Codexis, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the first quarter 2020 Codexies earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. And without further ado, I would now like to hand the conference over to one of your speakers today, Mr. Bruce Voss. Please go ahead.

Thank you. This is Bruce Voss with LHA. Thank you all for participating in today's Codexys call to discuss first quarter 2020 financial results and recent business progress. Joining me from Codexys are John Nichols, President and Chief Executive Officer, and Ross Taylor, the company's Chief Financial Officer. During this call, management will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent that statements made by management are not descriptions of historical facts regarding Codexys, they are forward-looking statements reflecting the beliefs and expectations of management as of May 7, 2020. 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 the company's control and could materially affect actual results. In particular, there is significant uncertainty about the duration and impact of the COVID-19 pandemic. This means that results could change at any time, and the currently contemplated impact of the virus on the company's operations, financial results, and outlook is a best estimate based on available information. For details about these risks, please see the quarterly news release that accompanies this call, as well as the company's SEC filings. Codexes expressly disclaims any intent or obligation to update forward-looking statements except as required by law. Today's conference call remarks will include both GAAP and non-GAAP financial results. Codexes believes the non-GAAP financial measures provide investors with useful supplemental information about the financial performance of its business, enable the comparison of financial results between periods where certain items may vary independently of business performance, and allow for greater transparency with respect to key metrics used by management in operating the business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding GAAP measures. Reconciliations between GAAP and non-GAAP financial measures can be found at the end of the financial results news release that was issued earlier today. Now I'd like to turn the call over to John Nichols. John?

Thanks, Bruce. Good afternoon, everyone, and thank you for joining us. Much has transpired in the world since our last investor call barely over two months ago, and we sincerely hope that you and your families have stayed safe and well in the face of the COVID-19 pandemic. As you will hear today, Codexys is indeed safe and well, and while moderately affected in the short term, we are delivering remarkably well as we operate through the effects of the pandemic. Thank you for joining us. Ensuring that team and their family's safety has been primary for us. Even before the San Francisco Bay Area shelter-in-place orders were initiated, the leadership team and I were practicing measures of social distancing, and we had formalized and launched our COVID-19 task force, which, under the seasoned, disciplined leadership of Dr. Bob Sato, our longstanding head of quality regulatory and analytical, has been crucial to lead us through these unprecedented times. With shelter-in-place orders issued on March 17, we swiftly and smoothly affected a company-wide work-from-home policy, effectively shutting down our research and development operations. The benefits of being proactive are clear at this point. No confirmed cases of COVID-19 infection of any of our employees and even more cohesive group who appreciate management's genuine concern for their wellbeing and the ensuing strengthening of our culture motivated by doing what's best for society and our community. From there, the collective attitudes and force of our organization through the pandemic have been remarkable. Researchers gathering virtually in teams to define new protein targets for us to pursue. Supply chain teams doing double time to ensure our products continue to flow for the essential needs of pharmaceutical manufacturing. Codex's teams collaborating with similarly affected customer teams driven to make progress despite the inefficiencies. New company electronic bulletin boards sharing pictures of quarantine encouragement, et cetera. delivering against the core strategic goals for the corporation. Here the list makes us equally proud. We have delivered better than expected revenues in the first quarter despite R&D operations being shortened by shelter in place. We inked and initiated joint activities for a landmark biotherapeutic partnering deal with Takeda in the middle of the pandemic. We collaborated with Novartis, despite their lab operation limitations, to get their new co-developer lab established and ready to practice. The enzyme manufacturing and supply chain team has successfully forged remote operational approaches, supported by the outstanding continuous operations of our equally competent external manufacturing partners that have effectively ensured that our core product revenue stream remains largely unaffected by the pandemic. And recently, we have started up R&D operations again at limited capacity and in a socially distanced way so that we are back conducting essential R&D activities in support of our customers and businesses. In the process of this limited and phased R&D restart, we are learning how to modify our rapid protein discovery workflow to ensure a safe social distancing in tandem. And that learning will enable us to ramp more effectively and safely when local governments relax the strict shelter-in-place ordinances currently in place. R&D revenues have been most affected since the mid-March shelter-in-place restrictions, but only a portion, effectively those R&D revenues that are customer-partnered, time-based projects. As these represent a meaningful portion of our total company revenues, and given that the magnitude of our R&D restrictions over time are impossible to accurately predict at this point, we are taking the prudent course of withdrawing our 2020 financial guidance. In contrast, other components of our R&D revenues are expected to be less impacted by operational limitations. In addition, we have been able to mitigate much of the cash flow impact from reduced R&D revenues through intelligently delaying or reducing third-party purchases and capital spending. We had plans to add to our protein engineering and commercialization capacities in 2020, but the vast majority of those headcount additions have been postponed to help preserve cash through the pandemic. However, several strategic hiring efforts continued as they are crucial to strengthen us over the long term. It is in this light that we are pleased to have recently announced the arrivals of doctors Stefan Lutz and Carl Cheney to our executive team. Stefan brings unprecedented knowledge in protein engineering and synthetic biology to lead our research team and is highly regarded and well-known within our industry. Carl compliments Stefan and the rest of the Codexys team given his broad-based technology development, scale-up, and commercial stage experiences. It is great to have Stefan and Carl join us as we build through and beyond the pandemic. Similarly, we are excited to have attracted two highly talented and networked prospective board members for proxy vote at our upcoming annual meeting. Dr. Alison Moore is a pharmaceutical development veteran with a career spanning Genentech, Amgen, and now as Chief Technology Officer of Allogene Therapeutics, a pioneering clinical stage company in CAR-T therapeutics. Complementing Alison and the rest of our board, Dr. Stephen Dilley brings substantial clinical stage drug development leadership experience to Cadex's Most notably, having recently served as CEO of A Immune Therapeutics, which has recently received its first FDA drug approval. Before handing over to Ross to detail our financials, let me summarize our confidence in the ongoing strength of Codexis. At the core of our great biotechnology company is our talented 160 plus person organization and our success in retaining They are responding brilliantly and are delivering in exceptional ways as we adjust to the pandemic. We are smartly and selectively attracting new, unique talent to make us even stronger, and we continue to strengthen and grow the list of great companies we proudly serve as collaborative partners. We are equipped to weather these uncertain times and are confident to be an even stronger Better Poised Cadexes on the other side. With that, let me turn the call over to Ross for a review of our financial performance. Ross?