Codexis at Jefferies Global Healthcare Conference: Enzymatic Synthesis Insights

On Wednesday, 04 June 2025, Codexis (NASDAQ:CDXS) presented at the Jefferies Global Healthcare Conference 2025, offering a strategic overview of its Ecosystems Platform for enzymatic RNA synthesis. The company highlighted its focus on scaling technology and strategic partnerships while addressing challenges like competition and cost management.

Key Takeaways

• Codexis is concentrating on scaling its enzymatic RNA synthesis technology and expanding its manufacturing capacity.
• The company aims to achieve positive cash flow by the end of 2026, driven by strategic partnerships and revenue growth.
• Codexis is leveraging AI to optimize ligase selection, significantly reducing time in the development process.
• The company is targeting a 50-kilo annual capacity facility, with a $30 million investment over two years.
• Codexis anticipates doubling its revenue in the latter half of the year, supported by existing pharma manufacturing and Eco Platform orders.

Financial Results

• Codexis expects to double its revenue in the second half of the year, fueled by its pharma manufacturing and Eco Platform orders.
• The traditional heritage pharma manufacturing business remains profitable with decent margins, providing a stable revenue base.

Operational Updates

• The GLP Eco Innovation Lab is operational, proving the flexibility and high success rate of Codexis’s technology.
• The company is transitioning from the consideration phase to implementation, facilitating market entry for existing products and early-phase molecules.
• Codexis plans to build a 50-kilo annual capacity facility, estimated to cost $30 million over two years.
• AI is employed to rapidly provide optimized molecule selection, enhancing efficiency in the development process.

Future Outlook

• Strategic partnerships are a priority, with Codexis targeting a few key partners over the next couple of years.
• The company aims to achieve positive cash flow by the end of 2026, with potential adjustments based on partnership developments.
• Codexis is working with partners to integrate enzymatic technology into existing facilities, supporting onshoring of supply chains.

Q&A Highlights

• Codexis is focused on competing with chemistry and CDMOs, particularly those based in China.
• The company is monitoring technology innovators to stay ahead in the market.
• AI has significantly reduced development time, providing a competitive edge.

For a detailed understanding of Codexis’s strategic direction and insights shared during the conference, refer to the full transcript below.

Full transcript - Jefferies Global Healthcare Conference 2025:

Tycho Peterson, Analyst, Life Science Team: think we’re good to go. I’m Tycho Peterson from the life science team. It’s my pleasure to introduce Codexis.

Happy to have Stephen Dully with us again this year. Stephen, maybe just to kick it off, obviously a lot of focus on ecosystem. Maybe let’s go back twenty four months since the platform was just getting started. Walk us through the journey there, lots happened. How do we go from kind of technology and concept to execution of commercial product?

Stephen Dully, Codexis: Great and thanks for having me back Tycho. So yeah, it is amazing that it’s just twenty four months since we rolled out the idea of the Ecosystems Platform. And at that stage we were responding to a bunch of companies that we have worked with on biocatalysis for synthesis of small molecules saying you could really solve a problem if you could turn the enzymatic capability to making RNA constructs. And we had some early success with mRNA that ended up with the partnership where we went with Aldevron with our high cap RNA polymerase and that’s going extremely well. And we’ve really been focused in house on siRNA.

And that’s become a really interesting sort of evolution of the landscape from enzymatic synthesis being a nice idea if you could do it to something that people thought, yeah, it’s probably real but not yet to I came from the Tides meeting two weeks ago and just about every other presentation somehow was involving enzymatic synthesis. Some of it was chemo enzymatic but a lot of it then talking about the advantages of actually enzymatic synthesis and we presented to a very packed, very large room that’s a room full of CMC people. And really the acceptance that there is a need for this technology as we scale the siRNA modalities has really changed and that Codexis is clearly out in front of the pack in terms of actually bringing that technology to fruition. So where we are right now is our GLP Eco Innovation Lab is up and running. We can make fragments or full length molecules by sequential synthesis enzymatically.

