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What changed in CODEXIS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CODEXIS, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+342 added−369 removedSource: 10-K (2026-03-11) vs 10-K (2025-02-27)

Top changes in CODEXIS, INC.'s 2025 10-K

342 paragraphs added · 369 removed · 259 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

74 edited+20 added−43 removed49 unchanged
Biggest changeAs of December 31, 2024, we owned or controlled approximate ly 1,760 active issued patents and pending patent applications in the United States and in various foreign jurisdictions, many of which are directed to our enabling technologies and specific methods and products that support our business in the pharmaceutical and oligonucleotide synthesis markets.
Biggest changeLikewise, in the generic pharmaceutical area, protection of our proprietary technology, products and services directed to our enzymes and methods of producing pharmaceutical products, through patent or trade secret laws or other legal protections is important for us and our customers to maintain a lower cost production advantage over competitors. 9 As of December 31, 2025, we owned or controlled approximate ly 1,600 active issued patents and pending patent applications in the United States and in various foreign jurisdictions, many of which are directed to our enabling technologies and specific methods and products that support our business in the pharmaceutical, biotherapeutics, and oligonucleotide synthesis markets, including related to our ECO Synthesis platform.
For additional information on the San Carlos facility, s ee Note 13, “Commitments and Contingencies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K. Our research and development operations include efforts directed towards engineering biocatalysts, bioprocess development, cellular engineering, biocatalyst screening, metabolites, strain improvement, fermentation development and process engineering.
For additional information on the San Carlos facility, s ee Note 13, “Commitments and Contingencies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K. 11 Our research and development operations include efforts directed towards engineering biocatalysts, bioprocess development, cellular engineering, biocatalyst screening, metabolites, strain improvement, fermentation development and process engineering.
The services we provide include: 6 • Method Development and Analytics: Customers require qualified methods to measure and ensure purity of their siRNA construct before going into the clinic. • Manufacturing . Process development and optimization are necessary to produce GLP material of a customer’s siRNA asset for preclinical testing prior to filing an IND and entering the clinic.
The services we provide include: • Method Development and Analytics. Customers require qualified methods to measure and ensure purity of their siRNA construct before going into the clinic. • Manufacturing . Process development and optimization are necessary to produce GLP material of a customer’s siRNA asset for preclinical testing prior to filing an IND and entering the clinic.
This facility allows us to optimize the development and scaling of a specific manufacturing process of a customer’s specific siRNA asset before completing the technology transfer to a CDMO partner for bulk GMP-grade production of drug substance to supply the customer’s clinical trials and eventual commercialization.
This facility allows us to optimize the development and scaling of a manufacturing process of a customer’s specific siRNA asset before completing the technology transfer to a CDMO partner for GMP-grade production of drug substance to supply the customer’s clinical trials and eventual commercialization.
These include, but are not limited to: Codexis, Codex, CodeEvolver, MOSAIC, SAGE, MicroCYP, MCYP, ProSAR, Unlock the Power of Proteins, the Codexis Protein Engineering Experts logo, Strategist, Continuity, Ameli, Forager, Analogene, Harvester, Atoms, Riptide, APS and a Codexis design mark (i.e., the stylized Codexis logo), as well as pending registration applications for ECO Synthesis and ecoRNA .
These include, but are not limited to: Codexis, Codex, CodeEvolver, ECO Synthesis, MOSAIC, SAGE, MicroCYP, MCYP, ProSAR, Unlock the Power of Proteins, the Codexis Protein Engineering Experts logo, Strategist, Continuity, Ameli, Forager, Analogene, Harvester, Atoms, Riptide, APS and a Codexis design mark (i.e., the stylized Codexis logo), as well as a pending registration application for ecoRNA .
Core Technology 11 We are a leader in the field of enzyme engineering to create novel enzymes, and our work across pharma biocatalysis and the ECO Synthesis manufacturing platform relies on our core technology. We are aware that other companies, organizations and persons have developed technologies that appear to have some similarities to our patented proprietary technologies.
Core Technology We are a leader in the field of enzyme engineering to create novel enzymes, and our work across pharma biocatalysis and the ECO Synthesis manufacturing platform relies on our core technology. We are aware that other companies, organizations and persons have developed technologies that appear to have some similarities to our patented proprietary CodeEvolver technologies.
We believe that the ECO Synthesis manufacturing platform could enable CDMOs and drug developers to scale production of RNA therapeutics with significantly less capital expenditure for infrastructure capacity and as a result, could potentially command significantly better economic terms than the current annual revenues for pharma biocatalysis enzymes.
We believe that the ECO Synthesis manufacturing platform could enable CDMOs and drug developers to scale production of RNA therapeutics with significantly less capital expenditure for production infrastructure and as a result, could potentially command significantly better economic terms than the current revenues for pharma biocatalysis enzymes.
Additionally, in April 2024 we entered into an asset acquisition agreement with another private biotherapeutics company under which we divested assets related to our investigational homocystinuria and maple syrup urine disease programs, and in June 2024, we entered into an asset sale agreement under which we divested assets related to our programs for the GLB1, GBM1, and SGSH genes, and our investigational AAV capsid technology.
Additionally, in April 2024 we entered into an asset acquisition agreement with another private biotherapeutics company under which we divested assets related to our investigational homocystinuria and maple syrup urine disease programs, and in June 2024, we entered into an asset sale agreement under which we divested assets related to our programs for the GLB1, GM1, and SGSH genes, and our investigational AAV capsid technology.
In November 2024, we presented data at the TIDES EU conference demonstrating the successful end-to-end enzymatic synthesis of an entire commercially approved small interfering ribonucleic acid (“siRNA”) therapeutic asset with the ECO Synthesis manufacturing platform.
In November 2024, we presented data at the TIDES Europe conference demonstrating the successful end-to-end enzymatic synthesis of an entire commercially approved small interfering ribonucleic acid (“siRNA”) therapeutic asset with the ECO Synthesis manufacturing platform.
This approach has existed for more than forty years and works effectively for small-scale manufacturing required during the discovery stage of clinical development. However, SPOS and phosphoramidite chemistry face multiple limitations in the context of commercial-scale manufacture of RNAi therapeutics. This approach requires significant infrastructure and capital investment to meet the anticipated future growth in demand for RNAi therapeutics.
This approach has existed for more than forty years and works effectively for small-scale manufacturing required during the discovery stage of clinical development. However, SPOS and phosphoramidite chemistry face multiple limitations in the context of commercial-scale manufacture of RNAi therapeutics. This approach will require significant infrastructure and capital investment to meet the anticipated future growth in demand for RNAi therapeutics.
SPOS and phosphoramidite chemistry are also currently limited to single-digit kilogram synthesis batch sizes, which presents challenges around quality control and scalability. Further, chemical synthesis requires large volumes of acetonitrile, a highly-flammable, organic solvent with high waste disposal costs, to facilitate the reaction environment necessary to produce RNAi therapeutics.
SPOS and phosphoramidite chemistry are also currently limited to single-digit kilogram synthesis batch sizes, and present challenges around quality control and scalability. Further, chemical synthesis requires large volumes of acetonitrile, a highly-flammable, organic solvent with high waste disposal costs, to facilitate the reaction environment necessary to produce RNAi therapeutics.
We also supply initial commercial quantities of biocatalysts for use by our collaborators to produce pharmaceutical intermediates and manufacture biocatalysts that we sell. For the ECO Synthesis manufacturing platform, our ECO Synthesis Innovation Lab is located within our corporate headquarters and is designed to supply GLP-grade material in sufficient quantities to support customers’ preclinical development.
We also supply initial commercial quantities of biocatalysts for use by our collaborators to produce pharmaceutical intermediates and manufacture biocatalysts that we sell. For the ECO Synthesis manufacturing platform, our ECO Synthesis Innovation Lab is located within our corporate headquarters and is designed to supply non-GMP-grade material in sufficient quantities to support customers’ preclinical development.
W e received 205,279 shares of seqWell's common stock from research and development services with seqWell i n the year ended December 31, 2023 .
W e received 205,279 shares of seqWell's common stock from research and development services with seqWell i n the year ended December 31, 2024 .
It is also designed to enable the manufacture of GLP-grade RNAi therapeutic material in sufficient quantities to support customers’ preclinical development. The ECO Synthesis manufacturing platform is a set of enzymatic tools and processes that are used together to manufacture siRNA. With this platform, we work with our customers to optimize the manufacturing of the customer’s asset.
It is also designed to enable the manufacture of non-GMP-grade RNAi therapeutic material in sufficient quantities to support customers’ preclinical development. 6 The ECO Synthesis manufacturing platform is a set of enzymatic tools and processes that are used together to manufacture siRNA. With this platform, we work with our customers to optimize the manufacturing of the customer’s asset.
In our revenue-generating pharma biocatalysis business (formerly our pharmaceuticals manufacturing business), we utilize our CodeEvolver technology platform to develop optimized enzymes that are used by some of the world’s largest pharmaceutical companies to improve the efficiency and productivity of their manufacturing processes for small molecule therapeutics.
Small molecule pharma biocatalysis In our small molecule pharma biocatalysis business, we utilize our CodeEvolver technology platform to develop optimized enzymes that are used by some of the world’s largest pharmaceutical companies to improve the efficiency and productivity of their manufacturing processes for small molecule therapeutics.
Using powerful machine learning tools and sophisticated molecular, cellular, and bioanalytical workflows, we design and screen libraries of thousands of variants every few weeks. Content-rich libraries screened under real-world conditions can yield dense and valuable datasets, which when data-mined effectively enables us to optimize multiple parameters in parallel.
Using powerful machine learning tools and sophisticated molecular, cellular, and bioanalytical workflows, we can design and screen libraries of thousands of variants. Content-rich libraries screened under real-world conditions can yield dense and valuable datasets, which, when data-mined, allow us to optimize multiple parameters in parallel.
Our goal is to be a value-added service provided to pharmaceutical innovators. Many of our potential clients seek expertise in areas that they cannot develop on their own, but seek to partner with companies who provide expertise in manufacturing. Through our ECO Synthesis platform, we offer a true partnership approach to drug manufacturing.
Our goal is to be a value-added technology solutions provider to pharmaceutical innovators. Many of our potential clients seek expertise in areas that they cannot develop on their own, but seek to partner with companies who provide expertise in manufacturing. Through our ECO Synthesis platform, we offer a partnership approach to drug manufacturing.
Other Differentiated Enzymes In addition to RNAi manufacturing and pharma biocatalysis applications, we have also applied our CodeEvolver technology platform to develop customized enzymes for customers using across other molecular biology applications, such as template dependent mRNA manufacturing, next generation sequencing, diagnostic testing and DNA oligonucleotide synthesis.
(“Merck & Co”) and Novartis Pharma AG (“Novartis”). Other Differentiated Enzymes In addition to RNAi manufacturing and pharma biocatalysis applications, we have also applied our CodeEvolver technology platform to develop customized enzymes for customers across other molecular biology applications, such as template dependent mRNA manufacturing, next generation sequencing, diagnostic testing and DNA oligonucleotide synthesis.
This platform allows us to use enzymatically synthesized RNAi sequences, to conjugate tissue targeting moieties such as GalNAc, onto an RNA strand, which is a common modification included on RNAi therapeutics to assist with targeted tissue delivery and to ligate (connect) RNAi sequences together. All of these capabilities are used to create a full-length and completed RNAi therapeutic asset.
This platform produces enzymatically synthesized RNAi sequences, and the conjugation of tissue targeting moieties such as GalNAc, onto an RNA strand (which is a common modification included on RNAi therapeutics to assist with targeted tissue delivery) and to ligate (connect) RNAi sequences together. All of these capabilities are used to create a full-length and completed RNAi therapeutic asset.
At the end of 2024, we completed the build out of our ECO Synthesis Innovation Lab, a facility that uses our ECO Synthesis manufacturing platform to synthesize gram-scale quantities of a customer’s desired siRNA construct suitable for pre-clinical testing.
At the end of 2024, we completed the build out of our ECO Synthesis Innovation Lab, a facility where our ECO Synthesis manufacturing platform is deployed to synthesize gram-scale quantities of a customer’s desired siRNA construct suitable for pre-clinical testing.
We believe their familiarity with our ability to engineer and scale complex enzymes is a significant commercial advantage for our ECO Synthesis manufacturing platform. However, there are also key differences that make this platform a compelling opportunity as compared to our existing pharma biocatalysis business.
We believe their familiarity with our ability to engineer and scale complex enzymes is a significant commercial advantage for our ECO Synthesis manufacturing platform. However, there are also key differences of this platform compared to our existing pharma biocatalysis business.
Additionally, there are opportunities for us to collaborate with CDMO partners to enable the manufacture of siRNA material at a greater scale than is currently possible within Codexis facilities. In 2025, we anticipate signing and announcing a CDMO scale-up partnership to provide a path to enzymatically synthesized GMP-grade siRNA material to drug developer customers in the near term.
Additionally, there are opportunities for us to collaborate with CDMO partners to enable the manufacture of siRNA material at a greater scale than is currently possible within Codexis facilities. In 2026, we anticipate signing and announcing additional partnerships with CDMOs to provide enzymatically synthesized GMP-grade siRNA material to drug developer customers in the near term.
As of December 31, 2024, Codexis is selling enzymes to pharmaceutical manufacturers f or 14 dr ug candidates currently in Phase 2 and Phase 3 clinical trials, or to customers working to convert to an enzymatic manufacturing process for drugs that have been commercially approved.
As of December 31, 2025, Codexis is selling enzymes to pharmaceutical manufacturers for 15 drug candidates currently in Phase 2 and Phase 3 clinical trials, or to customers working to convert to an enzymatic manufacturing process for drugs that have been commercially approved.
The process required by the FDA before a drug or biologic may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice regulations; • submission to the FDA of an Investigational New Drug Application (“IND”), which must become effective before clinical trials in the United States may begin; • performance of adequate and well-controlled human clinical trials to establish the safety and potency of the product candidate for each proposed indication, conducted in accordance with the FDA’s good clinical practice (“GCP”) regulations; • preparation and submission to the FDA of a new drug application (“NDA”) or biologics license application (“BLA”) after completion of all pivotal clinical trials; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP regulations and to assure that the facilities, methods and controls are adequate to preserve the drug's continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCPs; and • FDA review and approval of the NDA or BLA prior to any commercial marketing, sale or distribution of the product.
The process required by the FDA before a drug or biologic may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice regulations; • submission to the FDA of an Investigational New Drug Application (“IND”), which must become effective before clinical trials in the United States may begin; • performance of adequate and well-controlled human clinical trials to establish the safety and potency of the product candidate for each proposed indication, conducted in accordance with the FDA’s good clinical practice (“GCP”) regulations; • preparation and submission to the FDA of a new drug application (“NDA”) or biologics license application (“BLA”) after completion of all pivotal clinical trials; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP regulations and to assure that the facilities, methods and controls are adequate to preserve the drug's continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCPs; and • FDA review and approval of the NDA or BLA prior to any commercial marketing, sale or distribution of the product. 12 Any products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Our diversity, equity and inclusion policies are reviewed regularly and guided by our executive leadership team. Health and safety We are committed to maintaining a safe and healthy workplace for our employees. Our policies and practices are intended to protect our employees and the surrounding communities in which we operate.
Our executive leadership team reviews these policies regularly. Health and safety We are committed to maintaining a safe and healthy workplace for our employees. Our policies and practices are intended to protect our employees and the surrounding communities in which we operate.
In December 2023, we entered into an exclusive licensing agreement with Aldevron LLC (“Aldevron”), a global leader in the custom development and manufacture of plasmid DNA, RNA and proteins for the biotech industry, whereby Aldevron licensed our Codex HiCap RNA Polymerase.
Under the terms of the new agreement, we are eligible to receive sales-based royalties. In December 2023, we entered into an exclusive licensing agreement with Aldevron LLC (“Aldevron”), a global leader in the custom development and manufacture of plasmid DNA, RNA and proteins for the biotech industry, whereby Aldevron licensed our Codex HiCap RNA Polymerase.
They can be precisely engineered and optimized for specific functions, and to have particular characteristics, such as an ability to survive environments in which natural enzymes cannot, or to perform (bio)chemical transformations different than those for which they naturally evolved.
Enzymes are naturally occurring biological molecules critical to almost all biochemical reactions. They can be precisely engineered and optimized for specific functions, and to have particular characteristics, such as an ability to survive environments in which natural enzymes cannot, or to perform (bio)chemical transformations that are different than those for which they naturally evolved.
Under the terms of the deal, Aldevron received global manufacturing and commercialization rights to the Codex HiCap RNA Polymerase in exchange for payments for near-term technical milestones, along with commercial milestones and sales-based royalties for research use only material as well as GMP material.
Under the terms of the deal, Aldevron received global manufacturing and commercialization rights to the Codex HiCap RNA Polymerase in exchange for payments for near-term technical milestones, along with commercial milestones and sales-based royalties for research use only material as well as GMP material. 8 In March 2022, we entered into a Stock Purchase Agreement with seqWell, Inc.
(“Merck & Co”) and Novartis Pharma AG (“Novartis”). 5 ECO Synthesis Manufacturing Platform ECO Synthesis Overview A key strategic priority for Codexis is the advancement and commercialization of our ECO Synthesis manufacturing platform, which is designed to enable the commercial scale manufacture of RNAi therapeutics.
Key Strategic Focus Areas ECO Synthesis Manufacturing Platform ECO Synthesis Overview A key strategic priority for Codexis is the advancement and commercialization of our ECO Synthesis manufacturing platform, which is designed to enable the commercial scale manufacture of RNAi therapeutics.
The market for supplying enzymes for use in pharma biocatalysis is fragmented. There is competition from large industrial enzyme companies, as well as subsidiaries of larger contract research/contract manufacturing organizations, such as DSM Firmenich, Cambrex Corporation, Lonza, WuXi STA and Almac Group Ltd.
There is competition from large industrial enzyme companies, as well as subsidiaries of larger contract research/contract manufacturing organizations, such as DSM Firmenich, Cambrex Corporation, Lonza, WuXi STA and Almac Group Ltd.
We believe that the ECO Synthesis manufacturing platform presents several advantages to potentially address the limitations of SPOS and phosphoramidite chemistry. First, the platform is being developed to integrate within existing manufacturing facilities and utilizes equipment currently available in the industry, potentially eliminating much of the infrastructure investment required for commercial scale manufacturing of RNAi therapeutics with phosphoramidite chemistry.
