CDXS - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Codexis Third Quarter 2019 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After speakers; presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded [Operator Instructions].

I would now like to hand the conference over to speaker today, Bruce Voss. you. Thank sir. ahead, go Please

Bruce Voss

you. This all discuss LHA. you progress. Voss quarter is participating in Bruce business for and to financial with today's XXXX Thank results Thank Codexis' third call

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

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

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

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

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

A -John Nicols

highest this our revenue Good our Bruce. the quarterly performance generation everyone, Thanks, over XX% of promised quarter. joining you year, quarterly million current our the third $XX reached sales we delivered half up highest strong in the under Revenues seven nearly for year. proud exceptionally prior up and stepped us. years, I'm the business ever quarter revenues for and the representing on model. The afternoon, for of second thank

of Sales revenue strong the XX%, the expenses million growth year enabling product of into in quarter. nicely operating confidently continues our to and growth discipline revenue management guidance resulted with to full year. across The lines, spread and between respectively, momentum an R&D in profit in combination fourth our with operating performance revenue versus XX% of prior quarter, $XX and was us That the $XX million. reaffirm

importantly, with quarter customers Performance industrial and the mission revenue that platform segment by million expand a powered do of company over Our $XX and prove the engineering Enzymes revenues continue possibilities of This the of generation growing so. comprising and year-over-year, that our up Performance set and to to business are the harness proteins. to we list parallel to XX% a In verticals. over our Enzymes showing is CodeEvolver segments untapped And against way enabled success is diverse to core Codexis the sales. protein

penetration momentum with and global pharmaceutical the we manufacturing. Let's and in during start quarter protein expanding our delivered catalyst the deepening

share more the overactive for to XXXX. contributed of QX that again the million for Pharmaceutical time customers Kyorin highlighted took in drug launch expected from for and in treatment vibegron, their five a sales last shipment way the their active The their Januvia, a first for proud contribution are by the same in the pharma ingredient approval manufacturer bladder. a another top XX manufacturing Merck of product digit enzyme product for we seven lineup notable as we followed of of led in quarter customer each use Here quarter. with our than again $X

that Novartis noting than nearly drugs, an that world's of commercial the this purchase one million two for seven our protein relatively continued of list of the of one less out digit commercial sales, generic their of manufacturing largest their infrequent per companies generic rounding year. consistent purchased our once pharmaceutical product drugs. enzymes worth And for one $X campaign of is takes their of typically place catalyst

Our CodeEvolver for licensing quarter. was strategy also major the highlight a

A City in of continues transfer end newest of and team to been from same working revenues excellent scientists back the licensee of we time earned first CodeEvolver our and These deals been Codexis revenues Novartis parallel, from CodeEvolver Novartis scientists. California learning deal the our technology CodeEvolver the In million dollars lab months pace. in their both in several The Novartis For quarter. material the in us peer front materials several end R&D we has the Europe. for establishing quarter. delivered transferring at activities last the of have from the an labs Redwood Novartis CodeEvolver the

one from In stream the we CodeEvolver what a our addition, license, of with This milestone payment was licensees. revenue $X during in GSK's associated Codexis an its milestone from be the are continue manufacturing significant the million enzyme More coming first for advance CodeEvolver commercialization it of enzyme improve advancement QX to pharmaceuticals. back potential patented we milestone growing in that is seven to this of recognize the designed a a over possible expect key GSK end commercial the years. generated process digit to step of to for historical should payments

of in the Enzymes growing top with penetration into pharma CodeEvolver drug XX companies Performance Continuing quarter. performed our four other R&D manufacturing, we services

first customers, their X in For the started few ever work these of project have three last we months. digit

their the That addition set sizable working we their Solutions for at also they as nearing well of model having larger to pleased In is are with installations pharmaceutical is be of custom appear Pharma Porton technology adoption that customers. more much our pace manufacturing with opportunities.

