2020 Q2 Form 10-Q Financial Statement

#000120037520000033 Filed on August 07, 2020

View on sec.gov

Income Statement

Concept 2020 Q2 2019 Q2 2019 Q1
Revenue $14.97M $12.32M $15.58M
YoY Change 21.5% -9.0% 10.97%
Cost Of Revenue $1.699M $2.772M $4.391M
YoY Change -38.71% 6.17% 14.8%
Gross Profit $13.27M $9.547M $11.19M
YoY Change 38.98% -12.63% 9.54%
Gross Profit Margin 88.65% 77.5% 71.82%
Selling, General & Admin $8.522M $7.896M $8.415M
YoY Change 7.93% 6.77% 8.64%
% of Gross Profit 64.23% 82.71% 75.19%
Research & Development $10.85M $8.274M $8.016M
YoY Change 31.17% 12.27% 11.67%
% of Gross Profit 81.8% 86.67% 71.62%
Depreciation & Amortization $462.0K $430.0K $319.0K
YoY Change 7.44% 65.38% 34.03%
% of Gross Profit 3.48% 4.5% 2.85%
Operating Expenses $19.38M $18.94M $20.82M
YoY Change 2.29% 9.01% 11.06%
Operating Profit -$6.107M -$6.623M -$5.239M
YoY Change -7.79% 72.56% 11.3%
Interest Expense $60.00K $220.0K $230.0K
YoY Change -72.73% 29.41% 228.57%
% of Operating Profit
Other Income/Expense, Net $13.00K -$88.00K -$125.0K
YoY Change -114.77% 7.32% 108.33%
Pretax Income -$6.037M -$6.491M -$5.133M
YoY Change -6.99% 73.28% 9.31%
Income Tax $307.0K $16.00K $3.000K
% Of Pretax Income
Net Earnings -$6.344M -$6.507M -$5.136M
YoY Change -2.5% 74.22% 9.42%
Net Earnings / Revenue -42.39% -52.82% -32.96%
Basic Earnings Per Share -$0.11
Diluted Earnings Per Share -$0.11 -$118.5K -$94.89K
COMMON SHARES
Basic Shares Outstanding 59.00M shares 54.54M shares 54.16M shares
Diluted Shares Outstanding 59.00M shares

Balance Sheet

Concept 2020 Q2 2019 Q2 2019 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $75.60M $93.40M $47.30M
YoY Change -19.06% 74.25% 94.65%
Cash & Equivalents $75.65M $93.42M $47.32M
Short-Term Investments
Other Short-Term Assets $3.700M $2.000M $1.200M
YoY Change 85.0% 66.67% -20.0%
Inventory $686.0K $720.0K $633.0K
Prepaid Expenses
Receivables $26.40M $11.81M $12.60M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $106.5M $110.2M $63.71M
YoY Change -3.4% 66.32% 77.15%
LONG-TERM ASSETS
Property, Plant & Equipment $6.822M $5.312M $4.535M
YoY Change 28.43% 36.8% 73.09%
Goodwill $3.200M $3.200M $3.200M
YoY Change 0.0% 0.0% -1.27%
Intangibles
YoY Change
Long-Term Investments $1.000M $400.0K $500.0K
YoY Change 150.0% -42.86% -28.57%
Other Assets $391.0K $207.0K $1.013M
YoY Change 88.89% -50.0% 115.53%
Total Long-Term Assets $35.29M $36.55M $37.41M
YoY Change -3.47% 277.84% 338.1%
TOTAL ASSETS
Total Short-Term Assets $106.5M $110.2M $63.71M
Total Long-Term Assets $35.29M $36.55M $37.41M
Total Assets $141.8M $146.8M $101.1M
YoY Change -3.41% 93.26% 127.21%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $2.637M $2.164M $2.180M
YoY Change 21.86% -29.79% -16.06%
Accrued Expenses $6.943M $4.059M $7.127M
YoY Change 71.05% -19.64% 34.37%
Deferred Revenue $1.903M $5.851M $1.554M
YoY Change -67.48%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $200.0K $200.0K
YoY Change -100.0%
Total Short-Term Liabilities $18.94M $17.49M $18.65M
YoY Change 8.31% 6.59% -13.45%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Other Long-Term Liabilities $1.246M $1.222M $1.320M
YoY Change 1.96% -23.24% -24.96%
Total Long-Term Liabilities $1.246M $1.222M $1.320M
YoY Change 1.96% -31.15% -34.07%
TOTAL LIABILITIES
Total Short-Term Liabilities $18.94M $17.49M $18.65M
Total Long-Term Liabilities $1.246M $1.222M $1.320M
Total Liabilities $47.00M $48.11M $49.91M
YoY Change -2.31% 105.36% 69.55%
SHAREHOLDERS EQUITY
Retained Earnings -$356.4M -$342.1M -$335.6M
YoY Change 4.18% 4.3% 3.49%
Common Stock $6.000K $6.000K $5.000K
YoY Change 0.0% 20.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $94.79M $98.68M $51.21M
YoY Change
Total Liabilities & Shareholders Equity $141.8M $146.8M $101.1M
YoY Change -3.41% 93.26% 127.21%