We believe that the ECO Synthesis manufacturing platform presents several advantages to potentially address the limitations of SPOS and phosphoramidite chemistry. Our platform can be integrated within existing manufacturing facilities and utilizes equipment currently available in the industry, potentially eliminating much of the infrastructure investment required for SPOS and phosphoramidite chemistry.
In March 2022, we entered into a Stock Purchase Agreement with seqWell, Inc. (“seqWell”), a privately held life sciences company, pursuant to which we purchased 1,000,000 shares of seqWell’s Series C preferred stock for $5.0 million .
(“seqWell”), a privately held life sciences company, pursuant to which we purchased 1,000,000 shares of seqWell’s Series C preferred stock for $5.0 million .
As additional RNAi therapeutic candidates are approved for large disease indications, we believe using traditional SPOS and phosphoramidite chemical synthesis for commercial scale production will become prohibitively expensive, time-intensive, and challenging for many drug developers seeking to produce enough drug substance to address patient indications that require dosing more than 1 million patients annually.
As additional RNAi therapeutic candidates are approved for disease indications with higher prevalence, we believe using traditional SPOS and phosphoramidite chemical synthesis for commercial scale production will become prohibitively expensive, time-intensive, and challenging for many drug developers seeking to produce enough drug substance to address these larger patient populations.
In September 2024, we entered into a new non-exclusive commercial and manufacturing license agreement with Alphazyme (terminating the prior agreement), including licenses for the Codex HiFi DNA Polymerase, Codex HiTemp Reverse Transcriptase, Codex HiRev Isothermal Polymerase and other enzymes that were in development directed towards genomics and diagnostics applications prior to our strategic shift announced in July 2023.
In connection with this new agreement, we terminated all prior agreements with Alphazyme, including licenses for the Codex HiFi DNA Polymerase, Codex HiTemp Reverse Transcriptase, Codex HiRev Isothermal Polymerase and other enzymes that were in development directed towards genomics and diagnostics applications prior to our strategic shift announced in July 2023.
Any improvements to the CodeEvolver technology platform during the Technology Transfer Period will also be included in the license grants from Codexis to Novartis. Biotherapeutics Divestitures Our biotherapeutic product candidates, which were in clinical and preclinical development, were discovered using our proprietary CodeEvolver technology platform and ranged from orally delivered enzymes to engineered transgenes for delivery as gene therapies.
Biotherapeutics Divestitures Our biotherapeutic product candidates, which were in clinical and preclinical development, were discovered using our proprietary CodeEvolver technology platform and ranged from orally delivered enzymes to engineered transgenes for delivery as gene therapies.
Our unique enzymes drive improvements such as higher yields, increased purity, reduced energy usage and waste generation, all of which lead to improved efficiency and reduced costs in small-molecule manufacturing.
Our unique enzymes drive improvements such as higher yields, increased purity, reduced energy usage and waste generation, all of which lead to improved efficiency and reduced costs in small-molecule manufacturing. 5 History and Core Technology We are a pioneer in harnessing computational technologies to drive biology advancements.
CUSTOMERS We rely on certain key customers for a significant portion of our total revenues and our accounts receivable balances. For the year ended December 31, 2024, four customers accounted for approximately 18%, 13%, 10%, and 10% of our total revenues.
CUSTOMERS We rely on certain key customers for a significant portion of our total revenues and our accounts receivable balances. For the year ended December 31, 2025, one customer accounted for approximately 51% of our total revenues. As of December 31, 2025, three customers accounted for approximately 40%, 14% and 13% of our accounts receivable balances.
Finally, our process is aqueous based, potentially mitigating the need for high volumes of acetonitrile, significantly decreasing chemical waste streams, and reducing heavy disposal and purification costs.
Finally, our process is aqueous based, mitigating the need for high volumes of acetonitrile, significantly decreasing chemical waste streams, and reducing heavy disposal and purification costs. ECO Synthesis Innovation Lab We completed the build-out of our ECO Synthesis Innovation Lab at the end of 2024.
We expect to expand our enzymatic tools and process offerings as we further enhance the ECO Synthesis platform to address the overall market needs for scalable and sustainable RNAi manufacturing. History and Core Technology We are a pioneer in harnessing computational technologies to drive biology advancements.
We expect to expand our enzymatic tools and process offerings as we further enhance the ECO Synthesis platform to address the overall market needs for scalable and sustainable RNAi manufacturing.
In April 2023, Takeda discontinued its efforts in adeno-associated virus (“AAV”) gene therapy, including these development programs. In July 2024, we entered into an asset purchase agreement with Crosswalk Therapeutics (“Crosswalk”) for our investigational Fabry and Pompe disease compounds, both of which were previously part of our collaboration agreement with Takeda.
In July 2024, we entered into an asset purchase agreement with Crosswalk Therapeutics (“Crosswalk”) for our investigational Fabry and Pompe disease compounds, both of which were previously part of our collaboration agreement with Takeda.
Our primary competitors in that market are companies marketing either conventional, non-enzymatic catalysts or alternative biocatalyst products and services, or from full-service CDMOs offering conventional chemistry and biocatalytic approaches to the production of APIs. We also face competition from existing in-house technologies (both biocatalysis and conventional chemistries) within our client and potential client companies.
Pharma Biocatalysis We market our enzyme biocatalyst products and services to manufacturers of small molecule pharmaceutical intermediates and APIs. Our primary competitors in that market are companies marketing either conventional, non-enzymatic catalysts or alternative biocatalyst products and services, or from full-service CDMOs offering conventional chemistry and biocatalytic approaches to the production of APIs.
For the three other routes, our data highlighted that full-length oligos of equal quality and yields were obtained whether the fragments were made with enzymes or by traditional phosphoramididte chemistry.
For the three other routes, our data highlighted that full-length oligonucleotides of equal quality and yields were obtained whether the fragments were made with enzymes or by traditional solid phase oligonucleotide synthesis (“SPOS”) (current standard production route for oligonucleotide manufacturing).
We currently sell these enzymes, that have already been engineered and installed in a customer’s commercial manufacturing process at multi-kilograms to metric tons per annum scale.
As of December 31, 2025, we sold enzymes as biocatalysts to pharmaceutical manufacturers for 18 therapeutic drugs that are currently approved for commercial sales. We currently sell these enzymes, that have already been engineered and installed in a customer’s commercial manufacturing process at multi-kilograms to metric tons per annum scale.
As of December 31, 2024, four customers accounted for approximately 18%, 16%, 12%, and 10% of our accounts receivable balances. For more information, see Note 15, “Segment, Geographical and Other Revenue Information” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K.
For more information, see Note 15, “Segment, Geographical and Other Revenue I nformation” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K.
We offer competitive compensation and benefit programs including a company-matched 401(k) Plan, an Employee Stock Purchase Plan ( “ ESPP ” ), stock options for eligible employees, health savings and flexible spending accounts, paid time off, education and training programs, and employee assistance programs.
We offer competitive compensation and benefit programs including a company-matched 401(k) Plan, an Employee Stock Purchase Plan ( “ ESPP ” ), stock options for eligible employees, health savings and flexible spending accounts, paid time off, education and training programs, and employee assistance programs. 13 Diversity, equity and inclusion We are proud of our commitment to diversity and foster an inclusive work environment that supports our global workforce and the communities we serve.
We expect worldwide demand for RNAi therapeutics to grow significantly as RNAi therapeutic assets progress through clinical development and are commercially approved. The current industry standard for manufacturing RNAi therapeutics is a well-established, chemical-based method commonly called solid-phase oligonucleotide synthesis (“SPOS”) utilizing phosphoramidite chemistry.
As we move through 2026, the RNAi pipeline is pivoting from rare conditions to high-prevalence diseases like Alzheimer’s, hyperlipidemia and hypertension. We expect worldwide demand for RNAi therapeutics to grow significantly as RNAi therapeutic assets progress through clinical development and are commercially approved. The current industry standard for manufacturing RNAi therapeutics is a well-established, chemical-based method SPOS utilizing phosphoramidite chemistry.
The resulting evolved variants often have a combination of enhanced properties, such as increased activity, specificity, and stability under desired conditions, or improved manufacturability in the production host.
The resulting evolved variants often have a combination of enhanced properties, such as increased activity, specificity, and stability under desired conditions, and improved manufacturability in the production host. These enhanced properties provide differentiated technical performance in the target application and can provide our customers increased value in the commercial deployment of their products.
Pharmaceutical manufacturers that use biocatalytic processes can face competition from manufacturers that use more conventional processes and/or manufacturers that are based in regions (such as India and China) with lower operating, regulatory, safety and environmental costs. We also compete with companies developing and marketing conventional catalysts including, for example, Solvias AG, BASF, Johnson-Matthey and Takasago International Corporation.
Pharmaceutical manufacturers that use biocatalytic processes can face competition from manufacturers that use more conventional processes and/or manufacturers that are based in regions (such as India and China) with lower operating, regulatory, safety and environmental costs.
The principal methods of competition and competitive differentiation in this market are price, product quality and biocatalyst performance, including manufacturing yield, safety and environmental benefits and speed of product delivery.
We also face competition from existing in-house technologies (both biocatalysis and conventional chemistries) within our client and potential client companies. The principal methods of competition and competitive differentiation in this market are price, product quality and biocatalyst performance, including manufacturing yield, safety and environmental benefits and speed of product delivery.
Our scientists, bioinformatics experts and other professionals work collaboratively as interdisciplinary teams to unlock and advance technological innovation. 13 Compensation, benefits and development Our goal is to attract, motivate and retain talent with a focus on encouraging performance, promoting accountability and adhering to our company values.
Compensation, benefits and development Our goal is to attract, motivate and retain talent with a focus on encouraging performance, promoting accountability and adhering to our company values.
ITEM 1. BUSINESS COMPANY OVERVIEW We are a leading provider of enzymatic solutions for efficient and scalable therapeutics manufacturing, and we leverage o ur proprietary CodeEvolver ® directed evolution technology platform to discover, develop, enhance, and commercialize novel, high-performance enzymes and other classes of proteins. Enzymes are naturally occurring biological molecules critical to almost all biochemical reactions that sustain life.
ITEM 1. BUSINESS COMPANY OVERVIEW We are a leading provider of technology solutions to improve therapeutics manufacturing. We focus on impacting the manufacturing process by using o ur proprietary CodeEvolver ® directed evolution technology platform to discover, develop, enhance, and commercialize novel, high-performance enzymes and other classes of proteins.
KG (“Lactosan”) in Kapfenberg, Austria, ACS Dobfar S.p.A. (“ACSD”) (formerly known as DPhar S.p.A.) in Anagni, Italy, and Sekisui Diagnostics (UK) Ltd. (“Sekisui”) in Maidstone, United Kingdom.
KG (“Lactosan”) in Kapfenberg, Austria, ACS Dobfar S.p.A. (“ACSD”) (formerly known as DPhar S.p.A.) in Anagni, Italy, and Sekisui Diagnostics (UK) Ltd. (“Sekisui”) in Maidstone, United Kingdom. Generally, we perform smaller scale manufacturing in-house and outsource larger scale manufacturing, representing a large percentage of our production of novel enzymes, to CMOs.
Under the terms of the license agreement, Codexis is eligible to receive development and sales-based milestone payments based upon the future use of the enzyme in drug substance manufacturing. Licensing Our CodeEvolver Directed Evolution Technology Platform Novartis In May 2019, we entered into a Platform Technology Transfer and License Agreement (the “Novartis CodeEvolver Agreement”) with Novartis.
Under the terms of the license agreement, Codexis is eligible to receive development and sales-based milestone payments based upon the future use of the enzyme in drug substance manufacturing. In September 2024, we entered into a new non-exclusive commercial and manufacturing license agreement with Alphazyme LLC (“Alphazyme”).
The ECO Synthesis manufacturing platform is also being designed to manufacture tens to hundreds of kilograms of high-purity RNA per synthesis batch, with a closed-loop system intended to increase volumetric reagent efficiency which enables large batch synthesis.
ECO Synthesis is not constrained by the same process limitations as SPOS, and, by design, has the potential to manufacture tens to a hundred kilograms of high-purity RNA per run, with a closed-loop system intended to increase volumetric reagent efficiency which enables large batch synthesis.
Generally, we perform smaller scale manufacturing in-house and outsource larger scale manufacturing, representing a large percentage of our production of novel enzymes, to CMOs. 12 GOVERNMENT REGULATION Our enzymes are used by pharmaceutical and biopharmaceutical companies in the manufacture of their drug or biologic product candidates and finished products.
GOVERNMENT REGULATION Our enzymes are used by pharmaceutical and biopharmaceutical companies in the manufacture of their drug or biologic product candidates and finished products.
INTELLECTUAL PROPERTY Our success depends in large part on our ability to protect our proprietary technology, products and services under patent, copyright, trademark and trade secret laws. We also rely heavily on confidentiality and non-disclosure and other contractual agreements for further protection of our proprietary technology, products and services.
We also rely heavily on confidentiality and non-disclosure and other contractual agreements for further protection of our proprietary technology, products and services.
We expect to partner with one or more CDMOs for bulk GMP-grade siRNA production to supply customers’ clinical trials and beyond in the near-term. In September 2023, we announced that we had entered into an agreement for the assignment and assumption of lease for our San Carlos, California facility.
We expect to partner with one or more CDMOs for bulk GMP-grade siRNA production to supply customers’ clinical trials and beyond in the near term. I n November 2025, we signed a lease for a GMP manufacturing facility in Hayward, California.
Our United States (“U.S.”) patents and pending patent applications directed to the CodeEvolver technology platform developed internally by us have terms that expire between 2029 and approximately 2034. It is possible that some U.S. patents and patent applications (if issued) may be entitled to patent term extensions and/or patent term adjustments, which would extend the protection beyond these expiration dates.
It is possible that some U.S. patents and patent applications (if issued) may be entitled to patent term extensions and/or patent term adjustments, which would extend the protection beyond these expiration dates. It is also possible that some patents and patent applications (if issued) in other jurisdictions will be entitled to additional patent terms.
Over the lifecycle of the drug, market pressures further intensify as pharmaceutical companies lose their patent exclusivities and begin to experience competition from generic manufacturers of their products. Many of our customers are large global pharmaceutical companies who partner with us to develop engineered enzymes for use as biocatalysts, meeting precisely defined criteria.
Many of our customers are large pharmaceutical companies who partner with us to develop engineered enzymes for use as biocatalysts, meeting precisely defined criteria. Their goals are to improve the efficiency, productivity and sustainability of their manufacturing processes.
(“Maxygen”) in October 2010, which are associated with directed evolution technology, known as the MolecularBreeding technology platform developed by Maxygen. The intellectual property rights and other related assets that we acquired from Maxygen continue to be subject to existing exclusive and non-exclusive license rights granted by Maxygen to third parties.
Our current intellectual property rights also include patents, trademarks, copyrights, software and certain assumed contracts that we acquired from Maxygen, Inc. (“Maxygen”) in October 2010, which are associated with directed evolution technology, known as the MolecularBreeding technology platform developed by Maxygen.
As of December 31, 2024, there are six approved siRNA therapeutics on the market in the United States, primarily targeting rare orphan disease indications.
As of December 31, 2025 , there were eight approved siRNA therapeutics on the market in the United States, primarily targeting rare disease indications. However, there are hundreds of RNAi therapeutic assets in development, including 41 assets in Phase 2 and Phase 3 clinical trials.
Our business model for the ECO Synthesis manufacturing platform is centered around selling contract development and manufacturing services delivered through the ECO Synthesis Innovation Lab. These activities are typically governed by development agreements which include fees for process development, process optimization, analytical method development and qualification, CMC documentation and small-scale manufacturing of siRNA drug substance.
These activities are typically governed by development agreements which include fees for process development, process optimization, analytical method development and qualification, CMC documentation and small-scale manufacturing of siRNA drug substance. • ISO 9001 certified manufacturing facility . We provide purified enzymes and immobilized purified enzymes from our non-GMP manufacturing facility.
COMPETITION We face differing forms of competition in pharmaceutical biocatalysis and RNAi therapeutics manufacturing, as set forth below. 10 Pharma Biocatalysis We market our enzyme biocatalyst products and services to manufacturers of small molecule pharmaceutical intermediates and APIs.
COMPETITION We face differing forms of competition in pharmaceutical biocatalysis and RNAi therapeutics manufacturing, as set forth below. ECO Synthesis Manufacturing Platform for RNAi Therapeutics We market our ECO Synthesis manufacturing platform and contract development services through our ECO Synthesis Innovation Lab to drug sponsors developing RNAi therapeutics.
By contrast, the ECO Synthesis manufacturing platform could be applicable to many pharmaceutical and CDMO customers and has the potential to manufacture multiple different RNAi therapeutic assets with the same of enzymes and processes. Further, the potential scalability of our solution is differentiated from phosphoramidite chemistry, which is limited in batch size and requires high volumes of toxic solvent.
Pharma biocatalysis generally requires custom enzyme engineering projects specific to a single therapeutic asset, which involves significant time and resource investment from Codexis. By contrast, the ECO Synthesis manufacturing platform could be applicable to many pharmaceutical and CDMO customers and has the potential to manufacture multiple different RNAi therapeutic assets with the same set of enzymes and processes.
Under the terms of the agreement, we are eligible to receive sales-based royalties. 7 In June 2020, we entered into a Master Collaboration and Research Agreement with Molecular Assemblies, Inc.
In June 2020, we entered into a Master Collaboration and Research Agreement with Molecular Assemblies, Inc. (“MAI ” ) (the “MAI Agreement”), under which we provided enzyme evolution services and sold enzymes to MAI in the field of DNA synthesis.
In addition, it allows us to provide process development, analytical method development and other manufacturing process optimization which is required before the siRNA enters clinical-stage manufacturing and testing.
In addition, the infrastructure allows us to provide process development, analytical method development and other manufacturing process optimization which is required to enable the siRNA to proceed to clinical-stage manufacturing and testing. In 2025, we successfully manufactured non- good manufacturing practice (“GMP”)-grade siRNA drug substance for customers in our Innovation Lab under development services contracts.
We focus on leveraging our technology and capacity to enhance the properties and performance of enzymes to drive pivotal improvements in manufacturing of complex therapeutics across two key focus areas: our foundational, revenue-generating pharma biocatalysis business and our Enzyme-Catalyzed Oligonucleotide Synthesis™ (“ECO Synthesis™”) manufacturing platform, which is comprised of enzymatic tools, and processes, designed to enable large-scale manufacture of RNA interference (“RNAi”) therapeutics.
We employ our technology and expertise to enhance the properties and performance of enzymes to drive pivotal improvements in manufacturing of complex therapeutics across two key areas: our ECO synthesis manufacturing platform and our small molecule pharma biocatalysis business.
