Codexis ((CDXS)) has held its Q4 earnings call. Read on for the main highlights of the call.
Codexis, a leader in enzyme engineering, showcased a positive outlook during its latest earnings call, highlighting strong progress in its ECO Synthesis platform and Pharma Biocatalysis business. While the company is poised for revenue growth and reduced losses, it faces challenges in revenue generation without PAXLOVID and improving gross margins.
Progress in Enzymatic siRNA Synthesis
Codexis has made significant advancements in enzymatic siRNA synthesis, leveraging its ECO Synthesis platform. The company has successfully synthesized inclisiran through various methods and completed feasibility studies with leading siRNA innovators. This progress sets the stage for revenue-generating contracts expected in the second quarter of 2025.
Strong Traction in Pharma Biocatalysis
The company has expanded its presence in the Pharma Biocatalysis sector, particularly among mid-tier pharma and large biotech segments. Codexis has achieved commercial success and established new dialogues with existing customers, further solidifying its position in the market.
Revenue Guidance for 2025
Codexis has provided revenue guidance for 2025, projecting a range between $64 million and $68 million. This forecast anticipates double-digit growth across its entire business base, driven by the ECO Synthesis platform and Pharma Biocatalysis.
Significant Reduction in Net Loss
The company reported a significant reduction in net loss for 2024, decreasing to $65.3 million from $84.4 million the previous year. This improvement reflects enhanced financial management and cost reduction efforts.
Decline in Revenue without PAXLOVID
Codexis experienced a decline in annual revenue without PAXLOVID, reporting $59.3 million compared to $62 million the previous year. This highlights challenges in transitioning business models.
Decrease in Product Gross Margin
The company’s product gross margin fell to 56% for the year, down from 63% previously (excluding PAXLOVID). This decline is primarily attributed to changes in product mix.
Uncertainty in Gross Margin Improvement
Despite efforts to retire lower-margin products, Codexis faces uncertainty in achieving significant gross margin improvement in 2025. The company continues to work towards enhancing its margins.
Forward-Looking Guidance
In its guidance for 2025, Codexis projects total revenue between $64 million and $68 million, marking an increase from 2024’s $59.3 million. The company expects growth driven by the ECO Synthesis platform and aims to transition this technology from development to commercial execution. Codexis plans to sign revenue-generating contracts for siRNA manufacturing services by early Q2 and anticipates substantial revenue growth in the latter half of 2025. The company ended 2024 with $73.5 million in cash and aims for cash flow positivity by the end of 2026.
In conclusion, Codexis has demonstrated a positive trajectory with its advancements in the ECO Synthesis platform and Pharma Biocatalysis business. While challenges remain, particularly in revenue generation without PAXLOVID and improving gross margins, the company is well-positioned for growth. The forward-looking guidance reflects optimism for the future, with expectations of substantial revenue growth and improved financial performance.