CDXS - Earnings call transcript Q1 2021

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Operator

Welcome to Codexis' First Quarter 2021 Earnings Conference Call. At this time, all participants will be in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this event is being recorded. And I would now like to turn the conference over to Stephanie Marks from Argot Partners. ahead. go Please

Stephanie Marks

With and operator. Chief are Nicols, John Officer. Thank Executive me Officer; President Chief Codexis' and Codexis' you, today, Ross Financial Taylor,

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

place impact and In is the statements and company's in are the point not risks, COVID-XX virus there on operations, about the uncertainty at particular, information. in available means known should the impact uncertainties the undue pandemic. estimate time they change could that of unknown results. beyond outlook cases control of You is reliance significant company's duration and the on results forward-looking and that and best some because results could based the and any materially factors other actual on involve the contemplated currently This financial affect

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

John Nicols

pleased I'm present Codexis. quarter everyone. Thank strong very results to you, afternoon Good Stephanie. for XXXX a first

by shift mix to year products, XX% a began a than product anticipated. year-over-year. by even momentum with XXX% toward impressive company's With margins we also year of With enzymes, compared growing delivered from our continuing sales the commercializing accelerate, continuing a ago. grew up gross year product revenue growth the with and list grew higher-margin XX%, we revenue we of drivers to ago Total stronger XX%, to

fruit. high-growth Our bearing focus opportunities is on

customer-partnered revenue assets late-stage top segment, in sales for that first revenue. will year. and Urovant five we who over activities base XX manufacturing were have and results who driving with segment, across product own of quarter strong In for shortly. R&D details and this advanced the customers, first programs, Starting off Tools start and two growth for provide segment, trials broadly Ross growing the reporting market, clinical markets. Januvia million focusing had on on installations, list our a detailed updates set This first, revenue quarter, that business product the guidance second steadily and customers, contributed and our a distinct But candidate later quarter coupled of on their products, we over our in of contributed to XXXX. up Merck $XXX,XXX the manufacturing to with each development a sustainable including in in to RNA the initiated Life and an finally, Performance for enter the more Enzymes our strong clinical drug several I'll Allergan revenues with we in are our businesses. provide to of exciting $X had expanding we key completed quarter Biotherapeutics for in And pipeline Science quarter. we In commercial our marketed IND-enabling DNA polymerases, we're adoption strong

lower target products. and also manufacturing core the Codexis' revenues for using leadership where chemistry, enable sustainability value-creating enzymes. engineered enabling and the manufacturing capital-intensive two enzyme for capital Compared constantly is of the we represents end these their to energy built the manufacturing. cost decrease growing to wage our The generation. customers novel market design platform which accelerating dramatically and engineering market processes and traditional continue company's over decades currently. Codexis' enzymes the Small CodeEvolver large the first to enzymes our while high-performance This pharmaceutical being reduce is be sustainable non-enzymatic ability majority of past meaningfully, increase of needs speed discover the yields, our our a Codexis. inefficient, sustainable And molecule and usage have higher to is and reduced been this

of We their in install we with for do have the to pharmaceutical our pharma APIs. the great adopt XX partners. companies Merck enzymes world, them and partnered is with manufacturing Codexis largest XX of novel the a help example work

the diabetes sitagliptin we of ingredient manufacturing with tackled Januvia. generator was efficiency sustainable one Codexis' continues their of the and enzyme a original engineered for earliest that for commercialized of projects today. was The to manufacturing products One revenue the blockbuster us significant drug in cost active of the and Merck be to we improve sitagliptin

more our by own of adoption sustainably a other wide their a decided sitagliptin and enzymes with engineering CodeEvolver on their accelerate help islatravir, their of them XX-step chemistry to the value that traditional investigational More process significant using only As applicability in result Merck project to our manufacture the novel recently, recognized for Merck license performing we drug in-house. on with design convert requires was collaborated processes margins. the and up making to another a on We We their one work platform and of product projects, efficiency enzymes above-average Merck made enzyme sustainable general, capital to of Merck These enzymes priced HIV. portion only first revenue. platform. manufacturing newer newer these yield. three several quarter. installation, enzymes nine utilizes of The engineering the our increasing of of cascade CodeEvolver islatravir are by our process supplied for our an enzymes, possible in over like $X steps, process products enzyme enzyme million extensive dramatically these at In groundbreaking and being profitable to improving proprietary gross are their use

