Codexis, Inc. (CDXS) Earnings Call Transcript & Summary

Hi. I'm John Sourbeer, UBS' life science tools and pharma services analyst. Welcome to the last panel of the day, of day 1 of the UBS Healthcare Conference. We have -- we're hosting Codexis for this fireside chat, and we have John Nicols, President and CEO.

Pleasure to be here. Thanks.

Just to get things started, can you provide an overview of Codexis' business model and the different spaces you're involved in as a company? How did you get here? And where do you want to go in the future?

Awesome. Yes, pleasure. So Codexis, we're a 20-year-old company. We've been focused our entire history on enzymes as a class of products to discover and commercialize. And to discover, it requires a machine learning-based synthetic biology approach to find an enzyme product that actually will perform better than what Mother Nature has provided. And we've been focused on refining and improving the speed of our ability to discover novel enzyme products. And just to give you a sense, it would take what used to take us in the mid-2000s, 20 people, 2 years. Today, similar challenge, takes a team of 3 or 4 Codexis scientists less than 3 or 4 months. And so with just under 300 people in the company today, that gives us the capacity to discover over 20 enzymes in parallel. And we've expanded that dramatically over the last 10 years. We used to do maybe 5 or 6 parallel enzyme discovery projects, to now 20-plus. And that's expanded because we found a growing range of applications for novel engineered enzymes to deliver significant value to the world. Our entire 20-year history, we've been engineering enzymes to enhance the manufacturing of complex pharmaceutical drugs. So the core business, a large majority of our revenue is associated with pharmaceutical manufacturing. Over the last 5 or 6 years, we've extended from just pharmaceutical manufacturing. Now we're involved in bringing forward better food ingredients with our partners. We've launched a range of projects and products into the life science tools industry. And we've been -- also over the last 5 or 6 years, we've built a pipeline of drug discovery and development projects from our core platform where we're actually discovering with our platform unique large molecule drugs and we're advancing it through preclinical and early clinical development. We have over 12 projects in that area as well. So those are the 3 core areas. Again, all grounded in enzymes as a product to ultimately commercialize, leveraging our unique CodeEvolver enzyme engineering platform.

And that's a great intro into the next question I have. And can you just talk about how you pair the enzymes with technology and describe what is the potential of the applications on your CodeEvolver platform in engineered enzymes?

Yes. Cool. So I'll start again with our historical target area, enzymes for pharmaceutical manufacturing. And here, if we can design an enzyme to enhance the -- reduce the cost and enhance the sustainability of a pharmaceutical drug process. The typical TAM is somewhere in the $5 million, maybe $10 million per year enzyme product sale for Codexis. But we start early. We start usually with the clients, with the pharmaceutical company as Phase I or Phase II because that's a really natural place for us to bring our platform together with a partner because they really don't have a process fixed until after that point. So if we can get in -- design an enzyme that creates a fundamentally lower cost process, then we get fixed into their manufacturing recipe. And we have to wait a little while to ultimately advance through all the clinical development, but then we're set up to be a sustainable revenue -- product sales of our enzymes to that drug company. As they make their drug, they need to buy our enzymes. Today, we're installed in over a dozen different commercial pharmaceutical manufacturing processes. And we're also installed in 22 Phase II or Phase III drug processes, and that's more than doubled over the last 3 or 4 years as well.

And when you think about the competitive environment, how does Codexis differentiate itself from other syn bio players like Amyris or Zymergen?

Yes. Good question. So Zymergen is a much newer company. Amyris is a similar age company to us. We're focused on enzymes. Amyris does not use its synthetic biology platform nor does Zymergen -- or maybe they're recently starting to look at enzymes. But we're looking at modifying organisms to produce new novel enzymes. We've been doing that our entire 20-year history, and it's a unique product development challenge because you're dealing with a linear chain of amino acids with tremendous -- nearly infinite optionality. So really focusing on how to understand the relationships between changing these complex structures, these complex enzyme structures, and correlating that with real-world performance attributes is really what we focused on. And we've scaled the capacity specifically for enzyme engineering. And to design an enzyme versus a small molecule product like Amyris and Zymergen, it takes far fewer people and it takes far less time to do the product discovery and commercialization phase. So we think, for a lot of different reasons, we're really on the right product category for deploying synthetic biology. So we continue to scale it and continue to build the pipeline of products accordingly.