We continue to file new patent applications in our business areas of interest, for which terms generally extend 20 years from the non-provisional filing date in the United States. As of December 31, 2024 , we owned approximately 70 trademark registrations in the United States and foreign jurisdictions, as well as various common law trademarks.
The intellectual property rights and other related assets that we acquired from Maxygen continue to be subject to existing exclusive and non-exclusive license rights granted by Maxygen to third parties. We continue to file new patent applications in our business areas of interest, for which terms generally extend 20 years from the non-provisional filing date in the United States.
We also use the CodeEvolver platform technology to develop enzymes for the synthesis of RNAi therapeutics through our ECO Synthesis manufacturing platform, where our enzymes are poised to deliver many of the same benefits we offer in pharma biocatalysis across purity, yield, and improved manufacturing efficiency.
ECO Synthesis manufacturing platform Our ECO Synthesis ® manufacturing platform is comprised of enzymatic tools and processes that are designed to enable large-scale manufacture of RNA interference (“RNAi”) therapeutics. We use the CodeEvolver platform technology to develop enzymes for the synthesis of RNAi therapeutics in production processes that deliver improvements, including purity, yield, and manufacturing efficiency.
In 2025, we expect to manufacture good laboratory practice (“GLP”)-grade siRNA for customers in our Innovation Lab under development services contracts model, and we anticipate entering a partnership with a large-scale contract development and manufacturing organization (“CDMO”) to use our ECO platform of enzymatic tools and processes to synthesize good manufacturing practices ( “ GMP ” ) -grade siRNA drug substance for our customers.
We also entered into partnerships with three large-scale contract development and manufacturing organizations (“CDMOs”) to evaluate our ECO platform of enzymatic tools and processes to ultimately synthesize GMP -grade siRNA drug substance for our customers.
To address these pressures, pharmaceutical companies are driven to identify reliable, cost-effective, and sustainable manufacturing processes to produce both their new drug candidates and their existing products, while not impacting drug safety and efficacy. Manufacturing economies of scale are increasingly important to our pharmaceutical customers as they get closer to their commercial drug launch.
We anticipate beginning construction in the fall of 2026, with the facility in full production capability by the end of 2027 . 7 Pharma Biocatalysis Pharmaceutical companies are driven to identify reliable, cost-effective, and sustainable manufacturing process improvements to produce both their new drug candidates and their existing products, while not impacting drug safety and efficacy.
This portfolio also includes patents and pending patent applications in the biotherapeutics, mo lecular diagnostics, and other markets. As of December 31, 2024, our patents and pending patent applications, if issued, have terms that expire between 2025 and approximately 2045.
As of December 31, 2025, our patents and pending patent applications, if issued, have terms that expire between 2026 and approximately 2046. Our United States (“U.S.”) patents and pending patent applications directed to the CodeEvolver technology platform developed internally by us have terms that expire between 2029 and approximately 2034.
In the first quarter of 2021, we entered into an arrangement to lease this facility to serve as an additional office and research and development laboratory space which we occupied beginning December 20 21. As part of the restructuring of our business announced in July 2023, we consolidated operations to our Redwood City headquarters and discontinued investment in biotherapeutics.
We are currently working on designs to retrofit this facility to manufacture RNAi therapeutics for our customers in quantities sufficient for Phase 1 and potentially Phase 2 clinical trials As part of the restructuring of our business announced in July 2023, we consolidated operations to our Redwood City headquarters and discontinued investment in biotherapeutics.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. Supported by our annual employee survey, we believe our relationship with our employees to be generally good.
Supported by our annual employee survey, we believe our relationship with our employees to be generally good. Our scientists, bioinformatics experts and other professionals work collaboratively as interdisciplinary teams to unlock and advance technological innovation.
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In July 2023, we announced that we discontinued investment in certain development programs, primarily in our novel biotherapeutics business segment. As part of this strategic prioritization, during 2024 we completed the divestiture and monetization of certain biotherapeutics assets as well as certain non-core life science assets, including in genomics and next generation sequencing applications.
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In each of these agreements, we are currently in the feasibility testing stage and expect to advance at least one of these partnerships, including initiating a technology transfer to that organization, in 2026. We believe these relationships to be a vital extension of our strategy to be a technology solutions provider for our customers.
Removed
These enhanced properties provide differentiated technical performance in the target application and can provide our customers increased value in the commercial deployment of their products. 4 Key Strategic Focus Areas We provide enzyme-based solutions to our clients that address complex therapeutic manufacturing challenges in the areas of pharma biocatalysis and RNAi manufacturing.
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Through these arrangements, our customers will have access to proven, large-scale commercial manufacturers who are familiar with our process, and who can then offer a seamless manufacturing scale-up of our customers’ products.
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Both areas overlap in the technical enzyme engineering expertise required and also include similar potential customers. Many of our longstanding pharma biocatalysis customers are currently investing in both pharma biocatalysis for the development of small-molecule therapeutics and in the development of RNAi therapeutics, providing us a unique advantage in terms of our commercial reach.
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Further, the potential scalability of our solution is differentiated from phosphoramidite chemistry, which is limited in batch size and requires high volumes of toxic solvent.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeManufacturing of our enzymes is conducted primarily in four locations: our in-house facility in Redwood City, California, and at three third-party CMOs: Lactosan in Kapfenberg, Austria, ACSD in Anagni, Italy, and Sekisui in Maidstone, United Kingdom. Generally, we perform smaller scale manufacturing in-house and outsource the larger scale manufacturing to these contract manufacturers.
Biggest changeWe are dependent on a limited number of third-party contract manufacturers for large scale production of substantially all of our enzymes. We manufacture our enzymes primarily in four locations: our in-house facility in Redwood City, California, and at three third-party contract manufacturing organizations (“CMOs”): Lactosan in Kapfenberg, Austria, ACS Dobfar S.p.A.
If we are unable to continue to successfully develop and commercialize products in our pharma biocatalysis business, increase sales of existing products and services, develop and commercialize our ECO Synthesis manufacturing platform, and or develop new products or services, or otherwise expand our business, whether through new or expanded collaborations or other products and services, our net losses may increase and we may never achieve profitability.
If we are unable to continue to successfully develop and commercialize products in our pharma biocatalysis business, increase sales of existing products and services, develop and commercialize our ECO Synthesis manufacturing platform, develop new products or services, or otherwise expand our business, whether through new or expanded collaborations or other products and services, our net losses may increase and we may never achieve profitability.
In addition, certain of our competitors may also benefit from local government subsidies and other incentives that are not available to us. As a result, our competitors may be able to develop competing and/or superior technologies and processes and compete more aggressively and sustain that competition over a longer period of time than we could.
In addition, certain of our competitors may also benefit from local government subsidies and other incentives that are not available to us. As a result, our competitors may be able to develop competing and/or superior technologies and processes, compete more aggressively and sustain that competition over a longer period of time than we could.
Although we believe that, based on our current level of operations, our existing cash, cash equivalents and equity securities will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next 12 months, we may need additional capital if our current plans and assumptions change.
Although we believe that, based on our current level of operations, our existing cash, cash equivalents and equity securities will provide adequate funds for planned ongoing operations, capital expenditures and working capital requirements for at least the next 12 months, we may need additional capital if our current plans and assumptions change.
Patent, trademark, copyright and trade secret laws afford only limited protection for our technology, products and services. The laws of many countries do not protect our proprietary rights to as great of an extent as do the laws of the United States.
Patent, trademark, copyright and trade secret laws afford only limited protection for our technology, products and services. The laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States.
While interference proceedings are possible for patent claims filed prior to March 16, 2013, many of our filings will be subject to the post- and pre-grant proceedings set forth in the AIA, including citation of prior art and written statements by third parties, third party pre-issuance submissions, ex parte reexamination, inter partes review, post-grant review, and derivation proceedings.
While interference proceedings are possible for patent claims filed prior to March 16, 2013, many of our filings will be subject to the pre- and post-grant proceedings set forth in the AIA, including citation of prior art and written statements by third parties, third party pre-issuance submissions, ex parte reexamination, inter partes review, post-grant review, and derivation proceedings.
Our bylaws designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us our current or former directors, officers, stockholders, or other employees.
Our bylaws designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our current or former directors, officers, stockholders, or other employees.
Further, on September 21, 2023, the UK Secretary of State for Science, Innovation and Technology established a UK-U.S. data bridge (i.e., a UK equivalent of the Adequacy Decision) and adopted UK regulations to implement the UK-U.S. data.
Further, on September 21, 2023, the UK Secretary of State for Science, Innovation and Technology established a UK-U.S. data bridge (i.e., a UK equivalent of the Adequacy Decision) and adopted UK regulations to implement the UK-U.S. data bridge.
Our collaboration opportunities could be harmed and our financial condition and results of operations could be negatively affected if: • we or our collaborators do not achieve our research and development objectives under our collaboration agreements in a timely manner, or at all; • we develop products and processes or enter into additional collaborations that conflict with the business objectives of our other collaborators; • our collaborators and/or our contract manufacturers do not receive the required regulatory and other approvals necessary for the commercialization of the applicable product; • we are unable to manage multiple simultaneous collaborations; • our collaborators or licensees are unable or unwilling to implement or use the technology or products that we provide or license to them; • our collaborators become competitors of ours or enter into agreements with our competitors; • our collaborators become unable or less willing to expend their resources on research and development or commercialization efforts due to general market conditions, their financial condition or other circumstances beyond our control; or • our collaborators experience business difficulties, which could eliminate or impair their ability to effectively perform under our agreements.
Our collaboration opportunities could be harmed and our financial condition and results of operations could be negatively affected if: • we or our collaborators do not achieve our research and development objectives under our collaboration agreements in a timely manner, or at all; 19 • we develop products and processes or enter into additional collaborations that conflict with the business objectives of our other collaborators; • our collaborators and/or our contract manufacturers do not receive the required regulatory and other approvals necessary for the commercialization of the applicable product; • we are unable to manage multiple simultaneous collaborations; • our collaborators or licensees are unable or unwilling to implement or use the technology or products that we provide or license to them; • our collaborators become competitors of ours or enter into agreements with our competitors; • our collaborators become unable or less willing to expend their resources on research and development or commercialization efforts due to general market conditions, their financial condition or other circumstances beyond our control; or • our collaborators experience business difficulties, which could eliminate or impair their ability to effectively perform under our agreements.
Factors relating to our business that may contribute to these fluctuations include the following factors, as well as other factors described elsewhere in this report: • our ability to achieve or maintain profitability; • our dependence on a limited number of customers; 36 • some of our product supply agreements with customers have finite duration, may not be extended or renewed and generally do not require the customer to purchase any particular quantity or quantities of our products; • the timing of customer orders and our related revenue recognition may vary significantly from quarter to quarter; • with respect to customers purchasing our products for the manufacture of active pharmaceutical ingredients for which they have exclusivity due to patent protection, the termination or expiration of such patent protection and any resulting generic competition may materially and adversely affect our revenues, financial condition or results of operations; • our dependence on a limited number of products in our performance enzymes business; • our reliance on a limited number of contract manufacturers for large scale production of substantially all of our enzyme products; • our relationships with, and dependence on, collaborators in our principal markets; • our ability to successfully and timely develop and commercialize new products, including our ECO Synthesis manufacturing platform, for the markets we serve; • the potential of GSK, Merck, Novartis or any other performance enzyme customer terminating their agreements with us; • the success of our customers’ products in the market and the ability of such customers to obtain regulatory approvals for products and processes; • our ability to deploy our technology platform in life science tools markets; • our dependence on our collaborators or customers’ product candidates which could unexpectedly fail at any stage of preclinical or clinical development; • our dependence on our collaborators or customers’ product candidates which may lack the ability to work as intended or cause undesirable side effects; • our ability to successfully prosecute and protect our intellectual property; • our ability to compete if we do not adequately protect our proprietary technologies or if we lose some of our intellectual property rights; • our ability to avoid infringing the intellectual property rights of third parties; • our involvement in lawsuits to protect or enforce our patents or other intellectual property rights; • our ability to enforce our intellectual property rights throughout the world; • our dependence on, and the need to attract and retain, key management and other personnel; • our ability to prevent the theft or misappropriation of our biocatalysts, the genes that code for our biocatalysts, know-how or technologies; • our ability to protect our trade secrets and other proprietary information from disclosure by employees and others; • our ability to obtain substantial additional capital that may be necessary to expand our business; • our ability to comply with the terms of our Loan Agreement; • our ability to timely pay debt service obligations; • our customers’ ability to pay amounts owed to us in a timely manner; • our ability to avoid charges to earnings as a result of any impairment of goodwill, intangible assets or other long-lived assets; • changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported results of operations; 37 • our ability to maintain effective internal control over financial reporting; • our dependency on information technology systems, infrastructure and data; • our ability to control and to improve product gross margins; • our ability to protect against risks associated with the international aspects of our business; • the cost of compliance with EU chemical regulations; • potential advantages that our competitors and potential competitors may have in securing funding or developing products; • our ability to accurately report our financial results in a timely manner; • results of regulatory tax examinations; • market and economic conditions may negatively impact our business, financial condition, and share price; • business interruptions due to natural disasters, disease outbreaks or other events beyond our control; • public concerns about the ethical, legal and social ramifications of genetically engineered products and processes; • our ability to integrate our current business with any businesses that we may acquire in the future; • our ability to properly handle and dispose of hazardous materials in our business; • potential product liability claims; • changes to tax law and related regulations could materially affect our tax obligations and effective tax rate; and • our ability to use our NOLs to offset future taxable income.
Factors relating to our business that may contribute to these fluctuations include the following factors, as well as other factors described elsewhere in this report: • our ability to achieve or maintain profitability; • our dependence on a limited number of customers; 34 • some of our product supply agreements with customers have finite duration, may not be extended or renewed and generally do not require the customer to purchase any particular quantity or quantities of our products; • the timing of customer orders and our related revenue recognition may vary significantly from quarter to quarter; • with respect to customers purchasing our products for the manufacture of active pharmaceutical ingredients for which they have exclusivity due to patent protection, the termination or expiration of such patent protection and any resulting generic competition may materially and adversely affect our revenues, financial condition or results of operations; • our dependence on a limited number of products in our performance enzymes business; • our reliance on a limited number of contract manufacturers for large scale production of substantially all of our enzyme products; • our relationships with, and dependence on, collaborators in our principal markets; • our ability to successfully and timely develop and commercialize new products, including our ECO Synthesis manufacturing platform, for the markets we serve; • the potential of GSK, Merck, Novartis or any other performance enzyme customer terminating their agreements with us; • the success of our customers’ products in the market and the ability of such customers to obtain regulatory approvals for products and processes; • our ability to deploy our technology platform in life science tools markets; • our dependence on our collaborators or customers’ product candidates which could unexpectedly fail at any stage of preclinical or clinical development; • our dependence on our collaborators or customers’ product candidates which may lack the ability to work as intended or cause undesirable side effects; • our ability to successfully prosecute and protect our intellectual property; • our ability to compete if we do not adequately protect our proprietary technologies or if we lose some of our intellectual property rights; • our ability to avoid infringing the intellectual property rights of third parties; • our involvement in lawsuits to protect or enforce our patents or other intellectual property rights; • our ability to enforce our intellectual property rights throughout the world; • our dependence on, and the need to attract and retain, key management and other personnel; • our ability to prevent the theft or misappropriation of our biocatalysts, the genes that code for our biocatalysts, know-how or technologies; • our ability to protect our trade secrets and other proprietary information from disclosure by employees and others; • our ability to obtain substantial additional capital that may be necessary to expand our business; • our ability to comply with the terms of our Loan Agreement; • our ability to timely pay debt service obligations; • our customers’ ability to pay amounts owed to us in a timely manner; • our ability to avoid charges to earnings as a result of any impairment of goodwill, intangible assets or other long-lived assets; • changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported results of operations; 35 • our ability to maintain effective internal control over financial reporting; • our dependency on information technology systems, infrastructure and data; • our ability to control and to improve product gross margins; • our ability to protect against risks associated with the international aspects of our business; • the cost of compliance with EU chemical regulations; • potential advantages that our competitors and potential competitors may have in securing funding or developing products; • our ability to accurately report our financial results in a timely manner; • results of regulatory tax examinations; • market and economic conditions may negatively impact our business, financial condition, and share price; • business interruptions due to natural disasters, disease outbreaks or other events beyond our control; • public concerns about the ethical, legal and social ramifications of genetically engineered products and processes; • our ability to integrate our current business with any businesses that we may acquire in the future; • our ability to properly handle and dispose of hazardous materials in our business; • potential product liability claims; • changes to tax law and related regulations could materially affect our tax obligations and effective tax rate; and • our ability to use our NOLs to offset future taxable income.
In addition, if our customers or collaborators fail to comply with applicable regulatory requirements, the FDA and other regulatory authorities may: • issue an untitled letter or a warning letter asserting a violation of the law; • seek an injunction, impose civil or criminal penalties, and impose monetary fines, restitution or disgorgement of profits or revenues; • suspend or withdraw regulatory approval; • issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • mandate modification of promotional materials and labeling and issuance of corrective information; • issue consent decrees or corporate integrity agreements, or debar or exclude from federal healthcare programs; • suspend or terminate any ongoing clinical trials or implement requirements to conduct post-marketing studies or clinical trials; • refuse to approve a pending NDA, BLA or comparable foreign marketing application (or any supplements thereto); • restrict the labeling, marketing, distribution, use or manufacturing of products; • seize or detain products or otherwise require the withdrawal or recall of products from the market; • refuse to approve pending applications or supplements to approved applications; • refuse to permit the import or export of products; or • refuse government contracts. 29 Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
In addition, if our customers or collaborators fail to comply with applicable regulatory requirements, the FDA and other regulatory authorities may: • issue an untitled letter or a warning letter asserting a violation of the law; • seek an injunction, impose civil or criminal penalties, and impose monetary fines, restitution or disgorgement of profits or revenues; • suspend or withdraw regulatory approval; • issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • mandate modification of promotional materials and labeling and issuance of corrective information; • issue consent decrees or corporate integrity agreements, or debar or exclude from federal healthcare programs; • suspend or terminate any ongoing clinical trials or implement requirements to conduct post-marketing studies or clinical trials; • refuse to approve a pending NDA, BLA or comparable foreign marketing application (or any supplements thereto); • restrict the labeling, marketing, distribution, use or manufacturing of products; • seize or detain products or otherwise require the withdrawal or recall of products from the market; • refuse to approve pending applications or supplements to approved applications; • refuse to permit the import or export of products; or • refuse government contracts. 27 Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
Other challenges with a new technology such as our ECO Synthesis manufacturing platform include having an unknown and unproven development and regulatory path, uncertainly around the value that we can realize from the technology, uncertainty around the timeline for adoption of the technology by customers, and uncertainly around our ability to secure supply of necessary materials or to manufacture at GMP at scale and partner with customers on manufacturing and utilizing the technology.