helping Two by antiviral enzymes clinical excitingly, different candidates. manufacturing an manufacturing sustainable of with novel Recently increasing two been their FDA pathways for Codexis' stage proprietary has as pharmaceutical approaching. through in prospects products With COVID exciting and clinical these the COVID-XX we've development, to are sources for are manufacturing companies pharmaceutical products clinical hold development key stage potential Our for more revenues of Codexis. other enzymes of the moving pharma two treatments, number much for processes approval new products. rapidly late-stage clinic also accelerated pipeline large these candidates product potential the marketing and developing than

we enzymes including few lines development sustainably and recycling, In to These past beverage most for in quickly. feed. quarter installation of addition consumer and cost-reducing of lower market promising of the new designing ingredients, care our outlooks. reach customer These Stevia new food the regulatory product the announced launches. of the our PRIMA accelerate to & hurdles, first pharma, enzymes adoption Lyle's and their already M to each DOLCIA other a expanding commercial enzymes enzymes time higher-yielding relatively enable we've industries; Tate sweetener exciting two In years and applications, further Allulose, for short manufacturing range animal have more products TASTEVA to been partner enabling

deep accelerate In pipeline this shift enzyme growing development addition to a faster-to-market of margin will growth. industrial late-stage other towards continue candidates, products and Codexis' and with higher we expect

improvements This next-generation RNA three also for partners. is market addition Life to commercialization for to high market, given that which the polymerase, customer us HiCap Science margin prospects. Codexis new relatively area We've attractive, Codex for enable tools products in diagnostics, and in is opportunity enzymes biosensor above-average highly its and cycles develop a developed sequencing Enzymes Codex biopsy science life can This market marketed is liquid growth growth, affords DNA can the significant company. and Another and highly recently multiple of Codexis' the reverse specific more. customized opportunity be HiFi rapid genomics, enzymes Performance the transcriptase. new expansion customers, applications broad-based polymerase engineer Codex Tools for to we marketing:

RNA Our began to in toward of agent RNA levels. quarter as the using The and the polymerase this side recipe efficiency, success. that the RNA cap the polymerase. to have reduce various In Codex required enzymes provide capping cap on We the graph HiCap enabling already of customers marketing slide is end manufacturing from first efficiency right the these capping dramatically significantly year alongside advance higher at polymerases the commercialization amount improved loading an XXXX. engineered Codex shows rapidly agent DNA of at and we're demonstrating HiCap last way, we led

the range In of also we're vaccines gives for proprietary customer several stages our efficiency addition, various -- the downstream for quarter, RNA several unwanted and increases tested we stage us excellent product positioned commercial double-stranded who it customers, development to product decreases polymerase start customer's purification and with in candidates. The yield to that This benefits. in enzyme other product trials and installation simplifies which recorded first potential RNA, a yield therapeutic HiCap and sales well the the RNA production messenger to of first customer adoption of Codex is validated our manufacturers. In confidence mRNA-based processes of needs.

We beyond. and the and polymerase. formulated making of up next-generation formulation that sales DNA through We're rest been progress to also for a sales finish year, in XXXX mix a continue expect is a HiFi launch sequencing. master product setting the for to amplification standard this as of pace grow It we great library with meaningful Codex used has

drove the tested. increased HiFi Our findings results NGS highest in We use and the AGBT competitive analysis currently their potential fidelity enables in DNA future Codex of all that this interest. customer next-gen our we The dozens quarter, is sequencing for polymerases conference customers polymerase at of which trials kits. the demonstrates DNA with current enzyme showcased

R&D significant XX% we type which are the Life this undisclosed trend revenue recent programs. million the to we R&D up first over In partners well broadly with Tools year-over-year over kicked helped drive addition new growing Continuing to programs Life in multiple pipeline. our marketed $X Tools these customer in Science Several Science partnered quarter, from to products, off QX, in of work also customer-funded QX. projects added