Tate this Enzymes light industry, customer different customer up be other product applications to initiated sector growth XXXX. shared are We enthusiastic XQ, relatively in but sweetener ingredient each in wide in they set responses and base. Tate newly Shifting food new last their us aggressively their Lyle to we to our for had Performance food forward The outlook quarter with TASTEVA a projects markets. and two discussed from encouraging. market & stevia continues and M non-sweetener one with Lyle in continues have quarter qualification other the highlights and new &

materialize quarter for once the And better applications, QX. light excess days molecular see revenues in and are with new to quarter. DNA delivered we $XXX,XXX again last It's In even in great next and for they we applications, clients R&D in are continue beginning fourth two combined of top projects diagnostics biology these of molecular from generation sequencing. two this on our momentum revenues to new highlighted that

clients new and in generation, move these industrial towards verticals and exciting continue other as to Other well. revenue opportunities application

for highlight XX expansion R&D $X business. exciting As continued both product exceeded our them and Performance six the expansion digits are for half and customers applicability contributed the revenue across Enzymes to sales of These QX, base diversification the of Enzymes times sales of Performance customer above a and million our level. in in

Biotherapeutics segment to made Sciences sales Health $X.X up full to our Shifting revenues. of Novel Nestle million segment, the

hands, partner's we sales costs have know last were majority patients months. last sales the clinical same associated negligible they with continues in for were the or CDX-XXXX that quarter for as PKU the sales in segment dosed than CDX-XXXX Nonetheless, year making well phenylketonuria in that up of PKU As a the expected, program recent lower first year. versus candidate and with our revenues as and large time

Biotherapeutics Nestle as year. up discovery Health and the of made the the that disease majority segment's we work partnered for are programs with revenues quarter another close preclinical vast Science the quite encouraging for out results target research

candidates to continue to status two expect Novel We've remained look the to self-funded targets. list sharing For track forward pipeline, across achieve product our on year-end. and partnerable around we advance of favorably of Biotherapeutics we details entire the

engineer XX two that truly and to biology of high age And events of its demonstrate a lastly, synthetic coming I value excitement our of want infinite our with proteins. to proud power new near share more I'm team engineering than than of Attendance organizing XXX a protein exceeded Palo expectations. for from more in groundbreaking at day California innovators Codexis institutions our Alto, mostly two held forum last month. industrial

enzymatic manufacturing, Frances in as Arnold throughput have diagnostic bioinformatics. discovery, highlighted as applications keynote This in biologics agricultural were and thrilled We and generation, high our successes Dr. forum technical as progress recent well to speaker. and library screening

that the to world. The for pioneering received Prize new Dr. the the entire proteins and XXXX recall level high the real may tremendous two ideas presentations and over interest in expand enzymes. Nobel quality in generated impact directed of You of inspired and in evolution the days Arnold work discussions her energy of Chemistry of

the Summit event the SynBioBeta Annual sponsorship participation advancing world's arguably Codexis's mankind. largest The synthetic and leading focused gathering on followed at on impact biology its and

stage Lyle, the of in increased CodeEvolver, world main The of Officer in successes. commercialization of a synthetic space real well enjoys fireside between truly the in and technology a importance of chat biology as protein Technology success and & engineering, lead as Chief of included this several edge sign arena. both our role stream and events a highlighting the participation is delivering Codexis workshops, leading Tate and Our me preeminent the

as over With to now speed a CFO. me during get those his turn Ross job first impact Codexis and who to remarks, the quarter up to done let call great Ross? has Taylor,

Ross Taylor

million, $XX.X Total John. of of third XXXX. $XX.X you, up in from the were revenues QX million for XX% XXXX quarter Thank

