Prepared remarks
Greetings and welcome to the Codexis Second Quarter 2026 Financial Results Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Georgia L. Erbez, Chief Financial Officer and Chief Business Officer.
Thank you.
You may begin.
Thank you, operator. With me today are Alison Moore, President and Chief Executive Officer; Stefan Lutz, Chief Scientific Officer; and Britton Jimenez, Senior Vice President, Sales and Marketing. During this call, management will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 2000, including our guidance for 2026 revenue, anticipated milestones and product launches, facility expansions, technical milestones, and public announcements related thereto, as well as our strategies and prospects for revenue growth, path to profitability, and successful execution of current and future programs and partnerships. To the extent that statements contained in this call are not descriptions of historical facts regarding Codexis, they are forward-looking statements reflecting the beliefs and expectations of management as of the statement date 08/11/2026. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond Codexis' control and that could materially affect actual results. Additional information about factors that could materially affect actual results can be found in Codexis' filings with the Securities and Exchange Commission. Codexis expressly disclaims any intent or obligation to update these forward-looking statements except as required by law. And now I will turn the call over to Alison.
Thank you, Georgia, and thanks, everyone, for joining. Codexis generates manufacturing solutions using high-performance engineered enzymes. The investment of over 20 years of our expertise is playing out in our pharma biocatalysis pipeline, which supports 14 commercial products and a pipeline of programs in Phase II and III clinical development. This expertise has also enabled the creation of the ECOsynthesis manufacturing platform, a scalable aqueous process for the production of oligonucleotides. I am pleased to share our progress through the first half of 2026, and I am excited for the rest of the year and beyond. Today, we reported solid financial results for the second quarter of 2026, with revenue of $14.9 million. Our recent successful financing, which closed two weeks ago, resulted in a capital raise of $25 million of net proceeds. This provides us with greater stability and flexibility as we pursue our strategic goals. Georgia will give us more details on our financial achievements later in the call. An important highlight of the quarter was the TIDES U.S. Conference in May, where we shared important new data on our ECOsynthesis technology. Codexis presented data demonstrating full-length siRNA synthesis with precise control of phosphorothioate chemistry using our technology platform. Stereochemistry plays an important role in how oligonucleotides perform. Stefan Lutz, our Chief Scientific Officer, will provide additional details on the growing capabilities of our platform later in the call. I am also pleased to report that the construction of our GMP manufacturing facility is proceeding according to plan. This facility is a core component of our strategy to enable the adoption of ECOsynthesis into the pipelines and supply chains of our customers. This facility will deliver GMP material to support IND filings and supply clinical trials, and deepen Codexis' production-scale platform expertise. Our building permit application will be submitted momentarily and our manufacturing equipment has been ordered. We will begin construction following approval of the permit. The cost of the construction for this project is approximately $25 million. This investment underscores our long-term commitment to supporting product development, scale-up, and manufacturing for our customers. Years ago, the pioneering science of Codexis transformed the opportunities available to process chemists, enabling the manufacture of complex small-molecule chemistries. This innovation has now become standard practice in the production of small-molecule medicines. Today, we believe that the ECOsynthesis platform will similarly revolutionize the ability to generate large-scale quantities of siRNA medicines, making this advanced modality accessible to patients across all therapeutic areas. ECOsynthesis leverages enzymatic solutions and offers a scalable alternative to the current solid-phase organic synthesis technology. The latter is not sufficiently scalable and requires enormous amounts of solvent, posing significant challenges. As demand for siRNA is expected to increase 30-fold by 2035, this manufacturing bottleneck is anticipated to emerge within the next three years, particularly as large Phase 3 cardiovascular trials reach their conclusions. As communicated at TIDES, the industry recognizes the limitations of current production methods and acknowledges the need for radical new technologies. The impact of the ECOsynthesis platform is becoming increasingly clear as more organizations embrace enzymatic approaches. Codexis is in a leading position to industrialize this important new method. I will now turn the call over to Stefan for more details on our TIDES data.
