Codexis, Inc. Aktie

Greetings, and welcome to the Codexis Report 2026 Q1 Earnings Call. [Operator Instructions]. As a reminder, this conference is being recorded.

It is now my pleasure to introduce Georgia Erbez, Chief Financial Officer and Chief Business Officer. Please go ahead.

Thank you, operator. With me today are Dr. Alison Moore, Codexis' President and Chief Executive 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 1995, including our guidance for 2026 revenue, anticipated milestones, including product launches, facility expansions, technical milestones and public announcements related thereto as well as our strategies and prospects for revenue growth and successful execution of current and future programs and partnerships.

To the extent that the 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, May 7, 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.

Now I'll turn the call over to Alison.

Thank you, Georgia, and thanks, everyone, for joining. While it's been a short 8 weeks since our last call, we've accomplished a lot at Codexis. We are pleased to report another strong quarter and are busy preparing for the TIDES Conference next week, where we will present important new data on our ECO Synthesis technology.

Codexis generates manufacturing solutions using biocatalytic enzymes. Over the last 3 years, we have developed the ECO Synthesis manufacturing platform for the production of RNA medicine, specifically siRNA, and we are now focused on bringing this to the market. The standard approach of using solid phase organic synthesis for siRNA manufacturing is complex, solvent-intensive and challenging to scale.

Currently, siRNA pipelines are expanding from rare diseases to large population indications, which will create a significant manufacturing bottleneck in the next 3 years. ECO Synthesis has the potential to alleviate production constraints by delivering greater scalability and higher product quality with the added benefit of dramatically improving environmental impact.

Last year, we achieved a number of important milestones in platform performance and industry engagement, which generated tangible interest from our customers. In 2026, the potential impact of our platform is well understood. Across the industry, we are seeing increased interest in enzymatic production solutions. Our goal is to position Codexis as the leading manufacturing technology innovator. We are operationalizing our platform through scaling, improving process control and by our platform's unique capability of delivering superior siRNA product.

A new feature of our ECO Synthesis platform is the ability to generate siRNA with specific stereochemical control. Stereoisomers exist at both ends of most siRNA molecules and are made of the same atoms but are arranged differently in 3-dimensional space. As a reminder, drug developers have little influence over stereochemistry today as existing chemical manufacturing methods produce random mixtures that can vary in terms of therapeutic potency and purity.

Our engineered enzymes used in ECO Synthesis can deliver product with specific stereoisomer configurations. These stereopure molecules confer overall improved product quality and have the potential to deliver improved potency. We continue to explore the biological impact of this control and believe it could be a tremendous asset to those customers who seek ways to improve their products.

Our small molecule biocatalysis business remains an important part of Codexis and provides support for the investments we are making in ECO Synthesis. We supply uniquely designed enzymes for 13 branded commercial pharmaceutical products. This portfolio continues to grow with the recent approval of islatravir, a part of an important new combination treatment for HIV.

Codexis partnered with Merck, who carried out groundbreaking process chemistry, substituting a 16-step chemical synthesis with a biocatalytic cascade. This achieved a Green Chemistry Award in 2025. We are supplying enzymes for this commercial product and are proud to participate in the supply chain for HIV patients.

We are making remarkable progress at Codexis and momentum is increasing in 2026. We are proud of the advances we are making to further enhance the utility of the ECO Synthesis platform. We look forward to showing our customers and investors additional tangible proof of value of the technology.

Now to update you on our commercial activities and progress, let me turn it over to Britton.

Thanks, Alison. Our ECO Synthesis manufacturing platform continues to mature into a thriving and successful business. Most importantly, it is a platform capable of broadly supporting product development for the most important growing modality in the genomic medicine space. The number of RNA medicines in development is growing at an estimated rate of at least 10% per year with over 100 candidates in clinical trials and more than 400 in preclinical development.

Current production technologies will not be able to keep up with future demand. For example, there are 4 drugs in late-stage clinical development for cardiovascular indications. A 2% to 3% market penetration of one of these therapeutics into a 25 million addressable patient population will require more oligonucleotide production than the entire rare disease portfolio combined.

The impact of these powerful new therapies may not reach their full potential if they cannot be produced reliably, efficiently and scale and at scale. As innovators and CDMOs search for ways to expand capacity, the importance of new production technologies is rapidly accelerating, and this market is currently estimated to be at $2 billion.

For our ECO Synthesis platform, we have over 50 opportunities in our sales pipeline with 40 individual companies demonstrating strong continued interest in our technology. The valuation work with our CDMO partners is progressing and long-term commercial discussions are also moving forward. The industry knows there needs to be a change, and we intend to be the best option for both drug innovators and CDMOs.

In connection with what Alison mentioned before, our customers are interested in exploring how stereoisomer control can be incorporated into their products. We believe this new capability can improve product purity and potency for therapeutics. We are excited to add this approach to our ECO Synthesis portfolio.

In advance of the TIDES USA meeting, we completed exciting new data on stereochemistry. This groundbreaking presentation will underscore the breadth of our leadership in enzymatic technology. During TIDES, we will host a roundtable discussion with industry experts focused on stereochemistry and the value it can bring to next-generation RNA medicines. We will have additional presentations on environmental sustainability and the performance of highly engineered ligases.

Turning to our small molecule biocatalysis business. It remains stable and profitable. We continue to support 13 commercially approved products that are dependent on our enzymes. As we mentioned on a previous update call, we have a number of projects in clinical development. In the last 6 months, we have had data readouts on 3 studies, 2 of which were positive and one of which received FDA approval last month. We are assisting our customers with preparation for commercial launch for both programs. Our pipeline remains robust with 11 programs still in Phase III clinical development and data readouts expected on 4 clinical trials in the next 12 months.

We are excited for our prospects in 2026 and beyond. The next 3 years represent a critical window to increase global oligonucleotide production capacity. The industry must confront the challenge of scaling from manufacturing less than 1 metric ton of oligonucleotide therapeutics annually to 10x to 50x that in the next decade. There isn't a more important time for enzymatic production approaches to be deployed in global production infrastructure, and we are driving the ECO Synthesis platform toward this opportunity.

With that, I will now turn the call over to Georgia for a discussion of our financial results for the first 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 $15.2 million for the first quarter of 2026 compared to $7.5 million in the first quarter of 2025. The increase was primarily due to revenue from the Merck technology transfer agreement executed in the fourth quarter of 2025, which has now been fully recognized.

Product gross margin was 71% for the first quarter of 2026, which compares to 55% for the first quarter of 2025. For the first quarter of 2026, the increase was primarily driven by product mix and sales declines in several low-margin products that were replaced with more profitable product sales. We continue to expect 2026 annual gross margins to be comparable to the annual levels we reported in 2025.

Research and development expenses for the first quarter of 2026 were $11.4 million compared to $12.9 million in the first quarter of 2025, largely driven by lower allocable costs that were partially offset by higher employee-related costs and higher use of outside services.

Selling, general and administrative expenses were $9.8 million in the first quarter of 2026 compared to $12.4 million in the prior year period. The decrease was primarily due to lower employee-related costs due to lower headcount, lower stock-based compensation expenses and lower consultant fees and outside services.

Net loss for the first quarter of 2026 was $8.7 million compared to the loss of $20.7 million for the first quarter of 2025. We are fully engaged in our project to retrofit our new GMP plant and located in Hayward, California that was leased in 2025. We are currently in the detailed design phase and are preparing to apply for a building permit in the second quarter. Construction is planned to get underway in the second half of the year, and we expect to be fully operational by the end of 2027.

Together with our Redwood City headquarters, this marks a continued step forward in how we support development, scale-up and manufacturing our customers' products. We reiterate our revenue guidance and expect 2026 revenue in the range of $72 million to $76 million. Like 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 first quarter with $65.1 million in cash, cash equivalents and short-term investments, which compares to $78.2 million at the end of 2025. We expect our current cash will be sufficient to fund our planned operations and capital expenditures through the end of 2027. As a reminder, our financial guidance and cash runway include 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, and thank you, Britton. Our proprietary ECO Synthesis platform technology has the potential to radically alter the landscape of oligonucleotide manufacturing. The next step for Codexis is to deploy the technology into our customers' pipelines. We are working hard to achieve this goal in 2026.

For investors, we want to show proof of success. We can do this by signing broader and higher value types of contracts as well as innovative licensing deals. We will also be focused on financial performance by meeting our revenue targets while being mindful of our expenses.

We will continue to innovate in the field of RNA medicines using our skills and experience in biocatalytic enzymes. Our presentations at the TIDES USA meeting next week in Boston will showcase our newest innovation. We are continuing to scale up our ECO Synthesis manufacturing platform, and we are making progress towards achieving 0.5 kilogram scale by the end of this year.

I believe 2026 could be the year when ECO Synthesis is no longer viewed as just an alternative production technology, but the technology of choice for our customers' RNA medicines. We are excited by our prospects and proud of the dedication and achievements of our employees who have been instrumental in making the ECO Synthesis technology a reality.

Now we'd be happy to take your questions. Operator?

[Operator Instructions]. The first question comes from Allison Bratzel with Piper Sandler.