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

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

development Novartis announced quarter $X.X Lyle The million the These Tate CodeEvolver due the we were services of completion milestone previously. year Health for the that the CodeEvolver prior that in $XX.X offset from payment revenue XXXX. from GSK to GSK third agreement & mentioned from partially in from the of agreement by from XXXX John up increases R&D to to Science. and XX% increased QX a May revenues increase million, primarily Nestle was lower fees and

the the the R&D mix. to of margin XX% with from year $XX.X due XXXX the and XXXX $X.X segment. changes third revenue quarter ago, Novel from third the Performance quarter included Biotherapeutics product for of million to Gross million segment XX% on a in product revenue for Enzymes decrease was compared

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

SG&A depreciation Biotherapeutics $X.X the were of expense million segment. The $X.X segment $X.X remaining expense. expenses included the and in which million in Enzymes and SG&A from included QX expense Novel million portion from $X.X million, corporate of Performance overhead is

were million and services. offset in lower $X.X was from year which in partially SG&A with by an associated outside increase costs facilities headcount, due a increase ago, to expenses The primarily

income and $X.X a or compares per the year a basis, share. Net of quarter income the net expense, ago third share. compensation diluted per adjusted quarter depreciation million zero excluding XXXX per adjusted $XX,XXX, of stock of based income $X.XX cents net was the non-GAAP of share noncash On share, net diluted third million $X.X $X.X for for versus of million third for non-GAAP XXXX loss was per or $X.XX XXXX $X.XX or a which with quarter diluted or

the to from million revenue million. first Biotherapeutics $X.X Performance revenues $XX.X R&D results, the Turning XXXX. revenues were $XX.X months $XX.X from from up and million year-to-date of segment. and first nine nine were months the the XXXX million the Enzymes segment for Product financial total million Novel $XX.X XX% of consisted of was

product first on to revenue was product for of compared period, due the change XX% margin the prior a Gross mix. for XX% with months nine with XXXX year

million a R&D $XX.X SG&A $X.XX a months loss were with months first expenses $XX.X of the first for which the We net share. reported million. $X.XX were $XX.X last or per compares first of of year million loss for the nine XXXX per of million expenses $XX.X nine or for months nine XXXX of net share, and

share. loss net the $X.X of basis, net per XXXX million first loss $X.X non-GAAP months months was of of non-GAAP $X.XX loss XXXX versus a a the the or nine a first million share of for or nine per On $X.XX for

were proceeds that as of million, $XX XXth in Cash of June. increase completed $XX from up million the million December This we private and equivalent includes on $XX September XX from XXXX. placement

are press revenue we the the on affirming in XXXX in noted introduced call guidance we our As release, conference February. today

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

our product we And be expectation million on sales sales to be for also $XX our affirming for a to maintaining of XX% gross margin expectation and to are $XX We in are between million. XX%. product range

far Lastly, $XX million year-to-date should compared expenses for with of currently $XX operating million. so estimate range operating million, to year. year, expenses trended to of this expectations regards expectation in We to a of approximately expenses be $XX.X million the previous modestly operating $XX full our our below

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

John Nicols

Thanks Ross.

Let me confidence highlighting a growth. the close that my driving and prepared longer remarks double-digit strategies deliver consistent our to term by near are revenue

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

Proprietary discover together to the cutting CodeEvolver continue to are reception value The pace. ever at and and constantly of teams an applications commercializing continues the expand the by intelligence proteins core scientific the needs. as for competencies events proteins with delighted high discovering practiced at sponsored with customer at were accelerating ability with Codexis We dynamic novel prowess the our improving commercialize our synthetic to that we demonstrate edge engineered artificial real high CodeEvolver meet biology platform, in at Codexis performing proteins. rapidly world

ability the quarter our results Our financial in strategies. further for our exceptional produce such to reinforces confidence

We applications continue revenues well. other verticals to and and develop manufacturing, diagnostics biology. progress layering and as top on new as pharmaceutical growing like confident molecular in deeper into food, Plus, penetrating growing as Enzymes molecular new on we're make Performance we well

patentable, partner drug to candidate, differentiated further we Biotherapeutics, our and we ability year-end. around the status advance partnerable at are drug least clinical we develop two Novel our other bring of In to and as candidates programs watch CodeEvolver first validating new discover