We’ve proven that our technology is quite flexible and so far we’re batting at a very high percentage of being able to do all the constructs that people send us to do. And now it’s all about scale. And now it’s all about how do we get into process for existing drugs, for drugs that are going to be important in the future. And it’s moved from the sort of whether we should do this to the how do we do this and how do we adopt the technology. And so the people we’re talking to have changed often from the research people, the innovation people to the CMC teams thinking about how they’re going to build a process around this technology.

Tycho Peterson, Analyst, Life Science Team: And you said on the first quarter call, you’ve got your first revenue generating contract. Talk a little bit more about that project timeline scope?

Stephen Dully, Codexis: So that is a the first revenue generating contract associated with platform. We previously signed revenue generating contracts with the Ligase platform where we’re putting together shortmers. This is actually manufacturing initially at small scale a novel construct for a third party pharma innovator customer with our CDMO partner and then going from there to increasing scale to support the development of that molecule. And part of that is, so where we are with that right now is making the constructs in house, transferring the technology, getting our friends at Bachem to then make the constructs themselves, replicating our process and then to scale from there.

Tycho Peterson, Analyst, Life Science Team: And if you think about kind of what was presented at Tides, you had a number of the CDMOs back end, ST Pharma, Nitto, Aviva kind of all present. Talk a little bit about what they presented on, what were the takeaways there?

Stephen Dully, Codexis: Right. So what they were presenting on was the performance of Codexis ligase and often comparison to other ligases. So this was the focus of the presentation. It’s the cornerstone of chemo enzymatic synthesis is you make your fragments using conventional phosphoramidase chemistry and you can improve your yield and reduce your downstream purification costs by using a ligation step. Now our ligases are highly engineered and made specific to the construct that you’re trying to ligate.

The alternative approach which is already widely adopted and somewhat entrenched is using a generic wild type or very lightly engineered ligase which is cheap to drive the same reaction. And so what we’re having to show is that even though our ligase might cost a bit more, it’s well worth adopting because it reduces your overall production cost because of the improved efficiency of the reaction and therefore the impact that has on downstream purification for instance. So it’s really getting to brass tacks from talking about how our ligase is a better ligase to saying that actually saves you money. And that’s what we’re talking about with those people and what they were starting to present on.

Tycho Peterson, Analyst, Life Science Team: And I think you’ve talked about four customers purchasing ligase by the end of this year versus one last year. And then I think you’ve talked about a pretty good funnel. Can you maybe just talk a little bit about that pipeline, how it’s progressed and how you feel about is it more CDMOs, is it more innovators, what’s that mix like?

Stephen Dully, Codexis: So the three CDMOs that you mentioned as in Bachem and Nitto and ST Farm already see it as advantageous to have access to our ligase to sell on to their customers. So there’s a sort of a multi plicative function there. But we also have direct conversations with innovators and sometimes we have three way conversations with the CDMO and the innovator about how we use our ligase on the CDMOs platform to make the innovators molecules that kind of thing. And those conversations inevitably then lead to discussion of how we can facilitate adoption of the full ecosystem platform.

Tycho Peterson, Analyst, Life Science Team: And could you talk about the innovation lab, the ecosystem innovation lab? I think you’ve said the goal is to fully allocate that capacity. It will be a few larger customers, a broader mix of smaller programs. How should we think about the mix there?

Stephen Dully, Codexis: It’s about the mix of programs, okay? And what we want to be doing is using it to facilitate market entry of existing products right now, working on things that are big now but also to get our teeth into some very promising early phase molecules. So we need to enroll if you like a few of the big innovators, sort of household names everyone knows, but then also pepper it with some you know best athletes that we think that molecule is really interesting. It’s early phase but if we can own a piece of that, it can be very very important down the line.

Tycho Peterson, Analyst, Life Science Team: So yes, is it mostly phase one ready assets or is it more interest in earlier stage?

