Codexis Reports First Quarter 2013 Results

  Codexis Reports First Quarter 2013 Results

 -- Product gross margin increases to 38%; Product revenue up 34% from fourth
                               quarter 2012 --

                  -- Conference call today at 4:30 pm ET --

Business Wire

REDWOOD CITY, Calif. -- May 07, 2013

Codexis, Inc. (NASDAQ: CDXS), a developer of engineered enzymes for
pharmaceutical, biofuel and chemical production, today announced financial
results for the first quarter ended March 31, 2013.

“We are very encouraged by the continued growth of our pharmaceutical business
during the first quarter, which demonstrated strong sales and profit
expansion,” said John Nicols, President and CEO of Codexis. “These
improvements were driven in particular by long-term partnerships coming to
commercial fruition, most notably significant sales of enzymes to Merck and
stepped up collaborative revenue for argatroban injection through our
partnership with Exela Pharma Sciences, LLC. We also continue to expand our
pharmaceutical business through new partnerships, which we expect to increase
our development pipeline into the future.”

First Quarter Financial Highlights:

As a result of the termination, effective August 31, 2012, of Codexis’
Collaborative Research Agreement with Shell and the resulting loss of
associated collaborative research and development revenue, Codexis believes
that year-over-year comparisons for its first three quarters of 2013 are not
an appropriate measure of the company’s financial performance. All comparisons
used below are on a quarter-over-quarter basis, comparing the first quarter of
2013 sequentially with the company’s fourth quarter of 2012 financial results.

Revenues for the first quarter of 2013 were $11.5 million, a 45% increase from
$7.9 million in the fourth quarter of 2012. Product revenue in the first
quarter of 2013 was $9.1 million, a 34% increase from $6.8 million in the
fourth quarter of 2012. Product gross margin in the first quarter was 38%, an
increase compared to 15% in the fourth quarter of 2012. Collaborative research
and development revenue for the first quarter of 2013 was $2.3 million,
consisting of services of $0.6 million, an increase of 20% from $0.5 million
in the fourth quarter of 2012 and royalties and license fees of $1.7 million,
a 240% increase, compared to $0.5 million in the fourth quarter of 2012. The
increase in royalty and license fees was primarily due to $1 million in
revenue recognized from the launch of argatroban.

Research and development expenses in the first quarter of 2013 were $7.3
million, a decrease of 31% from $10.6 million for the fourth quarter of 2012.
Selling, general and administrative expenses in the first quarter of 2013 were
$8.1 million, an increase of 12% compared to $7.3 million in the fourth
quarter of 2012. The decrease in research and development expenses and
increase in selling, general and administrative expenses was primarily caused
by the realignment of certain departments, including supply chain,
engineering, quality control and quality assurance, into a newly created
commercial operations department resulting in $1.6 million of expenses that
were reclassified from research and development to selling, general and
administrative beginning January 1, 2013. When combined, research and
development expense and selling, general and administrative expense decreased
by $2.4 million, or 14%, compared to the fourth quarter of 2012. The overall
decrease was due to reductions in headcount and other discretionary expenses.

Net loss was $9.6 million, or a loss of $0.25 per share, based on 37.8 million
weighted average common shares outstanding in the first quarter of 2013. This
compares to a net loss of $15.5 million, or a loss of $0.41 per share, during
the fourth quarter of 2012.

Cash, cash equivalents, and marketable securities at March 31, 2013 were $46.1
million compared to $49.2 million at December 31, 2012.

Financial Outlook

Codexis' statements with regard to its outlook are based on current
expectations. The following statements are forward looking, and actual results
could differ materially depending on market conditions and the factors set
forth under "Forward-Looking Statements" below.

Codexis reaffirms its prior outlook for the full year 2013. Total
pharmaceutical revenues are expected in the range of $35 million to $40
million, with approximately $30 million of that total in product revenue.
Product gross margin is expected to be in the range of 30% to 35%, and total
gross margin for pharmaceutical revenue of approximately 50%. Regarding cash
burn, Codexis continues to expect cash burn in the range of $12 million to $16
million for the year.

Conference Call and Webcast

Codexis will hold a live conference call and audio webcast on Tuesday, May 7,
2013, at 4:30 p.m. Eastern Time. The conference call dial-in numbers are
800-798-2864 for domestic and 617-614-6206 for international. Please use the
pass code 54501345 and call approximately 10 minutes prior to start time. A
live webcast of the call will also be available from the Investors section of
www.codexis.com. A recording of the call will be available by calling
888-286-8010 for domestic or 617-801-6888 for international, beginning
approximately two hours after the call, and will be available for up to seven
days. Please use the pass code 19359615 to access the replay. A webcast replay
will also be available from the Investors section of www.codexis.com
approximately two hours after the call, and will be available for up to 30
days.

About Codexis, Inc.

Codexis, Inc. engineers enzymes for pharmaceutical, biofuel and chemical
production. Codexis’ proven technology enables scale-up and implementation of
biocatalytic solutions to meet customer needs for rapid, cost-effective and
sustainable process development – from research to manufacturing. For more
information, see www.codexis.com.

