Hep C biocatalyst sales slump as Codexis feels Sovaldi impact

By Dan Stanton contact

- Last updated on GMT

Hep C biocatalyst sales slump as Codexis feels Sovaldi impact
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.

CodeEvolver

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.”

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