Stephen Dully, Codexis: So in terms of the full eco synthesis the majority of work being done is on early stage things that are getting ready for tox. It’s that kind of level. And that’s why having a GLP capability in the innovation lab is great because we are now in a position to scale to tens or a hundred grams of an asset which is enough to get you through those kind of studies.

Tycho Peterson, Analyst, Life Science Team: And what are the economics in the innovation lab? Is it shared cost? Is it R and D revenue stream? How do we think about how you actually get paid on that work?

Stephen Dully, Codexis: So it starts with a relatively modest upfront for access to the technology and access to the resource. Then there will be some shared cost as you move forward in the development work and a success milestone and then we go from there in terms of scaling. But we have to make that pay its way through those kind of R and D relationships because it’s never going to be economically viable in terms of the quantity of siRNA kicks out because if it’s kicking out 100 grams and siRNA costs a million or 2 a kilo, that’s not enough to justify its existence.

Tycho Peterson, Analyst, Life Science Team: Yeah. Maybe just thinking a little bit longer term on the commercial strategy than for for Eco. You know, talk a little bit about how you you scale that up, how we think think about the go to market strategy. Again, it be a broad base of customers? Will it be more focused?

Are there a few big strategic partners you’re targeting over the next couple of years?

Stephen Dully, Codexis: We’re absolutely targeting a few strategic partners over the next couple of years. But the go to market strategy is to have the innovation lab as a magnet to build new processes, to have access then to a middle scale GMP facility. We’re right in the middle of working up exactly how long that’s going to take us. We think that we can very cost effectively build a 50 kilo annual capacity kind of facility within our financial means. So that will mean we can take things on pre clinically, we can do GLP up to the 10 to 100 grams to get through TOPS, we can then scale them through kilo scale at GMP and then tech transfer an existing process with the critical process parameters all nailed down, the analytics nailed down either to the innovator company or the CDMO.

And it shifts from an R and D contract early in the innovation lab to increasingly about the product that we’re selling as we scale.

Tycho Peterson, Analyst, Life Science Team: And when you say cost efficiently, can you give us kind of a framework of of what that looks like and then does that give you capacity for three years? What what’s kind of the road road map on capacity?

Stephen Dully, Codexis: So we’re looking at leveraging the real sort of volumetric productivity of the ECO process. And one of the huge attractions we showed slides of this at Tides meeting is you can do a lot more with a much smaller footprint and a lot less capital infrastructure. And so we’re looking at a facility in the sort of range of 35,000 square feet which would give you an annual capacity of siRNA production of anywhere up to 50 kilos. And those are remarkable numbers in the field of siRNA production. And really it’s about leveraging the fact there’s a lot of vacant manufacturing infrastructure from cell and gene therapy days right now and we can use very simple equipment because the enzymes do all the work.

And so we think we can stand up a facility in the range of $30,000,000 spent over two years. So that’s why I say it’s not a scary number. I’m not talking 200, I’m talking fairly accurate 30.

Tycho Peterson, Analyst, Life Science Team: As we think about onshoring supply chains, kind of moving back into The US, how does that play into kind of your roadmap?

Stephen Dully, Codexis: Well, actually love it because it enables us to have conversations with partners about putting enzymatic technology into existing facilities to bring important supply chains onshore. And that’s absolutely topical with companies that are looking at, Oh my God, my supply chain is exposed to China and elsewhere. How do I bring it in without spending enormous amounts of capital? And so the fact that we can reduce the CapEx and achieve comparable or even better run rates, that’s really, really important. It also opens the door to conversations around government grant money as well because this is very topical.

And one of the attractions in both of those is that you can stand this up relatively fast. The sort of gold standard for standing up a current sort of phosphoridite chemistry facility including building all the infrastructure you need for the highly flammable and sort of toxic solvents is about four to five years to get it on stream. We’re in the more like eighteen months to two years because this is a water based system in some very simple equipment. It takes you less than a year to build and then you’re doing your engineering runs. So all of that is really attractive in terms of the onshoring.