R&D temporarily enzyme, reverse in delaying new demand the for these finalization With the our we shifted of engineering project projects, the its teams resources for some from of commercialization. transcriptase slightly away customer-funded surge

that Assemblies manufacturing of working differentiated the of exciting of the This is enzyme the complete that to groundbreaking on range are to on for to to through in opportunity. a Novel strong now on DNA drug the longer power enzymes One has number biology a performance development products and our from review, to the begin the improvements DNA. enzymatic are market synthesizing long-chain in in viable, with increasing thereafter. project to we commercialization of Molecular with program We Codexis second Biotherapeutics. track this disruptive With synthesis. Assemblies expecting the the synthetic build year. Molecular extremely differentiated discovery remain the Tools Codexis of efforts partner to and Molecular impact launch the second and product of closing In storage. tremendous commercialization partnerships engineering engineering solution market capitalize data term we're potential dramatic high-growth customer see growth Science Leveraging Life XXXX, manufacture in markets wide half in an approach the silicon business CodeEvolver, compete discovery DNA continues to with for and out soon early make momentum process to half Assemblies cost-effective of and Science should work enabling the for for commercially collaboration Tools high-value a potential We this we Life significantly

Here gene therapy a using discovered and pipeline high-value oral of biologics and CodeEvolver we our rapidly candidates building advancing platform. are

programs we ago we clinical in today including IND-enabling development. early-stage had dozen few the in very another Just our programs pipeline years in pipeline. a to and stage Fast only in one and a have forward two

candidates multi-program for Pharmaceuticals with an Takeda impressive gene rare partnership therapy focused on have We diseases. improving

presented increasing of variants proud after strategy limitations that new time-dependent to the with partnered generated predictive CodeEvolver uptake leveraging key eliminating with of Modifying expression the gene transgenes is enzymes and therapies, enable in collaboration programs one Takeda. uptake and engineer using developed of in year greater improved differentiated therapies to a reduce We're over Takeda. a February, into epitopes Pompe to CodeEvolver such have transgene variant data, gene therapy's immunogenicity. novel disease performing enzyme we success have we better enhanced for indications better just with in novel approach for to for in transgenes difficult-to-access et in we GI and overcome discovery Accordingly, targets exciting growth challenging attributes improved as transgenes screened We candidates. WORLDSymposium cetera. high-value therapy improving other gene next-generation we've cellular optimization improved are design We existing enhanced stability safe for stability disorders. expression, on programs self-funded Codexis. embarked Pompe cells another with is rare alpha-glucosidase of oral that attributes CodeEvolver Leveraging efficacious half-life one At and GAA XX,XXX of our are to improved biologics more targeting half-life, disease the dramatically engineered stable some discover a

later clinical four with Nestlé IND-enabling this preclinical third and with is Science most Health activities partnership in for have parties. year. We early programs those campaign are the year. of between to the for biologics and CDX-XXXX stage the complete are studies stage first submission advanced in trials the of its partnered our begin toxicology GMP programs. this poised the And Three Most self-funded Nestlé manufacturing oral three setting IND CDX-XXXX quarter of of including co-owned

take financial Let you me through in our detail. more Ross now to hand results the call to over

Ross Taylor

end Novartis Allergan another QX $X.X as wind revenue Urovant agreement. transfer range than The Gross last tech first strong in sales shift expected million, XXXX with clinical was a product the million strength delivered CodeEvolver compared quarter of million due has basis the largely in million well XX% company range in was mix. development. above first the to on to our million quarter up it Product we lower Biotherapeutics revenues The to a increased as the as million XX% in period. XXXX was for year XXXX. revenue John prior Performance Enzymes Thanks, a Total compared segment. XX% for high for first XXXX our period. up Performance for quarter end expected period. from segment Enzymes afternoon, $X.X quarter were the the for margin year. of were process came first $XX.X Biotherapeutics, respectively $XX.X above On $XX.X and We The in down the and from new quarter revenues million This top contribution of prior major XX for from segment year $XX generics down product high and first the and and revenue of in big driven also from product was the of in prior $X.X by was pharma compares contributors of XXX% for $X.X Novel quarter $X.X from Novartis the our for to the decrease revenue and XXXX contribution R&D with compared results. million million Merck, was as and were everyone. favorable good our year the increase late-stage Novel

to Turning operating expenses.