Our financial At at CodeEvolver XXXX introducing afforded the million balance $XX final on full well to year we our be in call in February close and our XXXX next technology. when talented we conference and a by team results. note, value are on than quarter featured the our Codexis and guidance versatility high sheet more of discuss extremely capitalize cash growth our quarter variety opportunities fourth positioned of will we

overview, for the like Operator. I'd questions. With open that to call

Operator

Instructions] [Operator

John Nicols

in York Stephens our the alert first schedule. Conference Alpha the we busy be would November Select New our following in participating would Tuesday, will are XX at you I Investment Hallum We for be and While next like waiting Craig conference investments question, of Conference the to Nashville day.

the XX, Healthcare New Conference We Canaccord Stifel York. will Forum day New Wednesday, XXXX on Genuity following & the November Diagnostics Technology be presenting will Medical also in at XXXX And the be in at York.

be at and presentations Stifel the Webcasts Conferences Stephens to codexis.com. our Investors of of will the posted section

with for of Healthcare LHA the contact to heading meetings January, them to Francisco during conference. arrange Conference that us San you to those please For Annual work with in one-on-one JPMorgan

first Okay, operator, we're for the ready question.

Operator

comes first with Jefferies. question from Our Brandon Couillard

is line open. Your

Brandon Couillard

Good thanks. afternoon. Hi,

John Nicols

Hi, Brandon.

Brandon Couillard

would start food John, like the business. I to with

ramp you've kind quarter. million an about state? we potential light And you this product that Can $XX the mentioned us can little begin it for a was stands just bit where terms of Thanks. ramp You at [indiscernible]? revenue with of stevia at in think, you update share in Tate point, with talked to toward the that what number of steady

John Nicols

market Yes, it's qualitative encourage the receiving early position portfolio. sweetener TASTEVA sweetener. has within better customers kick M are stevia days continue But still. to really Tate with new to they & about yet Lyle their continues that tasting in. to us And how ramp the very and assertively their volume product inputs

in quality forward And back year about calendar they little and bit the talk a color XXXX inventory you were in about year, expect much come build can had guidance. as through working they to that February we finish & and and recent We most this quarter. of down as Lyle as what Tate get we'll from we XXXX

certainly really reaching that of long how is but at to future kind But just will ramp distant the quickly state. expecting Yeah, to this of can and the of product our list is curve. they term growth just be too penetrate market. their of early the And we what encouraged growth the their not by that It's prospects slope sales pretty in see hard we're of very continue Brandon. top question

Brandon Couillard

Excellent.

your share perhaps you with then talking you in investigate of a quality to the in the that right you hold you really number terms Biotherapeutics team may with in to and more teams with XXXX parties, any on third terms capacity with programs many to And do On But how can partners stood of to first Thanks. you share your now? of compounds, have conversations little of you thoroughly the where us qualitative the nature about talk other bit relative conversations side, working can maybe list off color. general, and of understand time of want around? may color the be discovery today

John Nicols

Yeah, good question.

gotten of validated that show competitive the status market. in out and/or that our bill preclinically be disease products that preclinical we've our partner needs So, research with differentiation versus product asset may the means the results

getting So a our in course patentability plus of row.