This is Peter Spanogiannopoulos on for Allison. I was wondering if you can give us a preview of what to expect from the upcoming stereochemistry data that will be presented at TIDES. Then as a follow-up, I'm wondering when we can expect to see some data demonstrating that this stereo control translates to improved efficacy.

Thanks for the question, Peter. Yes, we're very excited to show our data next week. What we are going to show for the first time demonstrates stereo control at both the 3 prime and the 5 prime end of the siRNA molecule. This has not been shown before, and we will show data describing how we achieve that and the product quality of the product.

We are currently working on generating data associated with the potential for improved activity. We have some data already and shortly, we are going to have more. I would also point out that there is some extremely nice published literature that has already demonstrated the opportunity of stereo control in siRNA medicine. That stereo control confers improved stability related to intracellular nuclease activity. Even mechanistically, there's a hypothesis about why there ought to be the opportunity of improved potency.

As I said, we have those data in the works, and we will definitely be sharing those when we have them also.

The next question comes from Kristen Kluska with Cantor Fitzgerald.

This is Ian on the line for Kristin. Could you speak at a high level about the risks that are involved in scaling the platform from 100-gram scale to like 500 gram by year-end? Now that you're operating at 100 gram, what aspects of the scale-up process do you believe have been derisked versus what remains to be proven?

Thank you for the question. We have a very skilled and experienced process development team here at Codexis that we have built over the last 3 years that have expertise both in traditional oligonucleotide synthesis who -- some of whom are enzymeologists and some of whom are what I would call more classic process development individuals. Together, they're working really well on stepping through the scale changes, which are often 5x to 10x scale changes every time we scale the process.

I think you may be aware, we started with a very lab scale process. Now we are at a scale where we can certainly deliver material for preclinical development and very shortly approaching the ability to deliver kilo scale. I mentioned that our goal is to achieve half kilo scale by the end of the year. Twofold from there will be much more straightforward.

The kinds of challenges that we're meeting during scale-up are what, I would call, normal process development challenges. Those are often the challenges of control of temperature, flow rates, etc., as we start to use larger and larger equipment. We are learning a lot about how to scale the process. I think that is part of the secret sauce that manufacturing technology companies start to accumulate. We continue to deliver products of higher and higher quality actually, and that's what matters at the end of the day.

The next question comes from Matt Hewitt with Craig-Hallum.

Congratulations on the strong start to the year. Maybe first up, regarding the Merck enzyme, I'm just curious, historically, those have been talked or discussed as being kind of $5 million to $10 million in annual revenues. I'm just curious where this one kind of fits into that and how we should be thinking about the ramp of that specific product this year?

It's a brand-new approval for us, and we are very excited by this. We are working with Merck right now as we work through their demand for the product moving forward. We hope to have more information for you in future calls. Right now, we're working with them on their supply chain and their demand on manufacturing moving forward. Stay tuned, and we'll hopefully have some more information for you in future calls.

Then maybe separately, the ongoing engagement that you have with the FDA regarding the ECO Synthesis platform, maybe an update on how those conversations are progressing? What will be the ultimate outcome from those discussions? Does it allow for faster approval with potential partnerships down the line? Or just explain what this will ultimately lead to?

Thanks, Matt. That's a great question. We're actually right now working on a briefing for our next interaction with the agency, which we are planning for in approximately a quarter. Codexis was accepted into the emerging technologies program in 2024. We have been engaged with the agency around the ECO Synthesis manufacturing platform in various conversations since then. The upcoming conversation that we will be having is an ongoing part of that program.

In addition to the emerging technologies program, we are working to put together the foundational information that is required to make a submission towards an Advanced Manufacturing Technologies designation. It's called the AMT designation. If and when we achieve that designation, that does enable faster timing on review times and the potential for accelerated approval.

The next question comes from Matt Stanton with Jefferies.

Maybe one on the CDMO partnership side. It sounds like the goal is to commence another strategic partnership by the end of '26, which is good to see. Would love to just get an update on the 3 existing CDMO partnerships you have now that it's been a few quarters, any proof points, learnings, next steps? How do you think about some of those original partnerships being able to engage more meaningfully towards contracts, revenue, things like that over time?

Yes. Absolutely. The partnerships we have with the CDMOs that we've announced are going fantastic. The engagement with the different CDMOs around our technology, then getting a better understanding of our technology, how it works, how it scales, like I said, have just been fantastic. Everyone's been extremely pleased with the results of that. Because of the great work of the teams on both here within Codexis and within those partnerships, that has allowed for us to advance our commercial discussions. We're in progress of those discussions. Everything is looking very, very positively. We're looking forward to what lies ahead of us because we do believe there's a great path in front of us.

As for other potential CDMO partners, absolutely, we're always evaluating the marketplace because we want to ensure that the availability of our technology is out there for our customers, the drug innovators to be able to get access to the technology. It's an exciting time. These partners are critical to our strategy. It opens the doors and allows for bigger and better opportunities for us because it's another pathway for us. Great things going there.

Then maybe just on the broader pipeline. It sounds like a lot of progress. You talked about a licensing deal with a major pharma company, hopefully in the back half of '26 year. Just any more flavor you can provide? Is that kind of one that you're working on, you think hits? Do you have a couple of opportunities and you're assuming one of them comes through? Would love just a little more color on that. Then anything you can provide in terms of the scope or shape of what that could look like? Is it early-stage work? Is there any chance that you could be looking at running in parallel on clinical pipeline programs? Just any more flavor in terms of the pipeline there and what that could look like over time?

Yes. There's definitely a lot of conversations happening around that. There's multiple opportunities that sit in front of us with bigger and broader partnerships. Those discussions have very different flavors to them because each of those organizations are looking at our technology in different ways. I'd say the discussions are ongoing. They're looking positive. I can't get into a lot of details around this right now just because of the types of conversations we're having. No, we're very optimistic about this. The excitement around this technology and the data that we're presenting just further enhances the value out there in the marketplace. I'd say great conversations, but still more to come here in the future.

[Operator Instructions]. The next question comes from Brendan Smith with Cowen and Company.

I just wanted to ask in terms of the sales funnel. Obviously, a lot of breadth here, but could you give a little more color on breakdown of out of those 40 companies, what's the mix between like large pharma, larger biotech and emerging biotech? Then maybe in terms of the 55 programs, could you just speak to which are maybe further along than others relative to each other?

Yes. No problem. Regarding the organizations, the funnel is very, very healthy. Why I say that is our conversations cover across that entire spectrum that you mentioned. We're talking to some of the largest drug innovators in the RNAi space. We're talking down to some cell companies. The size and shape is very different, which is fantastic because it gives us diversification within the platform, the technologies. We're derisking the conversations. We're not in one just specific market segment, which is great.

Now of course, in those conversations, like I mentioned, those organizations have different ideas on how they want to engage with us using our ECO Synthesis platform. Each of those conversations are unique and a little different on what we're trying to accomplish.

In regards to the programs, again, there is no one size fit all. People are talking to us about everything from very early-stage assets to clinical assets to commercial assets and everything in between. I can't sit here and say we only talk about one thing because there is a very good diversification within our conversations, which is really exciting.

I guess a large part of the thesis, obviously, has been the broader demand outstripping existing supply. Maybe with this technical differentiation, are you viewing even some smaller indications and maybe more niche programs as potential opportunities from an asset differentiation standpoint? Are there any other ways that you view are technically feasible beyond just this upcoming TIDES presentation, which we're looking forward to?

Yes. As Britton just stated, at the moment -- so just to be clear, we have existing work and existing contracts with some very large pharmaceutical companies and with innovator and stealth companies for the ECO Synthesis manufacturing platform. We are very open to what folks might like to use the platform for at the moment.

Since we're really just starting to show the data and show real evidence of the product quality associated with the opportunity of stereo control, I expect that we probably will get some more inbound interest there. We certainly will be interested to work with a variety of customers there. We don't have unlimited bandwidth. Actually, just right at the moment, we are working on improving productivity and throughput so that we can make sure that we have the right kind of velocity and capacity to meet those customers' demands. I suppose, maybe, Brandon, your question is, at the end of the day, if there would be a high-volume client or a client with high volume potential, we would prioritize that client.

Thank you. At this time, I would like to turn it back to Alison Moore for closing remarks.

Thank you, everyone, for joining us today, and we will certainly be looking forward to seeing some of you at upcoming investor conferences. If at any time you have additional questions, please feel free to contact us. I hope you have a good afternoon and evening. Thank you.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation, and have a great day.

Greetings, and welcome to the Codexis Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to your host, Georgia Erbez, Chief Financial Officer. Thank you. You may begin.

Thank you, operator. With me today are Dr. Stephen Dilly, CEO and Chairman; Dr. Alison Moore, Chief Technical Officer; and Britton Jimenez, Senior Vice President, Sales and Marketing, who will be available for Q&A to follow. During this call, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our guidance for 2025 revenue, anticipated milestones, including product launches, pilot scale manufacturing and paths to scale up 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 our beliefs and expectations as of the statement date, March 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 the 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'll turn the call over to Alison.