Thank you, Alison. At TIDES U.S. in May we presented new data demonstrating how our ECOsynthesis manufacturing technology is not only advancing existing capabilities, but also unlocking new capabilities for production of siRNA therapeutics. Drug developers currently have limited control over phosphorothioate stereochemistry, as existing chemical manufacturing methods produce complex mixtures that vary in therapeutic potency and require time- and labor-intensive downstream processing. In contrast, the engineered enzymes that power ECOsynthesis deliver products with defined stereochemical configurations, offering users unprecedented control within a scalable oligonucleotide manufacturing process. These stereopure molecules can confer improved product quality, enhanced therapeutic potency, and streamline manufacturing by reducing process complexity. We continue to explore the biological impact of stereo control and believe that this capability promises a significant advantage for customers seeking to optimize for performance, manufacturability, and differentiation of their siRNA assets. In addition, we introduced Starterless ECOsynthesis, a novel capability to launch RNA synthesis from a single nucleotide rather than a chemically synthesized starter oligonucleotide. Although still in the R&D stage, the starterless approach is a technically simpler solution to initiate oligonucleotide synthesis and lowers cost for siRNA manufacturing. This innovation is particularly relevant as the industry increasingly explores fragment-based assembly strategies in which shorter oligonucleotides are ligated to produce full-length siRNA therapeutics. In this context, eliminating the need for starter oligonucleotides offers even greater economic and operational advantages. Feedback from business and CMC representatives at the conference has reinforced our view that Starterless ECOsynthesis marks a material advancement in enzymatic siRNA manufacturing. We will provide updates on this technology as additional data become available. More broadly, our innovations presented at TIDES have generated significant interest across the industry and have resulted in additional engagement with prospective customers and strategic partners. I will now turn the call over to Britton for an update on our commercial activities.
Thanks, Stefan. The number of RNA medicines in development is expanding at an estimated rate of at least 10% per year, with over 100 product candidates in clinical trials and more than 400 in preclinical development. It is broadly recognized that current production technologies will not be able to keep up with future demand. The rapidly changing landscape for siRNA is felt most keenly by CDMOs who supply the vast majority of oligonucleotide medicines today using solid-phase organic chemistry. The ability to scale production is complicated by technical challenges associated with solid-phase synthesis and further burdened by the capital cost of building new facilities. It should be no surprise that some of our most motivated customers are CDMOs. For each of the three CDMOs we have contracts with, we have completed small-scale technology transfers into their facilities so that they can assess ECOsynthesis in-house. The most advanced of those assessments has been completed and we are in negotiations for a long-term commercial contract. We are very excited about this prospect as these relationships will be revenue-generating and will create additional channels for adoption and scaling of the ECOsynthesis technology. Our engagement with biopharmaceutical companies continues to flourish. Our specific objectives are to promote adoption of our technology into therapeutic asset pipelines, in which we supply preclinical and clinical material and support IND filings. In addition, our technology can be integrated into an innovator company's production environment. In the last quarter, we have been engaged with the pioneer siRNA companies in addition to other large biopharma companies to progress partnerships with these objectives. Our small-molecule biocatalysis business remains stable and profitable and it benefits from some recent new product approvals that have higher margins than the older legacy products. We continue to support 14 commercially approved products that are dependent on our enzymes, including four products that received regulatory approval in 2026. Another product received a label expansion, significantly increasing the market potential of that drug. After years without a new product approval, this activity has resulted in a renewed growth trend. The product pipeline also remains robust with 15 programs in Phase II or III clinical development and data readouts expected on seven clinical trials in the next two years. We are excited for our prospects to demonstrate sustained, steady growth in this side of the business. With that, I will now turn the call over to Georgia for a discussion of our financial results for the second quarter.
