Codexis (CDXS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $8.0M, meeting expectations but down year-over-year, with full-year guidance reiterated and double-digit product revenue growth targeted, excluding PAXLOVID™ enzyme sales.

• Technical progress included breakthroughs in enzymatic synthesis of full-length siRNA oligonucleotides, launch of dsRNA ligase services, and strong momentum for the ECO Synthesis platform.

• Net loss for Q2 2024 was $22.8M ($0.32/share), compared to $11.5M ($0.17/share) in Q2 2023; cash, cash equivalents, and investments totaled $73.2M as of June 30, 2024.

• Commercial organization strengthened by hiring a new SVP of Commercial Operations to support the next growth phase.

• Announced asset sales in biotherapeutics and new licensing agreements, including with Roche and Crosswalk Therapeutics.

Financial highlights

• Q2 2024 total revenue was $8.0M, with $6.3M in product revenue and $1.7M in R&D revenue, both down year-over-year due to lower non-recurring items and product mix.

• Product gross margin was 45% in Q2 2024, down from 71% in Q2 2023, mainly due to product mix variability.

• R&D expenses were $11.4M and SG&A expenses $15.7M in Q2 2024, with SG&A including a $2M one-time, non-cash stock-based compensation charge.

• Net loss widened to $22.8M in Q2 2024; loss per share was $0.32.

• Cash, cash equivalents, and investments totaled $73.2M at quarter end, expected to fund operations through positive cash flow by end of 2026.

Outlook and guidance

• Full-year 2024 guidance reiterated: product revenue expected at $38M–$42M, R&D revenue at $18M–$22M, and product gross margin at 58%–63%, excluding PAXLOVID™.

• At least 10% year-over-year product revenue growth expected, with 2H 2024 accounting for ~60% of annual product revenue and a strong Q4 anticipated.

• Path to positive cash flow by end of 2026, requiring a doubling of product revenue, is based on current pipeline and additional ligase orders.

• Management expects existing cash, investments, and revenue to fund operations for at least the next 12 months.

• Pre-commercial customer testing for ECO Synthesis™ platform expected in 2024, with early commercial licenses in 2025 and full launch in 2026.