Thank you, Georgia, and thanks, everyone, for joining. We have developed the ECO synthesis manufacturing platform, which is short for enzyme catalyzed oligonucleotide synthesis and has been developed to address many of the challenges experienced with the current siRNA production technology. The number of siRNA medicines in development are growing at a rate of 5% to 10% per year. And current production technologies will not be able to keep up with demand. The impact of these powerful new therapies may be compromised if they cannot be produced at scale. It's not a medicine if you can't make it. The total addressable annual market for production technologies in 5 years is estimated to be $2 billion. and we intend to establish Codexis as a key technology provider in this market.

Let's talk about how we're doing that. Last year was pivotal in both the focus and momentum of the company. We achieved a number of important milestones in 2025 in platform performance and industry engagement demonstrating tangible and significant interest from our customers who are all invested in making powerful siRNA therapeutics. We are demonstrating that we are at the forefront of biocatalytic enzyme innovation by developing technologies that can improve large-scale manufacturing of oligonucleotides and and potentially even deliver superior therapeutic asset activity. We reached an important technical milestone in delivering our platform having synthesized 10 grams of a commercially relevant siRNA using full sequential ECO synthesis.

Importantly, we shared detailed product quality data from this synthesis demonstrating no quality barriers related to our production technology. We are continuing to scale up the production platform in 2026 and currently operating at 100-gram scale in our ECO innovation lab and heading toward half a kilo scale by the end of the year. In addition, we had a client utilize our lies to manufacture a 3-kilogram batch of siRNA, a tremendous achievement in chemo enzymatic production, an important growth sector of our business. In terms of building a robust supply chain to support our ECO synthesis platform, we made significant progress in production infrastructure. Our ECO synthesis process involves a suite of purified enzymes to enable efficient, high-quality supply of these enzymes, we have modern modernized our non-GMP production capability in Redwood City and achieved ISO 9001 certification.

This certification provides confidence to our customers that we are operating under a particular quality standard. This milestone was reached in the first quarter of 2026, and since then, we have passed a facility and quality management system inspection by a large pharmaceutical customer readying Codexis for ECO enzyme supply. With respect to GMP production capability, we are fully engaged in our capital project to retrofit our new GMP plant that was leased in 2025. We will begin construction in the second half of this year and expect it to be fully operational by the end of 2027, further enabling the adoption of the ECO synthesis platform and serving our customers with GMP siRNA. Innovation is a cornerstone of our company and our culture. In 2025, we introduced a new feature of our ECO synthesis platform, which is the ability to generate siRNA with specific stereochemical control.

We presented our first data demonstrating stereoisomer resolution at Tide's U.S., and we are building the ability to control stereoisomer configuration at both the 3 prime and 5 prime end of the siRNA molecule. In addition, we are exploring the biological impact of this control and believe this could be a tremendous asset to those customers who seek ways to improve the potency and purity of their products. We will always be striving to lead the industry in innovations that are meaningful and directly relevant to the needs of our customers. On the commercial front, at the start of 2025, our goal was to market our and full ECO synthesis products and services by contracting with a broad range of customers in siRNA product development. We saw engagement from a range of innovators from large pharmas to emerging growth biotechnology customers. Britain will give a full update on our commercial activities later in the call. Our goal at the beginning of 2025 was to have 1 CDMO arrangement signed in 2025.

We surpassed that goal by signing 3 agreements 1 each with Bachem, and, highlighting the motivation from major providers who clearly understand the current limitation of standard solid chemical processes. Each of these partnerships is initiated with feasibility work in our own labs using a specific therapeutic asset sequence. In 2025, we returned our heritage small molecule biocatalysis business to a healthy profit margin and have seen stabilization in revenue. The pipeline of drugs in late-stage clinical studies remains robust and should fuel growth in this area for at least the next 3 to 5 years. This remains an important part of our business as it supports the investment that we are making in ECO synthesis. Operationally, we paid close attention to our expenditures and made the hard decision to realign our workforce in the fourth quarter. The savings we expect to realize from these efforts will partially offset the cost of our GMP facility, allowing us to make this important investment with minimal increase in our cash burn.

George will give you a more detailed description of our financial expectations. We ended the year in a strong cash position, fueled by the $37.8 million technology transfer agreement we signed with Merck in the fourth quarter. and we expect our current cash balance to fund operations and capital expenditures through the end of 2027. It's remarkable that in just a short time, we have moved enzymatic siRNA synthesis from an exciting idea to a reality. We are proud of the progress we've made in 2025 to achieve lift off of the ECO synthesis platform, and we look forward to showing our customers and investors additional tangible proof of the value of the technology in 2026. To walk you through our commercial achievements and plans for 2026. Let me turn it over to Britton.

Thanks, Alison. Broadly speaking, 2025 was the year we moved our ECO Synthesis manufacturing platform from an attractive concept to a promising and viable business. 2025 was also the year where our platform advanced from technical feasibility to being capable of supporting preclinical development as our customers progress towards IND and other regulatory submissions. And now I want to share more details on our revenue drivers for 2026. We then 2025 building and refining our sales messaging and filling the customer pipeline for our ECO synthesis platform. We have 55 opportunities in the sales pipeline with 40 individual companies, demonstrating strong continued interest in our ECO synthesis technology. The industry knows there needs to be a change, and we intend to be the best option for them, whether they are a drug innovator or a CDMO.

I'd like to spend a moment breaking down the stages of our agreement with innovators what they entail and offer a plan for how they could evolve. Our arrangements with CDMOs are slightly different and I'll review those as well. We announced last week a contract with an emerging biotech company. Under this contract, we will supply the innovator with 50 grams of siRNA material made using our ECO synthesis manufacturing platform. To clarify, -- this is fully enzymatic senses of siRNA drug septum. Once we delivered the material, they will be able to perform preclinical testing on the asset. Upon meeting the goals of this testing, the innovator plans to use our process to move their drug candidate into clinical studies. This is an exciting proposition for us as it is the first time we have a line of sight to having a drug made from the ECO synthesis platform move into human studies. Financially, this low 7-figure contract is fairly evenly split between services and product revenue and is expected to be completed over the next 12 months.

This contracted the prototype of how we enter into evaluation agreements with our customers. Once a customer decides to move their drug candidate forward. We enter into a new multiyear agreement that will incorporate licensing fee, milestone payments as well as clinical supplier grade. The dollar value of these contracts will vary based on the size of clinical trial and the amount of material we must produce to meet the customers' needs. If the product is developed successfully, we will enter into a commercial supply agreement. We will continue to provide updates throughout 26 on examples of these types of contracts. We have also created relationships with CDMOs, all of which are currently in the technology feasibility assessment phase. Once this phase has been completed, we expect the relationship to move to an adoption phase where we will transfer our production scale process to their facility. We expect to work under a commercial agreement that would consist of upfront licensing fees plus referral revenue-sharing arrangements.

We expect referrals to be bilateral you will refer our customers to our preferred CDMOs. And likewise, our CDMO partners will refer customers to us who are seeking to improve their manufacturing process. Our small module biocatalysis business remains stable and profitable. As we mentioned on our last earnings call, we support 14 programs in late-stage clinical development. We have had data readouts on 3 of those studies, 2 of which were positive. Our customers are in the process of seeking commercial approval for those programs and we are already seeing activity in preparation for supporting commercial launch. As we mentioned late last year, this is evidence that our historical business can start to show sustained growth again for the next few years. You still have additional opportunities to add to this late-stage pipeline and we'll continue to service the needs of our customers who seek value-added enzymatic solutions to their drug manufacturing activities.

As Alpha mentioned earlier, we are focused on being a technology innovator in the oligonucleotide market. We are already having conversations with customers about how to employ stereo either control to deliver improved product purity and potentially improve potency with further technological development and demonstration of the importance of this approach, this has the potential to be an important offering in our commercial portfolio. In addition to product and service sales, I want to take a moment to note Codexis' rich history in business development and technology at laces. One of our strengths is identifying innovative ways for our customers to benefit from our technology, whether it's its foreign field outside our core focus or out-licensing our CodeEvolver technology we have had a long practice of signing licensing deals. The agreement we signed with Merck late last year is evidence of the importance of the strategy, having provided a $38 million of non-dilutive capital. We remain committed to this practice and intend to sign a licensing type deal at 2026.

I hope you can appreciate the feeling of excitement we have for our prospects in 2026 and beyond. We are aligned behind our ECO synthesis technology and are energized to truly make 26 a demonstrable success. With that, I will now turn the call over to Georgia for a discussion of our financial results for the fourth quarter and full year '25.

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-K filed today for a more detailed discussion. Total revenues were $38.9 million for the fourth quarter of 2025 and compared to $21.5 million in the fourth quarter of 2024. The increase was primarily due to the Merck technology transfer agreement executed in the fourth quarter of 2025. We do expect a small amount of revenue under this agreement to be recognized in the first quarter of 2026. For the year ended December 31, 2025, revenue was $70.4 million compared to $59.3 million for the prior year. Product gross margin was 64% for the fourth quarter of 2025. For the year ended December 31, 2025, product gross margin was also 64% compared to 56% for the prior year. During both the 3-month period and full year period, the increase was primarily driven by product mix and declines in several low-margin products that were replaced with more profitable product sales. We expect gross margins to be stable in 2026 at the levels we were able to sustain in 2025.

