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April 21, 2008
Volume 86, Number 16
p. 10

Stock Market

Codexis Going Public

Biocatalyst developer files for initial public offering of $100 million, but there are risks

Ann Thayer

Biocatalyst developer Codexis has taken the first step toward becoming a public company by filing for an initial stock offering. The Redwood City, Calif.-based firm seeks to raise $100 million to finance its development of biocatalysts for pharmaceutical and industrial uses.

Codexis was created in 2002 on the basis of enzyme optimization technology from Maxygen. More recently, Codexis has linked its fortunes to the emerging biofuels area. In late 2007, it established a five-year collaboration with Shell Oil to develop enzymes for making fuels from cellulosic biomass. Shell holds a 13% stake in Codexis and contributed $8.3 million in R&D funding, or 33% of the firm's revenues, last year.

In the biofuels area, Codexis competes with DuPont and other large chemical companies. It also competes with smaller firms such as Virent Energy Systems and Iogen, both of which also work with Shell. Other competitors include Amyris Biotechnologies and Verenium, formed in mid-2006 from the merger of Diversa and Celunol.

In going public, Codexis will face a challenging stock market—one that can be particularly unkind to industrial biotech firms. Shares in Metabolix, which went public in late 2006, trade 60% below where they were six months ago. Verenium's shares have fallen 70% since early 2007, and its auditors are questioning its ability to continue operating.

Codexis hopes it can fare better. In 2007, it had revenues of $25.3 million, about 45% of which came from products such as enzymes and intermediates for major drug products. Pfizer accounted for 13% of these revenues. Codexis reported a net loss of about $39 million.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society