Codexis (CDXS) Q3 2026 Earnings Call Transcript

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DATE

Nov. 12, 2026

CALL PARTICIPANTS

• Chief Financial Officer and Chief Business Officer - Georgia Erbez
• President and Chief Executive Officer - Alison Moore
• Chief Scientific Officer - Stefan Lutz
• Senior Vice President, Sales and Marketing - Britton Jimenez

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TAKEAWAYS

• Total Revenue -- $19.3 million, representing an increase from $8.6 million in the prior-year period driven by higher product sales.
• Product Revenue -- $15.7 million, reflecting the launch of new customer products with higher margins compared to established products.
• Net Loss -- $8.1 million, narrowing from a net loss of $19.6 million in the third quarter of 2025.
• Net Loss Per Share -- $0.08 per share, compared to a net loss of $0.22 per share in the same period last year.
• Product Gross Margin -- 74.5%, improving from 64% in the prior-year period due to a shift in sales toward more profitable products.
• Cash and Short-term Investments -- $72.7 million as of Sept. 30, 2026, compared to $78.2 million at the end of 2025.
• Equity Financing -- $25 million in net proceeds, raised through an offering completed in July 2026 to strengthen the balance sheet.
• Debt Refinancing -- $60 million term loan facility, including an initial $42.5 million drawdown used to replace $42 million in existing debt.
• Revenue Guidance -- $72 million to $76 million for the full year 2026, which the company reiterated.
• Gross Margin Guidance -- low 70% range for the full year 2026, an update from previous estimates due to sustained performance.
• Cash Runway -- through the end of 2028, according to management's projections for planned operations and capital expenditures.
• Product Sales Growth -- 78.5% for the first nine months of 2026, driven by the proprietary enzyme CDX-049.
• ECO Synthesis Scale -- 100-gram production reached, demonstrating a strong predictive relationship between process and product performance across scales.
• Process Efficiency -- 40% reduction in cycle times achieved during process optimization toward kilo-scale readiness.
• Potency Improvement -- threefold to fourfold increase in potency for stereo-defined siRNA compared to stereo-random controls.
• Biocatalysis Pipeline -- 12 programs in Phase II or III clinical development, providing potential diversification to the top line.
• Clinical Readouts -- data readouts for seven clinical trials expected over the next two years.
• R&D Expense -- $12.6 million, down from $13.9 million due to lower employee-related costs and reduced spending on outside services.
• SG&A Expense -- $10.1 million, down from $11.2 million reflecting lower headcount and reduced stock-based compensation.
• 2026 Drug Approvals -- three drugs utilizing company enzymes received approval this year, including two potential blockbuster products.

SUMMARY

Codexis, Inc. (NASDAQ:CDXS) reported third quarter results highlighting the technical advancement of its enzymatic manufacturing platform and a strengthened financial position following capital raising activities. Management reported that the company achieved 100-gram production scale for its ECO Synthesis platform while maintaining product quality that exceeds industry expectations. The company stated that the biocatalysis business returned to growth, supported by new product approvals and increased gross margins. Strategic focus remains on industrializing the enzymatic production of oligonucleotide medicines to address capacity and purity limitations in traditional manufacturing methods. Management indicated that recent evaluations with drug innovators and contract manufacturers provide a pipeline for potential licensing deals in 2027.

• CEO Moore reported on a successful September meeting with the FDA Emerging Technologies team to discuss specifications and comparability arguments for the ECO Synthesis platform.
• Britton Jimenez noted, "This will be Codexis' first technology transfer of ECO Synthesis into an innovator's pilot scale manufacturing environment," regarding a new evaluation agreement with a leading biopharmaceutical company.
• Jimenez stated, "One of these new parties is a major manufacturer who is seeking a capital-efficient way to reenter the oligonucleotide manufacturing space," referring to new CDMO engagements.
• Stefan Lutz stated, "Greater potency can translate into meaningful therapeutic and economic benefits, including the potential for lower doses, reduced manufacturing requirements and costs, less frequent administration and potentially additional routes of administration."
• CEO Moore stated, "In the coming months, we will be moving toward 500-gram production scale, advancing the ECO Synthesis raw material supply chain, and we will begin construction on our GMP production facility."
• The company reported that its ECO Synthesis platform can now efficiently incorporate tissue-targeting molecules at the end of therapeutic oligonucleotides within a standard workflow.

