets. human class terms by in enzyme. of we're sequencing diagnostic, could there that space chain that proceeding that biomarkers the of are benefit And quite in types are go So multiple we’re particular they’re different Codexis

that application to to their particular manufacture And well. a class with as of And going And it's products a efficiently. partnered a segment It's growth is as this enable the type a see we clients of more in application. up for biology also of more second enzyme. this The molecular niche we're company. space leader

So these growth that's for new a more color Brandon. two about little company applications the

Brandon Couillard

have funding expect Capital progressing months activity, you should biotherapeutic see this the of kind appreciate the raise, do I the Casdin of on that where back? that. XX the we accelerates you the over of that really back now kind next And pipeline development

John Nicols

it on to we've pipeline fast that we're the optionality as Yes, and in I think quite hard as Nestle as can. so clearly We're five led in we programs PKU beginning as to but Nestle frankly that working to the already parallel driving year. do gives we driving as hard us this program, can. we're of out-licensed And

costs preclinical It programs continue you posted be their capital it's rest our those require And we more development Now operating cycle to they on through although add of continue outlook a uphold of we'll far as early unfold. they spending as for piece of expense lot been year. discovery capital and might relatively we’ve But this why year, successful. example, those than how to keep those year this this to move so for modest are a higher the spends. will

year enable with developing not But pipeline sheet effectively will us pipeline. take additional some assets to It Next bets -- associated Enzymes advancement drive pipeline us balance that smart go our to therapeutics those the up the give Performance the in without naturally with runway say of successful those cash, a on only of option the and lot also money. us partnered customer I'd for spending our cash pipeline. the on of the enables that

Tate with & done on We did enzymes that was we a discover, Tate a account. significant attractive for & drive much Lyle that to before the others think element had key and the us our we believe ever showed our early program proof-of-concept Lyle. work commercialization could days that we we of We with own deal Stevia to more

in as well accelerate to help So our we Performance do too. growth to Enzymes look that

Brandon Couillard

Thanks.

revenue If or guidance sort in the Gordon. back half confidence of year, ramp for look back visibility of you more Could half half to double the that you in the compared less and R&D have first follow-up the revs just implies we to the just the the second of year. half? at Lastly, level speak on

Gordon Sangster

Yes, Part yet any revenue on license. is of from pretty we've recognized Brendan. a that, good Novartis it visibility haven't we got CodeEvolver the

second So the will year projects that the to to the we reach to we which will kick expect us other or of confirmed. half announced that by end be got of help in able year, and just we’ve complete the that guidance the

Operator

question next Craig-Hallum our Thank you. Hewitt with from Matt And comes Capital.

Matt Hewitt

Good afternoon. Gordon more you and wishes and you retirement bit enjoy like similar, your a Thanks all on best little the as for I'd congratulate on to details move freedom. and

Gordon Sangster

Thanks, Matt.

Matt Hewitt

Absolutely. Sticking first about question, on. little had vertical is be shaping was should how you those how bit, and I'm any with thinking or the quarter, pipeline of came a there six-figure curious last industrial going if with customers kind follow on we three that up that customers that forward?

John Nicols

in three more two biology of I question. are that molecular remarks and advance continues applications, prepared second the projects application R&D all the the -- diagnostic of grew them Yes, work a the were. gave definition which three in And those Brandon's I chapter new what customers based those of on project to these well. quarter In little detailed,

food The a really and not it's third application, of food near it’s application. food was kind a one another application classic

really aligned industrial we with sector. spoke a the to So last quarter, new as closely time, food space. This it it's

So food used it's put not it in enzymes. it sweetener, it’s another there. a clinics, we for it's Note that

of that revenue are. over those And the three three new the applications. those is second where hit growing the of in there and P&L quarter $X that's for million between them, three projects So well

Matt Hewitt

was in if year, it Did details new be guess the question those those, prepared give The would And pharma And one of a one that next top some regarding could follow-up remarks any helpful? there early NDA the NDA. customers. right? provide an would other two those an the a you was ahead I can recently I -- XX get additional color regarding you stepping received up be us on

John Nicols

information. revenue actually the companies two in top unnamed just four and both the your Yes. those companies area. pharma different I top XX for R&D are in the to product spoke XX And area

pipeline dedicated R&D So the project company actually for area, in they're with process referred was of the the to XX drug the top And parallel one a past. processes. their team leading a revenue of in projects working pharma a

whole a company company. revenue, we're my into actually top lot started top we're list looking top but this very early particular with business at here, not screens. were to at and is with second usually stack a excited And to quarter, gets translate Looking really Those a projects of it hopeful that haven't the really that XX and R&D the different other pharma done XX we gotten client, company protein XX high with very And in they lot have in drug engineering Codexis drug those client of a of the with we the revenue historically. it costly that pharma are showed not and that processes projects company. particular stage deeper did

a In ahead the product did of of area, is close. it -- company. product we you acceptance filing gotten their the NDA. NDA We the another for that XX over to in company million Urovant is next sales drug already They’ve top got addition, did $X year.