And then speaking on some of the products, could you share more about the partnership you have with Pfizer on PAXLOVID? What part does your enzyme play in the manufacturing of PAXLOVID? And what's the outlook on for future collaborations with Pfizer on antiviral drugs or other opportunities?

Yes. Great question. First, this is not the first time we've been involved in antivirals. So we actually were involved in antiviral -- in enzymes to enhance antiviral manufacturing historically, and we've commercialized those enzymes for historical hep C drugs. So this enzyme that has been fully commercialized by Codexis in the past, and as Pfizer built their PAXLOVID -- nirmatrelvir, actually the key ingredient in PAXLOVID, they looked at all the enzymes that Codexis had. We have a very intermittent relationship for many years with Pfizer. They actually, in our prepublic stage, they were an equity shareholder in Codexis. So we're very intimate with Pfizer. And they're fully aware of all the enzymes that we've discovered and advanced in our pipeline historically. So they tapped into our historical enzyme catalog and they found an enzyme that actually liberated substantial cost savings for the complex molecule of nirmatrelvir. And so early in 2021, way before they had the outstanding clinical trial results that we all heard about at the end of last year, they asked us, could you guys -- how quickly could you guys make substantial volume of the enzyme available? Because, if this works, we're going to have a huge scale up of nirmatrelvir in PAXLOVID. And we said we can reinstigate our manufacturing network very quickly. And 6 months later, we accepted orders from Pfizer, which were the largest product orders in the company's history in the middle of 2021, even before the Phase III trial results of PAXLOVID. And then we've continued to expand our manufacturing of the enzyme that enables a low-cost manufacturing process for PAXLOVID. This year, we're guiding investors to expect that we'll do somewhere between $75 million and $80 million of enzyme sales to Pfizer for their PAXLOVID manufacturing scale-up and ramp, which is just outstanding success for us. It's also been a great story to bring to other pharmaceutical companies. Because we've been working on bringing enzymatic manufacturing of small molecule drugs for decades to the pharmaceutical industry, and we've increasingly gotten the bench chemists and the R&D teams within big pharma to recognize how much value we can liberate, how widely across small molecule manufacturing. We estimate that at least 1 out of 3, maybe 1 out of 2 small molecule drugs, could materially benefit from our technology. So the R&D side has increasingly gotten it. And as we've gotten more and more installed, it's been -- that's how we've helped -- we've built the revenue ramp for our company over these years. But with PAXLOVID, other big pharma companies -- if you think about the manufacturing side or the supply chain side, they've kind of heard about enzymatic conversions from their R&D team, but they didn't think we could scale to this scale. They didn't think we could move this quickly. And so it's really opened up the mind share of big pharma about this technology is not just the playground of chemists in the bench lab. This truly can liberate substantial savings and substantial -- any scale, pharmaceutical manufacturing. And that's been exciting for us to showcase that story with -- from -- as a corollary to the PAXLOVID success story for the company. Within Pfizer, I mean, it's just really opened up executive relationships. It's opened up conversations in other areas, not just in antivirals, but other parts of Pfizer. It's given us an entree to talk more about what we're doing in drug discovery. We're also doing messenger RNA manufacturing. So it's really opened up a great growing relationship with Pfizer as a result of the PAXLOVID success.

And I guess just a follow-up on PAXLOVID. If vaccine demand were to decrease dramatically over the next year, just any thoughts on what you have on the sustainability of demand for PAXLOVID or other COVID therapies and how that plays out?