INDUSTRY GLOSSARY

• ECO Synthesis: A proprietary aqueous enzymatic process for manufacturing oligonucleotides as an alternative to traditional chemical methods.
• Oligonucleotide: Short DNA or RNA molecules used in various therapeutic applications, including gene silencing.
• siRNA (Small Interfering RNA): A class of double-stranded RNA molecules that interfere with the expression of specific genes.
• Biocatalysis: The use of natural catalysts, such as enzymes, to perform chemical transformations on organic compounds.
• Solid Phase Organic Synthesis: The traditional chemical method for manufacturing oligonucleotides, which management notes has physical scale and purity limitations.
• Stereochemistry: The study of the spatial arrangement of atoms in molecules; the company is using enzymatic control to create more potent stereo-defined medicines.
• Phosphorothioate: A modified chemical linkage used in oligonucleotides to improve stability and pharmacokinetic properties.
• CDMO (Contract Development and Manufacturing Organization): A company that provides drug development and manufacturing services to the pharmaceutical industry.

Full Conference Call Transcript

Operator: Welcome to the Codexis Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. And now I'll turn the conference over to Georgia Erbez, Chief Financial Officer and Chief Business Officer with Codexis. Please go ahead.

Georgia Erbez: Thank you, operator. With me today are Alison Moore, President and Chief Executive Officer; Stefan Lutz, Chief Scientific Officer; and Britton Jimenez, Senior Vice President, Sales and Marketing. During this call, management will make a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our guidance for 2026 revenue, anticipated milestones and product launches, facility expansions, technical milestones and public announcements related thereto as well as our strategies and prospects for revenue growth and successful execution of current and future programs and partnerships.

To the extent these statements contained in the call are not descriptions of historical facts regarding Codexis, they are forward-looking statements reflecting the beliefs and expectations of management as of the statement date, November 12, 2026. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Codexis' control and that could materially affect actual results. Additional information about factors that could materially affect actual results can be found in Codexis' filings with the Securities and Exchange Commission. Codexis expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law. And now I'll turn the call over to Alison.

Alison Moore: Thank you, Georgia, and thanks, everyone, for joining the call. Codexis generates manufacturing solutions using highly engineered enzymes. The use of biocatalysis in the pharmaceutical industry has dramatically advanced the production of complex small molecule therapeutics, and we are now focused on delivering a significantly improved enzymatic production system to manufacture oligonucleotide medicines. As we enter the final quarter of 2026, I am very proud of our accomplishments so far. Today, we reported solid third quarter results with revenues of $19.3 million, our fourth consecutive quarterly on-target performance. Early in the quarter, we completed an equity offering in which we raised $25 million of net proceeds.

In addition, this week, we announced we entered into a $60 million term loan agreement, of which $42.5 million was used in an initial drawdown to replace an existing loan. This combination of strong operating performance, bolstering our cash balance and deferring our debt repayment has strengthened our financial position as we complete the year. Georgia will give us more details on our financial achievements later in the call. 2026 has been a year of recognition for the developers of RNAi medicines, recognition of the huge therapeutic opportunity in large population indications and also recognition that traditional manufacturing methods are insufficient to support the commercial aspirations of these important new medicines.

