Last month, Codexis announced Nestle Health Science had licensed its protein engineering platform from Codexis in a $14m (€12m) deal that included an option to co-develop phenylketonuria drug candidate CDX-6114.
But during a third quarter financial call last week, Codexis said the deal has potential revenues of up to $357m plus low double-digit percentage royalties on future products sales and has affirmed its 2017 guidance to reflect this.
“We remain on target to initiate a phase one clinical trial in healthy volunteers early next year which will trigger an additional $4m milestone payment from Nestlé,” CEO John Nicols said on a conference call.
“Following that trial’s completion which is expected around the end of 2018, Nestlé will have 60 days to exercise its exclusive license option. A favourable decision will trigger a payment of $3m to Codexis.”
CDX-6114 – for which Nestlé takes responsibility for all expenses related to future development and commercialization activities – is a preclinical candidate being developed for the treatment of phenylketonuria.
The deal represents the first partnership for a Codexis biotherapeutic candidate discovered using its CodeEvolver protein engineering technology. Nestlé will also gain access to the CodeEvolver platform for the discovery of future protein candidates.
For the third quarter 2017, Codexis reported total revenues of $14.9m, incorporating product sales of $6.9m – up 71% on the same period last year – attributed to increased demand for enzymes.
‘Major’ pharma partnerships
Codexis has inked a number of strategic partnerships with pharma firms, including GSK and Merck & Co., and says these, as well as drug development deals such as the one with Nestlé, will be core to continuing financial growth.
“The partnerships with GSK and Merck centred around providing those pharmaceutical industry leaders with the ability to run our CodeEvolver protein engineering platform technology on their own. In doing so our protein engineering capacity replicates, discovering more protein as cost saving catalyst could ever do by ourselves,” said Nicols.
“Now GSK and Merck are using their own resources to create a stacking stream of novel proteins from which Codexis will derive sustained growing back-end revenues. These back-end revenues are beginning to unfold noting that we expect seven-digit revenues from the back end of these deals to start in 2018.”
He added: “We've only just started to tap into the vast potential of engineered proteins as new value creating materials.”