Turning to operating expenses. R&D expenses for the fourth quarter of 2025 were $11.7 million compared to $12.1 million in the fourth quarter of 2024, largely driven by lower employee-related costs and lower stock-based compensation expenses. R&D expenses for the year ended December 31, 2025, were $52.3 million compared to $46.3 million for the prior year. The year-over-year increase was primarily due to higher employee-related costs higher lab supplies expense and the internal reclassification of certain employees to the research and development function, partially offset by a decrease in outside services related to manufacturing and regulatory expense. Selling, general and administrative expenses were $11.2 million for the fourth quarter of 2025 compared to $13 million in the prior year period. The decline was largely due to lower employee-related costs and reduced use of outside services.

SG&A expenses for the year ended December 31, 2025, were $47.1 million compared to $55.1 million for the prior year. The decrease was primarily due to lower stock-based compensation expenses, lower legal expenses and reduced use of outside services. The fourth quarter 2025 expenses also include a onetime restructuring charge of $3.4 million related to the reorganization announced in November 2025. Throughout 2025, we sought ways to reduce our operating costs and improve gross margins. The improvements I just mentioned were prior to the benefits realized from the reorganization. We anticipate our operating expenses will also show improvement in 2026. We intend to use these savings to partially fund the planned increase in capital expenditures associated with our GMP facility build-out. For 2026, the combination of operating expenses and CapEx should be similar to what we experienced in 2025. Net income for the fourth quarter of 2025 was $9.6 million compared to a loss of $10.4 million for the fourth quarter of 2024. Net loss for the year ended December 31, 2025, was $44 million compared to $65.3 million for the prior year.

We expect 2020 revenue in the range of $72 million to $76 million. For the first quarter, we are comfortable with the current consensus estimates. Similar to quarterly trends we saw last year, we expect the 2026 revenue to be more heavily weighted towards the second half of 2026 versus the first half. Codexis ended 2025 with $78.2 million in cash, cash equivalents and short-term investments, which we expect will be sufficient to fund our planned operations and capital expenditures through the end of 2027. With that, I will now turn the call back over to Alison.

Thank you, Georgia, and thank you, Britton. ECO synthesis is a disruptive technology that can radically alter the landscape of oligonucleotide manufacturing. As with any potentially disruptive technology, the first step is to show that it can actually work. In 2025, we achieved that. The next step is to show that the technology is useful to our customers. We believe we also demonstrated that in 2025 by having success in multiple feasibility studies with our customers. The next step is to support the deployment of our technology into our customer pipeline. We intend to make significant progress in this regard with several customers in 2026. We also want to show the value of our approach in longer-term contracts with higher dollar values committed to H1. This is a lofty goal, but when we are determined to achieve this year. Our goal for 2026 are simple, show our investors proof of success. We can do this by signing the types of contracts I mentioned above, and also new innovative licensing deals.

We will also be focused on financial performance, meeting our revenue targets while being mindful of our expenses which is everyone's responsibility within Codexis. We want to continue to innovate in the field of RNA medicines using our skills and experience in biocatalytic enzymes. We will be presenting at the TIFS meeting this year and will showcase our work on stereoisomer control. This important new development has the potential to be our next product offering. We will also communicate our ongoing progress and scaling up our ECO synthesis manufacturing platform and making progress toward achieving 0.5 kilogram scale by the end of this year. Later this year, we will plan to begin the retrofit construction of our GMP facility, which is an important strategic asset for the company, and we will keep you updated on our progress there as well. 2026 is shaping up to be the year when ECO synthesis is not just an alternative production technology, but the technology of choice for our customers' RNA medicine. We're excited by our prospects and the dedication and achievements of our employees who have been instrumental in making the ECO synthesis technology a reality. Now we'd be happy to take your questions. Operator?

[Operator Instructions] Our first question is from Allison Bratzel with Piper Sandler.

I know of late, you've been highlighting the potential value for stereoisomer control and the potential to yield a superior drug profile. Could you just talk to when might we see that validated either preclinically or clinically and are any of your existing opportunities actively exploring this.

Thanks so much for the question. We're working very hard on this this year because we think that the opportunity may be very important. We are already examining the biological activity of some of the stereo configurations that we can generate using the ECO synthesis platform. We are going to show more substantive data around those stereo configurations at the TIDES U.S. meeting. And over the whole course of this year, we will be doing further work to associate those stereo configurations with the possibility of improved potency. This is based on a published precedent. In addition, we have had several conversations with customers who have pipelines that include siRNA assets. And they are also interested to collaborate with us to elucidate the opportunity for their particular assets. So we have a lot of activity in this area for 2026, and we expect beyond.

Our next question is from Kristen Kluska with Cantor Fitzgerald.

This is Rick Miller on for Kristen. Just a quick question. Could you help us kind of understand the general process of how you got to the recent announced deals? The recent announced deal, the one that we issued -- can I just ask a clarification? Are you referring to the deal in the recent press release?

Yes, that is correct. I think I will ask Britain to speak about the history of that relationship and how we how we think about that deal and the potential for the future progress in that relationship.

Yes. Yes, this deal, in particular, is very, very exciting. This is a -- as we mentioned in the press release, a small organization that has a cardiovascular asset that are looking and understand that what they're trying to achieve, the current industry cannot meet their needs. And so from their very early on in their development of this asset they've been in discussions with us because they know they have a challenge and they need to figure out a way to address that challenge and be able to bring their product to market so these discussions have been going on for many, many months with this organization. And they're very, very excited working with us. We're very excited working with them because we both believe that the ECO synthesis manufacturing platform can meet their needs and deliver the materials that they need for their clinical asset that eventually will get into commercial production as they work their way through the different clinical trials they need to go through.

Our next question is from Matt Hewitt with Craig-Hallum Capital Group.

Congratulations on your progress. Maybe just to dig in a little bit more on the 50-gram contract. Could you walk us through so this initial agreement is for low 7 figures Walk us through the process. So this is preclinical work. What happens next? Assuming the data comes back positive, where do they go? What phase do they move into? What does that contract look like? I'm assuming it's much larger than 50 grams. So help us extrapolate what this could ultimately become as this moves from a preclinical study into maybe at some point a commercial product?

Yes, I'll start with that, Matt. Thank you. So we like this prototype, and we hope that we would fill our book of business with a pipeline of these. So the example is that we commit to feasibility studies. We've been talking about that over the last year, where we determine if our technology and the particular sequence construct that a company is interested in progressing if there's a good match. We've seen that across numerous molecules now and are really starting to build a database and also build credibility across our current customers about the capability and power of the platform. So this contract that you're referencing was also initiated as a feasibility study, so a service-type contract.

And as we continue sharing data with this particular client in this contract, we will be completing this component of this contract with the delivery of 50 grams of material that this customer will then use to do preclinical studies with and they will start to create their early-stage comparability assessment of our product. Beyond this preclinical work 1 would expect that if the data continues to look successful, that the company will be interested in progressing product generated using the ECO synthesis platform into an IND submission and they would be generating ecology material and GMP material suitable to start a clinical trial. If our production platform continues to be their designated manufacturing process then our aspiration is that we will become their manufacturing partner and provide ultimately commercial material to assuming that their asset proceeds through development.

That's helpful. Is there a way for us to -- and I'm not asking for specific numbers, but how do we think about as that scales through development from preclinical to tox studies and beyond, how do we think about that low 7 figures. Does that become mid-7 figures. Does it become multiples of that? I'm just trying to figure out what can this become if you and your partners are successful with this specific program?

I think one way to think about it. I'm going to -- this is just an example that we wanted to share. And like I said, what our aspiration is to build a portfolio of such customers. And I also referenced that we have been doing feasibility that we think has been incredibly valuable with multiple customers over the last 15 months or more. And we have provided those services in a way that has been very easy for those customers to try to use the ECO synthesis technologies to test the mine. But we are moving forward with a powerful technology that is more and more recognized and we absolutely would expect that licensing deals associated with the technology, the opportunity to commit to this technology would be much more significant in terms of the kind of revenue that they would earn for Codexis.

In addition, as you know, after our GMP facility is operational, we will be selling product in addition. I think that some of these things will go hand-in-hand. Some customers may want to license the technology completely and bring the technology in-house, in which case we will supply enzymes Smaller companies may want to purchase GMP siRNA from Codexis directly. And we will be able to do all of those Certainly, if our technology delivers a superior asset and we can prove that, then again, we would expect that, that could generate increased value for Codexis and our shareholders.

Got it. And if I could sneak 1 more in, and this 1 might be a little more geared towards Georgia, but what type of visibility do you have into the $72 million to $76 million revenue guidance that you have this year? I guess, how much of that do you feel like you've got line of sight or contracts in hand versus how much of that is still something that you expect to receive over the remainder of the year?

Well, so Matt, it's a good question. And we're sitting in the early part of 2026. So the way that we build our projections is to look at historical buying practices of our clients. and make estimates moving forward. We -- as you said at the beginning of the year, you always have amount of your projections that are speculative that are unknown, and this year is not any different. But the base of our business is from what we look forward to from our past buying practices of our customers. So we do have line of sight on quite a large percentage of this of this business, but it's still early in the year.