Other challenges with a new technology such as our ECO Synthesis manufacturing platform include having an unknown and unproven development and regulatory path, uncertainty around the value that we can realize from the technology, uncertainty around the timeline for adoption of the technology by customers, and uncertainty around our ability to secure supply of necessary materials or to manufacture at GMP at scale and partner with customers on manufacturing and utilizing the technology.
Finally, our business could be negatively affected if any of our collaborators or suppliers undergoes a change of control or were to otherwise assign the rights or obligations under any of our agreements. 21 We have invested significant resources to enable enzymatic nucleic acid synthesis, which is based on novel ideas and technologies that are largely unproven.
Finally, our business could be negatively affected if any of our collaborators or suppliers undergoes a change of control or were to otherwise assign the rights or obligations under any of our agreements. We have invested significant resources to enable enzymatic nucleic acid synthesis, which is based on novel ideas and technologies that are largely unproven.
If our capital resources are insufficient to meet our capital requirements, and we are unable to enter into or maintain collaborations with partners that are able or willing to fund our development efforts or commercialize any enzyme products that we develop or enable, we will have to raise additional funds to continue the development of our technology and products and complete the commercialization of products, if any, resulting from our technologies. 26 In addition, we may choose to raise additional capital due to market conditions or strategic considerations, such as funding the ongoing commercialization of our ECO Synthesis manufacturing platform and a GMP manufacturing facility , even if we believe we have sufficient funds for our current or future operating plans.
If our capital resources are insufficient to meet our capital requirements, and we are unable to enter into or maintain collaborations with partners that are able or willing to fund our development efforts or commercialize any enzyme products that we develop or enable, we will have to raise additional funds to continue the development of our technology and products and complete the commercialization of products, if any, resulting from our technologies. 24 In addition, we may choose to raise additional capital due to market conditions or strategic considerations, such as funding the ongoing commercialization of our ECO Synthesis manufacturing platform and a GMP manufacturing facility , even if we believe we have sufficient funds for our current or future operating plans.
Provisions in the Loan Agreement impose restrictions or require prior approval on our ability, and the ability of certain of our subsidiaries to, among other things: • sell, lease or transfer certain parts of our business or property, including equity interests of our subsidiaries; • engage in new lines of business; • acquire new companies and merge or consolidate; • incur additional debt or guarantee the indebtedness of others or our subsidiaries; • create liens or encumbrances; • pay cash dividends and make distributions or redeem or repurchase our capital stock; • make certain investments; • enter into transactions with affiliates; and • terminate or, in certain cases, amend our material agreements. 27 The Loan Agreement also contains other customary covenants.
Provisions in the Loan Agreement impose restrictions or require prior approval on our ability, and the ability of certain of our subsidiaries to, among other things: • sell, lease or transfer certain parts of our business or property, including equity interests of our subsidiaries; • engage in new lines of business; • acquire new companies and merge or consolidate; • incur additional debt or guarantee the indebtedness of others or our subsidiaries; • create liens or encumbrances; • pay cash dividends and make distributions or redeem or repurchase our capital stock; • make certain investments; • enter into transactions with affiliates; and • terminate or, in certain cases, amend our material agreements. 25 The Loan Agreement also contains other customary covenants.
In addition, customer spending may be affected by, among other things, general market and economic conditions beyond our control. 18 Our customers are engaged in research, development, production, and marketing of pharmaceutical products and intermediates.
In addition, customer spending may be affected by, among other things, general market and economic conditions beyond our control. Our customers are engaged in research, development, production, and marketing of pharmaceutical products and intermediates.
If government proposals to reduce or eliminate budgetary deficits result in reduced allocations to government agencies that fund research and development activities, or results of operations may be materially adversely affected.
If government proposals to reduce or eliminate budgetary deficits result in reduced allocations to government agencies that fund research and development activities, our results of operations may be materially adversely affected.
If we fail in our integration efforts with respect to any of our acquisitions and are unable to efficiently operate as a combined organization, our business and financial condition may be adversely affected. 28 Risks Related to Government Regulation Even if our customers, future customers or collaborators obtain regulatory approval for any products utilizing our enzymes, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense.
If we fail in our integration efforts with respect to any of our acquisitions and are unable to efficiently operate as a combined organization, our business and financial condition may be adversely affected. 26 Risks Related to Government Regulation Even if our customers, future customers or collaborators obtain regulatory approval for any products utilizing our enzymes, such products will remain subject to ongoing regulatory requirements, which may result in significant additional expense.
Concerns about inflation, energy costs, geopolitical issues, the United States mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, increased unemployment rates, and increased credit defaults in recent years.
Concerns about inflation, energy costs, geopolitical issues, the United States mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumers confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, increased unemployment rates, and increased credit defaults in recent years.
If the steps we have taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. 35 Risks Related to Owning our Common Stock We are subject to anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware law that could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders.
If the steps we have taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. 33 Risks Related to Owning our Common Stock We are subject to anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware law that could delay or prevent an acquisition of our company, even if the acquisition would be beneficial to our stockholders.
There also may be claims in patent applications filed in some countries that, if granted and valid, may also block our ability to commercialize technology, products, services or processes in these countries if we are unable to circumvent or obtain rights to them. 33 The industries in which we operate and the biotechnology industry, in particular, are characterized by frequent and extensive litigation regarding patents and other intellectual property rights.
There also may be claims in patent applications filed in some countries that, if granted and valid, may also block our ability to commercialize technology, products, services or processes in these countries if we are unable to circumvent or obtain rights to them. 31 The industries in which we operate and the biotechnology industry, in particular, are characterized by frequent and extensive litigation regarding patents and other intellectual property rights.
In addition, any patent issued to us or to our licensor may provide us with little or no competitive advantage, in which case we may abandon such patent, license it to another entity or terminate the license agreement. 31 Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop technologies, products or services that are identical or similar to ours or that compete with ours.
In addition, any patent issued to us or to our licensor may provide us with little or no competitive advantage, in which case we may abandon such patent, license it to another entity or terminate the license agreement. 29 Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop technologies, products or services that are identical or similar to ours or that compete with ours.
Conducting business internationally exposes us to a variety of risks, including: • changes in or interpretations of U.S. or foreign laws or regulations that may adversely affect our ability to sell our products, repatriate profits to the United States or operate our foreign-located facilities; 38 • the imposition or increase of tariffs and other trade barriers, including as a result of the recent U.S. presidential election; • the imposition of limitations on, or increase of, withholding and other taxes on remittances and other payments by foreign subsidiaries or joint ventures; • the imposition of limitations on genetically-engineered or other products or processes and the production or sale of those products or processes in foreign countries; • currency exchange rate fluctuations; • uncertainties relating to foreign laws, regulations and legal proceedings including pharmaceutical, tax, import/export, anti-corruption and exchange control laws; • the availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; • increased demands on our limited resources created by our operations may constrain the capabilities of our administrative and operational resources and restrict our ability to attract, train, manage and retain qualified management, technicians, scientists and other personnel; • economic or political instability in foreign countries; • difficulties associated with staffing and managing foreign operations; and • the need to comply with a variety of United States and foreign laws applicable to the conduct of international business, including import and export control laws and anti-corruption laws.
Conducting business internationally exposes us to a variety of risks, including: • changes in or interpretations of U.S. or foreign laws or regulations that may adversely affect our ability to sell our products, repatriate profits to the United States or operate our foreign-located facilities; 36 • the imposition or increase of tariffs and other trade barriers, including as a result of the U.S. presidential administration; • the imposition of limitations on, or increase of, withholding and other taxes on remittances and other payments by foreign subsidiaries or joint ventures; • the imposition of limitations on genetically-engineered or other products or processes and the production or sale of those products or processes in foreign countries; • currency exchange rate fluctuations; • uncertainties relating to foreign laws, regulations and legal proceedings including pharmaceutical, tax, import/export, anti-corruption and exchange control laws; • the availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; • increased demands on our limited resources created by our operations may constrain the capabilities of our administrative and operational resources and restrict our ability to attract, train, manage and retain qualified management, technicians, scientists and other personnel; • economic or political instability in foreign countries; • difficulties associated with staffing and managing foreign operations; and • the need to comply with a variety of United States and foreign laws applicable to the conduct of international business, including import and export control laws and anti-corruption laws.
Uncertainties resulting from initiation and continuation of any patent or related litigation could harm our ability to compete. 32 Additional uncertainty may result from legal precedent handed down by the United States Federal Circuit Court and Supreme Court as they determine legal issues concerning the scope and construction of patent claims and inconsistent interpretation of patent laws by the lower courts.
Uncertainties resulting from initiation and continuation of any patent or related litigation could harm our ability to compete. 30 Additional uncertainty may result from legal precedent handed down by the United States Federal Circuit Court and Supreme Court as they determine legal issues concerning the scope and construction of patent claims and inconsistent interpretation of patent laws by the lower courts.
If our customers are not successful in attaining or retaining product sales due to market conditions, reimbursement issues, or other factors, our results of operations may be materially adversely affected. If we are unable to develop and commercialize new products for the pharmaceutical, biotherapeutics, diagnostics and life science tools markets, our business and prospects will be harmed.
If our customers are not successful in attaining or retaining product sales due to market conditions, reimbursement issues, or other factors, our results of operations may be materially adversely affected. If we are unable to develop and commercialize new products for the pharmaceutical and life science tools markets, our business and prospects will be harmed.
For these reasons, we may not be able to utilize a material portion of the NOLs reflected in our financial statements, even if we attain profitability. 25 As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Nasdaq regarding our internal controls over financial reporting.
For these reasons, we may not be able to utilize a material portion of the NOLs reflected in our financial statements, even if we attain profitability. 23 As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Nasdaq regarding our internal controls over financial reporting.
Changes in the healthcare industry’s pricing, selling, inventory, distribution, or supply policies or practices, or in public or government sentiment for the industry as a whole, could also significantly reduce our revenue and results of operations. 30 Compliance with European Union chemical regulations could be costly and adversely affect our business and results of operations.
Changes in the healthcare industry’s pricing, selling, inventory, distribution, or supply policies or practices, or in public or government sentiment for the industry as a whole, could also significantly reduce our revenue and results of operations. 28 Compliance with European Union chemical regulations could be costly and adversely affect our business and results of operations.
Furthermore, because of the substantial amount of discovery required in connection with U.S. intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. 34 We may not be able to enforce our intellectual property rights throughout the world.
Furthermore, because of the substantial amount of discovery required in connection with U.S. intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. 32 We may not be able to enforce our intellectual property rights throughout the world.
We are aware that other companies, including Ginkgo Bioworks, BRAIN, and Enzymicals AG, have alternative methods for obtaining and generating genetic diversity or use mutagenesis techniques to produce genetic diversity. Some companies, including Biomatter Designs, Arzeda, and Enzymaster, leverage predictive computational algorithms to guide enzyme engineering efforts.
We are aware that other companies, including Ginkgo Bioworks, BRAIN Biotech AG, and Enzymicals AG, have alternative methods for obtaining and generating genetic diversity or use mutagenesis techniques to produce genetic diversity. Some companies, including Biomatter Designs, Arzeda Corp., and Enzymaster, leverage predictive computational algorithms to guide enzyme engineering efforts.
During 2023, the closures of Silicon Valley Bank (“SVB”) and Signature Bank (“Signature”) and their placement into receivership with the Federal Deposit Insurance Corporation, and the government-brokered sale of the deposits and majority of assets of First Republic Bank to JPMorgan Chase, created bank-specific and broader financial institution liquidity risk and concerns.
During 2023, the closures of Silicon Valley Bank and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation, and the government-brokered sale of the deposits and majority of assets of First Republic Bank to JPMorgan Chase, created bank-specific and broader financial institution liquidity risk and concerns.
Any such expiration, termination or reduction could materially adversely affect our revenues, financial condition and results of operations. For the year ended December 31, 2024, we derived a majority of our product revenue from these product supply agreements.
Any such expiration, termination or reduction could materially adversely affect our revenues, financial condition and results of operations. For the year ended December 31, 2025, we derived a majority of our product revenue from these product supply agreements.
Any products that receives FDA approval will remain subject to ongoing regulatory requirements for manufacturing, labeling, packaging, distribution, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information, among other things.
Any product that receives FDA approval will remain subject to ongoing regulatory requirements for manufacturing, labeling, packaging, distribution, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information, among other things.
The prevalence of artificial intelligences (“AI”) tools in the global marketplace and rapid changes thereto raise the risk to our systems by making more sophisticated tools available to bad actors, and by making our data more vulnerable to inadvertent leaks or corruption by employees and others.
The prevalence of artificial intelligence (“AI”) tools in the global marketplace and rapid changes thereto raise the risk to our systems by making more sophisticated tools available to bad actors, and by making our data more vulnerable to inadvertent leaks or corruption by employees and others.
Our information technology systems and those of our external vendors, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from computer viruses and malware (e.g. ransomware), malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
Our information technology systems and those of our external vendors, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from computer viruses and malware (e.g. ransomware), malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, software or hardware errors, misconfigurations, bugs, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
We may be forced to secure alternative sources of supply, which may be unavailable on commercially acceptable terms, and could cause delays in our ability to deliver products to our customers, increase our costs and decrease our profit margins. 20 We currently have supply agreements in place with Lactosan, ACSD and Sekisui.
We may be forced to secure alternative sources of supply, which may be unavailable on commercially acceptable terms, and could cause interruptions or delays in our ability to deliver products to our customers, increase our costs and decrease our profit margins. We currently have supply agreements in place with Lactosan, ACSD and Sekisui.
Similar laws regulating personal information generally or health information in particular have passed in more than a dozen states and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The same is true for emerging laws and regulations related to AI.
Similar laws regulating personal information generally or health information in particular have passed in other states and have been proposed in additional states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The same is true for emerging laws and regulations related to AI.
An allegation or perception that we have not taken sufficient action or have taken the wrong actions in these areas could negatively harm our business and reputation. 44
An allegation or perception that we have not taken sufficient action or have taken the wrong actions in these areas could negatively harm our business and reputation. 43
Finally, our charter documents establish advanced notice requirements for nominations for election to our Board and for proposing matters that can be acted upon at stockholder meetings.
Finally, our charter documents establish advance notice requirements for nominations for election to our Board and for proposing matters that can be acted upon at stockholder meetings.
These efforts are subject to numerous risks, including the following: • customers in these markets may be reluctant to adopt new manufacturing processes that use our enzymes; • we may be unable to successfully develop the enzymes or manufacturing processes for our products in a timely and cost-effective manner, if at all; • we may face difficulties in transferring the developed technologies to our customers and the contract manufacturers that we may use for commercial scale production of intermediates and enzymes in these markets; • the biotherapeutics products that use our tools may not receive regulatory approval or be commercially viable; • the contract manufacturers that we may use may be unable to scale their manufacturing operations to meet the demand for these products and we may be unable to secure additional manufacturing capacity; • customers may not be willing to purchase these products for these markets from us on favorable terms, if at all; • we may face product liability litigation, unexpected safety or efficacy concerns and product recalls or withdrawals; • our customers’ products may experience adverse events or face competition from new products, which would reduce demand for our products; • we may face pressure from existing or new competitive products; and • we may face pricing pressures from existing or new competitors, some of which may benefit from government subsidies or other incentives.
These efforts are subject to numerous risks, including the following: • customers in these markets may be reluctant to adopt new manufacturing processes that use our enzymes; • we may be unable to successfully develop the enzymes or manufacturing processes for our products in a timely and cost-effective manner, if at all; • we may face difficulties in transferring the developed technologies to our customers and the contract manufacturers that we may use for commercial scale production of intermediates and enzymes in these markets; • the biotherapeutics products that use our tools may not receive regulatory approval or be commercially viable; • the contract manufacturers that we may use may be unable to scale their manufacturing operations to meet the demand for these products and we may be unable to secure additional manufacturing capacity; • customers may not be willing to purchase these products for these markets from us on favorable terms, if at all; • we may face product liability litigation, unexpected safety or efficacy concerns and product recalls or withdrawals; • our customers’ products may experience adverse events or face competition from new products, which would reduce demand for our products; • we may face pressure from existing or new competitive products; and • we may face pricing pressures from existing or new competitors, some of which may benefit from government subsidies or other incentives. 17 A reduction or delay in government funding of research and development for our customers may adversely affect our business.
Even if identified, we may be unable to adequately and timely investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection and to remove or obfuscate forensic evidence. We and certain of our external vendors are from time to time subject to cyberattacks and security incidents.
Even if identified, we may be unable to adequately and timely investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques (such as AI) that are designed to circumvent controls, to avoid detection and to remove or obfuscate forensic evidence. 39 We and certain of our external vendors are from time to time subject to cyberattacks and security incidents.
We are dependent on a limited number of customers. Although we continue to expand our customer base, our current revenues are derived from a limited number of key customers. For the years ended December 31, 2024 and 2023, customers that each individually contributed 10% or more of our total revenue accounted for 51% and 35% of our total revenues, respectively.
We are dependent on a limited number of customers. Although we continue to expand our customer base, our current revenues are derived from a limited number of key customers. For the years ended December 31, 2025 and 2024, customers that each individually contributed 10% or more of our total revenue accounted for 51% of our total revenues.
Some fermentation pathway design companies, like Ginkgo Bioworks (who recently acquired Zymergen), whose traditional focus has been to design microorganisms that express small molecule chemicals, could extend into designing organisms that express enzymes. There is also competition in the enzyme customization and optimization area from several smaller companies, such as BRAIN AG, Arzeda Corp., c-LEcta GmbH and Evocatal GmbH.
Some fermentation pathway design companies, like Ginkgo Bioworks, whose traditional focus has been to design microorganisms that express small molecule chemicals, could extend into designing organisms that express enzymes. There is also competition in the enzyme customization and optimization area from several smaller companies, such as BRAIN Biotech AG, Arzeda Corp., and c-LEcta GmbH.
In the future, our products could become subject to more onerous regulation, or the FDA could disagree with our assessment that our enzyme products are exempt from current GMP regulations.
In the future, our products could become subject to more onerous regulation, or the FDA could disagree with our assessment that our enzyme products are exempt from cGMP regulations.