Exploration of enzymatic approaches is building significantly, and Codexis ECO Synthesis platform is in the lead in defining alternative approaches. Industry dialogue has shifted from proof of concept towards implementation of novel technologies into development pipelines. In October, we signed a feasibility study with a pioneer in the field to test ECO Synthesis fragments with stereochemical control. In addition, we have signed an agreement with a large biopharmaceutical company to explore ligation of a clinical asset, and we are working on how to initiate a pilot scale technology transfer of ECO Synthesis technology into their pilot plant in order for them to assess the production capability in-house.

An important aspect of adoption readiness is the progress we've made to industrialize our platform. This includes scaling ECO Synthesis, improving operating parameters such as cycle time and ensuring that we can meet product quality expectations. In Q3, we have produced multiple batches of material using ECO Synthesis at 100-gram scale and with high quality. During our process optimization, we have also reduced our cycle times by 40%. We will continue to optimize both scale and process performance toward kilo-scale readiness. Some of this data was shared just last week at the TIDES Europe Conference, where we also included a first glimpse at the optimized biological activity achieved via stereocontrol of the siRNA.

I will now turn the call over to Stefan for more details on our most recent TIDES data and the additional findings we are planning to provide in the future. Stefan?

Stefan Lutz: Thank you, Alison. We had an exciting and busy schedule at TIDES Europe in Amsterdam last week. In 2 presentations, the Codexis team delivered critical updates addressing 3 key customer questions: scale, platform capability and stereochemistry. Let me elaborate briefly. As Alison already mentioned, our main stage presentation formally announced the successful scale-up of the ECO Synthesis manufacturing platform to 100 grams. Equally important, we're able to share the excellent quality of oligonucleotide produced at that scale, exceeding industry expectations at this stage of development. In addition, the 100-gram synthesis demonstrated a strong predictive relationship between process and product performance across scale. We saw consistent product quality of oligonucleotides manufactured by ECO Synthesis at both the 100-milligram and 100-gram scales.

This consistency validates our process understanding, which is foundational for faster, more predictable development. It also gives us confidence in our ability to anticipate and optimize performance as we advance to larger scale. Building this level of process understanding takes time, and there are no shortcuts. Over the past 3 years, beginning with our first 1-gram oligonucleotide synthesis in the fall of 2023, we have systematically built, scaled and refined the ECO Synthesis manufacturing platform. Today, we believe we have established a robust foundation for large-scale manufacturing. Next, we presented an important expansion of the ECO Synthesis platform, a direct incorporation of tissue-targeting molecules at the end of therapeutic oligonucleotides.

ECO Synthesis can now attach these targeting molecules efficiently, quantitatively within the standard workflow. Given the importance of targeted delivery in today's siRNA therapeutics, this capability addresses a critical customer need and further strengthens the platform's value proposition. Already operational in our ECO Innovation Lab, this capability moves us closer to a true end-to-end oligonucleotide synthesis solution from the first nucleotide to the final tissue-targeting molecule. Finally, we shared an exciting update from our ongoing work to understand the potential biological value of phosphorothioate stereochemistry. Two fully stereocontrolled antisense strands produced using ECO Synthesis were converted into therapeutic siRNA duplexes and tested in primary human hepatocytes.

Compared with the chemically synthesized stereo random control, the stereo-defined siRNAs showed three to fourfold greater potency while achieving comparable levels of maximum gene knockdown. Greater potency can translate into meaningful therapeutic and economic benefits, including the potential for lower doses, reduced manufacturing requirements and costs, less frequent administration and potentially additional routes of administration. These early results provided encouraging evidence that stereochemical control could become an important source of therapeutic differentiation and value. Our innovations presented at TIDES are generating significant industry interest and have led to the additional engagement with prospective customers and strategic partners. Importantly, the dialogue is shifting from questions about technical feasibility to considerations around deployment, regulatory strategy and process economics.

We see this as an indicator of growing confidence in the ECO Synthesis technology and a more mature focus on its path towards pipeline adoption. With that, I will turn the call over to Britton for an update on our broader commercial activities. Britton?