Cashflow Statement

Concept 2020 Q2 2019 Q2 2019 Q1
OPERATING ACTIVITIES
Net Income -$6.344M -$6.507M -$5.136M
YoY Change -2.5% 74.22% 9.42%
Depreciation, Depletion And Amortization $462.0K $430.0K $319.0K
YoY Change 7.44% 65.38% 34.03%
Cash From Operating Activities -$10.07M -$5.060M -$2.851M
YoY Change 99.01% -36.35% -31.88%
INVESTING ACTIVITIES
Capital Expenditures -$730.0K -$810.0K $445.0K
YoY Change -9.88% -44.14% 2681.25%
Acquisitions
YoY Change
Other Investing Activities -$1.000M $0.00
YoY Change
Cash From Investing Activities -$1.730M -$810.0K -$445.0K
YoY Change 113.58% -44.14% 2681.25%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 120.0K 51.93M -$2.082M
YoY Change -99.77% 34.26% -24.67%
NET CHANGE
Cash From Operating Activities -10.07M -5.060M -$2.851M
Cash From Investing Activities -1.730M -810.0K -$445.0K
Cash From Financing Activities 120.0K 51.93M -$2.082M
Net Change In Cash -11.68M 46.06M -$5.378M
YoY Change -125.36% 57.31% -22.79%
FREE CASH FLOW
Cash From Operating Activities -$10.07M -$5.060M -$2.851M
Capital Expenditures -$730.0K -$810.0K $445.0K
Free Cash Flow -$9.340M -$4.250M -$3.296M
YoY Change 119.76% -34.62% -21.54%