Yes, it's really hard to tell. And this is a key question all investors have. I mean we went from essentially 0 sales of this enzyme to Pfizer in 2020 to $75 million to $80 million in 2022. We're very confident and have purchase orders in -- to cover that guidance revenue for enzymes to Pfizer's PAXLOVID. In 2023 and beyond, it's not clear to Pfizer. They're not saying things publicly. However, they have placed orders with Codexis through -- into the beginning of 2023, which give us -- and they're noncancelable orders. So it gives us some cover for significant revenue for our enzyme sales into 2023. But beyond that, I think we're just going to have to let the world play out. Of course, it's going to be very dependent on the course of the pandemic. Also, we're starting to see the buildup of supply chains through the medicine patent pool. Pfizer, through the medicine patent pool, has enabled generic companies in other parts of the world to be able to make and sell PAXLOVID into less developed countries. That process lagged Pfizer's ramp-up of manufacturing by about a year. So we're now starting to see companies come to Codexis for enzyme. Generic companies come to Codexis for generic PAXLOVID. So we'll see some lift for sales in 2023 from that as well.

And then just the biotherapeutics pipeline, any updates on the 2 programs, the PKU and EPI? And you have there -- and any plans for, I guess, pipeline expansion as well?

Yes. Yes. So I mean this is a really exciting part of the company. So I'll just do a little bit of history, if that's okay, John. We're -- 5 or 6 years ago, we were really focused on manufacturing opportunities with the pharmaceutical industry. But in effect, our platform is a large molecule generator, enzymes are complex large molecules. And so we felt to ourself like maybe we can apply our platform to actually discover new biologic drugs, and it was a big idea for us. And we took our time. So the first program we invested in was to design an enzyme for PKU, phenylketonuria, patients that could be administered orally. And large molecules, almost universally, large molecules need to be injected. Why? Because large molecules ingested through the GI would have to withstand the body's natural assault and breakdown of large molecules. We all ingest protein molecules, enzymes or proteins, very, very effectively in the upper part of the small intestines. So we needed to design an enzyme that would withstand that breakdown, the body's natural breakdown of proteins, while it breaks down other proteins, liberating phenylalanine, our enzyme did not break down, so it could react with that phenylalanine, which would solve the challenge for PKU patients. That program is moving through early clinical development. Somewhere towards the end of this year, early next year, we've out-licensed that program to Nestlé Health Science fully. So Nestlé Health Science will be running a multiple ascending dose study sometime around the end of this year, early next year, and we'll see the results of that in 2023. We expect and that would be a milestone opportunity for the company. But that program back in history really opened up our eyes to, hey, this platform really could be a drug discovery engine. And since that point in time with good early preclinical data for PKU, we started to expand our sites. We started to work on lysosomal storage disorders. We focused on Fabry disease and Pompe disease. And since -- and we had great preclinical success there as well, which led to our second leading partnering opportunity where we partnered with Takeda, actually the Shire division of Takeda, which is focused on rare diseases. And we entered into a multiprogram partnership with Takeda. In the beginning of the pandemic actually in the second quarter of 2020, we announced that deal. We started to -- we transitioned enzymes as transgenes to Takeda for their gene therapy development program for Fabry disease. We then delivered transgene variants from our platform for Pompe disease. And we started work in a new area, a blood factor disorder, with Takeda as well. And we just actually showcased some of this data at the Cell & Gene Therapy conference just in the last week or so. They had an option to extend the partnership to a fourth program. They exercised that option, a year after starting the program, which was very encouraging. And it's led Codexis to focus a good healthy percentage of our biotherapeutic pipeline into the gene therapy area. Back to exocrine pancreatic insufficiency. This is a condition where there's pancreatic breakdown in enzymes that are normally excreted into the human GI that help break down fats. Protein starches are limited because of the pancreatic issues. And these patients need supplementation of these enzymes. It's a multibillion dollar addressable market today. There are several approved drugs on the market. Codexis went after coming forward with better enzymes that are more stable, again, to withstand the body's natural ability to break down enzymes in the GI system. And we focus first on the lipase enzyme, which is the enzyme that breaks down fats and lipids. And we designed an enzyme that requires tenfold less enzyme than standard of care pancreatic enzyme replacement therapies. And we have brought that into early clinical development and we should have a readout from a Phase I study before the end of this year. And we're excited for that moment. The preclinical data is fabulous, and we're super excited to be advancing that program as well.

