Stephen, you have been with Codexis since 2020 and became its CEO in 2022. How would you describe your transition into the role of CEO in the midst of the pandemic?
It was a challenging time, but that challenge was precisely what motivated me to step into the CEO role. During my tenure on the board, it was clear that the pandemic had created a temporary surge in demand for our products, we had a big deal with Pfizer to help make PAXLOVID (pill-form, treatment for COVID-19). However, as the pandemic waned, we anticipated a significant revenue gap and pressure on the stock, and this was compounded unexpectedly by a general market downturn. This situation necessitated a disciplined approach to transform Codexis. We aimed to pivot the company from its reliance on pandemic-driven revenues to building a robust organization capable of thriving independently. The foundation for a strong business was there, thanks to the strategic use of our cash reserves for early exploration into new opportunities which I’ll tell you about.
The essence of my job was to harness Codexis’ potential in enzyme engineering and biocatalysis across diverse applications, from food and biofuels to pharmaceuticals, and decide on the strategic direction. The discipline to streamline operations, focus our spending, and ensure control over our destiny was crucial, especially in a financial environment that seemed unfavorable for raising additional funds. We meticulously managed our resources, invested wisely, and leveraged our core competencies in enzyme engineering to create new value for customers in any production process which uses enzymes.
Would you say you were prepared for the shift away from COVID-related revenue streams?
Initially, the duration and impact of the pandemic were uncertain, and we did not fully anticipate the eventual decline in demand for COVID-related products. The situation was fluid, and the effectiveness of vaccines, the potential continuation of COVID-19 treatments, and the return to normalcy were all unknowns. I want to reiterate one thing: at the time of the pandemic, only one thing mattered to me and the rest of the company was helping as many people get through the pandemic safely, preserving their lives, as possible. I’m proud of how everyone at Codexis took up that responsibility.
In hindsight, some aspects may seem obvious, but at the time, we were navigating unprecedented territory. Now, as we find ourselves in a more familiar and stable world, we're focused on growing our platforms.
Codexis as it stands today then - what role do enzymes play in the pharma industry, and who are Codexis' customers?
Enzymes are pivotal in various industrial processes - especially in pharmaceutical manufacturing, they catalyze specific reactions in the synthesis of small molecule therapeutics.
Our clients primarily include pharmaceutical companies like Pfizer and Merck, who utilize our engineered enzymes in the production of drugs such as PAXLOVID and JANUVIA. This sector of our business, which has been our forte for over a decade, contributes significantly to our revenue, with a handful of enzymes accounting for the majority of our earnings. The engineered enzymes are optimized for specific chemical reactions, offering efficiency and reducing waste in drug manufacturing.
Our business is also expanding into the oligonucleotide synthesis sector, targeting emerging areas like siRNA therapeutics. This involves leveraging our enzyme engineering capabilities to create more efficient and less wasteful methods of synthesis compared to traditional chemical approaches. The mRNA and siRNA spaces, boosted by the pandemic's focus on mRNA vaccines, present new opportunities. Our engineered HiCap RNA polymerase, for example, which we recently out licensed to Aldevron, offers advantages in mRNA synthesis by minimizing double-stranded contaminants and improved capping efficiency. While mRNA technology has matured, we are exploring partnerships for its commercialization, and we see significant potential in siRNA for treating a range of diseases with fewer doses.
Can you elaborate on Codexis' platforms?
Codexis operates two main platforms: pharmaceutical manufacturing or biocatalysis, and an emerging focus on oligonucleotide synthesis. At the heart of our innovation is the CodeEvolver technology, which enables the design of new enzymes through a combination of vast enzyme variant libraries and AI-driven predictions. This technology allows us to significantly alter an enzyme's properties, such as stability, activity, and specificity, through iterative evolution.
For small molecule APIs, the challenge is straightforward: converting one molecular structure into another efficiently. However, for oligonucleotide synthesis, we need versatile enzymes capable of handling various building blocks, including chemically modified ones, which requires an enzyme to be both "promiscuous" and efficient. Our success in evolving enzymes for different applications demonstrates our capability to meet the complex demands of both pharmaceutical manufacturing and the burgeoning field of oligonucleotide therapeutics.
ECO Synthesis, our latest and most advanced platform, makes a departure from traditional methods of oligonucleotide synthesis. By inverting the conventional process—anchoring enzymes rather than the oligonucleotide itself—we can efficiently assemble RNA strands in a highly controlled manner. This method utilizes a suite of enzymes developed by Codexis, including those for blocking and unblocking sequences during synthesis, as well as kinases for creating the necessary nucleotide triphosphates and quadriphosphates. The result is a versatile and scalable system that can produce any RNA sequence, transitioning from offering single enzymes for specific reactions to providing a comprehensive kit for any type of RNA synthesis.
ECO Synthesis is designed to cater to a wide range of clients, from large pharmaceutical companies to smaller biotech firms and CDMOs. Our strategy involves direct collaboration with big players in the sRNA space, providing CDMOs with the necessary tools and knowledge to use our platform, and offering bespoke synthesis services to smaller companies for their preclinical and clinical needs. By tailoring our offerings to each segment, Codexis aims to facilitate access to our technology at various stages of drug development and production, ensuring that our innovations reach and benefit a broad spectrum of the pharmaceutical industry.
Our ECO Synthesis platform is set to revolutionize the RNA synthesis space by addressing scalability and sustainability challenges inherent in traditional phosphoramidite chemistry. The conventional method is limited in batch size and heavily reliant on environmentally detrimental organic solvents. ECO Synthesis operates in water, dramatically reducing the carbon footprint and eliminating the need for large-scale, expensive containment facilities. This innovation not only promises a more sustainable approach but also significantly reduces capital investment requirements, enabling the production of siRNA at scales previously deemed unfeasible with traditional chemistry.
What does the recent collaboration with Roche signify for Codexis?
Our collaboration with Roche exemplifies Codexis' capability and versatility in enzyme engineering beyond our core focus areas of biocatalysis and RNA synthesis. By developing a next-generation DNA ligase for Roche's diagnostic kits, we have demonstrated our ability to enhance the detection efficiency of liquid biopsies for cancer, showcasing the potential of our technology in improving health outcomes. Our RNA ligase is set for launch this year.
How do you envision the company's progress in the next three years?
The commercial strategy for Codexis includes the imminent launch of our RNA ligase, followed by the rollout of our ECO Synthesis platform, starting with early access for customers in 2025 and a full commercial launch in 2026. We saved a lot of lives during COVID with mRNA. We believe siRNA therapeutics have the potential to change the world, we work with companies who believe the same, and we realize the enzymes to make their therapeutics.