partially $XX.X a fees in prior million R&D Our R&D the expenses up for the first in increased quarter for of million due The primarily from period. The which lower compensation SG&A higher resulting expenses. XXXX. from prior expense $XX.X were cost legal and offset $X.X depreciation. for per XXXX and the share XXXX were loss million to compensation year were and increases share of regulatory travel per for $XX and headcount biotherapeutics, partially primarily and allocation expenses. million compared increase $X.XX for for Net $X preclinical expenses SG&A to items or quarter due with compared higher million costs or higher in $X.X were expenses of XXXX $X.XX by net the These offset of loss lab supplies period. to year quarter by first million first were of QX the was lower development was

XXXX cash seize Turning puts $XXX company's Cash we in to strong of which us to March and position look the growth the balance were equivalents XX, sheet. as opportunities. as a million,

remains of QX a represents guidance quarterly over to that which year revenues our XX% for results, now growth our we XXXX. the for one. QX We total anticipate continue million similar to XX% to $XX the are with business be lumpy and strong to revenues million a in XXXX. reiterating should level expect Even QX. basis, On $XX between total be the of We

growth XX% We continue toward which XXXX, on end between the to gross year. million margin our and expect high XX% trend XX% expect to over $XX for XX% XXXX. we sales in the to of product $XX represents to sales million be Also, the to range product of guidance of

combined in materially for full SG&A QX, R&D for on basis expected than expenses these lower has somewhat the not from the description of for While expenses we anticipate in and combined back outlook We call our range provided and in changed were XXXX $XX we quarter our million will expenses on in a year of SG&A $XX February. XXXX. earnings the million R&D be to the second

sequentially These summary, strong QX. margin well-positioned to our XXXX to strong are SG&A of I'll roughly in R&D and and from growth in anticipate in and by excellent start a product important addition growth. With QX XX% turn R&D our from XXXX. gross QX should of product QX increase future to XX% in infrastructure and growth investments the In by we revenues we combined revenues increase SG&A we expansion another for in total In back in and drivers sequentially that had are in call expenses John.

John Nicols

Ross. Thanks

the Let remarks year. for context our me out in our goals of close prepared this

Ross have As started strength and I both off financially. today XXXX Codexis shared with has

across Life From also sustainable toward made the clinical continued drive and longer adoption launched critical the as our manufacturing in the objectives for progress term check have on medium all our to biotherapeutic plan XXXX. excellent the RNA widening We in pharmaceutical step and polymerases strategic to that of we out second company installations excellent to our early industrial and will growth well. the Science boxes in advancing customer trials, list our in segment newly this Tools DNA product

class. for possibilities delivering track the that company's by We're on ambitions. product the accelerate the are growth continue excited enzymes to as catalyst limitless will We on a nearly so

make and planet. health We scratch Codexis difference a how of surface have the for begun of the the can to enzymes only people

Operator? to your Now, questions. take happy we'd be

Operator

conducting Instructions] we'll this be Thank time, question-and-answer you. session. a At [Operator

John Nicols

While May first invite very for a kicking the dynamic we're discussion into to want question, off on XXXX you We waiting to the on panel plenary know XXth, that be I'll let you will there. I session what the Conference. speaking be Biopharma all SynBioBeta listen

be attending addition, multiple and in we presenting and will In investor conferences May June.

with We seeing to those. event we will dates. many forward issue you of the We details virtually press those at as approach look releases

Operator

proceed Couillard Our first comes Please your Brandon today Jefferies. of question. question from with

Brandon Couillard

the science John Thanks. afternoon. of the progress detail on appreciate I all programs. around Good some the life

trialing about process talked the like evaluation that customers sort years? how next you polymerase, terms for remind just potential of their you magnitude of let's over us the for say DNA HiFi looks of about the polymerase NGS Can dozens what length talk of potential For the three the kits. in you two using see DNA and opportunity

John Nicols

Thanks Yes. Brandon.

