Corporate Overview p John Nicols, President and CEO February 2014
Forward‐Looking Statements These slides and the accompanying oral presentation contain forward‐looking statements that involve risks and p y g p g uncertainties. These statements relate to future events or our future financial or operational performance and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward‐looking statements. Forward‐looking statements include all statements that are not historical facts. In some cases, you can identify forward‐looking statements by terms such as “may,” “will,” “should,” “could,” “would”, “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” or the negative of these terms, and similar p , , , p j , p , p , g , expressions and comparable terminology intended to identify forward‐looking statements. These forward‐looking statements represent our estimates and assumptions only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise publicly any forward‐looking statements, whether as a result of new information, future events or otherwise. Other factors that could materially affect actual results, levels of activity, performance or achievements can be found Other factors that could materially affect actual results levels of activity performance or achievements can be found in Codexis’ Quarterly Report on Form 10‐Q for the period ended September 30, 2013 filed with the SEC on November 12, 2013, including under the caption “Risk Factors.” If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results, levels of activity, performance or achievement may vary significantly from what we projected. Our logo, Our logo “Codexis Codexis,” “We We are Biocatalysis™ are Biocatalysis™” and other trademarks or service marks of Codexis, Inc. appearing in this and other trademarks or service marks of Codexis Inc appearing in this presentation are the property of Codexis, Inc. This presentation contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply relationships with, or endorsement or sponsorship of us by, these other companies.
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Who We Are • Codexis is the global leader in is the global leader in •
•
• • • 3
biocatalysis Delivers most advanced and customized solutions for t i d l ti f pharmaceutical and complex chemistry industries Proven technology enables rapid, cost‐effective and sustainable process development – from research to manufacturing f i 90 employees; 45 in R&D NASDAQ‐listed: CDXS NASDAQ‐listed: CDXS Headquartered in Redwood City, CA
Investment Highlights • A leading edge biotechnology toolkit A leading edge biotechnology toolkit − Disruptive value creation built on unrivaled technological prowess
• A profitable, growing platform business p ,g gp − Growing portfolio of products serving an expanding customer list − Robust development pipeline set to feed future sales growth
• Accelerating penetration in large, underserved markets A l ti t ti i l d d k t − Process development in pharma and other complex chemistry markets − Long‐term opportunities in development of new improved drugs
• Focused on future profit growth and cash flow generation − Gross profit CAGR of 50% over last 5 years − Expect year‐on‐year gross profit growth of 15‐20% in 2014 Expect year‐on‐year gross profit growth of 15‐20% in 2014 − 2014 cash burn expected to be less than $8M 4
Biocatalysis iocatalysis Technology Technology Platform Platform
Technology Platform to Engineer Biocatalysts Beginning Biocatalyst
• Enable novel manufacturing processes Enable novel manufacturing processes • Deliver better economics than
traditional chemistries • Work in wide industrial conditions • Timelines that fit drug development
cycle demands cycle demands • Unrivaled capability as the industry
Proprietary Engineering
pioneer − 210 worldwide patents granted − Reduced proof‐of‐concept screen time from 8
to 2 weeks over the past 3 years − Investing (sophisticated marriage of biology & computation) to stay ahead
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Optimized p Biocatalyst
Codexis is the Biocatalysis Partner of Choice
New Biocatalyst Evolution
objective performance
Codexis
Competitors
time
Best Performing Biocatalysts
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Full C Commercialization i li ti Capability
Delivering Value for Pharma Customers Upgrade the Chemical Process U d h Ch i l Conventional Process
The conventional process produces process produces toxic waste and requires purification Waste
Benefits of Benefits of Biocatalysis fi f Biocatalysis i l i • Higher quality and yield • Minimized waste generation • Less energy intensive • Improved operator safety • Run in multi‐purpose assets
Hazardous Chemicals
• Shrink # of unit operations
Codexis’ Green Process Evolved Biocatalyst
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Minimal Waste
• Lower capex p ambient
operating design
Product Portfolio Product Portfolio
Early Adoption in Pharma Development Pipeline KITS: KITS:
BENCH CHEMIST AWARENESS/ ACCESS
• Sets of readily available biocatalysts for given chemistry • Off the shelf or from a catalog
$10‐$50k Orders (Proof of Concept):
FOLLOW‐ONS FOLLOW‐ TO VALIDATE
LOCKED‐ LOCKED‐ IN BY IN BY PHASE III 10
• • • •
2010‐2012 kit sales:
+151% Up to $100k Orders (RFP Optimization):
2010‐2012 sales:
2010‐2012 sales:
+100%
+100%
Customer buy‐in Inclusion in DMF/NDA Patents filed Supply chain
Drug Patent Filings Referencing Referencing Biocatalysis:
2010‐2012:
+100% 100%
