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    CODEXIS (CDXS)

    CDXS Q3 2024: Follow-on siRNA orders lift revenue outlook

    Reported on Aug 4, 2025 (After Market Close)
    Pre-Earnings Price$3.14Last close (Oct 31, 2024)
    Post-Earnings Price$3.32Open (Nov 1, 2024)
    Price Change
    $0.18(+5.73%)
    • Robust Customer Interest: Executives highlighted increasing engagement from major siRNA drug developers and CDMOs, with customers already turning initial orders into larger volume follow‐on orders. This signals a strong demand for Codexis’ ECO Synthesis technology and enzymatic ligase products, enriching the near-term revenue pipeline.
    • Clear Path to Scalability and Margin Improvement: The Q&A detailed efforts to bring enzyme production in‐house—which is expected to drive higher margins compared to legacy products—and ongoing investments that will eventually lower production costs. These initiatives support a scalable model with improved operating economics.
    • Diverse and Strategic Partnership Opportunities: The discussion pointed to multiple collaborative approaches, including prospective GMP scale-up partnerships and potential joint development contracts, which enhance revenue diversification and mitigate risks by engaging both large pharma and specialized CDMOs.
    • CDMO Partnership Execution Risk: The Q&A highlighted challenges in securing a major GMP scale-up partner, including multiple steps to prove the technology and package materials for scale-up. Any delays or hurdles in these partnerships could impact near-term revenue growth.
    • Capital Expenditure Pressure: Management discussed substantial near-term investments—low single-digit millions for facility modernization and a larger outlay for a kilogram scale facility beginning in mid-2025. These expenditures, if not offset by rapid revenue growth, could pressure margins.
    • Dependency on Delayed Revenue Ramps: Some non-core assets such as the Alphazyme deal are expected to start ramping only in 2025 with further acceleration into 2026-2027, which adds uncertainty to near-term earnings and cash flow.
    1. 2025 Outlook
      Q: What are 2025 swing factors?
      A: Management stressed two critical drivers for 2025: robust growth in pharma manufacturing revenues and converting initial ligase orders into fuller, higher-volume orders to strengthen the company’s future performance.

    2. Margin Impact
      Q: Will in-house enzymes boost margins?
      A: Executives noted that by shifting to new, higher-margin enzymes in-house, the company is poised to improve gross margins, although the exact impact remains qualitative.

    3. Targeted Investments
      Q: What is the scale of investments?
      A: Management detailed that targeted investments will involve low single-digit million-dollar upgrades for current facilities, with a larger, phased spend on a kilogram-scale facility projected in later 2025 and into 2026.

    4. CDMO Partnerships
      Q: What hurdles remain for CDMO ties?
      A: The team emphasized challenges in securing a major siRNA-producing CDMO partner and ensuring a reliable raw material supply, which are vital for effective manufacturing scale-up.

    5. Alphazyme Revenue
      Q: When will Alphazyme revenues ramp?
      A: Management expects revenues from the Alphazyme partnership to begin in 2025 and then gradually accelerate through 2026 and 2027 as commercialization efforts progress.

    6. Technical Collaboration
      Q: What structure for technical deals?
      A: Executives described that technical collaborations could take various forms—from straightforward development contracts to joint ventures with upfront milestones and royalties, tailored to each partner’s needs.

    7. Synthesis Quality
      Q: What gauges synthesis success?
      A: Management highlighted overall yield and the impurity profile as the two primary parameters to assess the quality and success of the enzymatic synthesis process.

    8. Partnership Details
      Q: How detailed will partnership disclosures be?
      A: The team indicated they plan to provide as much detail as possible, including partner names and program specifics, though the extent varies per collaboration.

    9. Therapeutics Variation
      Q: Does process vary by therapeutic?
      A: While the process remains largely consistent across current siRNA therapeutics, adjustments are being made to tailor the platform to specific customer constructs as needed.

    Research analysts covering CODEXIS.