So, time first the DNA question continued development HiFi sales our just for for line polymerase.

So, critical course. of trialing is

So, the scale in are customers small testing.

mix that in their our many polymerase of their sequencing step various master next-gen workflows workflow. various next-gen use are with Our amplification different DNA customers sequencing applications. for There particular

in months. So, typically step. of this trialing say a three range critical effort I'd to is a customer the six would take

have period some of for time. them been of underway Some

are some well But are So, of those of in prospects motion. those customer started some today some of -- those just it. recently

we customers to the then towards we've expect we benefits start trials seen through move discussions. move to if some validate the see performance attributes So, And summer. we'd results and as from sales-based these should the that

run the of in will XXXX should biology is set probably So, not product to year year-on-year move XXXX. that's and see towards should see as up This machine a diagnostics. polymerase molecular the as summer. end move sales really the any -- and used start in ramp this diagnostic world some should the company the the first layer we environment. world the diagnostic that extremely in one in a us through of Pretty a category product their workflow. if largest as in in running enzymes require for DNA the -- meaningful of well versus We genomic to much sequencing through next-generation growth of a We commercial we

three hope, could per product or years successful this over if in so. year. we're today, like the exceeds $XX so, products one largest portfolio market expect And penetrating the next million of largest and And at our be our this we

could pathway plus success So continued we $XX sales -- with definitely product. million see success in a to this

Brandon Couillard

in XQ for your year, hear specifically? just product Great. both clarification that first Did And revenue suggested the think you I a of similar revenues right and Ross. outlook revenues I you terms to R&D quarter. for true the then Is

Ross Taylor

Good Yeah. question, Brandon.

expect products, I saw versus very will in the products in growth with revenue QX. R&D think in we would think similar be of I'd what I to pretty mix product nice QX.

think I comparison makes lump Keep of likely be from a revenues down is large year. there. a had last to mind certainly we year revenue in QX come in Takeda in tough from last which QX R&D

Brandon Couillard

to especially think gross Okay. there talk next And ultimately about products? over margins lastly some towards product you the longer-term mix do progress. gross continue then these product as make of runway Can few the margins newer you could to? good Where the just shift go time years, over

Ross Taylor

I'll step-up at Yeah that answering XXXX. in think nice we a Yeah. guidance see expect I to a margins given we gross Brandon. stab in take our --

gross likely I will would I'm next the I trend our improvement margin you of with in think years. But not XXXX continue improvement see over it product some seeing the think over versus pace we're in that necessarily time. that XXXX. should sure several continue

much the products. mix a in shift the past, that towards of in discussed driven we've As the is by really higher-margin product

Brandon, of terms go certainly eventually over point sure is to out, trying next years at I'm predict trend we a or see where but not there that to this want levels the peak In few positive. really the we

Brandon Couillard

you. Thank Okay.

Ross Taylor

Thanks.

Operator

question of your is from Doug next Cowen. question. proceed Schenkel Please The with

Kyle Boucher

plan businesses. were that be its any & on relationship & Tate Doug. were This solutions they some the wanted had afternoon. on early products and beverage that the to for fruition Lyle? last media Thanks questions. for Hi, I If sale speculation of would start exploring to come is Tate Kyle taking to has the food impact primary Codexis responded Lyle to there and with with just this week good

John Nicols

I'll thanks. Kyle that field Hey, one.

the about primary out. significant big & products division bulk one for put that division primary restructuring be that spin to that that its Tate are top products some potential as customers commodity primary products So What products the highlighted. like there high-fructose & we there one for corn Tate of our rumors Lyle you've of the of potential was out would saw more were some as Lyle spin their out the syrup would division, were

So on Lyle that would a and with Tate focus beverage division. leave their food & solutions

are enzymes Tate would & and Our food Tate on TASTEVA for & products is in food supplier more at Lyle become the were rumors make growing we as for But that And co, These we point. business a that with a we've products it the very division. The see supplier out and way if Lyle spin out division. beneficial, & that Tate Tate the would and Tate Lyle. products that beverage stay today & their & this remain solutions we value key if focused -- division unqualified Lyle products beverage it and products & higher all & that very with kind Lyle the would and for Lyle important as see is beverage into new the of a focused to for Lyle that developed we our we DOLCIA to net new Tate would the division. as have spins to developed are co. on M Tate both important Honestly, new and the we enzymes be Allulose food PRIMA business primary