Britton Jimenez: Thanks, Stefan. As our engagement with leading innovators progress, we are seeing interest in the value our ECO Synthesis platform can bring to customers. In October, we announced a feasibility study with a pioneer in the field where Codexis will use our ECO Synthesis technology to synthesize stereo-defined fragments. This innovator uses a fragment synthesis and ligation strategy, but is seeking to increase the purity of fragment above what they can achieve using standard solid phase chemistry techniques. They will be evaluating our platform as a way to achieve their manufacturing purity targets. Another example of innovator engagement is an evaluation agreement we signed this week with a leading biopharmaceutical company with a pipeline of siRNA assets.

With this customer, we plan to assess ligation strategies for a late-stage asset and the performance of ECO Synthesis production at pilot scale. This will be Codexis' first technology transfer of ECO Synthesis into an innovator's pilot scale manufacturing environment, an important milestone in demonstrating how the platform's small footprint and aqueous process can enable integration into an existing manufacturing infrastructure. Together, these engagements allow us to demonstrate the potential of ECO Synthesis in addressing the needs of our customers and the industry. Beyond these engagements, we have additional conversations moving forward with other large pharma and biotechnology innovators, which is translating into an exciting pipeline of opportunities.

We are pursuing relationships with CDMOs who are currently the primary sources of oligonucleotide production for the industry. We have 3 ongoing evaluations following small-scale technology transfers, and we have recently engaged with 2 other CDMOs. One of these new parties is a major manufacturer who is seeking a capital-efficient way to reenter the oligonucleotide manufacturing space. Our small molecule biocatalysis business remains profitable and has seen a return to growth this year as it benefits from some recent new product approvals.

Our product sales for the first 9 months of 2026 increased 78.5% over the similar period last year, led by CDX-049, a proprietary enzyme used in the production of 2 branded pharmaceuticals with one of the products being granted label expansions by the European Commission earlier this year. Our product pipeline in biocatalysis remains robust with 12 programs in Phase II or III clinical development and data readouts expected on 7 clinical trials in the next 2 years. This year, 3 drugs have been approved that use our enzymes in their production and 2 represent potential blockbuster products. All these drugs are just launching and may become strong contributors to future revenue, offering significant diversification opportunities to our top line.

We are excited for the prospects for steady growth and continued profitability in this side of the business. With that, I will now turn the call over to Georgia for a discussion of financial results for the third quarter.

Georgia Erbez: Thanks, Britton. Good afternoon, everyone. Today, I will provide a brief overview of our financial results here on the call and invite you to review our 10-Q filed today for a more detailed discussion. Total revenues were $19.3 million for the third quarter of 2026 compared to $8.6 million in the third quarter of 2025. We are particularly pleased with the revenue performance in this year's third quarter as we experienced strong performance of our pharma biocatalysis business, which, as Britton mentioned, we see as evidence of a return to growth. Not only has this side of our business outperformed last year, but also is on pace to exceed revenues achieved in each of the last 3 years.

Not only is our biocatalysis revenue growing, it is also increasingly profitable. Product gross margin was 74.5% for the third quarter of 2026, which has continued its improvement trend over the gross margin we achieved in the first half of 2026 and over the gross margin for the entire year for 2025. Due to the sustained gross margin improvement in the first 9 months of 2026, we now anticipate achieving gross margins in the low 70s for the full year 2026. Research and development expenses for the third quarter of 2026 were $12.6 million compared to $13.9 million in the third quarter of 2025.

The decline was largely driven by lower employee-related costs and reduced spending on outside services and lab supplies. Selling, general and administrative expenses were $10.1 million in the third quarter of 2026 compared to $11.2 million in the prior year period. The decline was primarily due to lower employee-related costs associated with reduced headcount, lower stock-based compensation expenses and lower allocable costs. Controlling expenses remains a key focus for Codexis. We want to use our capital efficiently and in areas that bring the largest positive impact to the success of our overall business. Net loss for the third quarter of 2026 was $8.1 million compared to a loss of $19.6 million for the third quarter of 2025.