Forward-Looking Statements

This press release contains forward-looking statements relating to Codexis’
forecast for 2013 total pharmaceutical revenue, product revenue, product
margin, total gross margin for pharmaceutical revenue and total cash burn; and
Codexis’ ability to secure new pharmaceutical partnerships that will build
Codexis’ pharmaceutical development pipeline. You should not place undue
reliance on these forward-looking statements because they involve known and
unknown risks, uncertainties and other factors that are, in some cases, beyond
Codexis’ control and that could materially affect actual results. Factors that
could materially affect actual results include Codexis’ dependence on
obtaining third-party funding, or identifying and effecting some other
strategic option for, its CodeXyme® cellulase enzymes and CodeXol® detergent
alcohols programs; Codexis’ need for substantial additional capital in the
future in order to expand its business; Codexis’ ability to maintain internal
control over financial reporting; any impairments Codexis may be required to
record in the future with respect to its goodwill, intangible assets or other
long-lived assets; the success of cost saving measures Codexis undertook
following the termination of the Shell collaboration, including Codexis’
reduction in force; Codexis’ dependence on a limited number of products and
customers in its pharmaceutical business; customers' ability to timely pay
amounts owed to Codexis; Codexis’ primary reliance on one contract
manufacturer for commercial scale production of substantially all of its
enzymes; Codexis’ ability to develop and commercialize new products for the
pharmaceutical markets; Codexis’ relationships with, and dependence on, its
collaborators in its principal markets; Codexis’ ability to deploy its
technology platform in new adjacent market spaces; Codexis’ dependence on, and
need to attract and retain, key management and other personnel; the success of
customers' pharmaceutical products in the market and the ability of such
customers to obtain regulatory approvals for products and processes; Codexis’
pharmaceutical product gross margins are variable and may decline from quarter
to quarter; Codexis’ dependence, in part, on Arch Pharmalabs Ltd’s ability to
effectively market and sell certain pharmaceuticals products; Codexis’ ability
to maintain license rights to a commercial scale expression system for enzymes
that convert cellulosic biomass to sugars; various challenges to the
feasibility of the production and commercialization of biofuels and bio-based
chemicals derived from cellulose; potential reduction in demand for commercial
products using Codexis’ technology as a result of fluctuations in the price of
and demand for certain commodities; and Codexis’ biofuel and bio-based
chemicals business opportunities may be limited by the availability, cost or
location of feedstocks. Additional factors that could materially affect actual
results can be found in Codexis’ Annual Report on Form 10-K filed with the
Securities and Exchange Commission on April 2, 2013, including under the
caption “Risk Factors.” Codexis expressly disclaims any intent or obligation
to update these forward-looking statements, except as required by law.

                                                              
Codexis, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In Thousands, Except Per Share Amounts)
                                                                  
                                    Three Months   Three Months   Three Months
                                    Ended          Ended          Ended
                                    March 31,     December 31   March 31,
                                    2013           2012           2012
Revenues:
Product                             $  9,137       $  6,834       $  15,167
Collaborative research and             2,344          1,078          14,612
development
Government awards                     -            -            1,357   
                                                                  
Total revenues                        11,481       7,912        31,136  
                                                                  
Costs and operating expenses:
Cost of product revenues               5,665          5,779          12,642
Research and development               7,322          10,594         16,349
Selling, general and                  8,124        7,286        9,395   
administrative
                                                                  
Total costs and operating             21,111       23,659       38,386  
expenses
                                                                  
Loss from operations                   (9,630  )      (15,747 )      (7,250  )
                                                                  
Interest income                        27             41             75
Other expenses                        (85     )     (6      )     (118    )
                                                                  
Loss before provision                  (9,688  )      (15,712 )      (7,293  )
(benefit) for income taxes
                                                                  
Provision (benefit) for income        (65     )     (173    )     197     
taxes
Net loss                            $  (9,623  )   $  (15,539 )   $  (7,490  )
                                                                  
Net loss per share of common        $  (0.25   )   $  (0.41   )   $  (0.21   )
stock, basic and diluted
                                                                  
Weighted average common shares
used in computing net loss per        37,842       37,581       36,057  
share of common stock, basic and
diluted

                                                          
Codexis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In Thousands)
                                                              
                                             March 31,        December 31,
                                             2013             2012
Assets
Current assets:
Cash and cash equivalents                    $ 31,231         $ 32,003
Marketable securities                          12,943           13,524
Accounts receivable, net                       7,412            7,545
Inventories                                    1,687            1,302
Prepaid expenses and other current assets     4,095          5,395    
Total current assets                           57,368           59,769
                                                              
Restricted cash                                1,511            1,511
Non-current marketable securities              1,939            3,623
Property and equipment, net                    14,792           16,650
Intangible assets, net                         12,090           12,934
Goodwill                                       3,241            3,241
Other non-current assets                      2,701          2,237    
Total assets                                 $ 93,642        $ 99,965   
                                                              
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                             $ 4,445          $ 3,654
Accrued compensation                           4,152            3,495
Other accrued liabilities                      4,826            6,948
Deferred revenues                             4,352          2,186    
Total current liabilities                      17,775           16,283
                                                              
Deferred revenues, net of current portion      1,254            1,299
Other long-term liabilities                   3,868          3,943    
Total liabilities                              22,897           21,525
                                                              
Stockholders' equity:
Common stock                                   4                4
Additional paid-in capital                     295,863          294,128
Accumulated other comprehensive loss           56               (136     )
Accumulated deficit                           (225,178 )      (215,556 )
Total stockholders' equity                    70,745         78,440   
Total liabilities and stockholders' equity   $ 93,642        $ 99,965   

Contact:

Codexis, Inc.
Investors
Paul Cox, 212-362-1200
ir@codexis.com
or
Media
Jemma Connor, +44 161 359 3255
jemma.connor@notchcommunications.co.uk
 
Press spacebar to pause and continue. Press esc to stop.