Kyle Boucher

maybe one And more. really helpful. you. just Thank That's

discovery? Regarding Thank and what And sort your these biotherapeutics wholly we gene both all preclinical should how gated stages from of into you. biologics therapies have owned And stage pipeline the preclinical timing there? are expect? assets oral many

John Nicols

Sure.

in product is development Health in at today Nestlé stage discovered replacement -- is history Nestlé' pipeline now stage. biotherapeutic with is So our we we've clinical being by It the of disease. clinical Science. phenylketonuria That with is in CodeEvolver stage. the in the program Codexis' today for enzyme the the that clinical That CDX-XXXX, -- exception today in the only everything run that that preclinical is Codexis therapy developed

real Science. to under We for the out to quick, shape have product a program CDX-XXXX formally out-licensed in study multiple are good read Nestlé the in is and stage Science's Nestlé' XXXX. dose run prepared address formulation didn't expect Health Health that it they that critical The just in working solid remarks. on upgrades And really ascending control. dose to They we

not it's a be up for a big program pretty Other XXXX, event product XXXX. clinical big it in event. readout set but That than have doesn't a in So critical will development in give a of programs, our to of all we've that stage. preclinical chapters our color of all into three separated programs just bit XX are that. And preclinical the little on

First the is discovery stage.

this variants, results of structure against Here we're we that research variants. We're in call this or enzyme assess target CodeEvolver of molecular variants usually to lot changing is protein the generate different stage The variants. the tens testing attributes those stage clinic the Codexis one before biologic using a discovery of to discovery IND-enabling sets have doing preclinical prepared the these of be sets research, our clinical course to program the to CodeEvolver thousands The the co-owned increasingly done of in lead we preclinical elevate oral that candidate variants up for trials those of best disease. IND-enabling particular all chapter. third and preclinical we the one our we're generating We've identified from of Codexis is relevant program candidates we're animal all starting manufacturing that from an doing done remarks chapter and to Health us IND-enabling with we've for to is, much Today, XXXX hone in from the Nestlé' with CodeEvolver is from where That's chapter. in FDA research the we translatable critical CDX-XXXX. clinical variants trials later. quarter invest that see animal more second The we're on our discovery models in chapter the in get trials end research, to work we're of approaching programs the the That's do we've In stage. over. the work. year thereafter. And that the Science, to the with should toxicology preclinical in we're IND candidate. shared the that in the up going do GMP able we

define So nice feel a there, And by means. -- all your hopefully answered for you chapters I'm development. questions all that you if I critical the not we but think drug various discovery had others I please how gave and of early

Kyle Boucher

great. clear thought, That’s That’s you. thank

Ross Taylor

Kyle. Thank you,

Operator

is Johnson proceed question question. of Please Stephens. with next The from your Jacob

Jacob Johnson

this year Good comments thanks. just quarter. missed and the the Ross -- first Hey, in but if prepared in for Maybe afternoon. comment apologize, really to I the start one I strong

you you last think in just than quarter. Was I pull first on quarter? expressed comment just or better forward any came this had in quarter, what in the the can maybe better-than-expected there cadence

Ross Taylor

Right.

just the I think of really of the it was orders. some timing

in But of Maybe that not what came expected well say expected. it of earlier necessarily pull-forward think were effort expected. we things part than was was originally as was it I different than wouldn't just really a but a issue. we more a timing few Some certainly. on our timing I orders the

year predict any change to on we're it guidance business that off know certainly pleased our this is very strong the of at you can we a be basis point. don't see a number for need to quarterly or you'll lumpy start our but As But difficult reasons.