their So is up lining year. this launch client next for

Matt Hewitt

last was number remember notes process last give what quarter, have So, QX? my be you I'm great. to somewhere trying sure. for I'm in now? got the you for that I That's working could the one How R&D number it us but group many teams right currently one. are if May

John Nicols

XX Right Yes. now protein engineering teams. maybe we XX, operating parallel are

Operator

from next Cohen. comes question Schenkel our Doug And you. with Thank

Your line open. is now

Ryan Blicker

up revenue May Ryan Brandon's suggest Congrats visibility if earlier have us Hi. This to on job. just taking the that on that to new retirement in strategic up new on first on much congrats another in would you and following Ross how point? Thanks that my this on the on is be questions. for for correct? Gordon so, at question R&D Doug. you QX. -- deal the This do to and is to on And expect seem step guidance QX,

Gordon Sangster

the back say the I'd would good of license. be half on the visibility CodeEvolver Novartis main the We're thing got year. pretty

start haven't projects, we in second a talking deals alluded at in but in will are revenue John of as verticals the well now that and half. And third that the we're yet of them about. But looking recognized quarter in there’s there the of these terms We -- ramp right QX. some are any other to up possibility variety new of

Ryan Blicker

then, And if this, in I your XXXX? you on launch on I Great. and apologize any enzyme provide you this still NGS missed for are customers update NGS revenue polymerase the late can overall year to but track Thank you.

John Nicols

Yes. We still out in NGS up ligase expect getting arena. the DNA focused the is sales launched shortly. is market. to very deliver data enzymes trialing on polymerase which material already be in the buttoned would for Those there The

to So, this be in up before for set be and year hand end. absolutely, will launch customers will

So, we're there. good still work doing really

really are excited. We

workflows. that our good and DNA target to encouraged segment for getting other beneficial only see by in are we are ligase running the looking opportunities a company, really enzymes also next-gen not clients for it's We the for polymerase, be and sequencing workflows for our

Operator

next Thank you. Arce And comes from your Wainwright. question from H.C.

Your line open. now is

Ed Arce

best better you'll Gordon your and you. be off the certainly you on missed all retirement Thank I you wish hopefully and time Codexis. have will a

on pipeline, pipeline. little the more color becoming give meaningful is soon? line Tate & Could a project this new a got Lyle of one the John that than included probability opportunity there and I believe stated its bit that On into other you us revenue

John Nicols

Arce. the answering question, I make sure to I’m just want

you new prepared that referred initiated remarks? Lyle our was the about Tate to projects I that So are in you & -- asking

Ed Arce

Yes.

John Nicols

So -- it's an early it's start. early

early and in & Lyle process, probability lower. advance So, grows. investment But CodeEvolver the the install through by enzyme to always as justifies the commercially Tate of R&D we it creating engineering odds protein liberates is of value success

user technology. now projects. They our & what been power do. we know and Tate proven So It's times can is impactful very Lyle several of the successfully

our usually the how relationship them. the -- guys to is these point really they technology, of which state know with So

if still I directed project knowledge commercializing the with but a the early. the of prospect has of higher their accomplished the into beginning I technology, Tate with is be would this wielding years. of in a things say can projects speaking, two it's project successful like given no started commercialization said this generally all prospect. place, has as other take & Tate Lyle, from So, & Lyle two little ultimately well, commercial to both also go XQ just can -- that which And

Ed Arce

there XX get when then were on over last on does the two months. the additional make Thank generics is business, generics that we board? How And segment, for how you of meaningful and it the projects and on a go projects -- stated this more you. sense you to much

John Nicols

the products sustaining industry. at six commercial for total, generic have in pipeline we Looking the

pre-commercial. We have five

those are a with So businesses example. six sustaining for success revenue than the Merck, in ones total lot smaller

they're generic own a to develop are the process. rare And So pipeline, their enzyme its process, nice targeting pieces scope. noting smaller money they drug generic business, in of pre-commercial of generally spend a side the revenue would it's pretty that Codexis

one that You see done case. can have we in

us. the So it's fund that customer to to programs. those we the project encouraging But drive anomaly, is usually

stable it's segment. for So, nice growing. anyway, It's a so

holders we sector. this patent and think average, but on we I world to grow drug with do in better manufacturing continue support business the

Ed Arce

then And Novel on Biotherapeutics. last question is my

to XXXX. that the saying CDX-XXXX in is you're So expected start trial

So what before the is still, study left started? get done can needs or to what get

John Nicols

program Yes, is now of so this the under direct Nestle. control

So or which the conducted that in XXXX precise, trial Nestle phenylketonuria mentioned lining not patients PKU informed an be we from with remarks prepared up. what milestone the a to Nestle, And I first out-licensing any longer. is the but we’re have have with partnering we in opportunity arrangement earn to involved was

that year, year. next with not a another basically CDX-XXXX models horizon go in milestone say that PKU this it's to well there's marker So things your next on to year continue if the

how And partnering running with we're projects in have very Nestle. they're and close that to that Nestle, both we in ongoing program

would confident assertively we product would. we we CDX-XXXX the and and that are as they're So fully hope as aggressively driving as as

way the the they're with running pleased very program. we're So

Operator

[Operator Instructions].

with Our next comes Schwartz from First Steve question Analysis.