Where we also are going and need to go is the raw material supply and starting from very simple raw materials and using enzymatic processes to build the building blocks that you eventually make the RNA out of. And having a number of conversations with different flavors of partners for each of those steps along the way.

Tycho Peterson, Analyst, Life Science Team: RNA ligase, I think you’ve delivered your first order to a large pharma customer. You’ve got a second initial order of drug innovator. Maybe just walk through that process from securing the order to the delivery. Any feedback from the customer so far?

Stephen Dully, Codexis: Yes, so both of those cases were really interesting in that they initially told us they were going elsewhere. They tested the ligase and came back and said, yeah, actually we’ve tested it. We believe it is important to use the best ligase. It makes sense economically. What we’re looking at is scaling over time.

So as the drug moves through its phases of development, the amounts of ligase scale up. In both of those cases, they parallel processed initially and then moving increasingly towards ligation based on our product. And we only just, I mean a few weeks ago rolled out our machine learning AI platform for ligase selection. And what this means is we can provide very, very rapidly a molecule optimized to the exact reaction people want to run. And that’s a very different approach from taking a generic ligase and just if it doesn’t work very well putting in more.

And it’s up to us to convince people that that is worth doing. It also increases the need for trusting relationships, so working with partners that increasingly trust us because in order to do that they have to share the construct with us, otherwise we can’t select. And so, of that is toe in the water and then people get increasingly confident and that’s what makes me optimistic for the future because ligase supplied for a big drug can be tens of millions of annual revenue to us. And that’s from our base that’s an important bridge to the full eco platform.

Tycho Peterson, Analyst, Life Science Team: Maybe just talk a little more on the AI module. Mean what does that mean in terms of time saved? Is there a separate revenue opportunity for you there?

Stephen Dully, Codexis: We believe so and it’s orders of magnitude in terms of time saved. There’s been a lot of buzz around AI and application to biology. This is actually a worked example where it worked, right? And it worked because it’s a very constrained problem that we’re setting the AI tool. What we learned experimentally was that the function of the ligase is dictated by a finite number of nucleotides either side of the point that you’re trying to stitch the molecule together.

And we also have generated many thousands of ligase variants in our library and so it really limits the distance that the AI has to extrapolate so it stays accurate. It’s unlikely to be hallucinating. And what we’ve had since we rolled this out is a few people throwing test cases at us often when they think they know they’ve got the optimal ligase. And the cool thing is when we can say, actually you’re wrong, it’s that one, right? And so there’s enough sort of scientific traction that I’m really optimistic this is going to turn into something.

Tycho Peterson, Analyst, Life Science Team: That’s really interesting, yeah. Anything you can say on the second customer you’ve signed up there? It’s a drug innovator, anything about kind of the size, scale of the project and how does the

Stephen Dully, Codexis: is a drug innovator with multiple, multiple many assets very focused in the siRNA space. So and that’s been what I’ve had my commercial team focus on is I don’t particularly want the one offs. I want companies that have a deep commitment to the area of siRNA have a pipeline and so it can be about platform adoption rather than having to start from ground zero every time with every asset. Because I kind of like to role play the conversations within the big innovator of the CMC guy bowling into executive committee saying, I want to adopt this wacky new process to make your billion dollar drug, right? And how to avoid getting that guy fired, right?

And it has to be validated and it has to be low risk and the second time is easier than the first time. And sometimes that comes from relying on really trusted partners. And what we’ve learned is we get a lot of joy by working with CDMOs who are already supplying the big innovators with their siRNA because then it’s about the CDMO saying, we wanna tweak the process, right? Trust us, we know what we’re doing as opposed to Codexis coming out of left field and doing this. So it’s really all this stuff about classic marketing which is reducing the points of friction.

Tycho Peterson, Analyst, Life Science Team: Not to be too myopic but just thinking about the back half of the year here, you effectively per guidance are doubling the revenues. Maybe just talk a little bit about how derisked that is and is it tied to the potential eco deals? How do you get there?