Our next question is from Dan Arias with Stifel.

Alison, maybe a high-level one here. You guys are entering a new phase with what you can do. So I guess I'm just curious where you think the industry finished 2025 when it comes to total siRNA demand. I mean I remember when you first talked about this pivot towards ECO synthesis back in '23, I believe. You had a slide that said that it was like 1,000 kilos a year and that by the next decade, it could be 30,000 kilos. So I know the big picture questions are sort of tough to answer, but for those that are kind of trying to keep tabs on this scale up journey where does it feel like we are at the industry level right now?

Yes. So great question. I think that the siRNA therapeutics pipeline seem very vibrant at the moment. Of course, we can look right at the end of that, we can look at commercial assets. There are commercial assets noise, so that total number is growing. You can see that the commercial asset revenue line is growing. We also know that there are a couple of very large indication size there's 3 assets sitting in some large pharma pipelines. And then through those types of customers and our interactions with them. We also understand that there's an extremely large number of siRNA assets in preclinical and early-stage clinical trials. So I myself look at the clinical trial numbers in FDA. Gov and I count them from time to time, and those are growing very nicely. To your point about demand, you're correct. -- that the estimates on demand, they vary significantly, but we are, I think, confidently looking at something like and I'll give you a broad range, 10 to 30 tons, 10 to 30 metric tons of oligonucleotide material required by 2030. And so I think that there is a very significant addressable market there, and we intend to have a significant piece of that.

Yes. Okay. Very helpful. And maybe just a follow up, Georgia, how much gross margin variability do you see when you think about that mix of outsourced business versus partners that are taking ECO in-house directly over, say, the next 12 to 24 months. Is that something that represents a mix question and so therefore, a profitability question? Or do you not see it that way?

No, we don't really see it that way. The ECO business right now has been primarily services. So there's not a lot of gross margin you can calculate, that side of our business right now. So the gross margin is really -- it's calculated on product sales only. And so that right now, the majority of that is our historical biocatalysis business. And the gross margins are pretty stable there. we were able to sustain a 64% gross margin for the entire year. I mean there are some quarterly variability, but we got 64% gross margin in the fourth quarter, plus for the whole year. So feel pretty good about having that margin or close to it with some error of margin around that through 2026, we see those as being pretty stable now.

Our next question is from Brendan Smith with TD Cowen.

I wanted to actually ask about the revenue mix from here and maybe just got tech a few modeling assumptions I understand your color on the legacy biocatalysis business, but is it fair to assume at least kind of incremental or modest growth of that segment over the next few years? Or should we interpret kind of this broader strategic pivot to mean ultimately aligning down of biocatalysis revenues as some of these newer partnerships take more and more share of revenue growth? Just kind of checking in on how we should think about the split of your growth over the next few years.

Yes, please, Georgia. The bulk of our growth is we really do expect that to come from the ECO side of the business. Our base business, the small molecule biocatalysis business is -- has stabilized, and we do -- we mentioned that we had a pipeline of products that are in late-stage clinical testing. We've had data readouts on 3 of those. 2 were successful. We do expect that, that side of that pipeline of opportunities will continue to fuel growth for the next few years. So -- but it is more -- the more higher growth rate will -- we expect to come from the ECO side of the business. I hope that answers your question.

Yes. Sounds good.

There are no further questions at this time. I would like to turn the conference back over to management for closing remarks.

Thank you so much, everybody. I hope you can tell, we're so excited about what's ahead and really appreciate you joining for our call today. Thank you.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation. Goodbye.

Greetings, and welcome to the Codexis Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to your host, Georgia Erbez, Chief Financial Officer. Thank you. You may begin.

Thank you, operator. With me today are Dr. Stephen Dilly, CEO and Chairman; Dr. Alison Moore, Chief Technical Officer; and Britton Jimenez, Senior Vice President, Sales and Marketing, who will be available for Q&A to follow. During this call, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our guidance for 2025 revenue, anticipated milestones, including product launches, pilot scale manufacturing and paths to scale up 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 our beliefs and expectations as of the statement date, November 6, 2025. 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'll turn the call over to Stephen.

Thank you, Georgia, and thanks, everyone, for joining. We've had a very exciting and important few months that have set us up extremely well for the changes we're announcing today. First, we were very pleased to sign the supply assurance agreement with Merck. We've been working on this for months, and it was a key reason why we had the confidence in our revenue projections for the year. More importantly, it was one of the final pieces of the jigsaw we needed to fall into place for us to be ready to commit to the transformation of Codexis into a full-service manufacturing innovator in the field of oligonucleotide manufacturing.

We also expect to sign the lease for our new facility in the next week or 2, which will give us the capability to manufacture GMP-grade siRNA in kilogram quantities using our ECO Synthesis technologies. We are really excited by the commercial trajectory of the ECO platform. This time last year, we were closing in on our first revenue-bearing contract. Today, we have 11 with 40 more in the pipeline. Finally, the technical team has continued to make spectacular progress on perfecting and scaling the ECO platform, and we will be presenting new data at TIDES EU next week.

So in summary, we have the financial resources, the real estate, the expertise and the demand lined up to move Codexis into the next phase of our transition. On a personal note, this completes the task I came here to do as CEO. Over the past 3 years, in an effort expertly led by Kevin Norrett, we've conducted a thorough assessment of the most attractive markets that can be accessed using our CodeEvolver technology. About 2 years ago, we got very excited about the enzymatic synthesis of siRNA, an endeavor that led to the ECO Synthesis platform you see today.

Now that we are confident in the market and the potential of the platform, the time is right to optimize and streamline the organization to maximize our ability to succeed. Evolving from an enzyme supplier to an innovative manufacturing solutions provider allows us to streamline our existing organization. This will significantly reduce our cost base while improving our responsiveness and nimbleness and allowing us to build further for the future. We've looked to optimize every level of the organization. With that in mind, I'm extremely excited that Alison Moore, our Chief Technical Officer, will succeed me as CEO. I intend to remain with Codexis as Executive Chair. There's a saying that successful CDMOs are run by leaders with deep technical expertise. Alison is a great leader and has deep experience and expertise in perfecting and scaling novel manufacturing platforms.

Similarly, Kevin has handed over the commercial reins to Britton Jimenez, a domain expert in commercial leadership of CDMOs. Britton is here on the call to answer your commercial questions.

With that, I'm going to hand over to Alison.

Thank you, Stephen. I've been part of Codexis for the last 5 years, first as Board member and then as member of executive leadership. I've had the pleasure of seeing Codexis evolve into an innovation leader in oligonucleotide manufacturing. Our technology has the potential to truly enable the delivery of a breadth of siRNA therapeutic opportunities to all patient populations. And I'm excited to have the opportunity to lead the company in executing on this important goal. I spent 20 years at Amgen in different operations roles, including process development, manufacturing and supply chain management.

I'm very familiar with the complexities and challenges of deploying new technologies to the manufacturing space. In addition, I also have experienced the challenges of developing and scaling genomic medicines from my time at Allogene, where I spent 5 years leading their efforts to industrialize and scale CAR-T cells. Across modalities and in various therapeutic areas, I have been fortunate enough to have been part of bringing several advanced medicines, some of which are billion-dollar drugs to hundreds of thousands or even millions of patients. We know we're in the right area with the right technology that has the potential to expand the use of siRNA, a really important emerging class of drugs.

We have streamlined our organization to focus on what we excel at, ECO Synthesis, both manufacturing and providing production technologies to our customers. It's exciting to see Codexis evolve from an enzyme supplier to a production solutions partner. For example, recently, one of our customers has used our ligase to produce a 3-kilogram batch of siRNA. Our organization is now aligned to deliver services and products to all our customers. I want to emphasize that our heritage small molecule biocatalysis business remains a crucial part of Codexis. We have a long history of delivering enzymes on time and in full to our customers, and we intend to continue this performance.

As important as execution will be in the next few years, continuing to fill our pipeline is equally as important. Our sales force has been reconfigured under Britton's leadership to expand our customer base further into the oligonucleotide therapeutics market. We have the resources, both operationally and financially to execute on this plan.

With that, I'll turn the call over to Georgia, who can describe our current financial performance and give you a glimpse of what to expect going forward. Georgia?

Thanks, Alison. Good afternoon, everyone. We announced many important events at the company today, but they are all connected to give Codexis the best chance to succeed. We've been working on the Merck agreement for months. And while the timing was uncertain, we were confident it would happen this year. The agreement gives us a vital infusion of nondilutive cash that allows us to execute on our business plans that also include building out the GMP facility. We will recognize a significant portion of the revenue from the Merck contract in the fourth quarter with the rest recognized in the first quarter of 2026. While finalizing the division between the 2 quarters is still in process, we can confirm that we will make or slightly exceed the top end of our guidance range for 2025. Part of repositioning Codexis envisions altering our priorities.