So that conversations we're partnerable with reach doesn't presume that this status. in clients to

partner and to data On are are continuous some in research the But, a preclinical It's showing kind consistently have early marketplace we to value. we ongoing may that's data of that be of Biotherapeutics between, the going or driving very get our to of finish year, data the an year. We're have the areas that this with seeing sharing we strategic into how we show next as maybe close. going of event data where kind sense we're with a of generating. that you we kind that preclinical be a companies

So we're encouraged. very

team to have preclinical over The that generation. data into out little Those a that a well from to validate programs towards for The well are have of of the coming as impressive these for Nestle, trials. believe the entire to Those clinic. research generation we working trials average now had success are the year. research with preclinical R&D very the partnership kind discovery candidate candidate in candidates very done preclinical on a proceed on will both advanced differentiable need effectively as we've across, that pipeline, a of been data

advancing. well our So we're Biotherapeutics excited with really is how pipeline discovery

we're or targeting XX operating kind number Today, regards and is roughly of company for whole for engineering or protein the the XX teams. of pipeline. the parallel teams the the the therapeutics that that capacity Your both we're applying R&D final question with company percentage the

right working new of are we that we're the XX the right building in molecules inside effect world protein on labs office here the to in So brand now.

and with As targets the world is we many which hit times, demanding we've accelerating. can protein molecules real highlighted speed discover

those those forward the teams are of or those that's versus or number XX of XX now. focused So so five discover XX%, Biotherapeutics roughly teams molecules going teams more on right And yesterday. can of the pipeline or

continue XX those the Performance The some we self-funding. share But Performance of working Enzymes other business. funded for do on Enzymes were also of teams for minor projects XX mostly are the to

ligase launch in invest next well. continue the For sequencing example, for we the sequencing for product, are second the of area, programs the and the DNA DNA polymerase generation as nearing next two even to our making better we market generation product the

Brandon Couillard

Thanks. That's you the and helpful. is for implies million realistic the year just Thanks. of product And only with about fourth us to in puts sometime. the then quarterly for would be guidance Can for Ross, $X.X just $X.X and million, which one lowest number quarter XQ? some is that the takes help revenues the in how

Ross Taylor

are the guidance terms I a sales, think we the that opposed where sales, same in the time, business of product unpredictable. we to bit, more product at strong I lower range really is I Well, the the At end. think year-to-date higher had quarter of probably end a as little think realistic hits

that this So, point. at we just bringing weren't up real range comfortable

Brandon Couillard

Very good. Thank you.

John Nicols

Brian. Thanks,

Operator

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

open. Your line is

Matt Hewitt

strong Good performance. congratulations the afternoon, on and continued

John Nicols

Matt. Thanks

Matt Hewitt

segment First there you non-sweetener new a up, on couple had the food food there. last projects the quarter,

expect their process come back there kind customers that walk out little to going where a QX bit? of a do here. of they those to like of that little Sounds figuring teams and that in stand? you a was maybe And how a Is through back function bit pause

John Nicols

at you high got think it I level. Yes, a

third for disclose one those modest to and with in in client two million there another with with $X CodeEvolver back work that revenues Tate did, candidates the not the applications, third than And two took & we one be We quarter. quarter. So yet, in downstream combined combination projects with place generated the we're liberty at Lyle we validated could to those create used less those that clients.

that kind customers. sense cast a go natural performing customers short-term food process get pause of a makes how is the it the to ingredient and and it's that ingredients really, the for food and so for trial the where and actually And

that project while so the it's quarter. much quarter prepared next be I in or to it those so revenue to the encouraging. even certainly any significant generate significant third us, become fourth didn't are areas And still continue in the two encouraged really commented bigger in Like year quite going remarks, into revenue contributors and we for

Matt Hewitt

And I it completion is is then PKU Xb opportunity, the milestone it's next the a know That's be what the think great. or the completed walk starting a milestone us would expected by Phase the just of payment? on X, trigger to Phase through end Does you regarding be year. trigger

John Nicols

The of completion next trial. trigger Xb patient is Phase the a

end years that for mentioned when Is next year. the and we be year, the that our some payment. it done And a of may which it million by as and that's done of be of completed triggered could next we the will milestone that sharpen so payment true? Is at in you milestone beginning come clarity year Phase until be but end I the think the forward will not XXXX? Xb $X that's done possibility Codexis towards is that XXXX And trial about to that the point with, guidance at that

Matt Hewitt

million. $X It's

be next that to my Okay, was question. going

quarter. you Thank much the on congratulations strong great. very that's So

John Nicols

Thanks, Matt.

