Codexis has felt the impact of Gilead’s Sovaldi with product revenues tumbling almost 60% due to the reduction in its hepatitis C biocatalyst and intermediate business.
After the US approved Gilead’s nucleotide analog inhibitor drug Sovaldi in December, “the hepatitis C world has changed,” Codexis CEO John Nicols told this publication last month. The firm expected a decrease in demand for its hepatitis C intermediates and biocatalysts and yesterday the results were seen in its first half 2014 financial report.
For the six months up to June 30, Biocatalyst product revenue stood at $5.8m (€4.2m), a 59% fall on the same period last year. However, operating expenses were also down by 50% resulting in a net loss of $14.8m compared to $22m in 2013.
Sovaldi’s effect was confirmed by David McCaman - Codexis’ VP, Corporate Controller – during a conference call yesterday. “The decrease in product revenues was primarily due to a significant shipment of intermediate products in 2013 to the Hepatitis C drug market that is no longer shipping in 2014 as a result of newer products entering that market.”
Codexis entered a collaboration to develop and supply enzymes for Merck & Co.’s hepatitis C portfolio - including the protease inhibitor Victrelis (boceprevir) – in 2007, and the contract was extended for a further three years in 2012 . Merck also uses Codexis’ enzymes for its diabetes drug Januvia.
Nicols also told investors the company had signed a “new multiyear contract to supply enzymes to a major European generic drug manufacturer in the second quarter,” though could not divulge more information.
The results did not include the $6m up-front payment from GlaxoSmithKline of a $25m licensing agreement for Codexis’ CodeEvolver protein engineering platform technology signed last month .
The platform will allow GSK to develop biocatalysts for both new and established drugs and - as part of a new strategic direction for Codexis - is being installed at GSK’s own R&D facility.
“They’ve decided to install it in an R&D facility in [Upper Merrion]Pennsylvania and we’re going to be working over the next couple of years to train them on how they can do the protein engineering in the future without us,” Nicols said.
“We see that this is a very viable model and option for other major drug companies who, like Glaxo, have a wide and large and diverse pipeline and can apply biocatalyst on many different products at once.”