We are moving away from promoting our historical small molecule biocatalysis business. The market dynamics in this business segment have changed over the last 3 years. We see pricing pressure on new prospective enzyme development contracts. A dollar spent in winning new business and developing the enzyme does not produce the same return as it did 5 years ago. We have made the decision to reduce our sales and marketing efforts in this segment and refocus our efforts on new business in the ligase and ECO Synthesis business lines.

However, we have a long and successful history of supplying our customers, and this remains of vital importance to Codexis going forward. We may experience a drop in service revenue next year from our historical business, but this will be replaced by development services in the ligase and ECO areas. We still expect our historical business to grow for the next 5 to 10 years. Because of the work we've done in the past, there are 14 drugs using our enzymes in Phase III clinical trials, many of which will have data readouts in the next 12 months.

With a modest success rate, we expect to fuel growth in our existing pipeline of products that will require little to no additional investment from us, which should allow us to maintain favorable margins. Revenue is half the equation. And during the last few months, we've examined our spend across all areas of the company. We made the hard decision to reduce our headcount across every group, including reducing the size of our research and commercial groups to reflect the shift in strategy away from building the heritage enzyme business. We are still working through our financials for 2026, and we'll give more specific guidance after the first of the year, but we expect this restructuring will reduce our burn by approximately 25%. Together with the cash received from Merck agreement, we are able to extend our runway through 2027.

We have a number of projects similar to the Merck agreement in our line of sight, and we'll keep you informed as those discussions mature, and we understand the nature of those transactions and their size and timing.

Starting on Slide 6, 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 $8.6 million for the third quarter of 2025 compared to $12.8 million in the third quarter of 2024. The decrease was primarily due to variability in customers' manufacturing schedules and clinical trial progression. Product gross margin was 64% for the third quarter of 2025 compared to 61% in the third quarter of 2024. The increase in gross margin was largely due to a shift in sales towards more profitable products and declines in less profitable legacy products. Research and development expenses for the third quarter of 2025 were $13.9 million compared to $11.5 million in the third quarter of 2024. The increase was primarily driven by higher headcount, higher lab supply expense and internal reclassification of certain employees to the research and development function.

Selling, general and administrative expenses for the third quarter of 2025 were $11.2 million compared to $13.6 million in the third quarter of 2024. The decrease was primarily due to lower employee-related costs and legal expenses and reduced use of outside services. The net loss for the third quarter of 2025 was $19.6 million or $0.22 per share compared to a net loss of $20.6 million or $0.29 per share for the third quarter of 2024. We ended the third quarter in a strong cash position with $58.7 million in cash, cash equivalents and investments. As a reminder, this number does not include any funds from the Merck agreement.

As I mentioned earlier, together with the new infusion of cash, which we expect to receive in the fourth quarter, our cash will be sufficient to fund our planned operations through the end of 2027.

With that, we'd be happy to take your questions. Operator?

[Operator Instructions] And our first question comes from Kristen Kluska with Cantor Fitzgerald.

I just want to wish everybody on the management team all the best during this transition. Those of you that are stepping down or leaving, you were a very instrumental part of this transition. So congratulations on that. First question for me is just if you could speak about this transition and if it's going to impact some of the plans you laid out on the last call, namely the partnership strategy you might like to take for potential partners starting with as many early programs as possible to create more shots on goal as well as plans to have a GMP scale-up partner signed?

So thanks, Kristen, and I'm still here. It doesn't change our plan one jot. And we're really very, very encouraged with what we've done. You've seen Nitto coming across the line with the start of a scaling partnership there. We've talked before about others who are still in the hopper. We are continuing to land those early phase contracts. And I mentioned that we've moved from 1 to 11. Many of those are sort of what we consider having big fish in waiting where we are starting small, proving that the technology can support the molecule and then growing with the product. And the other thing I'd like you to note from the prepared remarks is -- the comment that our ligase has now been used in a production run of a 3-kilo batch. So we think things are developing in a very, very promising way.

And as we think about some of these early partners, including this ligase example you ran, I guess, how much are you able to talk or utilize some of these initial findings to think about future partner conversations? Obviously, I can respect there's confidentiality agreements between these companies, but a lot of these early partners are going to be instrumental in some of the discoveries and seeing what this engine can do that can potentially influence more discussions in the future.

This is Alison. I'll take a shot at that one. I think that, yes, our platform is proving itself as we speak with larger numbers of customers. Those customers seem to be so far, very pleased with the product that we're making with every customer, since customers come to us with unique requests and unique sequences, we are understanding better and better how our platform performs at baseline and how it can flex and be adaptable to what our customers need. So we're really, really happy with the trajectory right now, very excited to progress in 2026, hopefully, into larger co-development development type relationships.

And one of the things that we're doing is maintaining our optionality in terms of what we can provide to the customer out of our own facilities. So there are essentially 3 things. There's -- the scaling the ligase at ISO quality standards, so we can be in clinical and even commercial products. Then making the core enzymes and reagents for customers that are going to end up doing this themselves and essentially giving us a royalty of the final product. And then there's the capability of making siRNA in our own facility. And the beautiful thing about the place we're just about to sign Alison, can do all of those things in a very modular way. So we're well set whichever way the market moves.

Your next question comes from Matt Hewitt with Craig-Hallum Capital Group.

This is Tollef Kohrman for Matt Hewitt. Can you please describe the unique capabilities or advantages Nitto brings to its evaluation agreement that Proton doesn't currently offer, particularly in terms of scalability, manufacturing expertise or technology integration?

Yes. No problem. This is Britton here. Yes, Nitto is a great partner, and we're very excited about the agreement that we have in place with them. And as you know, if you look at back at Nitto Avecia, they're one of the market leaders in the CDMO marketplace. And they're going to be able to help us scale our technology into the larger batch sizes that are going to be needed in the Phase II, Phase III and commercial production. So it's one of the pieces in our strategy that we've been working on that we've been discussing over the past year, and we're going to continue to push forward with Nitto Avecia and others in the marketplace that can continue to support our strategy.

[Operator Instructions] Your next question comes from Chad Wiatrowski with TD Cowen.

Just want to dig on -- you mentioned 11 revenue-generating contracts in hand today. Could you speak a little bit about the contribution of that siRNA revenue in the product revenue segment? And I know you haven't guided to 2026, but can we expect that to help offset some of the decline in maybe the legacy small molecule biocatalyst sales? Or will it not quite offset fully the strategic refocus?

Yes. So the contracts that we have right now are all in the service area. They're not in the product area. So that's where you'll see these new contracts come into the financials. And it is -- we do expect the service revenue to be relatively consistent from year-to-year. It's just the -- where we're getting it is shifting. And we have expected this shift for quite some time.

Got it. And then anything you want to highlight just with TIDES EU coming up next week. What can we expect to see out of those presentations? And how impactful could that be for the commercial progress?

Yes. So we're really excited about TIDES next week. What we promised we would talk about was how is our technology scaling -- and we've been basically working all year on that, and we're really proud to show our data around the performance of our platform at scale. In addition, when we talked with the FDA earlier this year about our platform, they were particularly interested in our ability to be able to analyze product during the production process, so having an in-process control. And we will also have a presentation about the opportunity of in-process analytics using the ECO Synthesis platform.

So we think that both of these presentations are first-in-class presentations for the siRNA therapeutic developers and that particular market in general.

And ladies and gentlemen, there are no further questions at this time. So I'll hand the floor back to Alison Moore for closing remarks.

Thank you, everybody. Thanks for calling in today. We have a lot more to talk about with respect to our excitement related to ECO Synthesis. I will have a lot more to say going forward. I am so excited to have the privilege of my new role. And thank you for listening in today.

Thank you. And with that, we conclude today's conference call. All parties may now disconnect. Have a good day.

Welcome to Codexis Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

And now I'll turn the call over to Georgia Erbez, Chief Financial Officer. Please go ahead.

Thank you, operator. With me today are Dr. Stephen Dilly, Codexis Chairman and Chief Executive Officer; and Kevin Norrett, Chief Operating Officer.

During this call, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our guidance for 2025 revenue, anticipated milestones, including product launches, pilot scale manufacturing and path to scale up, 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 our beliefs and expectations as of the statement date, August 13, 2025.

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 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'll return -- I'll turn the call over to Stephen.

Thank you, Georgia, and thanks, everyone, for joining. Our second quarter results are strong and demonstrate our ability to run an effective business. We've maintained a solid cash balance, operating margins are significantly improved. Our revenue is above consensus and our operating loss is half compared to Q2 2024.

Given this trajectory, it is clear that the objective of cash flow breakeven by the end of 2026 is attainable. However, given the strong interest in the ECO Synthesis platform with more than 30 ongoing customer engagements, we're considering that this may not necessarily be the best way to create stockholder value. It is apparent that demand for ECO will rapidly exceed our ability to supply, starting in the ECO lab and then moving to GMP production.

Therefore, we're exploring options that would expand our bandwidth to support early projects now and investing in the future to maximize the return from the ECO platform. The clearest path to creating value over the longer term is to lock in as many early phase products as we can onto the ECO platform. As they mature into late-phase assets and commercial drugs, the return on investment becomes compelling, particularly if we remain the direct source of siRNA for as long as possible. To share a bit more, let me pass it over to Kevin.