Stephen Dully, Codexis: We get there partly through the natural sort of cadence of our business which has always been lumpy and orders moving from one quarter to another can significantly affect that. When we planned out the year, we’re exactly where we should be in terms of the probability of orders, where we’ve got line of sight on what we’ll deliver the second quarter and then the growth into the third and fourth without any sort of real Hail Marys in there. So, we’re quietly confident rather than totally ballistic about it. But it’s understanding the sort of the patterns that people do their scaling in and how they order and the way the conversations go. And some of that is based on work in the innovation lab and some ligase orders, but the majority is driven by pharma manufacturing, a heritage business where we have a lot of experience and know what we’re looking at.

Tycho Peterson, Analyst, Life Science Team: Is any of that pharma manufacturing kind of being pulled forward? That’s a common question we get just around tariffs and global supplies moving around the globe but maybe some of it’s being added too.

Stephen Dully, Codexis: We haven’t seen a huge amount of that actually. It’s been very much on track and the kind of drugs that we’re working with, I’m probably not as exposed as some other modalities because of where we sit in the sort of CMC process because we’re one step in a long process and all the rest of it. So we’ve not seen anyone sort of obviously stockpiling or anything like that.

Tycho Peterson, Analyst, Life Science Team: How about competition? I mean, I assume kind of CDMOs are largely customers and complementary, right? But are any of them you know trying to compete with you more more directly?

Stephen Dully, Codexis: Oh yeah, I mean this was the thing that came up at Tides was we’ve always sort of we’ve had a notion that our competition is other people trying to do enzymatic synthesis. Well, yeah, but they’re a long way behind us. That’s not our principal challenge. Our principal challenge is people trying to do chemistry better, right? What’s two years ago people thought we were mad saying, there’s going be 30 metric tons of demand for siRNA by the end of the decade.

That was received wisdom at this tides meeting. People were saying, yeah, it’s 30 metric tons and here’s how we’re gonna get there. And ligation was a sort of new thing or very quiet topic. Everyone was talking about chemo enzymatic synthesis and ligation making it better. There was a lot of work around how to use liquid phase and how to recycle solvents and how to do all this stuff to squeeze the pips and make chemistry as good as you possibly can.

And so that sense, that’s the benchmark in one way for what we need to achieve with ECO. But we’re no longer having to justify our existence in terms of is there a demand for siRNA medicines. We’re past that now. And even the people trying to scale chemistry say, we think we can meet the immediate demand or we can move to address it. But long term it’s going to move to enzymatic synthesis.

And we heard that out of the mouths of people like Hongjin said that in words of one syllable, which is important. Others have said the same thing that when you get to molecules needing multiple hundred kilos of supply annually, enzymatic has to be the way to go. So world’s moving in our direction but we have to move into that space as quickly as we can because you know, otherwise the vacuum will get addressed through you know, people brute forcing it.

Tycho Peterson, Analyst, Life Science Team: And do you worry more about CDMOs or in house pharma you know doing it?

Stephen Dully, Codexis: More about CDMOs doing it and just crunching it and and you know, it’s again where the the political situation is interesting because you know, some of the CDMOs with you know, involvement in China or or even Chinese based are having to get out in front of that right now and moving quite aggressively. But I’d rather be competing in a market where people are being aggressive about trying to get a share of it rather than having to tell people the market exists. You know, it’s a sort of healthier dynamic.

Tycho Peterson, Analyst, Life Science Team: And you know, away from CDMOs, are there any pure technology competitors that you know, you’re keeping an eye on?

Stephen Dully, Codexis: Oh, we’re keeping an eye on the group of technology innovators that can sort of evolve enzymes and all that kind of stuff. The ones that have been in the sort of DNA oligo space. There’s only really one pure play enzymatic synthesis startup, that’s n plus one, really nice science, really interesting. We’re keeping an eye on them but we’re at a significantly greater scale than those guys right now with more flexibility as well. So, in terms of putting forward the best technology, we’re in great shape.