Jacob Johnson

for Maybe of that trialing outlook could enzymes for more enzymes. talk And some just can the but one polymerase, then just it. for is I kind you the Ross. type the polymerase? market? launch of heard just manufacturing. about initial about I you you for some enzyme RNA And products DNA something talked other but think about John end mRNA there recently are for for touched know better that on the supply Got need Thanks you maybe we've the it's of

John Nicols

penetration given Yes with to ligase relates We polymerase. particular enzyme we of Roche enzymes In see focused enzymes are polymerase the is RNA deck space. manufacturing for to the Yes Science less that the very Life the customer generated first That's of shows in the in of just in there our project more just RNA polymerases. less very given benefit we're as But first have polymerase some Jacob. the provides by the the positioned seeing in RNA partner with capping it as spoken polymerase into RNA that so general, market broadly HiCap time. These We Tools past thanks key a in Tools. the we're prepared the the and Life application to a benefits beginning as We amount today are well remarks with Indeed quarter. to partnered provided do first We benefit RNA which polymerase enzyme versus we've portfolio. the efficiency company given engineer as to DNA manufacturing. color us we're highlighted on had for some encouraged to world we specific a and -- primarily on customer more type opportunity others. to tremendous tremendous that of developments. RNAs. RNA messenger are bring RNA shared manufacturing. polymerase they Q&A, for for data niche a from less today sales It them very would see our incumbent into growing speak in the RNA well -- the meaningful based in trying than think growth the of for gravitas to the a world RNA messenger But enzyme but broad projects messenger it really customer in what growing speaking, this list to potential. DNA in actually And as progress our we're now Science we've their

a seeing enzymes only others color on of cycle that we're these have but we the partnering and/or opportunity, amount So amount for investors our we've just given customers that development a the earlier you not in we're also that and fair tremendous days. of with

it Codexis. So be very, to for very continues dynamic exciting a space

Jacob Johnson

for Thanks I all there. it. color, Got leave it will John. the

John Nicols

Thank you, Jacob.

Operator

question. Matt Hewitt next proceed Craig-Hallum question The your of is Group. Please Capital from with

Matt Hewitt

Good afternoon. question. Thanks taking for

Just a couple for me.

later? maybe and a and we kind should First pick and lull things progress things Is orders received quarter, how initial so you that way development of take maybe you accelerate that about the those it upfront or launched think bigger on from there, the started there's prestocking they take two -- up for the they polymerase or maybe in take then get a get quarter a drug an -- much where first batch will ramp? should RNA like

John Nicols

good fit are working Matt of Thanks Yes Early to their messenger for more say of that orders former. sure. I'd Most particular polymerase particular their into the question. is the smaller. our RNA for RNA. recipe manufacturing

kind programs it their batches forward then in they these pipeline. development in to customers other move clinical stage of within will we with As apply start

either into or trialed RNA These and approach get particular given their hope domino to it first within a customer the validated in to – programs programs agent point. into and pipeline. it are or messenger installed other this one RNA, messenger for vaccine all development therapeutic stage at dominoes So a for is then we it and

the we'll batches for of growth of so see the we've commercial so Orders applying but in in past, within shared customers big we're to polymerase. messenger COVID-XX number we'll development customer are the RNA the generally make come, follow-on starts vaccines, each all two lumpiness growth As then in our and RNA programs stage. for the some clinical not materials that installed as in programs it's and stage more will customers see number

to we're very new so sales, kicked in, to to through as start customers, off commercial And start get into break us encouraged we've first break see XXXX.

year. through be that we move So we're to the outlined as I the very we on that much track on just hope

Matt Hewitt

separate Got it. And then maybe one question.

looking garnered on batches? batch, an or larger is to you're Thank have that will you're there be up when you a efficiencies you gross at difference, move move and can a are then working there commercial trial up you. impact margins these those to on products, As batches as that

John Nicols

– gross a Yes. clinical margins as working Typically we And start when stage, in they're generally we above-average margins. revenue, with we sales, have customer the gross higher smaller they're with those for these But gross being margins. polymerase, see RNA polymerase our through customer, come towards will the RNA to accretive some margins our commercialization bases. from high we generally, HiCap down the for move

matures So bit. what able even margins. a will This pricing of the deliver from we least even for after down would up company comes we've at expect application and that versus little incrementally been the to we lifting our some the product be after – historical

Matt Hewitt

you. Thank Great. Okay.