In order to market a biologic or drug product in the United States, our customers, future customers or collaborators must undergo the following process required by the FDA: • completion of extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance with the FDA's Good Laboratory Practice requirements; • submission to the FDA of an IND, which must become effective before human clinical studies may begin in the United States; • approval by an independent institutional review board (“IRB”) representing each clinical site before the clinical study may be initiated at the site; • performance of adequate and well-controlled human clinical studies in accordance with GCP requirements to establish the safety, purity and potency (or efficacy) of the product candidate for each proposed indication; • preparation of and submission to the FDA of an NDA or BLA after completion of all clinical studies; • potential review of the product candidate by an FDA advisory committee; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the product candidate is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements; • FDA review and approval of a BLA or NDA prior to any commercial marketing or sale of the product in the United States; and • any post-approval requirements, if applicable.
To market a biologic or drug product in the United States, our customers, future customers or collaborators must undergo the following process required by the FDA: • completion of extensive preclinical laboratory tests and preclinical animal studies, certain of which must be performed in accordance with the FDA's Good Laboratory Practice requirements; • submission to the FDA of an Investigational New Drug Application, which must become effective before human clinical studies may begin in the United States; • approval by an independent institutional review board or ethics committee representing each clinical site before the clinical study may be initiated at the site; • performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice requirements to establish the safety, purity and potency (or efficacy) of the product candidate for each proposed indication; • preparation of and submission to the FDA of a New Drug Application (“NDA”) or Biologics License Application (“BLA”) after completion of all clinical studies; 15 • potential review of the product candidate by an FDA advisory committee; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the product candidate is produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements; • FDA review and approval of a BLA or NDA prior to any commercial marketing or sale of the product in the United States; and • any post-approval requirements, if applicable.
We believe our enzyme products are exempt from compliance with the FDCA and the implementing GMP regulations of the FDA, as our products are further processed and incorporated into final drug or biologic products by our customers and we do not make claims related to their safety or effectiveness.
We believe our enzyme products are exempt from compliance with the FDCA and the FDA’s GMP implementing regulations, as our products are further processed and not incorporated into final drug or biologic products by our customers and as we do not make claims related to our products’ safety or effectiveness.
There is competition from large industrial enzyme companies, such as Novozymes and DuPont, as well as subsidiaries of larger contract research/contract manufacturing organizations, such as DSM, Cambrex Corporation, Lonza, WuXi STA and Almac Group Ltd.
There is competition from large industrial enzyme companies, such as Novozymes and DuPont, as well as subsidiaries of larger contract research/CMOs, such as DSM-Firmenich AG, Cambrex Corporation, Lonza Group, WuXi STA and Almac Group Ltd.
Our future success will depend on our ability to maintain a competitive position with respect to technological advances. In addition, as we enter new markets, we will face new competition and will need to adapt to competitive factors that may be different from those we face today.
Our future success will depend on our ability to maintain a competitive position with respect to technological advances. In addition, as we enter new markets, we will face new competition and will need to adapt to competitive factors that may be different from those we face today. 20 We face competitive challenges related to our ECO Synthesis manufacturing platform.
We also rely on external vendors to supply and/or support certain aspects of our information technology systems. The systems of these external vendors may contain defects in design or manufacture or other problems that could unexpectedly compromise information security of our own systems, and we are dependent on these third parties to deploy appropriate security programs to protect their systems.
The systems of these external vendors may contain defects in design or manufacture or other problems that could unexpectedly compromise information security of our own systems, and we are dependent on these third parties to deploy appropriate security programs to protect their systems.
Moreover, any settlement of or adverse judgment resulting from litigation relating to intellectual property rights could require us to obtain a license to continue to make, use, import, sell or offer for sale the technology, products or services that is the subject of the claim, or otherwise restrict or prohibit our use of the technology, products or services.
Moreover, any settlement of or adverse judgment resulting from litigation relating to intellectual property rights could require us to obtain a license, which may be on terms that are not favorable to us, to continue to make, use, import, sell or offer for sale the technology, products or services that is the subject of the claim, or otherwise restrict or prohibit our use of the technology, products or services.
Any such issues could materially and adversely affect our financial condition, results of operations, cash flows and the timeliness with which we report our internal and external operating results. The accessibility of AI intensifies these risks. Our business may require us to use and store personal information of our customers, employees, and business partners.
Any such issues could materially and adversely affect our financial condition, results of operations, cash flows and the timeliness with which we report our internal and external operating results. Our business may require us to use and store personal information of our customers, employees, and business partners on our information technology systems.
As such, as of December 31, 2024 , we owned or controlled approximately 1,760 active issued patents and pending patent applications in the United States and in various foreign jurisdictions. As of December 31, 2024 , our patents and patent applications, if issued, have terms that expire between 2024 and approximately 2045.
As such, as of December 31, 2025 , we owned or controlled approximately 1,600 active issued patents and pending patent applications in the United States and in various foreign jurisdictions. As of December 31, 2025 , our patents and patent applications, if issued, have terms that expire between 2026 and approximately 2046.
In addition, if our customers, future customers or collaborators fail to comply with applicable FDA or other regulatory requirements at any time during the drug development process, clinical testing, the approval process or after approval, they may become subject to administrative or judicial penalties, including the FDA’s refusal to approve a pending application, withdrawal of an approval, warning letters, product recalls and additional enforcement actions, any of which may have an adverse effect on our financial condition. 17 We believe that our products are exempt from FDCA requirements, but FDA or other regulators may disagree and find that our products are subject to such requirements.
In addition, if our customers, future customers or collaborators fail to comply with applicable FDA or other regulatory requirements at any time during the drug development process, clinical testing, the approval process or after approval, they may become subject to administrative or judicial penalties, including the FDA’s refusal to approve a pending application, withdrawal of an approval, warning letters, product recalls and additional enforcement actions, any of which may have an adverse effect on our financial condition.
The accessibility of AI intensifies these risks. We have programs in place to detect, contain and respond to data security incidents, and we make ongoing improvements to our information-sharing products in order to minimize vulnerabilities, in accordance with industry and regulatory standards.
We have programs in place to detect, contain and respond to data security incidents, and we make ongoing improvements to our information-sharing products in order to minimize vulnerabilities, in accordance with industry and regulatory standards.
Government funding of research and development is subject to the political process, which is inherently fluid and unpredictable. Our revenue may be adversely affected if our customers delay or limit purchases as a result of uncertainties surrounding the approval of government budget proposals, including reduced allocations to government agencies that fund research and development activities.
Our revenue may be adversely affected if our customers delay or limit purchases as a result of uncertainties surrounding the approval of government budget proposals, including reduced allocations to government agencies that fund research and development activities.
We face competitive challenges related to our ECO Synthesis manufacturing platform. The current industry standard for manufacturing RNAi therapeutics is a well-established, chemical-based method, SPOS, utilizing phosphoramidite chemistry. Primary competitors in this space include CDMOs, such as Agilent Technologies, which has made significant capital investment to expand their RNA manufacturing capabilities using phosphoramidite chemistry.
The current industry standard for manufacturing RNAi therapeutics is a well-established, chemical-based method, solid-phase oligonucleotide synthesis, utilizing phosphoramidite chemistry. Primary competitors in this space include CDMOs, such as Agilent Technologies, which has made significant capital investment to expand their RNA manufacturing capabilities using phosphoramidite chemistry.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. 40 In the EU, the EU General Data Protection Regulation (“EU GDPR”) governs the processing of personal data.
We currently have license agreements, research and development agreements, supply agreements and/or distribution agreements with various collaborators. We may have limited or no control over the amount or timing of resources that any collaborator is able or willing to devote to our partnered products or collaborative efforts. Any of our collaborators may fail to perform its obligations.
We may have limited or no control over the amount or timing of resources that any collaborator is able or willing to devote to our partnered products or collaborative efforts. Any of our collaborators may fail to perform its obligations.
The ability of our customers, future customers or collaborators, including any company developing RNAi and other RNA-based therapeutics, to advance product candidates utilizing our products to clinical trials and to ultimately receive regulatory approvals is highly uncertain.
Therapeutics development programs are highly regulated and expensive, and our enzyme products are complex and subject to quality control requirements. The ability of our customers, future customers or collaborators, including any company developing RNAi and other RNA-based therapeutics, to advance product candidates utilizing our products to clinical trials and to ultimately receive regulatory approvals is highly uncertain.
Any failure, or perceived failure, by us to comply with federal, state or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of customer confidence, damage to our brand and reputation and a loss of customers, any of which could have an adverse effect on our business. 43 Evolving expectations around corporate responsibility practices, specifically related to environmental, social and governance (“ESG”) matters, may expose us to reputational and other risks.
Any failure, or perceived failure, by us to comply with federal, state or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of customer confidence, damage to our brand and reputation and a loss of customers, any of which could have an adverse effect on our business.
As a result of our strategic shift and our refined focus on certain programs and business lines, we may fail to capitalize on other opportunities that may be more profitable or for which there is a greater likelihood of success.
As a result of our refined focus on certain programs and business lines, we may fail to capitalize on other opportunities that may be more profitable or for which there is a greater likelihood of success. Because we have limited financial and managerial resources, we have recently focused our efforts on developing certain programs and business lines.
Security breaches, loss of data and other disruptions, whether related to artificial intelligence or other means, could compromise sensitive information related to our business or individuals, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition.
Security breaches, loss of data and other disruptions, whether related to artificial intelligence or other means, could compromise sensitive information related to our business or individuals, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition. 38 Information technology helps us operate efficiently, interface with customers, maintain financial accuracy and efficiency and accurately produce our financial statements.
Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.
As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business. 41 Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.
If cost-containment efforts or other healthcare reform measures limit our customers’ profitability, they may decrease research and development spending, which could decrease the demand for our products and services and materially adversely affect our growth prospects.
The timing of legislative, regulatory or executive action related to future healthcare reforms, if any, remains uncertain. If cost-containment efforts or other healthcare reform measures limit our customers’ profitability, they may decrease research and development spending, which could decrease the demand for our products and services and materially adversely affect our growth prospects.
If we fail to achieve profitability, or if the time required to achieve profitability is longer than we anticipate, we may not be able to continue our business.
If we fail to achieve profitability, or if the time required to achieve profitability is longer than we anticipate, we may not be able to continue our business. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
There is a risk that we could be impacted by a cybersecurity incident that results in loss or unauthorized disclosure of personal data, potentially resulting in us facing harms similar to those described above. 42 Among other requirements, the EU GDPR prohibits the international transfer of personal data subject to the EU GDPR from the European Economic Area (“EEA”) to third countries that the European Commission does not recognize as having an ‘adequate’ level of data protection, unless a data transfer mechanism (such as, EU Standard Contractual Clauses or “EU SCCs”) has been put in place or a derogation under the EU GDPR can be relied on.
Among other requirements, the EU GDPR prohibits the international transfer of personal data subject to the EU GDPR from the European Economic Area (“EEA”) to third countries that the European Commission does not recognize as having an ‘adequate’ level of data protection, unless a data transfer mechanism (such as, EU Standard Contractual Clauses or “EU SCCs”) has been put in place or a derogation under the EU GDPR can be relied on.
Our biocatalytic based manufacturing processes must compete with these internally developed routes. Additionally, we also face competition from companies developing and marketing conventional catalysts such as Solvias Inc., BASF and Takasago International Corporation. 22 The market for supplying enzymes for use in pharma biocatalysis is fragmented.
The processes used by these companies include classical conventional organic chemistry reactions, chemo catalytic reactions, biocatalytic reactions or combinations thereof. Our biocatalytic based manufacturing processes must compete with these internally developed routes. Additionally, we also face competition from companies developing and marketing conventional catalysts such as Solvias Inc., BASF and Takasago International Corporation. The market for supplying enzymes is fragmented.
As more companies develop new intellectual property in our markets, the possibility of a competitor acquiring patent or other rights that may limit our products or potential products increases, and could additionally lead to litigation.
As more companies develop new intellectual property in our markets, the possibility of a competitor acquiring patent or other rights that may limit our products or potential products increases, and could additionally lead to litigation. 21 Our limited resources relative to many of our competitors may cause us to fail to anticipate or respond adequately to new developments and other competitive pressures.
With respect to customers purchasing our products for the manufacture of APIs for which they have exclusivity due to patent protection, the termination or expiration of such patent protection and any resulting generic competition may materially and adversely affect our revenues, financial condition or results of operations. 19 With respect to customers purchasing our products for the manufacture of API, or lead to the manufacture of API, for which exclusivity due to patent protection has or is about to expire, we can expect that the quantity of our products sold to such customers for such products may decline as generic competition for the API increases.
With respect to customers purchasing our products for the manufacture of API, or to lead to the manufacture of API, for which exclusivity due to patent protection has or is about to expire, we can expect that the quantity of our products sold to such customers for such products may decline as generic competition for the API increases.
In addition, some of our agreements, including the agreements with GSK, Merck, Novartis, Nestlé, Aldevro n, Roche, Crosswalk and Alphazyme provide for milestone payments, usage payments, and/or future royalty or other payments, which we will only receive if we and/or our collaborators develop and commercialize products or achieve technical milestones.
In addition, some of our agreements, including the agreements with GlaxoSmithKline plc (“GSK”), Merck Sharp & Dohme (“Merck”), Novartis Pharma AG (“Novartis”), Nestlé Health Science (“Nestlé”), Aldevro n LLC, Roche Sequencing Solutions, Inc., Crosswalk Therapeutics and Alphazyme LLC, provide for milestone payments, usage payments, and/or future royalty or other payments, which we will only receive if we and/or our collaborators develop and commercialize products or achieve technical milestones.
Moreover, given the unpredictable nature of the current economic climate, including future changes in rates of inflation and the potential for high tariffs or other trade barriers, it may be increasingly difficult for us to predict and control our future expenses, which may harm our ability to conduct our business. 39 Business interruptions resulting from disasters or other disturbances could delay us in the process of developing our products and could disrupt our sales.
Moreover, given the unpredictable nature of the current economic climate, including future changes in rates of inflation and the potential for high tariffs or other trade barriers, it may be increasingly difficult for us to predict and control our future expenses, which may harm our ability to conduct our business. 37 International trade policies, including tariffs, sanctions and trade barriers, may adversely affect our business.
In the European Union (“EU”), the EU General Data Protection Regulation (“EU GDPR”) governs the processing of personal data. The United Kingdom (“UK”) has implemented the EU GDPR as the UK GDPR which sits alongside the UK Data Protection Act 2018 (the “UK GDPR”, and together with the EU GDPR, the “GDPR”).
The United Kingdom (“UK”) has implemented the EU GDPR as the UK GDPR which sits alongside the UK Data Protection Act 2018 (the “UK GDPR”, and together with the EU GDPR, the “GDPR”).
Any failure or perceived failure by us to comply with applicable laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business. 41 In the United States, Health Insurance Portability and Accountability Act (“HIPAA”) imposes, among other things, certain standards relating to the privacy, security, transmission and breach reporting of certain individually identifiable health information.
Any failure or perceived failure by us to comply with applicable laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.
These companies include many of our large innovator and generic pharmaceutical customers, such as Merck, GSK, Novartis, Pfizer, Bristol-Myers, Kyorin, Urovant, and Teva which have significant internal research and development efforts directed at developing processes to manufacture APIs and intermediates. The processes used by these companies include classical conventional organic chemistry reactions, chemo catalytic reactions, biocatalytic reactions or combinations thereof.
These companies include many of our large innovator and generic pharmaceutical customers, such as Merck, GSK, Novartis, Pfizer Inc., Bristol-Myers Squibb, Kyorin Pharmaceutical Corporation, and Teva Pharmaceuticals, which have significant internal research and development efforts directed at developing processes to manufacture APIs and intermediates.
The accessibility of AI intensifies these risks. 40 In addition, unauthorized persons may attempt to hack into our products or systems to obtain personal data relating to employees and other individuals, our confidential or proprietary information or confidential information we hold on behalf of third parties.
In addition, unauthorized persons may attempt to hack into our products or systems to obtain personal data relating to employees and other individuals, our confidential or proprietary information or confidential information we hold on behalf of third parties. We also rely on external vendors to supply and/or support certain aspects of our information technology systems.
A reduction or delay in government funding of research and development for our customers may adversely affect our business. A portion of our revenue is derived from customers whose funding is partially dependent on both the level and timing of funding from government sources, which funding can be difficult to forecast.
A portion of our revenue is derived from customers whose funding is partially dependent on both the level and timing of funding from government sources, which funding can be difficult to forecast. Government funding of research and development is subject to the political process, which is inherently fluid and unpredictable.
Some of our product supply agreements with customers, if in place, have finite duration, may not be extended or renewed and generally do not require the customer to purchase any particular quantity or quantities of our products.
The loss or reduction of business from one or a combination of our significant customers could materially adversely affect our revenues, financial condition and results of operations. 16 Some of our product supply agreements with customers, if in place, have finite duration, may not be extended or renewed and generally do not require the customer to purchase any particular quantity or quantities of our products.
The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches (which has increased the likelihood of, and risks associated with, data breach litigation). Further, the California Privacy Rights Act (“CPRA”) significantly amended the CCPA, which went into effect in January 2023.
The CCPA also provides for civil penalties for violations, as well as a private right of action for certain data breaches (which has increased the likelihood of, and risks associated with, data breach litigation).
Our products are currently manufactured following the voluntary quality standards of ISO 9001:2015, and we anticipate signing and announcing a partnership with a CDMO to provide enzymatically synthesized, GMP-grade siRNA to customers in the near term. Our planned collaboration with a CDMO may not come to fruition and, even if it does, may not scale up as anticipated.
Our products are currently manufactured following the voluntary quality standards of ISO 9001:2015, and we have collaborations with a number of CDMOs, and anticipate signing and announcing additional partnerships to provide enzymatically synthesized, GMP-grade siRNA to customers in the near term.
We are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products and achieving or sustaining profitability. Our ability to maintain and manage collaborations in our markets is fundamental to the success of our business.
It is possible some of our contractual counterparties could be impacted by this or future legislation. We are dependent on our collaborators, and our failure to successfully manage these relationships could prevent us from developing and commercializing many of our products and achieving or sustaining profitability.
Our ECO Synthesis manufacturing platform is designed to enable the commercial-scale manufacture of RNAi and other RNA-based therapeutics through an enzymatic route.
Failure to validate performance at scale, demonstrate regulatory acceptance, or overcome other challenges with the new technologies could impede customer adoption and our revenues. Our ECO Synthesis manufacturing platform is designed to enable the commercial-scale manufacture of RNAi and other RNA-based therapeutics through an enzymatic route.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhere our bi-annual cybersecurity risk assessment identifies areas for improvement, we document and track our remediation activities, which are also reported to the Audit Committee and senior management annually. In this way, our program to manage cybersecurity risk integrates with our overall risk management processes.
