Codexis, Inc.

Welcome to the Codexys First Quarter 2024 Earnings Conference Call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this event is being recorded. And now I'll turn the call over to Carrie McKim, Director of Investor Relations. Please go ahead.

Thank you, operator. With me today are Dr. Stephen Dilley, Codexys President and Chief Executive Officer, Kevin Norritt, Chief Operating Officer, Sri Riali, Chief Financial Officer, and Stefan Lutz, SVP of Research. 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, including our guidance for 2024 revenue, product revenues, and gross margin on product revenues, anticipated milestones, including product launches, technical milestones, and public announcements related thereto, as well as our strategies and prospects for revenue growth and successful execution of current and future programs and partnerships. To the extent that statements contained in this call are not descriptions of historical facts regarding Codexys, they are forward-looking statements reflecting the beliefs and expectations of management as of the statement date, May 2nd, 2024. 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 Codexys control, and that could materially affect actual results. Additional information about factors that could materially affect actual results can be found in Codexys filings with Securities and Exchange Commission. Codexys expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law. And now, I'll turn the call over to Stephen.

Thanks Carrie, and thanks everyone for joining. We've started 2024 really well. In addition to a strong financial start to the year, we're also making exciting technical progress with our Ecosynthesis manufacturing platform. During our call in February, we projected at least 10% year-on-year growth in product revenue in 2024. Everything is shaping up nicely in line with our expectations. As in past years, we expect some of our projected revenue to be a bit lumpy across quarters, but we're confident in reiterating our full year 2024 guidance. Now, just two years ago, customers came to us saying that if we could enzymatically synthesize full-length RNA oligos, they'd be interested. We're now very close to meeting that objective or in the final stages of completing the enzymatic synthesis of a full-length oligonucleotides by the Tides USA meeting in a couple of weeks' time. We believe this will be a scientific first. After we achieve this historic milestone, we can then go back to those customers and offer to make them enzymatically synthesized versions of their proprietary molecules at research grade, which they can in turn test and compare to conventionally synthesized material. Throughout developing our ecosynthesis technology and engaging with these potential customers, we've learned that optimal process conditions vary quite significantly depending on the construct being built. That's why we've positioned ourselves with a versatile set of capabilities that can be adapted to best suit each molecule. Starting with our ligation program, we can use our double-stranded RNA ligase to stitch separate RNA fragments together into full-length constructs. We're confident that ligation is a crucial component of this market, and we've seen increasing interest from customers who want to explore this approach. In fact, in Q1, we secured a low-to-mid single-digit million-dollar order for an engineered double-stranded RNA ligase with a large pharma company, with potential for more orders in 2025. We're also looking forward to further commercial interest once we launch our double-stranded RNA ligase screening service at Tides USA, which Stefan and Kevin will cover shortly. In addition to setting us up for significant downstream revenues, our double-stranded RNA ligase program encourages customers to introduce an enzymatic step into their existing manufacturing process and positions us to engage with those who want to explore full sequential synthesis. From there, we have optionality how to generate the most value, including the potential to move in-house full-scale SRNA production when the time is right. Our plans for the Ecosynthesis Innovation Lab will play a vital role in this process for two reasons. One, it provides a facility where we can perform ligation on behalf of customers, and two, It gives us a venue to define and optimize the manufacturing process for each customer before scale-up. That's critical because ahead of transferring a process to a partner, we need to make sure it works seamlessly, is efficient, and is entirely scalable. The Innovation Lab will ensure that our technology gets baked into early-stage programs that have potential to generate meaningful revenue dollars down the line. Our timeline for that facility remains on track, and we expect to have it largely built out by the end of this year. We're also really pleased with progress towards the enzymatic synthesis of costly input materials like NQPs and the enzymatic placement of targeting moieties. By addressing these additional elements of the manufacturing process, we can deliver an even more valuable product and significantly increase our own potential revenue capture in the process. Underpinning this progress is our Codevolver directed evolution platform, which marries rich data sets and iterative learning with experts who have decades of experience tackling increasingly complex engineering projects. The Codexys competitive advantage is artificial intelligence combined with great data and human intelligence. With that, I'd like to pass the call over to Stephan Lutz, our Senior Vice President of Research, to describe some of our exciting technical progress. Stephan?