Thanks, Stephen. Moving to Slide 3. We are pleased with recent progress across each of our core businesses, and we remain on track for the key milestones we mentioned during TIDES U.S. earlier this year. Before sharing updates on our ECO Synthesis platform, let me start with our strong Q2 revenue, which was driven by increasing orders for enzymes supporting late-phase and commercialized APIs within the Pharma Biocatalysis business.

Codexis remains the gold standard in enzyme engineering. Customers continue to bring us their most challenging small molecule manufacturing problems because we have a proven track record of delivering high-quality enzymes that address each client's specific needs. That credibility has fuelled the expansion of our early biocatalysis engagements with some recent wins within the large pharma segment.

As we have mentioned before, our commercial focus has been on generating these new programs, but they take time to grow into meaningful revenue streams. However, they provide the basis for future revenue growth as they move through clinical trials and towards commercialization.

Shifting to our ECO Synthesis platform, customer engagement is progressing nicely. At the TIDES U.S. meeting earlier this year, enzymatic manufacturing solutions were a central focus and 3 of our CDMO collaborators featured the ECO platform in their own presentations. That meeting also made it clear that ligation, otherwise known as the chemo-enzymatic route, is rapidly becoming the new standard in siRNA manufacturing.

As a result, we are extremely focused on winning new ligase customers with our machine learning capabilities and expansive ligase library. Some of our newest customers came to Codexis after they were not able to achieve desired performance from competitor and wild-type ligases. We continue to believe ligase performance makes a fundamental difference in the productivity and cost of a manufacturing process, and we are seeing indications that our customers are recognizing this, too.

As I mentioned before, we expect to add several new ligase customers before the end of the year. Finally, we continue to believe that our ligase business creates the bridge to our full ECO platform. We have also continued to fill our sales funnel with new potential ECO innovation lab customers. We have signed another new contract with TIDES U.S., and we expect to bring additional customers on board before the end of the year.

These proof-of-concept projects with process development and material scale-up allow us to show customers that we can develop a reproducible, scalable process for their assets before they commit to our process for GLP material for tox studies and future GMP material for their clinical trials. As we've said before, another critical element of securing long-term customer buy-in is to have a credible path to GMP-grade material.

Our CDMO partnering strategy provides one option, but establishing a Codexis-owned GMP facility offers a few key benefits. First, it will dramatically improve our ability to create a seamless scale-up process before tech transfer to a customer's chosen CDMO. Second, this facility enables us to service small and medium-sized drug innovators, allowing them to stay with Codexis for the long term with supply of GMP-grade material for their Phase I and II clinical trials.

As you can tell, our ECO Synthesis business is lifting off. Our focus is on translating our exciting commercial momentum into meaningful revenue, and we look forward to a busy second half of the year.

With that, I will now turn the call over to Georgia for a discussion of our financial results.

Over to Georgia for a discussion of our financial results.

Thanks, Kevin. Good afternoon, everyone. Starting on Slide 4, 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 revenue for the second quarter ended June 30, 2025, was $15.3 million compared to $8 million in the second quarter of 2024.

The increase was primarily due to variability in Pharma Biocatalysis customers' manufacturing schedules and a clinical trial progression, further demonstrating the trends we've seen of order size and timing having a significant effect on revenue. As we begin the second half of the year, it's important to note that we will continue to see some lumpiness in our quarter-to-quarter revenue due to the inherent unpredictability of our Heritage business.

This will be mitigated over time as ECO revenues begin to grow. But for the next few years, we anticipate a hybrid dynamic while Pharma Biocatalysis remains a significant percentage of our base business. Product gross margin was 72% for the second quarter of 2025. This was up from 45% in Q2 2024, largely due to shifts in sales to more profitable products and declines in less profitable legacy products.

While this is a significant increase quarter-to-quarter, we do not anticipate this magnitude of change to be sustained over the entire year. We continue to push for efficiencies in our manufacturing practices and expect gross margins to improve for the year -- for the entire year compared to 2024. Turning to operating expenses. Research and development expenses for the second quarter of 2025 were $13.8 million compared to $11.4 million last year.

The increase was largely driven by costs associated with higher headcount as well as internal reclassification of certain employees to the research and development function. Selling, general and administrative expenses were $12.39 million compared to $15.7 million in the second quarter of 2024. The decrease was primarily due to lower stock-based compensation expense, lower legal expense and reduced use of outside services.

As ECO revenues begin to materialize, we are conscious of our burn rate and remain focused on carefully managing expenses. We are fortunate to be in a strong cash position, and we are making the most of that by streamlining our business practices and thoughtfully balancing our resource allocation. The net loss for the second quarter of 2025 was $13.3 million compared to $23.8 million for the second quarter of 2024.

Finally, based on our current operating plan, we are reiterating our 2025 guidance. As a reminder, we guided to a range of $64 million to $68 million for 2025. We ended the quarter in a strong cash position with $66.3 million in cash, cash equivalents and investments, which we expect will be sufficient to fund our planned operations through the first quarter of 2027. With that, we'll be happy to take your questions. Operator?

[Operator Instructions] Our first question comes from the line of Matt Stanton with Jefferies.

Maybe just to start off on the pipeline. If I go back to May at TIDES, I think it was over 20. Now you're talking about well over 30. I think the deck had 34 specifically. So can you just help level set us? I assume these are at various stages of discussions. So maybe bucket them out a bit in terms of where they are in the funnel. And then any more color you can provide on the May over 20 to now over 30 coming at TIDES, just mix between Biopharma originators or CDMOs, maybe even on a geographic basis, just a bit more flavor on some of those incremental opportunities coming into the pipeline from there.

Kevin, that's [indiscernible] one for you.

No, super exciting to say that we have well over 30 discussions going on. I think that number might even be a little bit higher growing into the 40s as we speak today. Particularly, it's a mix of CDMOs, drug or large drug innovators and small stealth biotech and medium-sized biotechs. It's really hard to point any one single customer segment. I think the other thing in terms of where they are in various stages, I think I mentioned that we signed another one potential customer. We signed another customer since the last time we spoke, and we expect to sign several new ligase customers before the end of the year. We're very much on track for both of those metrics. But they are at various stages of discussion, and we're super excited about the progress we've seen so far.

Yes. And the great thing about this breadth of pipeline is we can't hope to service all of them. So we can start to choose and select and say where are the places where we can get the most traction, which are the ones that look most interesting to us, and that's really driving our strategy.

And Steve, maybe sticking with you, just can you talk about in terms of process development projects entering the ECO innovation lab, any more color in terms of those customer programs? I know it's very early days, but how that's maybe tracking versus plan, if there's any way to kind of talk about where utilization of the ECO lab is today or where it could be by the end of the year? And then maybe the second part of that question, just you talked about in your prepared remarks around kind of exploring options for additional capacity.

I guess maybe just any more color in terms of what those options are that you're considering? And any update on timing of when we could learn more about that? It sounds like the demand is far out seeing supply. So it sounds like maybe we'll get an update sooner rather than later given that reason, but would just love any more color in terms of the options and the timing around those things.

Yes. So great question. The thing that we are really excited about is recruiting and locking in early phase projects where they start out of the gate as ECO projects and they remain ECO projects all the way through development and commercialization. The obvious challenge with that is it takes a while, and there will be attrition. But the good news is it's actually relatively cheap for us to scale that early phase support. And so the very current conversation here within Codexis is how we set up ECO Lab #2 because we had a certain capacity for ECO Lab #1, and it's very easy to service that early part of the funnel.

What we're also finding is that the performance of our platform is very, very good, and we're super pleased with the scalability and what we call the volumetric efficiency, which means we can do more with a smaller footprint. And so we're actually rebuilding our models with aspirations to go a lot further ourselves and control the value that way.

Okay. That's helpful. [indiscernible] Maybe if I could sneak one more in on the guide. I know you talked about kind of lumpiness, but just any more color to provide in terms of phasing? Will 3Q be up relative to 2Q? I know 4Q is typically seasonally strong, but any more color on the cadence and just visibility and comfort just given the magnitude of the step-up from first half kind of low $20 million revenue to low to mid-40s in the back half. Any more color there would be appreciated.

So we still expect a pretty steady growth in our base business. But we -- as we guided in the beginning of the year, that guidance is still the same. We do expect the bulk of the growth to come from our ligase and our ECO Synthesis business for the second half. And based on the cadence of the conversations that we're having and the negotiations we're having, that is where that growth will come from in the second half. And looking at the guidance, the average guidance on the Street, it's within the range of reasonableness.

Our next question comes from the line of Allison Bratzel with Piper Sandler.

Really a follow-up to some of the last questions. I just wanted to drill down on some of your commentary that you're exploring options to expand the bandwidth to maximize return on the ECO platform. I guess, could you just expand on how that changes. The near-term steps you plan to take in building out ECO Synthesis? And also just where does the path to GMP come into play?

You have optionality via CDMO partnership versus building out your own GMP capabilities. Could you just talk to the relationship there? And then maybe separately, just kind of a back to basics question, but one I've been getting from investors is, could you just remind us of your IP position around ECO Synthesis, the platform? What does that look like? And just can you talk to the overall competitive moat you have there around the platform?