Biggest changeAreas of cybersecurity risk are assessed every two years, and updates are reported by our Chief Financial Officer to the Board’s Audit Committee and senior management annually. Where our bi-annual cybersecurity risk assessment identifies areas for improvement, we document and track our remediation activities, which are also reported to the Audit Committee and senior management annually.
The members of the Cybersecurity Council do not have specific expertise in cybersecurity risk other than the Vice President of Information Technology (“VP IT”) who has more than 20 years of experience, and engages with trusted third-party experts for support and guidance when additional expertise is required.
The members of the Cybersecurity Council do not have specific expertise in cybersecurity risk other than the Vice President of Information Technology (“VP of IT”) who has more than 20 years of experience and engages with trusted third-party experts for support and guidance when additional expertise is required.
An actual or suspected cybersecurity incident that jeopardizes the confidentiality, integrity, or availability of Codexis' information systems or any information residing therein (or threat that presents significant risk to our information systems as identified by IT) is reported to the Cybersecurity Council by our IT Department.
In an event that an actual or suspected cybersecurity incident that jeopardizes the confidentiality, integrity, or availability of Codexis' information systems or any information residing therein is identified (or threat that presents significant risk to our information systems as identified by IT) it is reported to the Cybersecurity Council by our VP of IT.
We assess and identify cybersecurity risk to such information by maintaining cybersecurity policies that require continuous monitoring and detection programs and network security precautions. Our program incorporates industry-standard frameworks, policies and practices designed to protect the privacy and security of our sensitive information.
We assess and identify cybersecurity risk to such information by maintaining cybersecurity policies that require continuous monitoring and detection programs and network security precautions. Our cybersecurity risk management program incorporates industry-standard frameworks, policies and practices designed to protect the confidentiality, integrity, and availability of our sensitive information.
With respect to third parties who provide services affecting critical business management systems, we collect and maintain SOC2 or SOC1 type II reports (attestation of controls at a service organization over a minimum six-month period). For other third-party service providers, cybersecurity risk is addressed as appropriate.
With respect to key third party service providers affecting critical business management systems, we collect and maintain SOC2 or SOC1 type II reports (attestation of controls at a service organization over a minimum six-month period) based on their respective risk profile. For other third-party service providers, cybersecurity risk is addressed as appropriate.
In addition, we periodically scan our environment for any vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our data security practices. A third party security consultant conducts regular network security reviews, scans and audits, and we may consult with other external experts as warranted by a particular cybersecurity incident or threat.
We also engage third parties to assess effectiveness of our data security practices. A third party security service provider and consultant conducts regular network security reviews, scans and audits, and we may consult with other external experts as warranted by a particular cybersecurity incident or threat. In addition, we maintain insurance that includes cybersecurity coverage.
A successful attack on our information technology systems could have significant consequences to the business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security.
Despite the implementation of our cybersecurity program, our security measures cannot guarantee that a cyberattack will not occur. A cyberattack on our information technology systems could have significant consequences to the business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security.
As of the date of this report, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations and financial condition. Despite the implementation of our cybersecurity program, our security measures cannot guarantee that a significant cyberattack will not occur.
In this way, our program to manage cybersecurity risk integrates with our overall risk management processes. As of the date of this report, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations and financial condition.
We manage cybersecurity risks by maintaining various protections designed to safeguard against cyberattacks, including firewalls and virus detection software, and periodic end user training on common cybersecurity threats (e.g. phishing exercises and interactive trainings). We have established our disaster recovery plan and we protect against business interruption by backing up our major systems.
We manage cybersecurity risks by maintaining various protections designed to safeguard against cyberattacks, including firewalls and virus detection software, and periodic training on common cybersecurity threats (e.g. phishing exercises and interactive trainings) including for incident response personnel and senior management . We have established a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents .
This specialist has extensive experience managing cybersecurity functions in his prior external roles, where he was responsible for overseeing cybersecurity strategy and operations, including incident response, threat intelligence, security awareness training programs, risk assessments and remediation, and regulatory and compliance matters.
The Company’s cybersecurity capability continues to utilize an external cybersecurity specialist with extensive experience managing cybersecurity functions, including overseeing cybersecurity strategy and operations, incident response, threat intelligence, security awareness training programs, risk assessments and remediation, and regulatory and compliance matters.
Removed
In addition, we maintain insurance that includes cybersecurity coverage. Areas of cybersecurity risk are assessed bi-annually, and updates are reported by our Chief Financial Officer to the Board’s Audit Committee and senior management annually.
Added
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we us e NIST Cybersecurity Framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Key elements of our cybersecurity risk management program include but are not limited to the following elements.
Removed
Areas of cybersecurity risk are assessed bi-annually, and updates are reported by the Chief Financial Officer to the Audit Committee and senior management annually.
Added
We have a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents.
Removed
Where our bi-annual cybersecurity risk assessment identifies areas for improvement, we document and track our remediation activities, which are also reported to the Audit Committee and senior management annually. 45 Senior management has appointed a Cybersecurity Council that is responsible for identifying, escalating, and facilitating the assessment and determination of the materiality of cybersecurity incidents and threats.
Added
In addition, we periodically conduct risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information, including scans of our environment for any vulnerabilities and penetration testing.
Removed
In December 2024, the VP IT exited the company, and IT expert advice to the Cybersecurity Council is currently provided by an external cybersecurity specialist.
Added
Further, the Audit Committee generally reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The Board of Directors also periodically receives briefings from management on our cyber risk management program.
Added
Board members receive presentations on cybersecurity topics from management, internal security staff or external experts as part of the Board of Director’s continuing education on topics that impact public companies]. 44 Senior management has appointed a Cybersecurity Council that is responsible for identifying, escalating, and facilitating the assessment and determination of the materiality of cybersecurity incidents and threats.
Added
Our IT Security team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include: briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that the facility that we currently lease in Redwood City, California is adequate for our needs for the immediate future and that, should it be needed, additional space can be leased to accommodate any future growth.
Biggest changeWe believe that the facilities that we currently lease in Redwood City and Hayward, California are adequate for our needs for the immediate future and that, should it be needed, additional space can be leased to accommodate any future growth. 45
We have one (1) option to extend the term of the lease for the Penobscot Space for five (5) years, and one (1) separate option to extend the term of the lease for the Chesapeake Space for five (5) years.
We have one option to extend the term of the lease for the Penobscot Space for five years, and one separate option to extend the term of the lease for the Chesapeake Space for five (5) years.
We entered into the initial lease with MetLife for our facilities in Redwood City in 2003 and the RWC lease has been amended multiple times since then to adjust the leased space and terms of the RWC Lease.
We entered into the initial lease with MetLife for our facilities in Redwood City in 2003 (the “RWC Lease”) and the RWC Lease has been amended multiple times since then to adjust the leased space and terms of the RWC Lease.
Added
In November 2025, we entered into a lease agreement with 30831 Huntwood Avenue LLC (“Huntwood”) for approximately 34,000 square feet of office, laboratory, research and development, and manufacturing space located at 30831 Huntwood Avenue, Hayward, California (the “Huntwood Space”). The lease term for the Huntwood Space is through the end of November 2031.
Added
We have two options to extend the term of the lease for the Huntwood Space, each allowing for an additional period of five years. We anticipate commencing occupancy of the Huntwood Space in the first quarter of 2027.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−5 removed3 unchanged
Biggest changeCDXS $ 100.00 $ 136.52 $ 195.56 $ 29.14 $ 19.07 $ 29.83 Nasdaq Composite Total Return XCMP $ 100.00 $ 144.92 $ 177.06 $ 119.45 $ 172.78 $ 223.87 Nasdaq Biotechnology (Total Return) Index XNBI $ 100.00 $ 126.42 $ 126.45 $ 113.65 $ 118.87 $ 118.20 47 Unregistered Sales of Equity Securities and Use of Proceeds During the year ended December 31, 2024, we did not issue or sell any unregistered securities not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Biggest changeUnregistered Sales of Equity Securities and Use of Proceeds During the year ended December 31, 2025, we did not issue or sell any unregistered securities not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. Issuer Purchases of Equity Securities None.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item concerning securities authorized for issuance under equity compensation plans is incorporated by reference from the information that will be set forth in the Definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual Meeting of Stockholders to be held in 2025 (the “2025 Proxy Statement ” ).
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item concerning securities authorized for issuance under equity compensation plans is incorporated by reference from the information that will be set forth in the Definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual Meeting of Stockholders to be held in 2026 (the “2026 Proxy Statement ” ).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our common stock is quoted on the Nasdaq Global Select Market (“Nasdaq ” ), under the symbol “CDXS.” As of February 24, 2025, there were approximatel y 123 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our common stock is quoted on the Nasdaq Global Select Market (“Nasdaq ” ), under the symbol “CDXS.” As of March 5, 2026, there were approximatel y 113 stockholders of record.
Removed
Stock Price Performance Graph The following tabular information and graph compare our total common stock return with the total return for (i) the Nasdaq Composite Index and (ii) the Nasdaq Biotechnology Total Return Index for the period December 31, 2019 through December 31, 2024.
Removed
The figures represented below assume an investment of $100 in our common stock at the closing price on December 31, 2019 and in the Nasdaq Composite Index and the Nasdaq Biotechnology Total Return Index on December 31, 2019 and the reinvestment of dividends into shares of common stock.
Removed
The comparisons in the table and graph are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock.
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The tabular information and graph shall not be deemed “soliciting material ” or to be “filed ” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Removed
December 31, $100 investment in stock or index Ticker 2019 2020 2021 2022 2023 2024 Codexis, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+15 added−35 removed40 unchanged
Biggest changeRESULTS OF OPERATIONS The following table shows the amounts from our consolidated statements of operations for the periods presented (in thousands, except percentages): Year Ended December 31, % of Total Revenues 2024 2023 2022 2024 2023 2022 Revenues: Product revenue $ 36,786 $ 42,906 $ 116,676 62 % 61 % 84 % Research and development revenue 22,559 27,237 21,914 38 % 39 % 16 % Total revenues 59,345 70,143 138,590 100 % 100 % 100 % Costs and operating expenses: Cost of product revenue 16,288 12,809 38,033 27 % 18 % 27 % Research and development 46,263 58,885 80,099 78 % 84 % 58 % Selling, general and administrative 55,148 53,250 52,172 93 % 76 % 38 % Restructuring charges — 3,284 3,167 — % 5 % 2 % Asset impairment and other charges 165 9,984 — — % 14 % — % Total costs and operating expenses 117,864 138,212 173,471 199 % 197 % 125 % Loss from operations (58,519) (68,069) (34,881) (99) % (97) % (25) % Interest income 3,670 4,172 1,441 6 % 6 % 1 % Interest and other expense, net (10,393) (12,274) 124 (18) % (17) % — % Loss before income taxes (65,242) (76,171) (33,316) (111) % (108) % (24) % Provision for income taxes 34 69 276 — % — % — % Net loss $ (65,276) $ (76,240) $ (33,592) (111) % (108) % (24) % Revenues Our revenues consist of product revenue and research and development revenue as follows: • Product revenue consist of sales of biocatalysts, pharmaceutical intermediates, and Codex biocatalyst panels and kits. • Research and development revenue include license, technology access and exclusivity fees, research services fees, milestone payments, royalties, optimization and screening fees.
Biggest changeThe Term Loan carries an interest-only period of 36 months (with the possibility to extend up to 48 months upon achievement of certain pre-specified financial milestones) and will bear interest at a floating rate of the sum of (a) the greater of (i) prime rate and (ii) 7.50%, plus (b) 3.25%. 49 RESULTS OF OPERATIONS The following table shows the amounts from our consolidated statements of operations for the periods presented (in thousands, except percentages): Year Ended December 31, % of Total Revenues 2025 2024 2023 2025 2024 2023 Revenues: Product revenue $ 26,028 $ 36,786 $ 42,906 37 % 62 % 61 % Research and development revenue 44,359 22,559 27,237 63 % 38 % 39 % Total revenues 70,387 59,345 70,143 100 % 100 % 100 % Costs and operating expenses: Cost of product revenue 9,338 16,288 12,809 13 % 27 % 18 % Research and development 52,307 46,263 58,885 74 % 78 % 84 % Selling, general and administrative 47,074 55,148 53,250 67 % 93 % 76 % Restructuring charges 3,407 — 3,284 5 % — % 5 % Asset impairment and other charges — 165 9,984 — % — % 14 % Total costs and operating expenses 112,126 117,864 138,212 159 % 198 % 197 % Loss from operations (41,739) (58,519) (68,069) (59) % (99) % (97) % Interest income 2,625 3,670 4,172 4 % 6 % 6 % Interest and other expense, net (4,813) (10,393) (12,274) (7) % (17) % (18) % Loss before income taxes (43,927) (65,242) (76,171) (62) % (110) % (109) % Provision for income taxes 47 34 69 — % — % — % Net loss $ (43,974) $ (65,276) $ (76,240) (62) % (110) % (109) % Revenues Our revenues consist of product revenue and research and development revenue as follows: • Product revenue consists of sales of biocatalysts used in the manufacture of small molecule active pharmaceutical intermediates, enzymes such as dsRNA ligase used in the manufacture of siRNA molecules, enzymes for the molecular biology and diagnostic markets, and Codex ™ biocatalyst panels and kits. • Research and development revenue includes license, technology access and exclusivity fees, research services fees, milestone payments, royalties, optimization and screening fees.
The Term Loan carries an interest-only period of 36 months (with the possibility to extend up to 48 months upon achievement of certain pre-specified financial milestones) and will bear interest at a floating rate of the sum of (a) the greater of (i) prime rate and (ii) 7.50%, plus (b) 3.25%.
The Term Loan carries an interest-only period of 36 months (with the possibility to extend up to 48 months upon achievement of certain pre-specified financial milestones) and will bear interest at a floating rate of the sum of (a) the greater of (i) the prime rate and (ii) 7.50%, plus (b) 3.25%.
Under the terms of the Cantor Sales Agreement, Cantor may sell the shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.
Under the terms of the Cantor Sales Agreement, Cantor may sell the shares at market prices by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act.
On May 2, 2024, we filed a registration statement on Form S-3 registering the offer and sale of these shares under the Securities Act which became effective on May 14, 2024. We will pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the Cantor Sales Agreement.
On May 2, 2024, we filed a registration statement on Form S-3 registering the offer and sale of these shares under the Securities Act which became effective on May 14, 2024. We will pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the Cantor Sales Agreement.
Liquidity We believe that our existing cash and cash equivalents, combined with our future expectations for product revenues, research and development revenue, and expense management will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirement s for at least the next 12 months.
Liquidity We believe that our existing cash and cash equivalents, combined with our future expectations for product revenues, research and development revenue, and expense management will provide adequate funds for planned ongoing operations, capital expenditures and working capital requirement s for at least the next 12 months.
If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.
If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the control of the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.
In addition to using full enzymatic sequential synthesis, adding one nucleotide at time to synthesize the two strands from beginning to end, we demonstrated synthesis of the same siRNA asset using three other routes utilizing enzymatic ligation with our double-stranded RNA (“dsRNA”) ligase, which can stitch together fragments of chemically and/or enzymatically synthesized RNA to form the full siRNA drug structure.
In addition to using full enzymatic sequential synthesis, adding one nucleotide at a time to synthesize the two strands from beginning to end, we demonstrated synthesis of the same siRNA asset using three other routes utilizing enzymatic ligation with our double-stranded RNA (“dsRNA”) ligase, which can stitch together fragments of chemically and/or enzymatically synthesized RNA to form the full siRNA drug structure.
On May 2, 2024, we entered into the Cantor Sales Agreement with Cantor, under which Cantor, at our discretion and at such times that we may determine from time to time, may sell up to a maximum of $75.0 million of shares of our common stock.
Sales Agreements On May 2, 2024, we entered into the Cantor Sales Agreement with Cantor, under which Cantor, at our discretion and at such times that we may determine from time to time, may sell up to a maximum of $75.0 million of shares of our common stock.
We determine the stand-alone selling price (“SSP”) and allocate consideration to distinct performance obligations. We measure revenue based on the consideration specified in the contract with each customer, net of any sales incentives and taxes collected on behalf of government authorities.
We determine the stand-alone selling price (“SSP”) and allocate consideration to distinct performance obligations. 55 We measure revenue based on the consideration specified in the contract with each customer, net of any sales incentives and taxes collected on behalf of government authorities.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our capital resources sooner than we expect. 56 However, we may need additional capital if our current plans and assumptions change.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our capital resources sooner than we expect. However, we may need additional capital if our current plans and assumptions change.
Recent Accounting Pronouncements See Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K for a full description of recent accounting standards, including the respective dates of adoption and effects on our consolidated financial position, results of operations and cash flows. 60
Recent Accounting Pronouncements See Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K for a full description of recent accounting standards, including the respective dates of adoption and effects on our consolidated financial position, results of operations and cash flows. 57
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, expectations regarding our strategy, business plans, financial performance and developments relating to our industry.
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, expectations regarding our strategy, business plans, financial performance and developments relating to our industry.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item IA: "Risk Factors," of this Annual Report on Form 10-K and elsewhere in this report. The forward-looking statements in this Annual Report on Form 10-K represent our views as of the date of this Annual Report on Form 10-K.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A: "Risk Factors," of this Annual Report on Form 10-K and elsewhere in this report. The forward-looking statements in this Annual Report on Form 10-K represent our views as of the date of this Annual Report on Form 10-K.
OFF-BALANCE SHEET ARRANGEMENTS As of December 31, 2024, we had no off-balance sheet arrangements as defined in Item 303 of Regulation S-K as promulgated by the SEC. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements.
OFF-BALANCE SHEET ARRANGEMENTS As of December 31, 2025, we had no off-balance sheet arrangements as defined in Item 303 of Regulation S-K as promulgated by the SEC. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements.
They can be precisely engineered and optimized for specific functions, and to have particular characteristics, such as an ability to survive environments in which natural enzymes cannot, or to perform (bio)chemical transformations different than those for which they naturally evolved.
They can be precisely engineered and optimized for specific functions, and to have particular characteristics, such as an ability to survive environments in which natural enzymes cannot, or to perform (bio)chemical transformations that are different than those for which they naturally evolved.
The Loan Agreement provides for an aggregate principal amount of up to $40.0 million and with a maturity date of February 13, 2029 (the “Innovatus Loan”). We actively manage our cash usage and investment of liquid cash to ensure the maintenance of sufficient funds to meet our working capital needs. Our cash and cash equivalents are held in U.S. banks.
