Codexis, Inc. (NASDAQ:CDXS) Q4 2023 Earnings Call Transcript

Sri Ryali: So remember, there’s a double-stranded DNA ligase and there’s double-stranded RNA ligase. The DNA ligase is exactly what you said, it’s an asset sale. So it’s cash used an out licensing deal, but Roche has bought it from us, right? So it’s simply money on the barrelhead, and then we have no further sort of interest in it. With Aldevron, it was a low single-digit upfront, but then a healthy double-digit royalty. And what we’re saying when we mean high double digit is not $10 million, right? We don’t mean $99 million, but we don’t mean $10 million, right? So we’ve got to be in there somewhere. Then with a double standard RNA ligase, that is a really exciting product because that’s the same product we can – the program, we can sell to multiple customers where we were getting upfront enzyme payments and potentially royalties and significant supply agreements down there.

So we see – back to the question earlier around the TAM, we see that in the real high double-digit potential for that enzyme class over the next coming years. That’s big for us.

Kevin Norrett: Yes. I would say just to add to that, one of the things as we’ve gone through our customer conversations is, this really has become much more of a meaningful business segment for us in terms of potential opportunity because this is their first step into phosphoramidite chemistry. So it’s an immediate cost reducer and an immediate impact, whereas ECO Synthesis, as we know, we’re going to be talking about that launching in ’26, and we need to bring people into the fold of a full enzymatic way of synthesizing siRNA. So it’s a much easier lift in terms of getting customers over the hump in terms of buying into the proposition. Yes.

Sri Ryali: One thing to add is that any royalties from the Aldevron deal would likely show up in our R&D revenue line and not product revenue.

Evan Stampler: Okay. Super. And did you say how much is embedded in the guide for each of those things or not yet or you haven’t?

Sri Ryali: On the upfront, we said that the low single-digit million is embedded in the R&D revenue. We haven’t broken out the royalties.

Evan Stampler: Okay, great. Thanks so much.

Operator: Thank you. There are no further questions at this time. I’ll turn the call back over to Stephen Dilly for closing remarks.

Stephen Dilly: Great. Well, thank you again for joining us today. Sri, Kevin, Carrie and I are looking forward to meeting many of you in person at the upcoming Cowen Conference in Boston next week. But thanks for participation today.

Operator: Thank you. This concludes today’s call. You may now disconnect. Goodbye.