Facts In Submission

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Description of Business<div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In these notes to the unaudited condensed consolidated financial statements, the “Company,” “we,” “us,” and “our” refers to Codexis, Inc. and its subsidiaries on a consolidated basis.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We discover, develop and sell proteins that deliver value to our clients in a growing set of industries. We view proteins as a vast untapped source of value-creating materials, and we are using our proven technologies, which we have been continuously improving since our inception in 2002, to commercialize an increasing number of novel proteins, both as proprietary Codexis products and in partnership with our customers.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We are a pioneer in the harnessing of computational technologies to drive biology advancements. Since 2002, we have made substantial investments in the development of our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering technology platform, the primary source of our competitive advantage. Our technology platform is powered by proprietary, artificial intelligence-based, computational algorithms that rapidly mine our large and continuously growing library of protein variants’ performance attributes. These computational outputs enable increasingly reliable predictions for next generation protein variants to be engineered, enabling delivery of targeted performance enhancements in a time-efficient manner. In addition to its computational prowess, our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering technology platform integrates additional modular competencies, including robotic high-throughput screening and genomic sequencing, organic chemistry and process development which are all coordinated to create our novel protein innovations.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Our approach to developing commercially viable biocatalytic manufacturing processes begins by conceptually designing the most cost-effective and practical process for a targeted product. We then develop optimized protein catalysts to enable that process design, using our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering platform technology. Engineered protein catalyst candidates - many thousands for each protein engineering project - are then rapidly screened and validated in high throughput screening under relevant manufacturing operating conditions. This approach results in an optimized protein catalyst enabling cost-efficient processes that typically are relatively simple to run in conventional manufacturing equipment. This also allows for the efficient technical transfer of our process to our manufacturing partners.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">The successful embodiment of our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering technology platform in commercial manufacturing processes requires well-integrated expertise in a number of technical disciplines. In addition to those directly involved in practicing our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering platform technology, such as molecular biology, enzymology, microbiology, cellular engineering, metabolic engineering, bioinformatics, biochemistry and high throughput analytical chemistry, our process development projects also involve integrated expertise in organic chemistry, chemical process development, chemical engineering, fermentation process development and fermentation engineering. Our integrated, multi-disciplinary approach to biocatalyst and process development is a critical success factor for the Company.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We initially commercialized our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering technology platform and products in the pharmaceuticals market, which remains a primary business focus. Our customers, which include many large global pharmaceutical companies, use our technology, products and services in their manufacturing processes and process development. We have also licensed our proprietary CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">® </sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">protein engineering technology platform to global pharmaceutical companies so that they may in turn use this technology to engineer enzymes for their own businesses. Most recently, in May 2019, we entered into a Platform Technology Transfer and License Agreement (the “Novartis CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> Agreement”) with Novartis Pharma AG (“Novartis”). The Novartis CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">® </sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Agreement allows Novartis to use our proprietary CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering platform technology in the field of human healthcare.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">As evidence of our strategy to extend our technology beyond pharmaceutical manufacturing, we have also used the technology to develop protein catalysts and industrial enzymes for use in a wider set of industrial markets. These target industries consist of several large market verticals, including food and food ingredients, animal feed, consumer care, flavors, fragrances and agricultural chemicals. In addition, we are using our technology to develop enzymes for customers using next generation sequencing ("NGS") and polymerase chain reaction ("PCR/qPCR") for in vitro molecular diagnostic and genomic research applications. In December 2019, we entered into a license agreement to provide Roche Sequencing Solutions, Inc. (“Roche”) with our first enzyme for this target market, the Company's EvoT4™ DNA ligase. In June 2020, we entered into a co-marketing and enzyme supply collaboration agreement with Alphazyme LLC for the production and co-marketing of enzymes for life science applications including, initially, high-fidelity DNA polymerase, T7 RNA polymerase and reverse transcriptase enzymes.