Codexis strategy to focus on biofuels, biobased chemicals

| November 18, 2011

Codexis Inc., the enzyme and high-value sustainable products developer based in California, may have grown through its presence in the pharmaceutical industry and the research and development sector, but according to Codexis CEO Alan Shaw during a third quarter earnings call, that could all change in the future. “While more than half of our revenue today comes from R&D funding,” Shaw said, “we expect in the future to earn revenue from three sources—the sale of enzymes, the sale of products made using our enzymes and microbes, and royalties from the use of our technology.”

Shaw’s call for change can already be seen through a new Codexis website, much of which highlights the role sustainable and biobased products will play for the company in the future. “Codexis transformed pharmaceutical manufacturing by driving the adoption of our biocatalysis solutions, which, prior to Codexis, were a promise that hadn’t become reality,” he said. More than 50 pharmaceutical companies use Codexis-tailored enzymes today to enhance the chemical processes needed to make drugs such as the cholesterol-reducing Lipitor made by Pfizer.

Although the numbers show Codexis’ revenue is growing from its involvement with the pharmaceutical industry, Shaw explained that the company hopes to repeat that success as it moves to the biofuels and biobased chemical industries. For third quarter 2011, the company received $33.3 million, an increase of 23 percent over the same time last year. Product revenue generated from enzymes and microbes accounted for $12.2 million, an increase of 29 percent over the same period last year, and collaborative R&D revenue increased to $19.2 million from $17.2 million in the third quarter of 2010 based on milestones reached by Codexis through a biofuel collaboration with Shell, and through a carbon capture program.

“We intend to repeat that revolution (of the pharmaceutical industry) in biofuels and biobased chemicals,” Shaw explained, “where our CodeEvolver platform enables us to extract sugar from nonfood biomass and to turn that sugar into high-value chemicals and fuel.”

Through a partnership with Chemtex, the company has already begun marketing a biobased detergent alcohol called Codexol that is intended for the household markets. The company also recently joined a group of companies operating in the Brazilian market as Codexis will use its enzyme improvement technology to enhance a sugarcane-to-ethanol process used by Raizen.

As for all of 2011, Codexis believes that it will receive revenues equal or greater than $120 million, a 12 percent increase compared to 2010.