We are reiterating our top line guidance for 2026 and expect revenue in the range of $72 million to $76 million. Codexis ended the third quarter of 2026 with $72.7 million in cash, cash equivalents and short-term investments, which compares to $78.2 million at the end of 2025. During the third quarter, we successfully completed an equity financing that raised approximately $25 million net of expenses. Subsequent to the close of the third quarter, we successfully entered into a $60 million senior secured term loan agreement, of which $42.5 million was drawn down upon closing. The drawdown was used to pay off our existing debt of $42 million.

The loan provides for 48 months of interest-only payments followed by a 12-month amortization period. We expect that our current cash will be sufficient to fund our planned operations and capital expenditures through 2028, in line with our previous cash runway guidance. With that, I will now turn the call back over to Alison.

Alison Moore: Thank you, Georgia, Stefan and Britton. Our ECO Synthesis technology has the potential to disrupt the landscape of oligonucleotide manufacturing and enable siRNA therapeutics to reach indications with large patient populations. We remain committed to industrializing our technology to allow deployment into our customers' pipelines. While we are keenly focused on improving scale, process performance and product quality, we are also listening to our customers and adding features to our platform that are vital to the success of our customers' products. This year, we have made advances, including discovering a method to achieve enzymatic synthesis without the use of a starter oligo, advancements in our stereochemistry approach and methods to incorporate tissue targeting capabilities into our technology.

A high priority goal for us is to close out the year with momentum. We've signed 2 important evaluation agreements in the last 2 months and have more in the funnel. This gives us excellent opportunities to sign higher-value contracts as well as innovative licensing deals in 2027. We have a number of commercial initiatives that are nearing the final stages of negotiations and look forward to keeping you informed of our progress. We will also be focused on financial performance by striving to meet our revenue targets while controlling our expenses. For investors, achieving these goals will show proof of success.

We will use our know-how and our over 20 years of experience in engineered enzymes to sustain and drive innovation in the field of RNA medicines. In the coming months, we will be moving toward 500-gram production scale, advancing the ECO Synthesis raw material supply chain, and we will begin construction on our GMP production facility. We are really excited by our prospects and proud of the dedication and achievements of the entire Codexis team who have been instrumental in making the ECO Synthesis technology a reality. Now we'd be happy to take your questions. Operator?

Operator: [Operator Instructions] Your first question comes from the line of Allison Bratzel with Piper Sandler.

Allison Bratzel: Just one for me on TIDES Europe. Just now coming off that meeting, could you maybe talk more to how -- what kind of new customer conversations are coming out of that and just where they're focused on that stereocontrol or scale or something else? And then just secondly on, I think you're going to have a meeting with FDA for Emerging Technologies team later this year. Just what's the status on that? And just what specific feedback are you looking to get from that FDA interaction?

Alison Moore: Ally, thank you very much for the question. This is Alison, and I'll have Britton answer your first question. But I'll take the question on the FDA interaction. We did have a very successful interaction with them in late September. The topics that we covered were to discuss our expectations and specifications related to the enzymes of the ECO Synthesis platform and also specifications related to siRNA generated by the ECO Synthesis platform. And we wanted to make sure that we weren't missing anything and that we were meeting the agency's expectations. That was a very useful conversation, and we feel very aligned with the agency.

And then another important conversation that we had with FDA was related to comparability and starting to get their thoughts on how one would construct a comparability argument, especially if that argument included stereochemical control compared to a stereo random solid phase chemistry originator. And we had a very constructive conversation about that. And once again, FDA were extremely engaged. They pay a lot of attention to this platform. I think they're very compelled by the opportunity of product purity, and we're looking forward to the next one. And now I'll ask Britton to comment on your first question.