</span></div><div style="text-indent:18pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%;">We have also begun using the CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:115%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%;"> protein engineering technology platform to develop early stage, novel biotherapeutic product candidates, both for our customers and for our own business. In October 2017, we entered into the "Nestlé Agreement” with Nestlé Health Science to advance CDX-6114, our enzyme biotherapeutic product candidate for the potential treatment of phenylketonuria ("PKU"). PKU is an inherited metabolic disorder in which the enzyme that converts the essential amino acid phenylalanine into tyrosine is deficient.</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:115%;"> </span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%;">In February 2019, Nestlé Health Science exercised its option to obtain an exclusive license to develop and commercialize CDX-6114.</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:115%;"> </span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%;">In March 2020, we entered into a Strategic Collaboration and License Agreement (“Takeda Agreement”) with Shire Human Genetic Therapies, Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”), for the research and development of novel gene therapies for certain disease indications, including the treatment of lysosomal storage disorders and blood factor deficiencies. </span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:115%;"> </span></div><div style="text-indent:18pt;margin-top:12pt;margin-bottom:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Below are brief descriptions of our business segments:</span></div><div style="text-indent:36pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;">Performance Enzymes</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We initially commercialized our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">® </sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">protein engineering technology platform and products in the pharmaceuticals market, and to date this continues to be our largest market served. Our customers, which include many large global pharmaceutical companies, use our technology, products and services in their manufacturing processes and process development. We have also used the technology to develop customized enzymes for use in other industrial markets. These markets consist of several large industrial verticals, including food and food ingredients, animal feed, consumer care, flavors, fragrances, and agricultural chemicals. We also use our technology to develop enzymes for customers using NGS and PCR/qPCR for in vitro molecular diagnostic and molecular biology research applications. </span></div><div style="text-indent:36pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;">Novel Biotherapeutics</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We are also targeting new opportunities in the pharmaceutical industry to discover, improve, and/or develop biotherapeutic drug candidates. We believe that our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering platform technology can be used to discover novel biotherapeutic drug candidates that will target human diseases that are in need of improved therapeutic interventions. Similarly, we believe that we can deploy our platform technology to improve specific characteristics of a customer’s pre-existing biotherapeutic drug candidate, such as its activity, stability or immunogenicity.</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Our first lead program was for the potential treatment of hyperphenylalaninemia (“HPA”) (also referred to as PKU) in humans. PKU is an inherited metabolic disorder in which the enzyme that converts the essential amino acid phenylalanine into tyrosine is deficient. In October 2017, we announced a global development, option and license agreement with Nestlé Health Science to advance CDX-6114, our own novel orally administrable enzyme therapeutic candidate for the potential treatment of PKU. In July 2018, we announced that we had dosed the first subjects in a first-in-human Phase 1a dose-escalation trial with CDX-6114, which was conducted in Australia. In November 2018, we announced top-line results from the Phase 1a study in healthy volunteers with CDX-6114. In December 2018, Nestlé Health Science became obligated to pay us an additional $1.0 million within 60 days after the achievement of a milestone relating to formulation of CDX-6114. In January 2019, we received notice from the U.S. Food and Drug Administration that it had completed its review of our investigational drug application for CDX-6114 and concluded that we may proceed with the proposed Phase 1b multiple ascending dose study in healthy volunteers in the United States. In February 2019, Nestlé Health Science exercised its option to obtain an exclusive, worldwide, royalty-bearing, sub-licensable license for the global development and commercialization of CDX-6114 for the management of PKU. In January 2020, we and Nestlé Health Science entered into a development agreement pursuant to which we and Nestlé Health Science are collaborating to advance a lead candidate targeting a gastro-intestinal disorder discovered through our Strategic Collaboration Agreement into pre-clinical and early clinical studies. The Strategic Collaboration Agreement was extended through December 2021. Using our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering platform technology, we have also developed a pipeline of other biotherapeutic drug candidates, all of which are in preclinical development. </span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Our most recent achievement in novel biotherapeutics came in March 2020, when we announced a strategic collaboration and license agreement with Takeda in which we will collaborate with Takeda to research and develop protein sequences for use in gene therapy products for certain disease indications. Under the terms of the Takeda Agreement, we will generate novel gene sequences encoding protein variants tailored to enhance efficacy as a result of increased activity, stability, and cellular uptake using our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">®</sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;"> protein engineering platform. Takeda will combine these improved transgenes with its gene therapy capabilities to generate novel candidates for the treatment of rare genetic disorders. We are currently collaborating on three initial programs for the treatment of Fabry disease, Pompe disease, and an unnamed blood factor deficiency. The Company is responsible for the creation of novel enzyme sequences for advancement as gene therapies into pre-clinical development. Takeda is responsible for the pre-clinical and clinical development and commercialization of gene therapy products resulting from the collaboration programs. Under the terms of the agreement, in addition to the three initial programs, Takeda may initiate up to four additional programs for separate target indications. In March 2020, we began research and development activities under the program plans and received a $8.5 million one-time, non-refundable cash payment.