Now we have the challenge in front of us to stop people talking about the technology and starting talking about the implications and the product we can produce, right? And so what I want to be doing in a year or so’s time is saying, that’s a kilo of siRNA, we’ve made it quicker, we’ve made it purer, we’ve made it cheaper, you should go with this.

Tycho Peterson, Analyst, Life Science Team: Can you maybe touch on the Aldevaran partnership? You know, how how has that gone? I think they had some data at Tides as well. Yeah. Maybe just give us an update there.

Stephen Dully, Codexis: Yeah. I mean, that’s been a a delightful partnership. It’s just over a year old since we out licensed the high cap RNA polymerase that’s for making mRNA constructs. Aldevron has developed a GMP process for that. They’re really scaling it and they’re having really good traction commercially.

We’re super pleased with that and we think that’s a very good model for some future enzyme supply partnerships as well. And so Aldevron exactly the type of company that we like to work with.

Tycho Peterson, Analyst, Life Science Team: And how has it been? Mean Danaher, I guess you kind of got involved after they were acquired, right?

Stephen Dully, Codexis: And so we absolutely are in conversations with Aldevron and Danaher and also one of the other companies in their constellation is SITIVA. And our technology runs on the SITIVA platform. So that’s again a great sort of room for conversations about how we can sort of have a symbiotic relationship because everyone that stands up an eco process is gonna need Saitiva equipment.

Tycho Peterson, Analyst, Life Science Team: So could we see deals coming through the Saitiva channels

Stephen Dully, Codexis: in year or think certainly through the Aldevron channel, yeah, and the Danaher channel. But yeah, and so it’s working with the innovators, the CDMOs, the technology enablers and then having our tendrils out in sort of the sort of startup land in terms of the new stuff that’s coming down the pike. So we’re a player in all those areas and doing that in a way where we can leverage scale, right?

Tycho Peterson, Analyst, Life Science Team: Yeah. Maybe on capital, you’ve talked about reaching positive cash flow by the end of twenty six. How do you think about the balance sheet and capital deployment with that in mind?

Stephen Dully, Codexis: So we need to move fast. We need to deploy capital to exploit this opportunity. When we look hard at the business, the traditional heritage pharma manufacturing business is profitable. It actually has a very decent margin and that’s an engine that reduces our need for capital. And so what that means is we can always dial back how much we’re spending on innovation and that’s how we triangulate when we get to cash flow breakeven and positive.

We’ve guided to sort of crossing that threshold sometime around the end of next year, end of twenty twenty six. That may or may not be the ideal strategy because it really is based on how concrete the opportunity is to invest to scale faster in the eco platform. We’re only going to do that when we know the deals are there, it’s absolutely real. So, that’s what we’re looking at but we’re in nice shape at the moment.

Tycho Peterson, Analyst, Life Science Team: I guess how do you think about that trade off? What is input from your board, feedback from investors? Do they want to kind of see you push off profitability to build a bigger book of business?

Stephen Dully, Codexis: If we have a very high level of not just conviction but certainty that those deals are real, right? Because think about it, if I have to scale to GMP through a GMP partner, they’re going to want a share of the value of doing that. If I have to tech transfer a laboratory based process into a CDMO, they are a CDMO, they’re going to want a development partner share of that asset. If I’m transferring a baked process that’s running at kilo scale, they’re a CMO, they’re simply scaling it and they’re operating as a scaling partner. That’s the opportunity but it needs to be based on real assets.

And what we want to be able to do over the coming months and towards the back end of this year is announce some partnerships such that investors can sort of nod and say, yeah, okay, we see the trajectory now, right? And that’s what the commercial group is hard at work on right now. And just as sort of index of that, we had five new customers come in after tides with commissioning projects to do proof of concept of the eco platform on their RNA assets. So you know, we can see it, we know it’s real, we have to have stuff we can show you, right?

Tycho Peterson, Analyst, Life Science Team: Yep. Great. I think we’ll leave it at that. Thank you.

Stephen Dully, Codexis: Thanks so much, Taker. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.