Britton Jimenez: Yes. Ally, Britton here. The information and data that we presented further validated what we have been saying over the past year that this is a technology that is growing, expanding. We're heavily focused on scaling the technology and having high quality with the technology. And that's something that we are able to demonstrate and show the actual data here at TIDES EU. So showing the actual 100 grams at a crude purity of greater than 90% is an incredible milestone for us because when you look at the industry and a lot of their standards and their expectation is you have to be greater than 90% with crude material, and we're showing we can do that.

So there is a lot of excitement around that. There's also a lot of conversations around our scaling factors now that we've taken to hundreds of grams, can we get to the kilos, 10 kilos, hundreds of kilos. And all the data and everything we have shows that we can meet all those objectives. So the conversations were great, a lot of excitement around it. This isn't something that's never been done before within our industry using an enzymatic process.

Operator: Your next question comes from Kristen Kluska with Cantor Fitzgerald.

Kristen Kluska: Congrats on these recent presentations. Just to kind of circle off that last question. I wanted to ask how phosphoramidite chemistry, how the product tends to be compromised or potentially the quality differentiating as the production increases in terms of the number of grams? And then also, as you guys think about the next steps to potentially demonstrate successful production of 500 grams, how are you guys going to characterize what would be a win for you in that scenario?

Alison Moore: Kristen, this is Alison. I'll start and ask Stefan to comment. So I think your question -- first question is about product quality with the existing chemistry and how that relates to scale, if I'm understanding your question correctly. So I think that there are 40 years of investment in solid phase organic synthesis and the folks that are making high-quality GMP material these days put a huge amount of effort into making and releasing very high-quality material. This takes very, very significant effort. The amount of purification required is fairly onerous. I don't think that, that's debatable. I think that as the chemistry scales, there are some physical limitations. Those are not necessarily quality limitations.

Those are physical limitations of the current technology and the ability for the solid phase component of that synthesis only to scale to between 7 and 10 kilos per batch, which certainly sounds like a decent amount of material, but not if you have to supply a market that demands metric tons annually. So just to recap, the ECO Synthesis manufacturing platform will not have those kinds of scale barriers. And then secondly, what we're working hard to show, and we've started to show in TIDES Europe is that our material even crude without purification is demonstrating high purity.

And we will continue to demonstrate that the chromatography and purification requirements of material made via ECO Synthesis will be much more efficient compared to solid phase chemistry. Stefan, anything else you'd like to add?

Stefan Lutz: Yes. Maybe one point to add about what causes the impurities in the chemical synthesis. The process itself, the chemical synthesis is really harsh conditions so as the oligonucleotide is being manufactured, this repeated exposure to these harsh conditions does actually damage a small fraction of the product. In contrast, ECO Synthesis that operate in an aqueous environment in a buffered environment, it's much, much milder. And we believe that is a significant contributor to the higher quality that we are observing.

Alison Moore: And then I think the second part of the question was what are we excited about with respect to 500 grams. So actually, how we're thinking about 500 grams and beyond. So now that we are more routinely making hundreds of grams of fragments, we also are -- we love the approach of using the ligation of multiple fragments. So the math is relatively straightforward. If we can already make hundreds of grams in fragments, then we can stitch those together using the ligase enzyme into hundreds of grams of material, and that's how we're going to approach 500 grams. And we will progress from there through quickly to a kilo.

What's important there was what Stefan mentioned in our prerecorded comments, which is we've also been working hard to determine the predictive performance over these scales. And we will constantly be assessing that because that enables us to move more rapidly as we increase scale. So we feel that we are very on track with our scale objectives, and we are very delighted to show everybody the performance of the 100-gram material and the product quality of that material. We feel that, that's a milestone, and we can proceed quickly from here.

Operator: Your next question comes from the line of Matt Hewitt with Craig-Hallum Capital Group.