</span></div><div style="text-indent:18pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We expect to continue to make additional investments in our pipeline with the aim of advancing additional product candidates targeting other therapeutic areas. </span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">For additional discussion of our business segments, see Note 13, "Segment, Geographical and Other Revenue Information."</span></div><div style="text-indent:18pt;"><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:115%;">Business Update Regarding COVID-19</span></div><div style="text-indent:18pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">We are subject to risks and uncertainties as a result of the current COVID-19 pandemic. The COVID-19 pandemic has presented a substantial public health and economic challenge around the world and is affecting our employees, communities and business operations, as well as the U.S. economy and other economies worldwide. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including the duration and severity of the pandemic and the extent and severity of the impact on our customers, new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.</span></div><div style="text-indent:18pt;margin-top:6pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">To date, we and our collaboration partners have been able to continue to supply our enzymes to our customers worldwide. However, we are dependent on our manufacturing and logistics partners and consequently, disruptions in operations of our partners and customers may affect our ability to supply enzymes to our customers. Furthermore, our ability to provide future research and development ("R&amp;D") services will continue to be impacted as a result of governmental orders and any disruptions in operations of our customers with whom we collaborate. We are continuing to assess the potential impact of the COVID-19 pandemic on our business and operations, including our product sales, R&amp;D service revenue, expenses and manufacturing. However, we are unable to fully determine and quantify the extent to which this pandemic affected our total revenues due to complex accounting judgments.</span></div><div style="text-indent:22.5pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In the U.S., the impact of COVID-19, including governmental orders ("Orders") governing the operation of businesses during the pandemic, caused the temporary closure of our Redwood City, California facilities and has disrupted our research and development operations. Research and development operations for all other projects were temporarily suspended from mid-March 2020 through the end of April in accordance with these Orders. In May 2020, we initiated limited operations and gradually ramped up our R&amp;D operations so that we are currently utilizing the majority of our normal R&amp;D capacity. Additionally, we have resumed small scale manufacturing at our Redwood City pilot plant in May 2020.</span></div><div style="text-indent:22.5pt;margin-top:9pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Our future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions and uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges faced by our customers. As of the date of issuance of the unaudited condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact our financial condition, liquidity, or results of operations is uncertain in the future.</span></div><div style="margin-top:12pt;"><span><br/></span></div><div><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:103%;">Recent Investing Activities</span></div><div style="text-indent:18pt;margin-top:12pt;"><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">In June 2020, we entered into a Master Collaboration and Research Agreement with Molecular Assemblies, Inc. (“MAI”), a privately held company, to engineer enzymes to deliver differentiated and cost-effective solutions for the enzymatic synthesis of DNA (“MAI Agreement”). Under an associated stock purchase agreement, we purchased 1,587,050 shares of MAI's Series A preferred stock for $1.0 million, and in connection with our investment, John Nicols, our chief executive officer joined MAI’s board of directors. Under the MAI Agreement, for a fixed monthly fee payable in shares of Series A preferred stock, we will apply our CodeEvolver</span><sup style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;vertical-align:top;">® </sup><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">protein engineering platform technology to improve the DNA polymerase enzymes that are critical for enzymatic DNA synthesis. Through the provision of these services, we are eligible to earn additional shares of Series A preferred stock. MAI will combine its advanced chemistries with our enzymes to drive the process to commercialization. For additional information, see Note 12,</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;"> "</span><span style="background-color:rgb(255,255,255, 0.0);color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;">Related Party Transactions," in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.</span></div>
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257000 USD
CY2019Q4 us-gaap Financing Receivable Recorded Investment Current
FinancingReceivableRecordedInvestmentCurrent
8806000 USD
CY2019Q4 us-gaap Accounts Receivable Gross Current
AccountsReceivableGrossCurrent
9063000 USD

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