Thanks, Britton. Good afternoon, everyone. Today, I will provide a brief overview of our financial results here on the call and invite you to review our 10-Q filed today for a more detailed discussion. Total revenues were $14.9 million for the second quarter of 2026, compared to $15.3 million in the second quarter of 2025. We are particularly pleased with the revenue performance in this year's second quarter as we experienced significant improvement in our biocatalytic enzyme business, which we see as a return to growth. Product gross margin was 73% for the second quarter of 2026, an improvement over the gross margin in the first quarter of 2026 and over the gross margin for the entire year of 2025. The strong result for the second quarter was primarily driven by higher sales of more profitable products. Due to this sustained improvement in the first half, we now expect gross margins to improve into the high 60s for the full year 2026. Research and development expenses for the second quarter of 2026 were $11.7 million compared to $13.8 million in the second quarter of 2025. The decline was largely driven by lower employee-related costs and reduced spending on outside services and lab supplies. Selling, general and administrative expenses were $10.9 million for the second quarter of 2026, compared to $12.3 million in the prior year period. The decline was primarily due to lower employee-related costs associated with reduced headcount, lower stock-based compensation expenses, and lower allocable costs. Controlling expenses remains a focus of ours to ensure we are using our capital efficiently and in functions that bring the highest and largest positive impact to the success of our business. Net loss for the second quarter of 2026 was $12 million compared to a loss of $13.3 million for the second quarter of 2025. We continue to expect 2026 revenue in the range of $70 million to $76 million. Similar to the quarterly trends we saw last year, we expect 2026 revenue to be more heavily weighted towards the second half of 2026 versus the first half. Codexis ended the second quarter of 2026 with $54.9 million in cash, cash equivalents, and short-term investments, which compares to $78.2 million at the end of 2025. Subsequent to the closing of the second quarter, we successfully completed an equity financing that raised a total of $25 million net of expenses, resulting in a pro forma cash balance of approximately $79.8 million. We expect that our current cash will be sufficient to fund our planned operations and capital expenditures through 2028, extending our previous cash runway guidance. As a reminder, our financial guidance and cash runway projection includes the expenses associated with the build-out of our GMP facility. With that, I will now turn the call back over to Alison.
Thank you, Georgia, Stefan, and Britton. Codexis' ECOsynthesis technology is already demonstrating its potential to alter the landscape of oligonucleotide manufacturing and enable siRNA to reach indications with large patient populations. Our next steps are to advance the industrialization that will support deployment of our technologies into customers' pipelines. For investors, we want to show proof of success. We are working hard to sign higher-value contracts as well as innovative licensing deals. We will also be focused on financial performance by striving to meet our revenue targets while being mindful of our expenses. We will continue to use our many years of experience in engineered enzymes to sustain and drive innovation in the field of RNA medicine. We are committed to achieving our goals and milestones for 2026. This includes beginning construction on our GMP production facility; progressing toward 500-gram pilot-scale production of siRNA in the Eco Innovation Lab; expanding a CDMO scale-up partnership for ECOsynthesis; securing the ECOsynthesis raw materials supply chain; and maintaining the pharma biocatalysis business at healthy gross margins. I believe 2026 will be the year that ECOsynthesis achieves the scale and performance metrics that prove it to be the technology of choice for our customers' siRNA medicine. We are excited by our prospects and proud of the dedication and achievements of the entire Codexis team who have been instrumental in making the ECOsynthesis technology a reality. We would be happy to take your questions. Operator, thank you.
Questions and answers
And ladies and gentlemen, at this time, we will conduct the question-and-answer session. Your first question comes from Allison Bratzel with Piper Sandler. Please state your question.
Hey, guys. Good afternoon and thank you for taking the question. Just following up on the stereochemistry data and the single nucleotide initiation capabilities you showed at TIDES U.S. Could you talk more about what customer reaction has actually looked like since then? Has that translated into new engagements? And then separately, could you talk to what kind of updates you would expect to be able to show at TIDES Europe later this year? And just what kind of customer conversations that could foster? Thank you.
Thank you very much, Allison, for the question. I am going to have Stefan say a little bit more about the technology and what to expect next, and then we will have Britton speak to what is happening commercially as a result.
Yes. On TIDES Europe, I think we really see an opportunity to continue the story from TIDES U.S., talking about the capabilities of the ECOsynthesis platform, but also to address more of the data on the biological impact of stereo control.
To build on Stefan's comments, a lot of excitement came from TIDES U.S. around both the stereochemistry control and the starterless initiator. From the stereochemistry control perspective, that has allowed us to engage with several customers who believe in both the therapeutic value of stereochemistry control and the quality benefits. Those conversations have advanced. We are in several conversations with customers around how they want to deploy this technology within their pipelines. From a starterless perspective, because this was a brand-new capability, many conversations are just getting started, but they are all significantly positive. We have had several past customers who were interested in our technology who have now changed their position and want to advance and test our technology because of this Starterless capability. Overall, the response has been extremely positive and it has allowed us to advance our conversations further with these customers.