And then as you're entering the supply and the generic version of JANUVIA, how should we think about the profitability and the volume difference on that product?

Yes, JANUVIA is one of our big breakthroughs back to pharmaceutical manufacturing as a key market for Codexis. So JANUVIA was approved by the FDA somewhere around 2010. And it was launched with a traditional chemistry route, which had multiple inefficiencies. So we worked with Merck right around the time of launch to actually come up with a second-generation process which would tap into Codexis' engineered enzymes. And we nailed it. We took a -- the enzyme enabled going from a multi-step process. We eliminated 3 steps in the chemical process. So we liberated significant capital from the manufacturer by designing this enzyme. We also took it from high-pressure precious metal reactor scheme, which are very limited and expensive in the world, to atmosphere carbon steel, which basically every chemical -- every CMO in the chemical industry and Merck can operate. So we liberated substantial capital efficiencies. We also increased the raw material yield in the last step of the active ingredient process by double-digit percentages. We reduced energy cost, double-digit percentages. We reduced waste generation, double-digit percentages. So we saved a significant amount of money for Merck and the production of the JANUVIA active a couple of years after they've got an FDA approval. And it was sufficient for Merck to shift their process to, today, the large majority of the active ingredient for JANUVIA is manufactured using our enzyme. Now fast forward, this is an approved drug in 2010, and it's soon to go off patent. It's soon to go generic. Codexis' business model, we essentially universally retain the rights to take an enzyme that we're selling to a patent holder and take it into the generic chapter. So we have already been working with generic companies to get our enzyme installed in their generic processes. And we've announced an extension with Merck. We've announced an Indian partnership. We've also contracted with several other, several of which are the leading generic companies to use our enzyme. So we're starting to get widely installed in the generic universe. As JANUVIA goes from Merck's patented exclusive domain to generic, we're quite confident we're going to be installed across a whole range, significant range of generic companies. And we also expect that JANUVIA as a prescribed drug will go up. So we're quite confident as we move for the first time as a company from being installed in a patented process to actually engineer across the generic line, and we're quite confident we'll be able to retain our revenues and roughly our gross margins. We might even have an opportunity to expand our gross profit margins as it moves to generic. So we've been building confidence both for ourselves and with investors for this transition. And that's important because it's been a $10 million per year product, which, behind PAXLOVID, is our largest product as a company.

Great. And then I guess just maybe stepping back, when you think about the enzyme products for DNA and RNA, just what is really the differentiating technology there? And just -- can you just refresh us on what the competitive outlook look like?

Yes. Let's take one at a time. So DNA synthesis and RNA synthesis are tapping into our technology, but they're a little unique in what we're delivering and what the markets need. DNA synthesis, I'll start there. DNA synthesis, so let's start with fundamental biology. I mean DNA is routinely manufactured in our bodies, in our cells, in the nucleus of our cells using enzymes, using enzymes and nucleotides in the nucleus of the cell. So Mother Nature has provided the ultimate and it's producing 1 billion length DNA high-quality, limited mutations very quickly inside the cocoon of the nucleus of the cell. Take it out of -- take those enzymes and nucleotides out of the cell, and they are not stable. The chemistry does not work. So the world has seen a model for how to do it inside the cells of biology, but we've not been able to replicate that outside the cell. So the world of DNA synthesis today is not using enzymes. It's using harsh chemicals with fundamental limitations. Like the very short length is able to be produced viably, and the only way to build a long gene-length DNA strand is to build small oligonucleotides and go through an extensive process to stitch those together to get what the world wants, which is gene-length DNA, 1,000 -- that's going to basically code for proteins that the world needs in drugs or for synthetic biology applications. So Codexis saw this. Why can't we use enzymes? Why haven't we been able to use enzymes in an industrial setting for DNA synthesis? And our answer is because the enzymes need to be engineered for that specific purpose that the world needs now that we didn't recognize earlier. So we went to work on engineering enzymes for that application. It was a big hill. We started working on this in 2020. We started working in a unique partnership, which I'll come back to in a second. And we did one of the most intensive enzyme engineering projects in our company's history, maybe the most intensive program. 18 months, we looked at hundreds of thousands of different enzyme variations. We tested essentially all of those enzyme variations, and we needed to create yields and productivities. We needed to stitch those 4 different nucleotides against a whole range of various nucleotide receptors. Very complicated. We needed to do that at 99-point-something percent yield to be competitive and economically viable against today's nonenzymatic chemical traditional routes. We did that. We have finalized. And now any strand of receptors with any of the 4 nucleotides, we can drive 99.9%, 99.5% yields. And that enables us to basically, one nucleotide at a time, build gene-length DNA. It enables us to do it much quicker than the industry today can deliver a gene-length DNA. And we brought that to a partner, a Series B company, who we see as best set up to disrupt today's world of DNA synthesis. Most of the companies like IDT, which is part of Danaher, Twist Bioscience has been very successful. We have partnered with Molecular Assemblies, a San Diego Series B company, to bring our enzyme. We've grown our equity participation. I serve on the Board of Molecular Assemblies. So together, our enzyme and enabling Molecular Assemblies, we're setting up to go into the DNA synthesis market, to commercialize their product in the early 2023 and to really start to enjoy not only the enzyme -- the benefits of selling enzymes to Molecular Assemblies but also downstream value creation by our equity participation in Molecular Assemblies. So it's a pretty exciting, pretty dramatic approach to leverage our enzymes to break into a multibillion dollar fast-growing industry like DNA synthesis.