John Nicols

Thank you.

Operator

is is line Ramakanth, question Swayampakula of Ramakanth your next H.C. from Mr. The open. Wainwright.

Swayampakula Ramakanth

Sorry. Good afternoon, John. questions. Really quick two

that you the RNA answered – picking on And I this see I business is think becomes know up this nice you answered that It's the steam. one RNA would When polymerase. first to question you meaningful? there long think The polymerase line probably extent polymerase how of depend a a time I are bit. didn't project? or of full – trial trialing your period folks on the catch certain the When they DNA far, is it to it but do does revenue

John Nicols

again or related question polymerase was or... DNA RNA second your to And polymerase Sure.

Swayampakula Ramakanth

polymerase. RNA Sorry Yes the one DNA – and DNA polymerase. polymerase one first is then

John Nicols

sure. Okay

So yes, both. good questions

customers was customer polymerase, number commercial that then first parallel our detailing RNA the of Matt in get and a polymerase I programs similarly. new stage is clinical sale to for pipeline little For Hewitt, penetrate that bit a assets their the of their installation into it expand in to work and a RNA one use their

commercial couple of is into broken great. customers which in The stage reality with orders these first clinical a sales already we've the fairly general. So in small are is

number been the from deliver the should ramp grow beginning to they'll this we've And and able what customers of of in year. so

as is now. move plus set the probably, the meaningful for revenues penetration towards hitting that of of we've lot If then trial months we about a is its validate a about results negotiation, XXXX talk performance The engage end product really sales months of timing, meaningful going revenues for sees would conditions, question, million Ross the this trial until kind our product we the to in like today, of installations got end and fully in that as to a about right milestones And to especially -- just to and base. polymerase, sales-based revenues six now. high It's It's that. DNA all So into potential but three really the which to six the customer for are assuming over of this start supply widening about, three and see. they'll in and But it's But to for are pricing, towards time. progress – customer they trialing through of within XXXX all $XX polymerase product qualified happen to to continue customer the the and dozens to $XX go heard for meaningful all each typically, up said us progression widening million stuff benefits high-five us XXXX. customer, the that revenues direct thereafter. really that our RNA you grow aren't DNA year, that, dial like this polymerase

progression for Life how of all sales for the Tool the it's generally, we that's enzymes So timeframe. kind Science that of see actually or a

Swayampakula Ramakanth

your then, any just to us? have update see, you provide Okay. ongoing if Thanks Pharma? for relationship that. And Porton And any on with can trying commentary you

John Nicols

work through progress years pharmaceutical catalysts pharmaceutical an But And they've like work meaningful takes while, our process in the with -- into we've really They've a and for which a to pharma expand into that we'll enzyme very early growing the with reach partners. small helps picked showcase And at Yes. They manufacturing overtime rapidly of manufacturing large their much sustainable pharma them of developed And product that They're nicely to with Sure. partner Porton both, Porton have that penetrate start partner to the that on. ingredients. seen that they're Codexis, to wide a without world, the it how working customers understand They flow manufacturing all China, projects customer lot. terrific of we've so the to a this on turned into to learned customers apply, Porton decades. in they market. ability great track. for installations multiple overtime. They're as haven't us, really, with with to the have the Yeah, us ability enzymes Codexis. translate we've adding the meaningful great many list product sales both have to sales. lot our proficient CMO. hang We've a about very we screen frankly a different but two size the base a become chemists, different spoken customer are really in assistance Codexis at larger of given They pharmaceutical that over developed.

Swayampakula Ramakanth

you. Thanks Thank that. for

John Nicols

Ramakanth. Thank pleasure. you, My Yeah.

Operator

back the I'm call I'll Nicols, showing there John closing are questions. remarks. for to no turn further

John Nicols

Well, us of look on Codexis Thanks to update very to continuing Okay. evening. forward. great progress much. for today. And thank at you forward a going the you all everybody joining We have

Operator

This concludes today's conference.

your this you time. may your participation. Thank You lines disconnect at for

Codexis (CDXS) 9 May 212021 Q1 Earnings call transcript