Sure. And so what we're focusing on is filling the capacity that we have and working out where we need to build. So Kevin and his team are doing a great job of filling the capacity around the ligase platform and then building out the funnel of early opportunities.

And it's the early opportunities where we can start them off with sequential synthesis of the ECO platform is where we're really focusing on increasing capacity. Now within that, what we're looking for is companies to work with that have a very good chance of succeeding that they have a well thought through strategy clinically, they have good access to funds and the opportunities that they're pursuing could become significant. So we do have a filter that we look through.

And then it's really how do we entice them onto the platform and work with them as partners going forward. And that comes to the second part of your question, which is the route to GMP. So what we need to do initially is provide them with high-quality, well-controlled material to test. Then we need to provide them with GLP grade material, which we can do right now out of the ECO Innovation Lab.

And then in the fullness of time, once that's run through a year or so later, they start to need GMP material. That time line is something that we can address ourselves. And we're increasing in our conversations with regulators, also looking at the facilities we already have and those that are available to us. We think much of this we can actually do ourselves. So -- and which comes to your third question, which is about IP protection. So we have an excellent IP portfolio around the enzymes, the process, all that good stuff.

But we are acutely aware that in the world of AI and everything else going on, that trade secrets and know-how are a very important part of defending your asset longer term and also being a great partner to work with. And it's -- I've said to you a number of times, I feel we're more in a high-tech kind of world than a biotech kind of world here where we're building a platform, and we have to think of all those things. So we pursue our IP strategy. We keep some of the secret sauce to ourselves, which is another driver of why we want to do more ourselves for longer. And then by the time this technology sees prime time, we are a very easy partner to work with, and we remove any incentives for people to try and work around us. So that's really our strategy.

Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald.

Congrats on the quarter and the clear level of interest that you're getting here. A couple of questions for me. First, how should we be correlating this strategy to go for some of the earlier stage and work with them for the long term from a revenue perspective? Is it that more initial shots on goal could lead to more future revenues even if hypothetically like 30%, 40% of these drugs end up being something meaningful? And then how should we also be thinking about the pace to collecting revenues, especially if there's a lot more companies upfront?

Great. So it is absolutely locking in a large number to get a slightly smaller number at the other end, hitting when the supply becomes important. And in that is as we move to be the direct supplier of the siRNA, we remove a lot of complexity out of the equation like how you make money from reagents and raw materials and all that kind of stuff through to saying, no, we're going to be competing based on the quality, the timeliness and the cost of the material that we supply direct to the customer.

Now what you also have to realize is in the early stages, we are asking often small companies to trust us with their baby, and we have to make that something that they can do easily. Some of that is by partnering with them very well, offering them reliability of supply, all those good stuff being able to point to how we're going to make the GLP and the GMP material, but managing their costs early on.

And so it definitely is something about be sort of less emphasizing the early revenues and really driving for a valuable market going forward as these assets mature. Now in order to pay for that, we have to drive revenues in the shorter term. And that's where the ligase strategy where increasingly, we are being validated in our assertion that we have a world-beating ligase portfolio in customers coming to us that have tried others and didn't like them and come back to us. And our access to big late-phase assets in the short term is through the ligation strategy. Anything to add to that, Kevin?

No, I think we're seeing that play out based upon what came out of TIDES and the chemo-enzymatic approach being here to stay. That's the only thing I would add. I'd say ligase is here, and it's a growing market, and we're making inroads versus competition.

Yes. And just to put that into the better mousetrap metaphor, our ligase is a better mousetrap than something people are already doing. And so we can compete directly on performance against an existing alternate. With the ECO platform, it's about doing something new and taking with them stepwise -- taking the partner with us stepwise as we progress it.

And then I would imagine as much as you guys want to go out there and do this in-house to convince these folks to stay with you long term, they probably want the same thing so that by the time they're later stage, they don't have to worry about any tech transfer or any significant step-ups that could delay their product getting on the market. So clearly, you've been having a substantial amount of conversations. Was it your experience that this is kind of what your potential partners were hoping for you to choose as well?

Absolutely. It's like the fewer transitions during the development time line, the better. And it's also the impressive scalability because a year ago, we thought we knew what the scalability of our tech was. Now we're much more certain. As we take each step up, we're really pleased with the improvements that we're making. And it allows us, as I say, to do more with a much smaller footprint, which is great.

Okay. And I'll ask one last question. Just how should we be thinking about the time and the cost for this process? And clearly, it sounds like there's a lot of interest and you can be selective here about working with some partners that could help offset this a little bit.

So one of the things that we did talk about in our prepared remarks was we did a modest, very targeted top-up of our cash position. That was designed to give us access to the facilities, infrastructure and everything else that we need to do this scaling. So be reassured about that. We're not getting out over our skis. We can afford to do what we need to do. Yes. And it really is looking at working through the rest of the year and having clarity early next year in terms of the trajectory.

It really depends on the mix of business that we see in the contracts that come out over the next 6 to 9 months, and we'll give you more clarity on that when we do our 2026 guidance.

Our next question comes from the line of Matt Hewitt with Craig-Hallum Capital Group.

Maybe first up, the variable manufacturing schedule you noted, does that imply that there's maybe some pull-forward pushout that's occurring, and that's what's creating the variability? Or is there something else that I'm missing?

If you look at the variability from Q1 to Q2 last year and then again from this year, it really is it's the timing of big orders. I don't want to get any more scientific than that. It's -- we just don't have a lot of visibility. There are some orders that we had anticipated, for example, in the fourth quarter, they came in the first quarter and vice versa. That's exactly what happened this time, probably not at the same magnitude that we expected this time. It's certainly not like what we experienced in the first quarter last year or this year. But it's definitely that it's having not quite a lot of predictability in when some of these larger orders come in.

Okay. That's super helpful. And then the GMP scale-up partner that you noted in the press release and in your prepared remarks, is that likely one of the 3 DMO -- or one of the 3 CDMO partners that presented at TIDES this spring? Or are there others that you're in discussion with that could ultimately leapfrog those 3?

So we are talking to more than those 3. They progress at different rates. But Kevin?

Yes. I mean, certainly, ones that we presented with are in the mix but as Stephen said, there are others that have risen to the -- to the challenge, I would say, in the last couple of months and are accelerating in terms of our conversations.

And I then come to what do we need CDMO partners for. And it's not immediately for scaling the ECO process itself. We can do that in-house. This is for relationships with big customers that are doing chemo-enzymatic. So quite often, what we get is one of those CDMOs bringing us a problem to address for them to service one of the big players. So that's really one of the critical models that we're working on.

Our next question comes from the line of Brendan Smith with TD Cowen.

I wanted to actually ask, first, just a bit more about how you see the potential revenue funnels through clinical development. I fully appreciate the ramp in revs is going to really depend on clinical success in the therapeutic area, among other things. But I guess just what kind of ramp from maybe preclinical to Phase I, II, III are you broad strokes forecasting, at least among partners that you've already signed or are in talks with? And then I have a follow-up.

Okay. So when you're talking about the very initial phases of feasibility, can the platform perform and do what they needed to do in terms of producing the construct, you're talking about collaborations that take a couple of months and are hundreds of thousands of dollars.

You then move from that, which is really a technical collaboration to some milestone-based revenues on -- as we progress through development, but also the material supply itself. And in early development, the way we make ourselves whole is by supplying the material for a certain cost, but also milestones as we go through that. But as it becomes more significant in terms of quantity, it gets much simpler and it's just the amount they're paying for the siRNA that they're buying from us. So that's the way the ramp works. We try and sort of square the circle early with the milestones and payments such it transitions to something very simple towards the latter stages.

Got it. Okay. That's very helpful. Appreciate that. And just maybe a quick follow-on. I wanted to ask, I guess, just as of today, and again, appreciate this might shift over time. But can you just speak a little bit to what the scope of options is to kind of fund some of the scaling to GMP maybe even faster than is necessary, just given kind of the renewed interest and maybe if potentially even to sale the Biocatalysis business or something like that would be on the table in that respect.

So we really like our Biocatalysis business because even though its growth trajectory is modest, it is very profitable because a lot of these are significant assets that we baked in a while ago. We know how to make them. The margins are good. Therefore, that is worth a lot to us as an engine that reduces our need for cash.

There's also work around the ligase, particularly lucrative contracts there that can help us fund. And also, we don't need to spend all the money we need to scale right away. So it's an incremental process where because the technology is very rapid to set up, we can stay just in front of the curve. It's not like we have to build a facility and then wait for 2 years. We can actually step forward with GLP within our existing footprint and then set up GMP in a very short time such that we're ready to supply as existing assets in our pipeline mature rather than building it and hoping they come.

I'm showing there are no further questions. I'd like to turn the call back over to Stephen Dilly for any closing remarks.

Well, thanks, everyone, for tuning in. And as you hear, we're very excited about where we are. We're thinking very hard about the market dynamics going forward and how best to capture the value from this exciting technology that we built in ECO Synthesis. And we'll be hoping to see some of you live at the forthcoming meetings over the next month or so. So thanks very much for tuning in.

This concludes today's call. Thank you for your participation. You may now disconnect the call.