And you touched on your cell and gene therapy partnership with Takeda, but I guess just what roles do you think that you play just longer term? And what's the outlook you have there for more partnerships or broadening areas within cell and gene therapy?

Yes, it's exciting. I mean we're not involved in cell therapy per se. We're involved in gene therapy. And gene therapy is -- fundamentally, it's the delivery of nucleic acid into human biology to affect disease states. And the delivery of the nucleic acid, the nucleic acid that's delivered in biology is almost always designed to express an enzyme. So deliver that DNA, have it land in a place where that DNA then can code for an enzyme that is going to do the biologic -- perform the biological function to help these patients. And so what we do is we engineer an enzyme that's ultimately going to be delivered by a specialized nucleic acid delivery as part of the gene therapy. It's usually referred to as a transgene. So we're engineering better transgenes than what we see being delivered by gene therapy companies today. Most gene therapy companies are delivering the DNA that will code for the missing enzyme in that particular patient's biology. An enzyme that would -- that's critical for lysosomal function, for example. And what we found is that the enzyme that is missing -- if it's inside the cell, it performs brilliantly, but a gene therapy needs to get it into the cell. It needs to express usually outside of the cell. So the enzyme itself needs to live a very different life than the missing natural enzyme. It needs to land in the liver and express. It needs to traverse the blood system and be stable. It needs to enter into cells, right? There needs to be some transport. So these are functions that we can engineer in with our platform into the transgenes. And we helped Takeda on this concept and we're extremely excited about their progress using our technology. We've started to look to do our own gene therapy development, where, in addition to looking at other diseases outside of the Takeda partnership, where we've done our own transgene -- we're doing our own transgene engineering. We're also doing some work to access viral vectors that can package the DNA associated with our engineered transgenes. And so over time, we're expecting to be able to bring our own full gene therapies into preclinical and clinical development. So it's early days. We're mostly focused in this area on the Takeda partnership and supporting them and growing that, but we're also doing some additional work outside of it ourselves.

And one area of the business we haven't touched on was the food and nutrition business. Just -- can you just talk on what kind of partnerships you have there? What are the future directions? And then how is Codexis differentiating itself from other syn bio food green provider like DMS (sic) [ DSM ] or Amyris?

