Codexis (CDXS) Stifel 2024 Healthcare Conference summary

Strategic focus and market outlook

• Emphasis on enzyme engineering for pharmaceutical manufacturing and entry into siRNA manufacturing with the ECO Synthesis platform.

• siRNA therapeutics market is rapidly expanding, with over 400–700 products in development and significant growth expected as more products target large indications.

• Anticipated inflection point in siRNA demand, potentially increasing from 1,000 kg to 30,000 kg annually as more products reach commercialization.

• Current chemical manufacturing methods for siRNA are capital intensive; enzymatic approaches offer scalability, improved yield, and lower costs.

• Focus remains on siRNA to establish expertise and commercial adoption before expanding to other nucleic acid modalities.

Technology development and customer engagement

• Demonstrated gram-scale synthesis of oligos, progressing to full-length siRNA synthesis and attachment of tissue-targeting moieties.

• Showcased flexibility by synthesizing siRNA using various combinations of chemical and enzymatic methods, meeting diverse customer needs.

• Ligation is currently the simplest and most cost-effective method for customers, with sequential synthesis capabilities being further developed.

• No significant technical disadvantages identified for different synthesis approaches at present.

• Major siRNA players are interested in adopting the technology across their pipelines to address future manufacturing challenges.

Commercialization, partnerships, and financial strategy

• ECO Innovation Lab is expected to be completed by year-end, consolidating capabilities and improving efficiency.

• GMP manufacturing will be pursued through partnerships with CDMOs, with a focus on capital efficiency and leveraging existing facilities.

• CDMOs are interested due to the scalability and cost-effectiveness of the enzymatic platform, with minimal CapEx compared to chemical methods.

• Cost savings for siRNA drugs could reach $20 million per $1 billion product, with potential for the company to capture up to half of that value.

• Revenue growth is expected from pharma manufacturing and double-stranded ligase business in the near term, with full ECO platform revenues anticipated by 2026–2027.