Matthew Hewitt: Congratulations on the progress made in the quarter. Maybe first up, regarding the new study, I think, Britton, you had spoken to that. Could you give us a few more details on that? One, I guess, is that a revenue-generating contract? And what is your hope or what do you expect to obtain once you are completed with that?

Britton Jimenez: Yes. I believe you're talking about the new contract, not the new study. So yes, so what we're looking at with that particular customer is there's actually 2 work streams that we're looking at with that customer. So one of the work streams is we're focusing on one of their clinical assets that's in late stage, and we will be looking at creating fragments for them and doing a ligation synthesis for them to meet their scale needs. This is a large indication asset. And so they're looking at how do we commercialize this in a large scale. So they're going to be evaluating and we'll be working with them and creating these fragments and the process necessary for them.

The second work stream that we're working on with them is around the actual transfer of our technology into their facility. They have a pilot scale facility that they're looking to bring the technology in. They want to touch and feel the technology, understand it better. And then once that's completed, then we'll further engage in much larger conversations with them. So it's multiple work streams here. We're very excited about it because as I said previously, this is the first time we've gone into an innovator. So it shows that it's not just the CDMO marketplace, but it's the innovators that are highly interested in our technology.

Operator: Your next question comes from Matt Stanton with Jefferies.

Matthew Stanton: Maybe just on the CDMO side, I think over the summer, you had 3 different tech transfers, small-scale tech transfers in process. One of them was effectively completed. Just curious how the other 2 have trended since then? And then also for the 2 newer CDMOs you called out as well, sounds promising. Anything to call out on those 2 newer ones in terms of how that process looks and feels relative to these 3 that you already have in flight?

Britton Jimenez: Yes. This is Britton. Thanks for the follow-up on that. Yes, for the current evaluation agreements that we have ongoing, 2 of those evaluation agreements have completed. The third one is still ongoing currently. Overall, the agreements or the work performed was excellent. Both those CDMOs are very happy with the outcome and then better understanding our technology and what it does. So conversations are still ongoing with them about bigger and longer-term agreements. So that's something that we're still focused on and engaged with. As for the 2 new CDMOs, one of them is very exciting. This is a CDMO that is currently not in the space.

And they look at this space and they see the potential and the growth within it, and they're trying to understand how do they enter the marketplace, what is the best strategy to get into the marketplace, and not only capture a small piece of the market, but they want to be very aggressive and take a large piece of this market. And they do feel our technology can help support that strategic goal that they have based on our technology and the value proposition that we've discussed before around less capital than space, aqueous process, getting into scale into those large indication assets, those are all very, very important factors that they're looking at.

So exciting times with this new CDMO, but we're excited about the conversations we've had with them and where we're headed.

Operator: Your next question comes from the line of Dan Arias with Stifel.

Daniel Arias: It sounds like to your point here, there is some additional evaluation work that's going to get going. If I look back a year ago at the evaluation agreements that you signed, I think, around the fall, Nitto Denko and then one other, what does the then versus now look like when it comes to just process and programs and the amount of ECO-related work taking place? Just trying to see how or to what extent you can kind of use these precedent experiences and say here's what can be expected with some of these newer ones.

Alison Moore: I think that the objective in the market in general is about what Britton said, it's about current practitioners getting their hands more firsthand on what enzymatic production processes look and feel like. I think we were absolutely at the forefront of this when we signed those very original agreements. Those customers were very interested, really curious. I would characterize the step forward over the last year is that the industry innovators and CDMOs really recognize that enzymatic solutions have to be incorporated into their production planning in the future. And they are -- so they're really thinking about what does that mean. I think it has shifted from curiosity to, okay, how do we think about deploying this.

And we're also seeing them be more aggressive about assessing alternative technologies as well, which is certainly -- that's a logical approach. So the shift, we're not concerned about that. I view that as just really forward-facing momentum in alignment with the understanding that chemistry is powerful with the current demands, but it is going to be limiting looking to the future. And so there must be alternative solutions. So we're having much more less curious and more serious conversations with those CDMOs. That's how I would characterize the difference. And then just to underscore what Britton said, I think that for CDMOs that have large existing asset bases, a lot of capital infrastructure already.