The Loan Agreement, which provided for an aggregate principal amount of up to $40.0 million, has a maturity date of February 13, 2029 (the “Innovatus Loan”). We actively manage our cash usage and investment of liquid cash to ensure the maintenance of sufficient funds to meet our working capital needs. Our cash and cash equivalents are held in U.S. banks.
Asset Impairment and Other Charges Asset impairment and other charges for the year ended December 31, 2024 were $0.2 million related to a long-lived asset impairment charge in the second quarter of 2024.
Asset Impairment and Other Charges No asset impairment charges were recognized for the year ended December 31, 2025. Asset impairment and other charges for the year ended December 31, 2024 were $0.2 million related to a long-lived asset impairment charge in the second quarter of 2024.
Asset impairment and other charges for the year ended December 31, 2023 were $10.0 million, consisting o f a $ 9.2 million long-lived asset impairment charge and a $0.8 million goodwill impairment charge, all of which are non-cash charges. No asset impairment charges were recorded for the year ended December 31, 2022.
Asset impairment and other charges for the year ended December 31, 2023 were $10.0 million, consisting o f a $ 9.2 million long-lived asset impairment charge and a $0.8 million goodwill impairment charge, all of which were non-cash charges.
At the end of 2024, we completed the build-out of our ECO Synthesis Innovation Lab, a facility that uses our ECO Synthesis manufacturing platform to synthesize gram-scale quantities of a customer’s desired siRNA construct suitable for pre-clinical testing.
At the end of 2024, we completed the build out of our ECO Synthesis Innovation Lab, a facility where our ECO Synthesis manufacturing platform is deployed to synthesize gram-scale quantities of a customer’s desired siRNA construct suitable for pre-clinical testing.
The following summarizes our cash and cash equivalents and short-term investments balances and working capital as of December 31, 2024, 2023 and 2022 (in thousands): December 31, 2024 2023 2022 Cash and cash equivalents $ 19,264 $ 65,116 $ 113,984 Short-term investments $ 54,194 $ — $ — Working capital $ 75,124 $ 57,636 $ 113,828 Sources of Capital In addition to our existing cash and cash equivalents, short-term investments and revenue generated through our existing operations, we are eligible to earn milestone and other contingent payments for the achievement of defined collaboration objectives under our collaboration agreements.
The following summarizes our cash and cash equivalents and short-term investments balances and working capital as of December 31, 2025, 2024 and 2023 (in thousands): December 31, 2025 2024 2023 Cash and cash equivalents $ 50,793 $ 19,264 $ 65,116 Short-term investments $ 27,416 $ 54,194 $ — Working capital $ 71,499 $ 75,124 $ 57,636 Sources of Capital In addition to our existing cash and cash equivalents, short-term investments and revenue generated through our existing operations, we are eligible to earn milestone and other contingent payments for the achievement of defined collaboration objectives under our collaboration agreements.
In addition, pursuant to our Loan Agreement with Innovatus, an affiliate of Innovatus Capital Partners, LLC, we borrowed $30.0 million from Innovatus, as Lender, on February 13, 2024 and may become eligible to borrow up to an additional $10.0 million upon the achievement of certain financial milestones.
In addition, pursuant to our Loan Agreement with Innovatus, an affiliate of Innovatus Capital Partners, LLC, we borrowed $30.0 million from Innovatus, as Lender, on February 13, 2024 and borrowed an additional $10.0 million on June 27, 2025 upon the achievement of certain financial milestones.
We recognize revenue in a manner that best depicts the transfer of promised goods or services to the customer, when control of the product or service is transferred to a customer.
We recognize revenue in a manner that best depicts the transfer of promised goods or services to the customer, when control of the product or service is transferred to a customer. We make significant judgments when determining the appropriate timing of revenue recognition.
We make significant judgments when determining the appropriate timing of revenue recognition. 58 Product Revenue Certain of our agreements provide options to customers which they can exercise at a future date, such as the option to purchase our product during the contract duration at discounted prices and an option to extend their contract, among others.
Product Revenue Certain of our agreements provide options to customers which they can exercise at a future date, such as the option to purchase our product during the contract duration at discounted prices and an option to extend their contract, among others.
In November 2024, we presented data at the TIDES EU conference demonstrating the successful end-to-end enzymatic synthesis of an entire commercially approved siRNA therapeutic asset with the ECO Synthesis manufacturing platform.
In November 2024, we presented data at the TIDES Europe conference demonstrating the successful end-to-end enzymatic synthesis of an entire commercially approved small interfering ribonucleic acid (“siRNA”) therapeutic asset with the ECO Synthesis manufacturing platform.
During the year ended December 31, 2024, 10,440,000 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement and we received gross proceeds of $31.3 million , or $29.7 million in net proceeds after Cantor’s commissions and direct offering expenses of $1.6 million .
In 2024, 10,440,000 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement and we received net proceeds of $29.7 million after Cantor’s commissions and direct offering expenses.
Research and Development Expenses Research and development expenses consist of costs incurred for internal projects as well as collaborative research and development activities. These costs primarily consist of (i) employee-related costs, which include salaries and other personnel-related expenses (including stock-based compensation), (ii) various allocable expenses, which include occupancy-related costs, supplies, depreciation of facilities and laboratory equipment, and (iii) external costs.
These costs primarily consist of (i) employee-related costs, which include salaries and other personnel-related expenses (including stock-based compensation), (ii) various allocable expenses, which include occupancy-related costs, supplies, depreciation of facilities and laboratory equipment, and (iii) external costs. Research and development expenses are expensed when incurred.
Restructuring Charges Restructuring charges consist of employee severance and other termination benefits due to workforce reduction plans that were initiated in the prior years. There were no restructuring charges recognized for the year ended December 31, 2024. Restructuring charges were $3.3 million and $3.2 million for the years ended December 31, 2023, and 2022, respectively.
Restructuring Charges Restructuring charges consist of employee severance and other termination benefits due to workforce reduction plans that were initiated in the fourth quarter of 2025 and in the third quarter of 2023. There were no restructuring charges recognized for the year ended December 31, 2024. Restructuring charges were $3.4 million in 2025 and $3.3 million in 2023.
Considering these industry practices and our experience, we do not believe the total of customer purchase orders outstanding (backlog) provides meaningful information that can be relied on to predict actual sales for future periods. 2024 compared to 2023 Total revenues decreased by $10.8 million in 2024 to $59.3 million, as compared to 2023.
Considering these industry practices and our experience, we do not believe the total of customer purchase orders outstanding (backlog) provides meaningful information that can be relied on to predict actual sales for future periods. 50 2025 compared to 2024 Total revenues increased by $11.0 million in 2025 to $70.4 million, as compared to 2024.
In May 2021, we entered into an Equity Distribution Agreement (“EDA”) with Piper Sandler & Co (“PSC”), under which PSC, as our exclusive agent, at our discretion and at such times that we determined from time to time, may have sold over a three-year period from the execution of the EDA up to a maximum of $50.0 million of shares of our common stock.
(“PSC”), under which PSC, as our exclusive agent, at our discretion and at such times that we determined from time to time, may have sold over a three-year period from the execution of the EDA up to a maximum of $50.0 million of shares of our common stock.
(2) Product gross margin is used as a performance measure to provide additional information regarding our results of operations on a consolidated basis. 2024 compared to 2023 Cost of product revenue increased by $3.5 million in 2024 to $16.3 million, as compared to 2023.
(2) Product gross margin is used as a performance measure to provide additional information regarding our results of operations on a consolidated basis. Cost of product revenue decreased by $7.0 million in 2025 to $9.3 million, as compared to 2024. Product gross margins increased to 64% in 2025 as compared to 56% in 2024.
As of December 31, 2024, $43.7 million of shares remained available for sale under the Cantor Sales Agreement.
As of December 31, 2025, $26.4 million of shares remained available for sale under the Cantor Sales Agreement.
During the year ended December 31, 2024 , 10,440,000 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement and we received gross proceeds of $31.3 million , or $29.7 million in net proceeds after Cantor’s commissions and direct offering expenses of $1.6 million .
In 2024, 10,440,000 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement, all during the third quarter of 2024, and we received net proceeds of $29.7 million a fter Cantor’s commissions and direct offering expenses.
Costs and Operating Expenses (in thousands, except percentages): Change Year Ended December 31, 2024 2023 2024 2023 2022 $ % $ % Cost of product revenue $ 16,288 $ 12,809 $ 38,033 $ 3,479 27 % $ (25,224) (66) % Research and development 46,263 58,885 80,099 (12,622) (21) % (21,214) (26) % Selling, general and administrative 55,148 53,250 52,172 1,898 4 % 1,078 2 % Restructuring charges — 3,284 3,167 (3,284) (100) % 117 4 % Asset impairment and other charges 165 9,984 — (9,819) (98) % 9,984 100 % Total costs and operating expenses $ 117,864 $ 138,212 $ 173,471 $ (20,348) (15) % $ (35,259) (20) % 52 Costs of Product Revenue and Product Gross Margin The following table shows the amounts of our product revenue, cost of product revenue, product gross profit and product gross margin from our consolidated statements of operations (in thousands, except percentages): Year Ended December 31, Change Year Ended December 31, Change 2024 2023 $ % 2023 2022 $ % Product revenue $ 36,786 $ 42,906 $ (6,120) (14) % $ 42,906 $ 116,676 $ (73,770) (63) % Cost of product revenue (1) 16,288 12,809 3,479 27 % 12,809 38,033 (25,224) (66) % Product gross profit $ 20,498 $ 30,097 $ (9,599) (32) % $ 30,097 $ 78,643 $ (48,546) (62) % Product gross margin (%) (2) 56 % 70 % 70 % 67 % (1) Cost of product revenue comprises both internal and third-party fixed and variable costs, including materials and supplies, labor, facilities and other overhead costs associated with our product revenue.
Costs and Operating Expenses (in thousands, except percentages): Change Year Ended December 31, 2025 2024 2025 2024 2023 $ % $ % Cost of product revenue $ 9,338 $ 16,288 $ 12,809 $ (6,950) (43) % $ 3,479 27 % Research and development 52,307 46,263 58,885 6,044 13 % (12,622) (21) % Selling, general and administrative 47,074 55,148 53,250 (8,074) (15) % 1,898 4 % Restructuring charges 3,407 — 3,284 3,407 100 % (3,284) (100) % Asset impairment and other charges — 165 9,984 (165) (100) % (9,819) (98) % Total costs and operating expenses $ 112,126 $ 117,864 $ 138,212 $ (5,738) (5) % $ (20,348) (15) % Costs of Product Revenue and Product Gross Margin The following table shows the amounts of our product revenue, cost of product revenue, product gross profit and product gross margin from our consolidated statements of operations (in thousands, except percentages): Year Ended December 31, Change Year Ended December 31, Change 2025 2024 $ % 2024 2023 $ % Product revenue $ 26,028 $ 36,786 $ (10,758) (29) % $ 36,786 $ 42,906 $ (6,120) (14) % Cost of product revenue (1) 9,338 16,288 (6,950) (43) % 16,288 12,809 3,479 27 % Product gross profit $ 16,690 $ 20,498 $ (3,808) (19) % $ 20,498 $ 30,097 $ (9,599) (32) % Product gross margin (%) (2) 64 % 56 % 56 % 70 % (1) Cost of product revenue comprises both internal and third-party fixed and variable costs, including materials and supplies, labor, facilities and other overhead costs associated with our product revenue.
Revenues are as follows (in thousands, except percentages): Change Year Ended December 31, 2024 2023 2024 2023 2022 $ % $ % Product revenue $ 36,786 $ 42,906 $ 116,676 $ (6,120) (14) % $ (73,770) (63) % Research and development revenue 22,559 27,237 21,914 (4,678) (17) % 5,323 24 % Total revenues $ 59,345 $ 70,143 $ 138,590 $ (10,798) (15) % $ (68,447) (49) % Revenues typically fluctuate on a quarterly basis due to the variability in our customers' manufacturing schedules and the timing of our customers' clinical trials.
Revenues are as follows (in thousands, except percentages): Change Year Ended December 31, 2025 2024 2025 2024 2023 $ % $ % Product revenue $ 26,028 $ 36,786 $ 42,906 $ (10,758) (29) % $ (6,120) (14) % Research and development revenue 44,359 22,559 27,237 21,800 97 % (4,678) (17) % Total revenues $ 70,387 $ 59,345 $ 70,143 $ 11,042 19 % $ (10,798) (15) % Revenues typically fluctuate on a quarterly basis due to the variability in our customers’ manufacturing schedules and the timing of our customers’ clinical trials.
You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report on Form 10-K.
You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report on Form 10-K. Business Overview We are a leading provider of technology solutions to improve therapeutics manufacturing.
On February 27, 2023, we filed a post-effective amendment to that Registration Statement on Form S-3. Pursuant to that post-effective amendment, we registered an aggregate $200.0 million of securities.
On February 27, 2023, we filed a post-effective amendment to that Registration Statement on Form S-3. Pursuant to that post-effective amendment, we registered an aggregate $200.0 million of securities. In May 2021, we entered into an Equity Distribution Agreement (“EDA”) with Piper Sandler & Co.
Interest Income and Interest and Other Expense, net (in thousands, except percentages): Change Year Ended December 31, 2024 2023 2024 2023 2022 $ % $ % Interest income $ 3,670 $ 4,172 $ 1,441 $ (502) (12) % $ 2,731 190 % Interest and other expense, net (10,393) (12,274) 124 1,881 (15) % (12,398) (9,998) % Total other income (expense), net $ (6,723) $ (8,102) $ 1,565 $ 1,379 (17) % $ (9,667) (618) % Interest Income Interest income decreased by $0.5 million in 2024 compared to 2023, primarily due to lower average cash balances.
Interest Income and Interest and Other Expense, net (in thousands, except percentages): Change Year Ended December 31, 2025 2024 2025 2024 2023 $ % $ % Interest income $ 2,625 $ 3,670 $ 4,172 $ (1,045) (28) % $ (502) (12) % Interest and other expense, net (4,813) (10,393) (12,274) (5,580) (54) % 1,881 (15) % Total other income (expense), net $ (2,188) $ (6,723) $ (8,102) $ 4,535 (67) % $ 1,379 (17) % Interest Income Interest income decreased by $1.0 million in 2025 compared to 2024, primarily due to lower average cash, cash equivalents and short-term investments balances.
The decrease was driven by lower product revenue and lower research and development revenue as compared to the prior year. Product revenue was $36.8 million in 2024, a decrease of 14% compared with $42.9 million in 2023.
The increase was primarily driven by higher research and development revenue as compared to the prior year. Product revenue was $26.0 million in 2025, a decrease of 29% compared with $36.8 million in 2024.
For the three other routes, our data highlighted that full-length oligos of equal quality and yields were obtained whether the fragments were made with enzymes or by traditional phosphoramidite chemistry.
For the three other routes, our data highlighted that full-length oligonucleotides of equal quality and yields were obtained whether the fragments were made with enzymes or by traditional solid phase oligonucleotide synthesis (“SPOS”) (current standard production route for oligonucleotide manufacturing).
Our primary source of cash flows from operating activities is cash receipts from our customers for purchases of products, collaborative research and development services, and licensing our technology to major pharmaceutical companies. Our largest uses of cash from operating activities are for employee-related expenditures, rent payments, inventory purchases to support our product sales and non-payroll research and development costs.
Our primary source of cash flows from operating activities is cash receipts from our customers for purchases of products, collaborative research and development services, and licensing our technology to major pharmaceutical companies.
For license agreements that include sales or usage-based royalty payments to us for which the license is the predominant item to which the royalty relates, we do not recognize revenue until the underlying sales of the product or usage has occurred. At the end of each reporting period, we estimate the royalty amount.
We will recognize revenues for the functional license at a point in time when the control of the license transfers to the customer. 56 For license agreements that include sales or usage-based royalty payments to us for which the license is the predominant item to which the royalty relates, we do not recognize revenue until the underlying sales of the product or usage has occurred.
The provision for income taxes in 2023 was primarily for fiscal year 2023 state income taxes and the accrual of interest and penalties on historic uncertain tax positions.
The provision for income taxes in 2023 was primarily for fiscal year 2023 state income taxes and the accrual of interest and penalties on historic uncertain tax positions. Net Loss Net loss for 2025 was $44.0 million , or a net loss per basic and diluted share of $0.50.
We focus on leveraging our technology and capacity to enhance the properties and performance of enzymes to drive pivotal improvements in manufacturing of complex therapeutics across two key focus areas: our foundational, revenue-generating pharma biocatalysis business and our Enzyme-Catalyzed Oligonucleotide (ECO) Synthesis (“ECO Synthesis”) manufacturing platform, which is comprised of enzymatic tools and processes, designed to enable large-scale manufacture of RNA interference ( “ RNAi ” ) therapeutics.
We employ our technology and expertise to enhance the properties and performance of enzymes to drive pivotal improvements in manufacturing of complex therapeutics across two key areas: ECO Synthesis manufacturing platform Our ECO Synthesis ® manufacturing platform is comprised of enzymatic tools and processes that are designed to enable large-scale manufacture of RNA interference (“RNAi”) therapeutics.
Our ability to earn these milestone and contingent payments and the timing of achieving these milestones is primarily dependent upon the outcome of our collaborators’ research and development activities and is uncertain at this time . 55 We have historically experienced negative cash flows from operations as we continue to invest in key technology development projects and improvements to our CodeEvolver technology platform, develop and commercialize new and existing products including our ECO Synthesis manufacturing platform and expand our business development and collaboration with new customers.
We have historically experienced negative cash flows from operations as we continue to invest in key technology development projects and improvements to our CodeEvolver technology platform, develop and commercialize new and existing products including our ECO Synthesis manufacturing platform and expand our business development and collaboration with new customers.
LIQUIDITY AND CAPITAL RESOURCES Liquidity is the measurement of our ability to meet working capital needs and to fund capital expenditures. We have historically funded our operations primarily through cash generated from operations, stock option exercises and public and private offerings of our common stock.
We have historically funded our operations primarily through cash generated from operations, stock option exercises and public and private offerings of our common stock.
This increase was primarily due to $3.6 million in higher payroll-based expenses, $0.6 million in higher legal expense, $0.4 million in higher repairs and maintenance expense, and $0.3 million in higher consulting and outside services. This was partially offset by $3.2 million in lower stock-based compensation expense and $0.4 million in lower allocable expenses.
This decrease was primarily due to $2.7 million in lower stock-based compensation expense, $1.8 million in lower consulting and outside services, $2.6 million in lower legal fees, $1.5 million in lower allocable expenses and $0.6 million decrease in employee-related costs. This was partially offset by $1.1 million increase in lease and facilities associated costs.