Thank you.
And your next question comes from Kristen Kluska with Cantor Fitzgerald. Please state your question. Kristen Kluska, your line is open. Please state your question and unmute yourself.
Hi, sorry. This is Jenny on for Kristen's line. Thank you so much for taking my question. My first question is how might the advances in stereochemistry allow partners to lower dosage, maybe save money, and potentially improve upon safety measures?
Thank you for the question, Jenny. I think Stefan could at least at a high level describe some of our own work that we are doing there, and then maybe just recap what the field understands about the potential.
When it comes to stereochemistry, these drugs operate within the cell and the cellular environment is chiral. Small-molecule drug development has shown that stereochemistry can be an important factor in therapeutic efficacy. Regarding the strengths of offering stereo control, it is important to highlight the manufacturing advantages that such a capability brings. The products resulting from enzymatic synthesis are much more narrowly defined and therefore simplify downstream processing, which today involves very elaborate purification chromatography steps. Those aspects certainly factor into advantages of controlling stereochemistry as well. We also have ongoing work here at Codexis where we are evaluating materials in biological assays to assess potential activity improvements related to specific stereo configurations.
Great. Thank you so much. Could you talk a bit about how much you believe the desire for precise stereochemical control will lead you to find potential partners? What are the key data or analyses that truly suggest its added benefits, and why will this matter as siRNA therapeutic development becomes more competitive in the coming years?
What we know from our current customers is that some feel quite strongly about the opportunity of stereo control and some are less concerned. We have created engagements with both kinds of customers and we are happy to deploy ECOsynthesis whether they are interested in stereochemistry or not. We do have one particular customer that is very interested in exploring any potential potency improvements that we might deliver through stereochemical control. Stefan and his team generated high-quality material and analytical data that we shared at TIDES. We are making material with particular stereo configurations, advancing studies to understand activity opportunities of different configurations, and we have other companies currently in negotiations who are interested in doing the same.
Your next question comes from Matthew Hewitt with Craig-Hallum. Please state your question.
Good afternoon. Thanks for taking the questions. Regarding the guidance of $70 million to $76 million in revenues this year, obviously back-half weighted, but that still implies a significant step up in the second half. How should we be thinking about cadence and how much of that step up in the second half are from contracts you already have in hand, whether for individual enzymes or work on ECOsynthesis and newer products?
The step-up comes from a variety of sources. Our revenue base is diverse. The performance of our base business has been improving, as you saw this quarter. We are continuing to see the same trends moving forward, and we also have strong leads and performance in the ECOsynthesis area. Stay tuned—we hope to have another strong quarter in Q3 and to provide more detail on the revenue split.
Understood. Regarding the four approvals that your partners received this year, what do those orders look like? Are they fairly consistent—do you expect steady orders like $5 million a quarter from a customer and then ramp over time—or will they be more lumpy, meaning you get an order in Q1 and then that customer might not come back until Q3? I'm trying to think about modeling that out.
I'd be happy to spend time with you offline to work through some of this. Every customer is different in how they prepare for commercial launch: some stockpile, some do not, and some have steadier manufacturing plans. So revenue can still be lumpy and unpredictable, but overall we are seeing positive trends from these approvals and we are excited about that.
Your next question comes from Matthew Stanton with Jefferies. Please state your question.
Hey, thanks. Maybe sticking with the biocatalysis business, understanding the business can be lumpy, can you talk about the pipeline? I think you said 15 programs in Phase II and III and seven of those read out over the next two years. Is there an opportunity for this business to see a more elevated growth rate as those read out and the 14 approved products continue to progress?
We are really excited about the prospects for the base business right now with the approvals coming up. As a reminder, in the last two years we had few approvals and now we are starting to see pipeline maturation. The drugs we support span a wide range of markets—some niche, some orphan, some large. Over the long term, once these approvals materialize, we expect this business could grow in the high single digits over the next five to seven years.
Thanks. On the three CDMO contracts, did you complete small-scale tech transfers with all three? Does that mean all of them are in more advanced negotiations, or is there more work to do with some of them? You mentioned progressing toward longer-term commercial contracts—does that refer to one of the three or multiple?
