Codexis, Inc.

Welcome to the Codexys third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that 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. Steven Dilley, Codex's President and Chief Executive Officer, Kevin Norritt, Chief Operating Officer, and Georgia Erbez, Chief Financial Officer. Dr. Stefan Lutz, our SVP of Research, is also here and will be available for any questions during the Q&A. 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, facility expansions, technical milestones, and public announcements related thereto, as well as our strategies and prospects for revenue growth, path to profitability, 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 this statement date, October 31st, 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.

Thank you, Carrie, and thanks, everyone, for joining. This has been another strong quarter for Cadexis. Let's review a few of the highlights. First, we strengthened our balance sheet by adding $31 million in net proceeds from existing institutional investors via our ATM. Secondly, We strengthened our executive leadership team with the hires of Georgia Erbez as Chief Financial Officer and Allison Moore as Chief Technical Officer. Their decades of relevant experience across multiple business entities will be invaluable as we enter our next phase of growth. Third, we strengthened the business. We delivered strong revenue growth in pharma manufacturing. We initiated several technical collaborations on our Ecosynthesis manufacturing platform And finally, we completed the divestiture of our legacy genomics enzyme portfolio to AlphaZyme, so we can focus our efforts on the core business. Moving to slide three, we have a clear path to profitability by the end of 2026. We get there based on two key factors. First, continued growth in pharma manufacturing revenues and improved profitability as our existing pipeline of higher margin biocatalysis products progress through clinical trials and into commercialization. Second, increasing orders for our double-stranded RNA ligase offering from existing customers as their siRNA assets progress through clinical trials. Even better news is that our strong cash position is sufficient to fully fund Cadexis until we reach profitability. The net result is that we expect Cadexis to reach positive cash flow based on the products, customers, and cash reserves that we have today, which will put us in the enviable position of launching the complete ecosynthesis manufacturing platform around the end of 2026 from an already profitable base business. Shifting to slide four. I want to talk briefly about why we chose to strengthen our balance sheet a few weeks ago by taking in about $31 million via our ATM. Some of the money, perhaps half, we plan to keep on our balance sheet for the foreseeable future to provide greater operating flexibility and, frankly, to cushion and strengthen our path to profitability. The rest will enable some very targeted investments that will strengthen our existing business and accelerate growth in new areas. First, we've identified an opportunity to accelerate adoption of our pharma manufacturing biocatalysis enzymes by moving some enzyme production in-house so that we can respond to initial scale-up requests rapidly and efficiently. We'll spend a few million dollars over the next year to modernize and streamline our existing internal manufacturing capability. We're going to invest in our downstream purification capabilities to support initial commercial orders of our double-stranded RNA ligase variants directly from Cadexis. Keeping this in-house a little longer improves our ability to be responsive to customer needs. Third, We're designing a kilogram-scale facility for our eco-synthesis manufacturing platform to supply GMP-grade siRNA drug substance for early-stage clinical trials. There's a theme here. We've learned that we can improve our speed, responsiveness, and value capture by taking assets a little further through development in-house. This is all part of evolving Cadexus into a truly customer-orientated, mature commercial organization which seems like a great segue to pass the call over to Kevin.