In o ur revenue-generating pharma biocatalysis business (formerly our pharmaceuticals manufacturing business), we utilize our CodeEvolver technology platform to develop optimized enzymes that are used by some of the world’s largest pharmaceutical companies to improve the efficiency and productivity of their manufacturing processes for small molecule therapeutics.
We expect to expand our enzymatic tools and process offerings as we further enhance the ECO Synthesis platform to address the overall market needs for scalable and sustainable RNAi manufacturing. 48 Small molecule pharma biocatalysis In our small molecule pharma biocatalysis business, we utilize our CodeEvolver technology platform to develop optimized enzymes that are used by some of the world’s largest pharmaceutical companies to improve the efficiency and productivity of their manufacturing processes for small molecule therapeutics.
Net Loss Net loss for 2024 was $65.3 million, or a net loss per basic and diluted share of $0.89. This compared to a net loss of $76.2 million, or $1.12 per basic and diluted share, for 2023. The decrease in net loss was primarily related to lower operating expenses in 2024.
This compared to a net loss of $65.3 million , or $0.89 per basic and diluted share, for 2024. The decrease in net loss was primarily related to higher revenues and lower costs and operating expenses in 2025. LIQUIDITY AND CAPITAL RESOURCES Liquidity is the measurement of our ability to meet working capital needs and to fund capital expenditures.
Cash Flows from Investing Activities The $52.1 million increase in net cash used in investing activities in 2024 as compared to 2023 was primarily due to higher cash utilized for purchases of short-term investments, partially offset by lower purchases of property and equipment in the current year.
Cash Flows from Investing Activities The $80.5 million decrease in net cash used in investing activities in 2025 as compared to 2024 was primarily due to the net effect of higher proceeds from the maturity of short-term investments and lower cash utilized for purchase of short-term investments.
Business Overview We are a leading provider of enzymatic solutions for efficient and scalable therapeutics manufacturing, and we leverage our proprietary CodeEvolver directed evolution technology platform to discover, develop, enhance, and commercialize novel, high-performance enzymes and other classes of proteins. Enzymes are naturally occurring biological molecules critical to almost all biochemical reactions that sustain life.
We focus on impacting the manufacturing process by using o ur proprietary CodeEvolver directed evolution technology platform to discover, develop, enhance, and commercialize novel, high-performance enzymes and other classes of proteins. Enzymes are naturally occurring biological molecules critical to almost all biochemical reactions.
These were partially offset by $1.7 million in higher allocable costs. 53 Selling, General and Administrative Expenses Selling, general and administrative expenses consist of employee-related costs, which include salaries and other personnel-related expenses (including stock-based compensation), hiring and training costs, consulting and outside services expenses (including audit and legal counsel related costs), marketing costs, building lease costs, and depreciation expenses and amortization expenses. 2024 compared to 2023 Selling, general and administrative expenses were $55.1 million in 2024 compared to $53.3 million in 2023, an increase of $1.9 million, or 4%.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist of employee-related costs, which include salaries and other personnel-related expenses (including stock-based compensation), hiring and training costs, consulting and outside services expenses (including audit and legal counsel-related costs), marketing costs, various allocable expenses, which include occupancy-related costs, depreciation expenses and amortization expenses.
Our unique enzymes drive improvements such as higher yields, increased purity, reduced energy usage and waste generation, all of which lead to improved efficiency and reduced costs in small-molecule manufacturing. 49 We also use the CodeEvolver platform technology to develop enzymes for the synthesis of RNAi therapeutics through our ECO Synthesis manufacturing platform, where our enzymes are poised to deliver many of the same benefits we offer in pharma biocatalysis across purity, yield, and improved manufacturing efficiency.
Our unique enzymes drive improvements such as higher yields, increased purity, reduced energy usage and waste generation, all of which lead to improved efficiency and reduced costs in small-molecule manufacturing.
The $8.7 million decrease in net cash used in investing activities in 2023 as compared to 2022 was primarily due to higher cash utilized for additional investments in equity securities and purchases of property and equipment in the prior year. 57 Cash Flows from Financing Activities The $52.4 million increase in net cash provided by financing activities in 2024 as compared to 2023 was primarily due to proceeds from the Innovatus Loan in February 2024 and proceeds from issuance of common stock under the Cantor Sales Agreement in the third quarter of 2024, partially offset by proceeds from issuance of common stock under the EDA during the first half of 2023.
Cash Flows from Financing Activities The $32.6 million decrease in net cash provided by financing activities in 2025 as compared to 2024, was primarily due to the $29.5 million proceeds from the first tranche of the Innovatus Loan in February 2024 and higher proceeds from issuance of common stock under the Cantor Sales Agreement in 2024, partially offset by the proceeds from the funding of the second tranche of the Innovatus Loan in June 2025.
Loan Agreement and Term Loans On February 13, 2024, we entered into the Loan Agreement with Innovatus consisting of up to two tranches, of which the first tranche of $30.0 million was disbursed upon execution of the Loan Agreement.
On February 13, 2024, we entered into a five-year term loan and security agreement (the “Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), an affiliate of Innovatus Capital Partners, LLC, as Lender, consisting of up to two tranches, of which the first tranche of $30.0 million was disbursed upon execution of the Loan Agreement and the second tranche of $10.0 million was funded on June 27, 2025 upon achievement of certain financial milestones.
(“Roche”) entered into in February 2024, recognition of $9.5 million revenue related to a license agreement with Pfizer entered into in December 2024, and $1.9 million higher revenue from existing collaboration agreements. 2023 compared to 2022 Total revenues decreased by $68.4 million in 2023 to $70.1 million, as compared to 2022.
(“Roche”) entered into in February 2024, and $9.5 million of revenue related to a license agreement with Pfizer Inc.
Interest and other expense, net, increased by $12.4 million in 2023 compared to 2022, primarily due to impairment of our investments in MAI, seqWell and Arzeda. 54 Provision for Income Taxes (in thousands, except percentages): Change Year Ended December 31, 2024 2023 2024 2023 2022 $ % $ % Provision for income taxes $ 34 $ 69 $ 276 $ (35) (51) % $ (207) (75) % The provision for income taxes in 2024 was primarily due to the accrual of interest and penalties on historic uncertain tax positions.
This decrease was partially offset by higher interest related to the long-term debt due to the funding of the second tranche of the Innovatus Loan in June 2025. 52 Provision for Income Taxes (in thousands, except percentages): Change Year Ended December 31, 2025 2024 2025 2024 2023 $ % $ % Provision for income taxes $ 47 $ 34 $ 69 $ 13 38 % $ (35) (51) % The provision for income taxes in 2025 and 2024 was primarily due to the accrual of interest and penalties on historic uncertain tax positions.
Cash Flows The following is a summary of cash flows for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ (49,410) $ (52,638) $ 11,284 Net cash used in investing activities (56,980) (4,858) (13,578) Net cash provided by (used in) financing activities 60,522 8,167 (575) Net decrease in cash, cash equivalents and restricted cash $ (45,868) $ (49,329) $ (2,869) Cash Flows from Operating Activities The $3.2 million decrease in net cash used in operating activities in 2024 as compared to 2023 was primarily due to the net effect of decreases in cash paid from operating expenses, primarily driven by the restructuring of our business in 2023 which included the assignment of our previous San Carlos facility lease in the fourth quarter of 2023, and changes in operating assets and liabilities.
If adequate funds are not available, we will not be able to successfully execute our business plan or continue our business. 54 Cash Flows The following is a summary of cash flows for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Net cash used in operating activities $ (19,376) $ (49,410) $ (52,638) Net cash provided by (used in) investing activities 23,502 (56,980) (4,858) Net cash provided by financing activities 27,928 60,522 8,167 Net increase (decrease) in cash, cash equivalents and restricted cash $ 32,054 $ (45,868) $ (49,329) Cash Flows from Operating Activities The $30.0 million decrease in net cash used in operating activities in 2025 as compared to 2024 was primarily due to the receipt of a $37.8 million fee from Merck in the fourth quarter of 2025, which was partially offset by increased payments associated with higher operating costs and reduction in force.
However, some of our purchase orders can be revised or cancelled by the customer without penalty.
We accept purchase orders for deliveries covering periods from one day up to 14 months from the date on which the order is placed. However, some of our purchase orders can be revised or cancelled by the customer without penalty.
Ltd. under a Strategic Collaboration and License Agreement, and $4.3 million lower revenue from other legacy collaboration agreements. This decrease was offset by $6.0 million higher revenue from our licensing agreement with Roche Sequencing Solutions, Inc.
The increase was primarily due to $34.0 million higher revenue from our licensing agreements with Merck entered into during the second and fourth quarters of 2025, and $3.3 million higher revenue from existing and legacy collaboration agreements. This increase was partially offset by the non-recurrence of $6.0 million revenue from our licensing agreement with Roche Sequencing Solutions, Inc.
In 2025, we expect to manufacture good laboratory practice (“GLP”)-grade siRNA for customers in our Innovation Lab under development services contracts model, and we anticipate entering a partnership with a large-scale contract development and manufacturing organization (“CDMO”) to use our ECO Synthesis platform of enzymatic tools and processes to synthesize good manufacturing practices ( “ GMP ” ) -grade siRNA drug substance for our customers.
We also entered into partnerships with three large-scale contract development and manufacturing organizations (“CDMOs”) to evaluate our ECO platform of enzymatic tools and processes to ultimately synthesize GMP -grade siRNA drug substance for our customers.
This was partially offset by a $1.9 million in lower payroll-based expenses and $0.7 million in lower allocable expenses. 2023 compared to 2022 Selling, general and administrative expenses were $53.3 million in 2023 compared to $52.2 million in 2022, an increase of $1.1 million, or 2%.
Research and development expenses were $52.3 million in 2025 compared to $46.3 million in 2024, an increase of $6.0 million, or 13%. This increase was primarily due to a $2.3 million increase in employee-related costs, $1.4 million in higher lab supplies, $3.7 million in higher allocable costs and $0.2 million in higher depreciation expenses .
As a result, we are dependent upon the performance and capacity of third party manufacturers for the commercial scale manufacturing of the enzymes used in our pharmaceutical and fine chemicals business. 51 We accept purchase orders for deliveries covering periods from one day up to 14 months from the date on which the order is placed.
In addition, we have limited internal capacity to manufacture enzymes. As a result, we are dependent upon the performance and capacity of third-party manufacturers for the commercial scale manufacturing of the enzymes used in our pharma biocatalysis, ECO and molecular biology and diagnostics enzymes businesses .
Interest income increased by $2.7 million in 2023 compared to 2022, primarily due to higher average interest rates on cash balances. Interest and Other Expense, net Interest and other expense, net, decreased by $1.9 million in 2024 compared to 2023, primarily due to the higher impairment charges recognized in 2023 related to our investments in Molecular Assemblies, Inc.
Interest and Other Expense, net Interest and other expense, net, decreased by $5.6 million in 2025 compared to 2024, primarily due to the $6.9 million impairment of our investments in Molecular Assemblies, Inc. (“MAI”) and seqWell Inc. (“seqWell”) during the third and fourth quarter of 2024 that did not reoccur in the current year.
We recognize revenue at the later of (i) when the related sale of the product occurs, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied, or partially satisfied. 59 Investment in Non-Marketable Securities Investment in Non-Marketable Equity Securities We measure investments in non-marketable equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis.
At the end of each reporting period, we estimate the royalty amount. We recognize revenue at the later of (i) when the related sale of the product occurs, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied, or partially satisfied.
We will be eligible to draw on the second tranche of $10.0 million upon achievement of certain milestones including certain pre-specified revenue thresholds and subject to payment of a facility fee equal to 1.00% of the amount of such term loan.
Both tranches were subject to payment of a facility fee equal to 1.00% of the amount of such term loan.
This decrease was primarily due to a $4.4 million decrease from lower use of outside services related to Chemistry, Manufacturing and Controls procedures (“CMC”) and lower regulatory expense, $4.3 million decrease in costs associated with lower headcount, $3.8 million decrease from lower lease and facilities costs due to the assignment of our San Carlos facility lease during the fourth quarter of 2023, and $0.3 million in lower depreciation expenses.
These were partially offset by a $1.3 million decrease from lower use of outside services related to Chemistry, Manufacturing and Controls procedures (“CMC”) and $0.7 million in lower stock-based compensation expense.
In 2023, 3,079,421 shares of our common stock were issued and sold pursuant to the EDA, all during the first half of 2023, and we received net proceeds of $7.9 million. On April 24, 2024, we terminated the EDA.
During the year ended December 31, 2025 , 7,244,966 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement, all during the second quarter of 2025, and we received gross proceeds of $17.3 million , or $16.4 million in net proceeds after Cantor’s commissions and direct offering expenses of $0.8 million .
As of December 31, 2024, $43.7 million remained available for sale under the Cantor Sales Agreement. 50 On February 13, 2024, we entered into the Loan Agreement with Innovatus consisting of up to two tranches, of which the first tranche of $30.0 million was disbursed upon execution of the Loan Agreement.
Our largest uses of cash from operating activities are for employee-related expenditures, rent payments, inventory purchases to support our product sales and non-payroll research and development costs. 53 Loan Agreement and Term Loans On February 13, 2024, we entered into the Loan Agreement with Innovatus consisting of up to two tranches, of which the first tranche of $30.0 million was disbursed upon execution of the Loan Agreement and the second tranche of $10.0 million was funded in June 2025 upon achievement of certain milestones including certain pre-specified revenue thresholds.
Removed
In July 2023, we announced that we discontinued investment in certain development programs, primarily in our novel biotherapeutics business segment. As part of this strategic prioritization, during 2024, we completed the divestiture and monetization of certain biotherapeutics assets as well as certain non-core life science assets, including in genomics and next generation sequencing applications.
Added
We use the CodeEvolver platform technology to develop enzymes for the synthesis of RNAi therapeutics in production processes that deliver improvements, including purity, yield, and manufacturing efficiency.
Removed
We expect to expand our enzymatic tools and process offering as further enhance the ECO Synthesis manufacturing platform to address the overall market needs for scalable and sustainable RNAi manufacturing.
Added
In addition, the infrastructure allows us to provide process development, analytical method development and other manufacturing process optimization which is required to enable the siRNA to proceed to clinical-stage manufacturing and testing. In 2025, we successfully manufactured non- good manufacturing practice (“GMP”)-grade siRNA drug substance for customers in our Innovation Lab under development services contracts.
Removed
Recent Developments Finalized Acquisition and License Agreement for certain non-core Life Sciences assets In line with our strategy relating to non-core Life Sciences assets, in January 2025 we sold assets that were developed under the seqWell Agreement to seqWell in exchange for the right to receive a cash payment upon future events and a warrant to purchase seqWell’s common stock exercisable upon future events, and terminated the seqWell Agreement.
Added
In each of these agreements, we are currently in the feasibility testing stage and expect to advance at least one of these partnerships, including initiating a technology transfer to that organization, in 2026. We believe these relationships to be a vital extension of our strategy to be a technology solutions provider for our customers.
Removed
Strengthened Board of Directors with new appointments We announced the appointment of Raymond De Vré , PhD, to our Board of Directors on November 12, 2024, followed by the appointment of Christos Richards on January 16, 2025.
Added
Through these arrangements, our customers will have access to proven, large-scale commercial manufacturers who are familiar with our process, who can then offer a seamless manufacturing scale-up of our customers’ products.
Removed
In addition, we have limited internal capacity to manufacture enzymes.
Added
During the year ended December 31, 2025, 7,244,966 shares of our common stock were issued and sold pursuant to the Cantor Sales Agreement, all during the second quarter of 2025, and we received net proceeds of $16.4 million after Cantor’s commissions and direct offering expenses.
Removed
The decrease in product revenue was primarily due to one-time revenue recognition of $8.2 million in 2023 related to Pfizer's fee previously received under the Enzyme Supply Agreement with Pfizer Ireland Pharmaceuticals, a subsidiary of Pfizer, Inc., a $2.9 million decrease due to the early termination of an enzyme supply agreement with a customer in 2023, and the one-time recognition of a $1.3 million settlement fee in 2023 under the same enzyme supply agreement.
Added
As of December 31, 2025, $26.4 million remained available for sale under the Cantor Sales Agreement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, the effect of a hypothetical 10% unfavorable change in exchange rates on currencies denominated in other than their functional currency would result in a potential loss in future earnings in our consolidated statement of operations and a reduction in the fair value of the assets of approximately $40 thousand.
Biggest changeAs of December 31, 2025, the effect of a hypothetical 10% unfavorable change in exchange rates on currencies denominated in other than their functional currency is minimal. 58
An immediate 10% change in the prime interest rate would result in a $0.2 million impact on our results of operations over the next twelve months from December 31, 2024. Foreign Currency Risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
An immediate 10% change in the prime interest rate would result in a $0.3 million impact on our results of operations over the next twelve months from December 31, 2025. Foreign Currency Risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
We do not enter into investments for trading or speculative purposes. As of December 31, 2024, the effect of a hypothetical 10% decrease in market interest rates would have an $0.3 million impact on a potential loss in future interest income and cash flows.
We do not enter into investments for trading or speculative purposes. As of December 31, 2025, the effect of a hypothetical 10% decrease in market interest rates would have a $0.2 million impact on a potential loss in future interest income and cash flows.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity Our unrestricted cash, cash equivalents, and short-term investments in marketable securities tot al $73.5 million as of December 31, 2024. We primarily invest these amounts in money market funds and short-term debt which are held for working capital purposes.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity Our unrestricted cash, cash equivalents, and short-term investments in marketable securities tot al $78.2 million as of December 31, 2025. We primarily invest these amounts in money market funds and short-term debt which are held for working capital purposes.
We are also exposed to market risk from changes in interest rates as a result of our indebtedness under the Innovatus Loan. At December 31, 2024, we had $30.0 million principal amount outstanding under the Innovatus Loan.
We are also exposed to market risk from changes in interest rates as a result of our indebtedness under the Innovatus Loan. At December 31, 2025, we had $41.2 million principal amount outstanding under the Innovatus Loan.
Removed
Investment in Non-Marketable Equity Securities We own investments in non-marketable equity securities without readily determinable fair values. We may value these equity securities based on significant recent arms-length equity transactions with sophisticated non-strategic unrelated investors, providing the terms of these security transactions are substantially similar to the security transactions terms between the investors and us.
Removed
The impact of the difference in transaction terms on the market value of the portfolio company may be difficult or impossible to quantify. 61

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