I mean, obviously, one of their objectives is to make sure that, that infrastructure is highly utilized. What's really potentially exciting are companies that are approaching us because they are now understanding that the ECO Synthesis platform, which we've communicated is approximately 70% more capital efficient. If you're not in this space and you view it as an attractive space for the future, this is a very attractive way to enter.

Operator: Your next question comes from the line of Mac Etoch with Stephens.

Steven Etoch: I'd love to get a sense of how your interest funnel has trended since demonstrating stereocontrol. Mainly I just want to get a sense for how clinical interest has trended versus preclinical and if that's changed at all.

Alison Moore: So the funnel transitions post describing stereocontrol data, Britton?

Britton Jimenez: Yes. So that -- we really launched that data at TIDES U.S. earlier this year in May. And so showing that we can fully control stereochemistry. And if you look at -- as we described this new agreement we signed with the pioneering siRNA company, that was when their focus was around stereocontrol. So is there new interest? Absolutely around controlling it.

Now that we presented data or Stefan presented data here at TIDES Europe around the biological effects and the three to fourfold increase in potency, we do expect even more interest from a clinical perspective because that potency can change the way a clinician or a developer looks at how they dose the patients, bigger knockdown, can they get to annual dosing. If it's a more potent product, potentially they don't have to give as much product to the patient, which then reduces their COGS. So there's a lot of opportunity here with this. I think we're going to learn more and more as we go.

But I think the big piece is to really look at this three to fourfold increase in potency, and we'll continue to have those conversations with our customer base.

Operator: Your next question comes from the line of Brendan Smith with TD Cowen.

Brendan Smith: Congrats on the quarter. You made a couple of references now to ongoing negotiations here and with the goal of confirming some new deals soon, of course, I know there's always a few irons in the fire and kind of tough to predict timing with certainty. And I guess apologies if I missed it, but can you maybe just give us a sense of how you're thinking about timing there and when we might get confirmation of some of these? Is it maybe fair to expect one or more announcements in the next quarter or so? Just I guess, any incremental color on timing would be great.

And then just to clarify, I know you mentioned some conversations with one pharma partner and kind of working on getting pilot scale into one or more of their programs. I guess when will you know if that's kind of gone through? And can you just maybe give us a sense of the phasing of revenues for a partnership like that over the coming quarters if everything does go according to plan?

Alison Moore: So I want to be clear that we highlighted 2 deals, one with an siRNA pioneer and just want to make sure that it's clear that there is a signed agreement with a large biopharmaceutical company. And we're excited about both of those. Work is already underway with respect to the one that is focused on stereocontrol and work is just getting underway with respect to the others. So we feel that after our early-stage assessments and lots of conversations that we really are achieving traction in this space.

And additionally, we feel that these 2 particular agreements describe work that really, if successful, ultimately connects us with the kind of technology licensing that we're really hoping to put in place down the road. So we think that these opportunities are the most significant opportunities that we have or some of them that we've put in place so far. As you said yourself, the funnel is dynamic. It continues to be very busy because there are so many opportunities in the siRNA space. And we've just referenced for the last question, the CDMO work that's ongoing. And we're working very hard to translate those into also signed agreements. Very difficult to predict the timing on those.

Operator: I'm showing there are no further questions. I'll turn the call back to Alison Moore for closing remarks.

Alison Moore: Well, thank you, everyone, for joining us today. We'll certainly be looking forward to seeing you at the upcoming investor conferences and perhaps on Zoom later today or tomorrow. If at any time you have additional questions, please feel free to contact us directly, and I hope you have a good evening. Thank you.

Operator: This concludes today's call. You may now disconnect.

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