Codexis posts Q2 net loss of US$3.9M, versus year-ago net loss of US$2.9M, on higher R&D expenses, costs associated with preparing to become a public company; revenue up 28% to US$24.5M

Graziela Medina Shepnick

REDWOOD CITY, California , August 5, 2010 (press release) – Codexis, Inc. (Nasdaq: CDXS), a clean technology company, today announced financial results for the second quarter ended June 30, 2010.

Financial Highlights

Revenue: For the second quarter of 2010, the company reported revenue of $24.5 million, an increase of 28% from $19.2 million in the second quarter of 2009. Product revenue of $8.5 million increased 102% over the same time period.

Operating Expenses: Research and development expenses in the second quarter of 2010 were $13.0 million compared to $12.1 million for the second quarter of 2009. The increase was primarily due to higher depreciation and stock-based compensation expenses. Selling, general and administrative expenses in the second quarter of 2010 were $8.7 million compared to $6.2 million for the second quarter of 2009. The increase was primarily due to increased headcount, legal and accounting costs associated with preparing to become a public company and higher stock-based compensation expenses.

Net Income/(Loss): Net loss was ($3.9) million, or ($0.15) per share, based on 26.6 million weighted average common shares outstanding in the second quarter of 2010. The company ended the quarter with 34.2 million shares outstanding as a result of the conversion of preferred stock and the issuance of new shares of common stock in connection with the company's initial public offering.

Adjusted EBITDA: On a non-GAAP basis, Adjusted EBITDA increased from ($0.1) million in the second quarter of 2009 to $0.5 million in 2010. Adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, stock-based compensation and preferred stock warrants fair market value adjustment to our net loss. A reconciliation of Adjusted EBITDA to net loss is presented below.

Cash: Cash, cash equivalents and marketable securities for the second quarter of 2010 increased to $100.3 million compared to $39.3 million at March 31, 2010 and $55.6 million at December 31, 2009. Codexis completed an initial public offering in April 2010, generating net proceeds of $72.5 million.

Outlook

For 2010, Codexis affirms its forecast for 2010 annual revenue of $94 million to $98 million, which would represent growth of 13% to 18% compared to 2009, and affirms its expectation that Adjusted EBITDA will be positive for full year 2010.

Recent Events

In June 2010, Merck and Codexis announced joint receipt of the Presidential Green Chemistry Challenge Award, given by the U.S. Environmental Protection Agency (EPA). The award recognized development of a novel biocatalytic production method for sitagliptin, the active pharmaceutical ingredient in Merck's Januvia. The new process improved efficiency and significantly decreased waste products, and was the subject of a joint Merck-Codexis paper published June 17, 2010 in the leading peer-review journal Science. This was Codexis' second EPA Green Chemistry award. The first was received in 2006 for an improved process for a key building block of atorvastatin, the active ingredient in Lipitor from Pfizer.

On June 28, 2010, Peter Strumph joined Codexis as Senior Vice President, Commercial Operations, a new position. Mr. Strumph is responsible for Codexis pharmaceutical product management and manufacturing operations worldwide. He brings to Codexis two decades of experience in senior manufacturing and operations management in the biopharmaceutical industry.

"We are very pleased with the results of our second quarter, highlighted by strong financial performance and important milestones in both pharmaceuticals and bioindustrials," said Alan Shaw, Ph.D., President and Chief Executive Officer. "We continue to make excellent progress building a strong, sustainable clean technology company."

Conference Call

Codexis will hold a conference call for investors on August 5, 2010 at 1:30 p.m. PT (4:30 p.m. ET). The conference call dial-in numbers are US: 866-788-0541 or International: 857-350-1679, access code 54501345. A live webcast of the call will also be available from the Investor Relations section of www.codexis.com. A recording of the call will be available by calling US: 888-286-8010 or International: 617-801-6888, access code 87964645 beginning approximately two hours after the call, and will be available for up to thirty days. A webcast replay from today's call will also be available from the Investor Relations section of www.codexis.com approximately two hours after the call and will be available for up to thirty days.

About Codexis, Inc.

Codexis is a clean technology company. Codexis develops optimized biocatalysts that make industrial processes faster, cleaner and more efficient. Codexis' technology is commercialized with leading global pharmaceutical companies and in development for advanced biofuels with Shell. Other potential markets include carbon capture, water treatment and chemicals.

Industry Intelligence Editor’s Note: In an omitted table, the company reported Q2 2009 net loss of US$2.8 million.

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