Yes. For those three CDMO partners, we completed the first half of the project within Codexis and then tech-transferred the process at small scale into their facilities. Each CDMO is on a slightly different timeline. One has essentially completed their entire assessment and is the most advanced; we are currently in long-term commercial partnership negotiations with that one. The other two are a step behind and are still evaluating our technology. We see this as a phased progression, and we are hopeful to wrap up the lead contract negotiation fairly quickly.
Your next question comes from Dan Arias with Stifel. Please state your question.
Hi, thanks. A bigger-picture question: industry activity continues to head in a good direction and your sales funnel is growing. You mentioned that this is the year from a scale perspective. If things go well, what would be a reasonable ballpark of how much siRNA you could be supplying to the industry in 18 to 24 months relative to today? What could be the scale factor on your supply overall in aggregate?
What we've been communicating is that this year is important. We are currently producing at hundreds of grams scale. When we ligate fragments together by the end of the year, we can be operating at about a half-kilogram scale. Then, just before we operationalize our GMP facility, we aim to be at kilogram-scale production. Our focus is adoption: we intend to have customers purchase their preclinical and clinical material from us. We already supply preclinical material. Working with CDMO partners also creates adoption channels and scaling opportunities. We think we can go from 1 kilogram and then step up, potentially by a factor of about 10 via partnerships.
I understand you're talking about your own capabilities. I'm trying to figure out how to understand what the industry might need 12 to 24 months down the line because demand is a bit less understood.
This is an important dynamic to watch over the next three years. There are four very large cardiovascular trials ongoing; if even one demonstrates the addressable patient population they target, it will constrain current installed capacity. CDMOs are spending on stainless steel facilities, and building that capacity is expensive and slow. For context, it is roughly a billion dollars of stainless steel investment to add one metric ton of annual capacity. That is an expensive route if demand is expected to increase 30-plus fold over the next ten years and it takes a couple of years minimum to build one facility. Codexis' technology is important because it provides an alternative without the same scale barriers and solvent requirements associated with current technology. We have previously communicated that we believe ECOsynthesis will be approximately 70% more capital-efficient. As industry demand grows, novel enzymatic technologies like ECOsynthesis will be deployed alongside existing solid-phase synthesis to enable future production needs.
Your next question comes from Brendan Smith with TD Cowen. Please state your question.
Hey, everyone. This is Chad Wiatrowski on for Brendan Smith. What were some of the technical risks or hurdles that you overcame as you innovated this technology up to hundreds of grams, and what do you see going forward as you scale to kilogram as the main technical hurdles to overcome?
Thank you for that question. I'll ask Stefan to say a few words about the uniqueness of our enzymes in terms of technical barriers, and then I'll speak a bit more to the scale question.
To address market needs for siRNA composition, the enzymes must be high-performance, engineered across a wide range of parameters. They must tolerate different building blocks, have robustness to operate over long reaction times, and be able to recognize and control stereochemistry. Building all these capabilities into the enzyme has been a formidable challenge that Codexis has addressed relying on two decades of enzyme-engineering experience. That unique capability is the foundation for process development to achieve scale and quality manufacturing.
The convergent disciplines at work—expertise in enzymology and its application into production processes—are our strengths. For example, enzyme behavior when immobilized requires extensive optimization. In terms of scaling, our process flow is relatively simple: nucleotides are in solution in a tank and flow over an immobilized enzyme which polymerizes the nucleotides, followed by a phosphatase that stops the reaction. The scale parameters we are optimizing are classic scale parameters: ensuring correct flow rates, optimal configuration of immobilized enzymes, and precise temperature control. Each synthetic nucleotide has its own character, so as we scale we need a robust design space so that any sequence from any customer can be created at scale and yield high-quality product. We are actively working on these elements and are already at hundreds of grams; half a kilogram is in sight by year-end.
Ladies and gentlemen, there are no further questions at this time. I will hand the floor back to Alison Moore for closing remarks.
Well, thank you for joining us today. We are looking forward to seeing you at the upcoming investor conferences in the second half of the year. If you have additional questions at any time, please feel free to contact us. Have a good evening. Thank you.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you all for your participation.