Your line open. is now

Steve Schwartz

him But wish listed I'll non-sweetener in fact cell of With to respect me to on Codexis in these keep application? complexity matters. Let well you through the you on pipeline, licensing food the given Or congratulations to something harass more you're let have the referring licensing And that if Is this life with the those different? John, what project self-funded be phone, Gordon to deals, to his deals. questions in pre-commercial ingredients. serious XXXX in is Gordon. term that glad completely food

John Nicols

which completely in quarter. customer in a That's for Steve. something to the the What question. second generated and Thanks project, spoke I remarks, highlighting was which analyst forget that. different, I asked us I of funded the actually revenue prepared referring for

the partnered one that's team targeting funds we're an developing that line. in using quite self-funded the we're we're our that R&D This in about. excited is with an own And application of one that. for three enzyme So customer an the

will because market as our partner, enzyme limited an to Ultimately, we very company. obviously channel a is seek

we the a into out, we're for will we take clients to create. go to speak that where going the a asset ideally competition partner to a value So market. then will to and on proof-of-concept. develop pitch can a point create have compelling them And And it

Steve Schwartz

that customer doing Tate partnered or & programs this, like other itself project spawn it something coming area already work does from in that Lyle immediate the a so has And you're through like or like these about? through

John Nicols

our can or These value enzyme partnership with business by prohibit Actually, can’t. for with see it where we project they deficiencies that enzyme. it see May our clients our us has privy that our bound work development another own used. we concepts an improved already application, doesn't or an enzyme or that on and identify likely a new team where all. fact we're in those opportunity by in own. frontline research to tomorrow's that are would would used enzymes If ideas to be being deliver market projects aren’t markets today's it No, discussions, where in be an confidentialities own

So these this we we are proven It's We opportunities as in proved proof-of-concept of do successful our projects Stevia and with conceived segments intelligence. proved CodeEvolver. successful with that own well. And model and are much. work very using other like then

Steve Schwartz

generics of direction big does the or the the favorable Okay. -- the competitive for to you you it the sticking on your at share pipeline the it seems same against generic opportunities all-in-all right, go a seems given more shrinking. about be asked certainly pricing you generic favorable Arce you have do. to the dynamics the is What Is the themselves passing here drugs, from through situation? gets this which company's then with life higher And where time of it's generic cycle a market had market volume like what on and ANDAs But any and pipeline. FDA area to snapshot, the in for and generics on it

John Nicols

gone about the that argue generic would have companies is locked of right time. because I generic challenging. many time. can of complexity the more drugs long generic it’s same drug market shrinking you not lifecycle are get of period think the the for successful through over actually These many, I But very in drug. share,

goes generic. the it's as market a position for of ourselves so hard And to all us position of grab to to -- us it companies piece for ourselves against impossible probably these trying

But investments very success. So, we're for returns a drugs. It to target like part R&D will our selected proteins will. continuous as all generate solid that generic we’ve hold partnerships had new great in it projects our today, is on utilization our up of not a creating for good of large where us

Steve Schwartz

expense. first XXXX activities, of at? like you consistent the last does What half to on half where have with can just where if seems $X modeling expense? you And some second the then the year this Okay. in the we been of for look my And touch of question be with expense million, is that speaking. generally around in should then respect R&D roughly It the year

Gordon Sangster

would R&D slightly. up half to in second the expense We ramp

we’ve to some are of the have of of the full half months programs. in the first year added hedge on that six just these some going also of We and depends

that $XX year, So, I back OpEx our evenly to for R&D get guidance total roughly in split million between G&A. the and would to expect

Operator

the to you. call Thank closing queue and any President back John Nicols, I'd to turn at no I'm remarks. in this showing And further the for CEO like questions time.

John Nicols

your ongoing the call to look We're providing about your many and Thank meantime, progress day. of year first great you. forward have last of In over to questions. this we Gordon quarterly Congratulations for career. updates Okay. you everyone the for your everyone half excited a developments earnings our

Operator

your for may great have thank program conference. you and all day. on does Everyone, gentleman, Ladies a disconnect. participation This and you today conclude your

Codexis (CDXS) 7 Aug 192019 Q2 Earnings call transcript