Operator

comes question with next Schenkel Cowen. from Our Doug

open. is line Your

Doug Schenkel

afternoon, guys. Hey, good

John Nicols

Hey, Doug.

Doug Schenkel

just the a Nestle. on Maybe follow question up last to

patient but according PKU situation that in I question, a to to is might thought early was trials.gov, just a study Maybe because a Phase XX was Phase is rare able curious, what clinical this to Xa. be initiated that disease I'm like, X move So naive this normally September. Nestle right you expected?

the suggested was if handle better additional conducting So whether this on the all small have just just curious this Nestle was as of initiation is something pharmacodynamic dosing. study is study and or by to FDA if expected, I'm that the a

John Nicols

way plan. clinical we've course the Nestle ongoing this running Yeah, - plan. for CDX-XXXX the to that was I it, ongoing And we and is we're been on positively, to this the they're This running this They've appropriate trials their it to the clinical get very assuming program. continues the how trials dictated, to been right and trial of is to running it's plan out involved through not the the their beyond control, plan it's what the and And expense, think right by expected data do. clinical do according run expecting but they're as think bear was way certainly they're clinical for go. this they them

Doug Schenkel

Okay, That's than a that that there want that. Thanks almost was going one that the me Was then to maybe I line one The guidance. forecasts for up all item function right. helpful. was through there? walking a back And margin. or to quarter of go light just every obviously on anything a line In little on bit was better expected. gross the bit else mix just quarter, was

Ross Taylor

product purely just your Yeah, mix. that's

Doug Schenkel

Yeah.

makes which and on Based guidance then back XX% to you XX% split revenue indicated that seems And to reiterated the if of about go QX. be QX Okay, QX, year sense. expecting you on be we call XX-XX. the you're now now, to guidance, was really half this second it the for expected like

being And of you're But ahead business. maybe of like plan? the you're just tracking you're the if just the pulling fourth that ahead recognizing out plan. I say make revenue of inherent sure. QX lumpiness just or because feels forward would I a I'm tracking just these guess point want wondering conservative I to as straight function of It quarter basically positioning largely really from facts you you're

Ross Taylor

get keep total here We QX, couple Yeah, the in to plus well past revenue sure we expected. number revenue guidance past even and I mean, before, the quarters, well third things better did have this as quarter, the QX. years. in guys in didn't same million a revenue our do I'm we have here get to big a have there. in mentioned we product in accomplish still I than very we heard guidance. And I you we as though think $XX

quarter. is the visibility We we our time, big this same have same we point. revenue think mean, I still fairly And a we've good very hurdle we this for a bit kept results volatile think at guidance do again, that's at have accomplish. to reasonable reasonably and business the total But quarter-to-quarter.

Doug Schenkel

Okay. super All That's all right. for the taking Thank helpful. questions. you

Operator

comes [Operator you. RK Our Wainwright. next Thank Instructions] from question with

open. is line Your

Swayampakula Ramakanth

my talking you. Most understand questions finalizing been and Good To start also potentially them. there about starting in Thank regarding the folks. couple for of to Trying the were status from of manufacturing products Porton tech what's but evening, Pharma off, have their the to CodeEvolver answered plans a them you partnership. processes. use

