The conclusion of Big Pharma contracts worth $22.5m (€18m) for Codexis’ artificial intelligence-driven protein engineering platform did not hinder its 2017 results.
Last week, Codexis reported an annual revenue of $50m, marking a 2% increase compared to 2016, and a 74% increase in product sales – to $26.7m.
Codexis granted a license deal for the platform to GlaxoSmithKline (GSK) in 2014, and to Merck & Co. in 2015, to develop biocatalysts for active pharmaceutical ingredient (API) production.
“This was an exceptional accomplishment by the Codexis team, especially considering that $22.5m of revenue in 2016 was non-recurring from the CodeEvolver licensing deals with GSK and Merck,” CEO John Nicols told investors on Thursday.
Last year, Nestlé Health Science licensed the CodeEvolver platform in a $14m deal aimed at discovering biotherapeutic protein candidates for the treatment of metabolic disorders.
According to Nicols, the firm is working to secure additional CodeEvolver deals, but did not factor this into its 2018 revenue estimate of $60-63m.
A ‘stepping stone’ approach
While Nicols says the firm is increasing its client base, it is hopeful for another CodeEvolver license deal.
Partnership agreements are a great “stepping stone for potentially entering into the next CodeEvolver license,” he said.
Such agreements have “led to more and more adoption of our technology, it just hasn’t led to the next CodeEvolver deal being right in front of us,” Nicols added.
Partnerships vs license deals
Although Codexis is encouraging large pharmaceutical firms to onboard the platform, signing enough partnership agreements could help sway the firm’s approach, he said.
However Nicols told investors multiple project teams require dedicated project capacity: “So for the most part we’re trying to drive these large pharmaceuticals towards CodeEvolver deals.”
Codexis must also consider how such deals impact intellectual property, he added.
“On the backend of CodeEvolver platform license the licensee owns the protein that’s created – and so that sets us up for a different kind of backend margin revenue outlook from a dedicated project team compared to a ColdEvolver license.”