All revenue categories showed significant year-over-year growth during Q3 of 2014
Codexis President and CEO John Nicols has said that he is pleased with the 'solid progress' the company is making towards its goals for 2014. The leading developer of biocatalysts for the pharmaceutical and fine chemical industries announced financial results for the third quarter and nine months ended 30 September 2014 that revealed significant year-over-year growth in Q3 in all revenue categories, together with a substantial decrease in operating expenses.
'We are on schedule with our execution of the recently announced CodeEvolver protein engineering licence with GSK and have completed the first Wave milestone deliverables. We expect to collect the associated US$5m technology transfer payment before year end,' Nicols said.
In July, Codexis granted GlaxoSmithKline (GSK) a licence to use its proprietary CodeEvolver protein engineering platform technology in the field of human healthcare. Codexis received US$6m in upfront fees and expects to receive an additional $5m by the end of 2014, subject to milestone completion. There is also the potential for Codexis to receive approximately $14m in further milestone payments over the next two years.
The company has also received three significant biocatalyst orders from major pharmaceutical accounts, two of which are follow-on orders from an existing customer. The third is for a new biocatalyst aimed at supplanting the customer's traditional, non-biocatalytic method.
Revenues for the quarter ended 30 September 2014 were $7.5m, a 90% increase from $3.9m in the third quarter of 2013. Of this, biocatalyst product revenues, which consist primarily of sales of biocatalyst intermediates, APIs and Codex Biocatalyst Panels and Kits, were $2.6m, an increase of 138% compared with $1.1m a year ago. This was primarily attributable to an increase in sales of enzymes for food-related products.
Biocatalyst research and development revenues, which include license, technology access and exclusivity fees, FTE payments, milestones, royalties, and optimisation and screening fees, totalled $3.4m, an increase of 66%, compared with $2.0m in the third quarter of 2013.
Revenue sharing arrangement sales were $1.5m, an increase of 84% compared with the third quarter of 2013, and relate to the licence to Exela PharmSci for the anticoagulant drug argatroban.
R&D expenses in the third quarter of 2014 declined 26% to $5.0m from $6.8m in the third quarter of 2013. The decrease was primarily due to lower depreciation expense resulting from the disposal or impairment of certain equipment previously used in discontinued R&D activities, as well as lower employee-related expenses associated with the company-wide restructurings implemented in late 2013.
Net loss for the third quarter of 2014 was $4.6m, compared with a net loss of $9.3m for the third quarter of 2013.
For the nine months ended 30 September 2014 Codexis reported total revenue of $21.1m. Biocatalyst research and development revenues of $7.2m increased by 45% and revenues from the revenue sharing arrangement with Exela of $5.6m increased by 144%, each compared with the corresponding period of the prior year. These increases were offset by a decrease in product revenues of 45% due to the previously announced decrease of sales into the Hepatitis C marketplace. Codexis reported a net loss of $19.4m for the nine months ended 30 September 2014.