If I call the said some late. before you apologize, I little a got commentary on

John Nicols

problem. nicely. very is going The partnership with No Porton

do the capabilities, protein with with engineering Because a year we're technology we're what So with a partnership like little library Novartis. over demands we Porton into of no partnership. were case The like in we doing transfer just now and and set nothing modest, that for the right Novartis. up them capabilities screening

transfer well the end quite last certainly time year. So the some been of done has before technology ago,

that's just opportunities out they've many running reinforce been just manufacturing does more that the pharmaceutical So And many, manufacturing. is to their the it model, pharmaceutical importancies business, and model. Codexis

every many on bid month. projects they So different

with efficient. back We its whether kind routinely get. Redwood talk warrants protein They're against to doing them talked existing job screening catalyst rapid them. of to opportunities. And great very be that collaborative about biocatalysts, protein our much very in model screening set the for done chemists. efficient they've results about those We're in that. them. manufacturing of very is here City and And a We They're great support they larger of engineering

get experience traction, with installed. catalytic prospects processes, with and now protein growing real that, see technology now our their we're starting base with And that with them to to see

partner hope business western and to quite sophisticated competent, They're So with, very we're we're things oriented, for very, growing encouraged, forward Porton. with continue and pleased. very look a to we're growing

Swayampakula Ramakanth

regarding Thank our CodeEvolver you. And licenses.

can think once we will So started. was pollinating you I I license we that the impression get your because - under

are we on where this at expect initiating a terms license? in Should So the that CodeEvolver point? we within track new something six of months next

John Nicols

the any the the CodeEvolver or justifies of to licensing but deal some another expand dozen investor. want a for more quite kind expectations run operation. some No, your at for other a the struck equipment, in time dedication also wouldn't set of the to be or case investment build to laboratory CodeEvolver license for themselves to licensing not the RK least fees only and entails, employees quickly business to that client the the takes Codexis, I It hiring of footprint that

the it's with big technology they're decision. to we've they're on applicability. So that working witnessed their some CodeEvolver commercialize. works the to of time And validate show usually that us that molecules it projects of with our investment trying all partners to them takes against a as three kind It means

just a little long bit winded of So, answer. a

having these steps for larger fruit the right beyond just number big justify are work CodeEvolver our with business. bear of more GSK pharmaceutical you and to license to business investment. as build our of all could consistently We And getting other Doing customers more widen companies. ultimately more progress to the investments Novartis. CodeEvolver who more and and case theoretically those and heard excellent We're penetration are Merck, CodeEvolver

for in as So effectively difficulty] as hoped as quickly you we'll and question. as posted. We're [technical your keep that assertively processes you working you'd as possible

Swayampakula Ramakanth

No.

customers sense, the that in more. seven regarding you talking about $X this were Thank Okay. streams revenues Then quarter talking widening or contributed there you. about how were you're are who million

or for sustainable how be streams could next revenue potentially these over pros and revenue what the So are the year? and streams these pushes quarters

John Nicols

their seven; world commercial. consistently solid for products contributing highlighted a these leading got the partners enzymes are Novartis, manufacturer, we've are are commercial, our Yes, I Nestle. Merck, growing us. I consistently of mean And generic

So pretty that's revenue steady a base. sustainable

have a positive of the data. lifted where gotten for or more mentioned product two already of approval, they million in million $X their Another one Phase them quarters up $X sales. X Lining customers they've pharmaceutical row plus,

highly the likely it's So get and they launch. will approval

So be get to we in but for would them waiting market. launch their and traction

the shipment So product assuming for ingredient dollar relatively I a happens sustainable very the color active This into a be Novartis for is million all small, some relatively did that $X to commercial, multimillion spotty put a in company. Novartis. quarter. revenue generator that'll

year. as not usually frequently they So don't it per product they their manufacture batches. routinely, in manufacture as And once

after third the next year but this in occur maybe year that that. until won't the probably of that had year, occur quarter again possibly and we So

a revenue as others the So a that's that on highlighted. not quarterly not I is consistent generator as, certainly of basis

a when of sign million reach fairly these, million dollar status, of always confidence sustainable on sustainability, to answer, growing but are revenue average a stage a of this great they other some for I base you RK that's generally $X the clients is company. think, give growing So that in detailed they list investors that plus and And plus that generally. not

Swayampakula Ramakanth

you for you. is all for That questions. sure. the Thank taking Thank

John Nicols

RK. you, Thank

Operator

from comes Advisors. Silk with question next Silk Investment Marc Our

Your line is open.