Growing Portfolio of Profitable Products PRECLINICAL
PHASE 1 PHASE 1
PHASE 2 PHASE 2
PHASE 3 PHASE 3
AstraZeneca BMS BMS Glycom/Nestle y / Krka Merck Merck Merck Merck Merck Merck Merck Merck Novartis Novartis Lilly Pfizer Roche Teva Teva Teva
2010 11
2013
LAUNCHED
Commercial Products & Customers • Expanding portfolio of commercial revenue Expanding portfolio of commercial revenue
with leading biopharma companies • Over 50 pharma companies use CDXS products or technology d t t h l
Top revenue sources in 2013 (>$1mm each) (>$1mm each) Atorvastatin (Arch Pharma) Boceprevir (Merck) Sitagliptin (Merck) Service Rev. (Merck)
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Top revenue sources in 2010 (>$1mm each)
Simvastatin (Undisclosed)
Atorvastatin (Arch Pharma) (A h Ph )
Argatroban (E l ) (Exela)
Boceprevir (Merck)
Rivastigmine (Novartis)
Patented Drug ( (Pfizer) )
Crizotinib ( (Pfizer) )
Service Rev. (Teva)
Patented Drug (Undisclosed)
Transforming Blockbuster Drug Manufacturing Drug Manufacturing • Developed new commercial production new commercial production •
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route for Januvia Merck announced process saved potentially $100M in manufacturing t ti ll $100M i f t i capacity expansion Improved productivity by 56%, increased yield by 7‐10% and reduced waste by 19% Merck received FDA approval for new CDXS 1 CDXS 1‐step step process process CDXS received EPA Presidential Green Chemistry Award in 2010 Merck and CDXS signed 3‐year extension of collaboration
PRIOR CHEMICAL PROCESS PRIOR CHEMICAL PROCESS
BIOCATALYTIC PROCESS
Growth Strategy Growth Strategy
Growth Strategy Overview • Replicate deep partnering success with Replicate deep partnering success with • • • •
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Merck at other major pharma Building out our commercial team and g sales force Increase early adoption and access to biocatalysis technology Expand late stage project flow through CMO partnerships p p Continue expanding reach of our leading technology platform in pharma and complex chemistry markets l h it k t
Substantial, Underserved Market Opportunity Significant untapped global market for biocatalyst platform
Small Molecule Pharma Small Molecule Pharma
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Value of API:
Addressable with Biocatalysis:
Biocatalyst Cost in Use:
Biocatalysis Market Potential:
$60bn
30%
5‐10%
$1‐2bn
Replicating Merck Partnership • Pursuing Pursuing development development
agreements with large biotech and pharma companies • From development services, to
customized biocatlayst engineering and technology g g gy license to CDXS platform • CDXS receives future commercial
royalties, milestone payments, technology fees and FTE funding
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Target Markets Big pharma Major biotech Major biotech Small biotech, CMOs, industrial biotech
Beyond Pharma: Expanding Biocatalysis in Complex Chemistry Markets Complex Chemistry Markets Superior enzymes for cost‐advantaged process solutions Improved process performance Efficiency & simplicity Pharmaceuticals and Intermediates
Faster development Sustainability Robust supply chain Robust supply chain
Flavors and Fragrances F
Food and Nutrition N t iti Agricultural Chemicals 18
Personal Care
Animal Health
Corporate Summary Corporate Summary
Financial Summary • Driving top‐line revenue − Expect $8M to 9M in Q4 2013 $ − 2013 year end revenue guidance of $30‐$32M − Projecting 5‐10% in total revenue growth in 2014
• Accelerating Biocatalysis profit growth in 2014 − Maintain greater than 50% gross margin; 10‐15% gross margin increase
year over year
• Operating discipline − Implementing needed cost efficiencies
• Preserve solid balance sheet P lid b l h − $31M cash (9/30/13), 2013 cash burn of approximately $23M. End of
year cash projected to be at approximately $26M − 2014 cash burn guidance of less than $8M 2014 cash burn guidance of less than $8M − No debt 20
Accelerating Long‐Term Profit Growth Total Biocatalysis Gross Total Biocatalysis Total Gross Profit Gross Profit
Revenue make up Revenue make‐up • Product revenues: sales of
($ in millions, USD)
biocatalysts or chemical intermediates (using biocatalysts) intermediates (using biocatalysts)
$20
• Collaborative R&D: FTE service
$15
revenues, royalties, milestone payments, & licensing fees
$10
Profit growth results $5
• 51% profit CAGR from 2009 ‐ 2013F • 2013 total gross margins: ~ 50%
$0 2009
2010
2011
2012
Product Gross Profit Collaborative R&D Gross Profit 21
((Est.) 2013 )
− Up from 18% in 2009 Up from 18% in 2009 − 2013 product gross margins of 30+%
Investment Highlights • A leading edge biotechnology toolkit A leading edge biotechnology toolkit − Disruptive value creation built on unrivaled technological prowess
• A profitable, growing platform business p ,g gp − Growing portfolio of products serving an expanding customer list − Robust development pipeline set to feed future sales growth
• Accelerating penetration in large, underserved markets A l ti t ti i l d d k t − Process development in pharma and other complex chemistry markets − Long‐term opportunities in development of new improved drugs
• Focused on future profit growth and cash flow generation − Gross profit CAGR of 50% over last 5 years − Expect year‐on‐year gross profit growth of 15‐20% in 2014 Expect year‐on‐year gross profit growth of 15‐20% in 2014 − 2014 cash burn expected to be less than $8M 22
C Corporate Overview t O i February 2014