Marc Silk

for you Thank my questions. taking

will gross John, focus Codexis? impact wins first selection, the How which no shift this XXXX be Biopharma's cost in one who is masses reducing the the matter impact So medication will to on could the of big margins.

John Nicols

properly It's for manufacturing Thanks. softball. as that a the modest their place the is definitely step pretty particular that's to drug they there. of margins, is boy, Yes, every tailwind in change our the pressures much component out the what one cost impacting the a big our cost applied of pharma largest can which ingredient, has in company. costs technology enables technology a to can exactly active That enable is pricing that's turn of and

technology. strength by that's our big this We our enabling business Performance Enzymes within more support pharmaceutical the see teams an which a enables more manufacturing. as pharma little the our we to engineering And with we're core general, in higher capacity for us work process underpinning So, then sophisticated it. for of encouraged in see

Marc Silk

the the get that's prices thrown if bathwater baby lower. doesn't if go these hopefully the with Well, do case, out

the just curious? Beyond kind from to you kind the Meat. was with Is rise people likes opportunity there reached I of meat the products of out there plant question of any of based Next

John Nicols

really trend natural biology some Beyond Meat, that used world. we're it's things a success are Burger. in that synthetic the Yes, wider world exciting There's consuming pathways to companies other to bio in synthetic having the like Impossible that

new, Codexis very So but but an far These company. not so overtime. that be we been is a relatively this could of their find materially, the unfolds certainly hasn't a we penetration class. It is and prospect see that how new watching for this rolling area and is we'll interesting this are are space markets companies relatively

Marc Silk

they think I'm hit out, didn't to to life while whether for And stock your me, still the you're interesting. last That's figure got trying guidance. quarter, pummeled going of your

say the answered. you was costs projects you near it But were I your to importantly, increases were term, that increases let's obviously more question future. increase going amount revenue also think that the which in is of self-funding, but the potential

that kind because might your which then answers, have of Is to beneficial correctly? less assume make is partnerships with figure the I the all to to where, and which thinking knowledge, out more would am where kind that sense ones can you fund, self-funding - you you'll ones know sell I partnerships. be So and the of something shift

John Nicols

R&D winners, half years is deal ago, self-investment. our anything. we In made Tate a sell And with and of Today self-funded not story average the of to a some fund or five our great Lyle. projects, we to six then it close. right. but beginning capacity And Yes, of stevia half, batting & the brought pickings we've quite didn't was got & Lyle towards close Tate

orally a phenylketonuria PK, with made Nestle. that enzyme disease the administrable until we the was The deal self-investment for

in So we to think for we higher when we a that are its batting way continue self-invest, monetize we a value ourselves stronger great puts that. clearly average a and and And shareholders. and the can position us priding Codexis asset with

forward So the cover. a give cost to go of a to that's the the some times us increasingly the risk what lot partnership we're is doing. best spread day, But to end funded short-term way at of

very So a we've of nice got both. mix

Marc Silk

confidence mouth Great. listen, is have my just to my enough this And other money buying back the put I and do overdone, is. company where to saying basically appreciate I and insider in you the shares

success. good congratulations So a and on quarter continued

John Nicols

Thanks Marc.

Operator

you. turn to the John like over session. call I Thank concludes back now the closing This to question-and-answer remarks. for Nicols

John Nicols

beyond. progress meantime, Okay. in results have forward you. everyone And of updates our We're for outlook for quarter, ongoing a questions. providing and the Thanks to the for the look excited XXXX our We to your everyone and Thanks. remainder very about great day.

Operator

concludes conference today's this gentlemen, and you for call. Thank participating. Ladies

now disconnect. may You

Codexis (CDXS) 5 Nov 192019 Q3 Earnings call transcript