Yes. Yes, it's in the -- we're a pharma manufacturing and drug discovery and now here we are in food. And that's the beauty of our platform. I just can't help but just share that. Like we have -- and we haven't touched much about life sciences either. I mean the applicability of enzymes for our future world is enormous. And our platform finds the enzyme faster, better, cheaper than others. And our business teams are finding a growing range of applications and industries that can benefit from engineered enzymes. And in essence, that's the excitement and that's the growth story of Codexis. And we've been delivering against that consistently over these last 10 years, especially. But back to food. So we started to see opportunities for engineered enzymes in the food space. And the first targets, we're looking at food ingredients, like food ingredient companies like Tate & Lyle, who became and is one of our leading partners today, can find, for example, trace ingredient, trace products in the natural environment, but they're so trace and unavailable that they're not economically viable. Take stevia. So if you squeeze the juice out of a stevia leaf, the vast majority of that juice is a particular compound. It's called the rebaudioside. And that compound is noncaloric, good. It is a high-intensity sweetener, good. It is fairly available from a stevia plant, if that's grown. That's pretty good. But it's got this bitter aftertaste. And so it's the Achilles heel of today's stevia. It's that same juice, that same plant. 0.1% of that juice is also high intensity. It's also natural and it doesn't have that bitter aftertaste. It is a chemical derivative of the main sweetener in the stevia leaf, but it's only 0.1%. So that's the problem. It's not viable. So Codexis, in partnership with Tate & Lyle, engineered a series of enzymes, 3 actually, that you put together with the stevia leaf juice, add 3 enzymes. After a substantial enzyme engineering program, the juice is, which is normally this bitter tasting stuff, is converted in less than 20 hours in a simple carbon steel reactor to 95% of the 0.1% stuff. So we just solved the problem of this naturally available, high-intensity, noncaloric, good tasting sweetener, the problem that it had of being uneconomically viable to produce. So we designed that process. It was all based around engineered enzymes that we think only Codexis could engineer. And in partnership with Tate & Lyle, they've scaled that process, and they've been out promoting that better-tasting stevia, they call it TASTEVA M, broadly to their customers and the various food and beverage applications, and they've steadily grown that to be a significant growing source of revenues for Codexis. We're supplying the enzymes to them. And in the first quarter, we did over $1 million of sales to Tate & Lyle for this process and one more that we designed. We also designed an enzyme in partnership with another company called Kalsec. And Kalsec is probably a company you're not familiar with. Great company, relatively small, but they're one of the leaders, if not the leader, in bringing hops, H-O-P-S, to the beer industry. And a problem with beer, hoppy beer is that hops breakdown under exposure to light. And so if you probably all will know now, and I share with you, you can't buy a hoppy IPA beer in a clear bottle because of this problem. So we worked with Kalsec to design an enzyme that enabled a new hop ingredient, which is light-stable to be launched by them. We just finalized this project last year with Kalsec, and they're out promoting it to the beer industry. And hopefully, they crack that market open and be another significant enzyme product sale for Codexis. So it's -- these are the kinds of applications that we've gotten involved in the food and nutrition area so far.

Really interesting stuff there. And I guess, just because you mentioned it before, this question, just on the life sciences side because we haven't touched much on it yet. Any new products or developments there just to run through on that side?

Yes. Yes. So I already shared the DNA synthesis story. So that's one of our flagship developments in life sciences. And it highlights the relevance of engineered enzymes for nucleic acid synthesis. The second area, and I'll touch that second as well, is in sequencing -- excuse me, in genomics and to do better high fidelity, diagnostics and genomics. But back to nucleic acid synthesis, shared the DNA synthesis story. We've also launched a product that enhances messenger RNA manufacturing. Here, the typical recipe for manufacturing messenger RNAs uses an enzyme called an RNA polymerase. We created an enhanced engineered RNA polymerase that minimizes the amount of expensive cap agent that's needed and minimizes the amount of RNA polymerases that's needed. And so we have branded that as HiCap RNA polymerase. We launched that around the beginning of last year. As we moved through 2021, we got multiple installations in clinical-stage messenger RNA-based vaccine and therapeutic development programs with a growing range of customers. And we see this -- our HiCap RNA polymerase as having significant advantages. And ultimately, we're hopeful that we become the go-to RNA polymerase for what should become a growing range of messenger RNA-based products to move through the clinical stage. So that's really exciting on the nucleic acid synthesis side. Our initial foray and a growing growth story for us is in genomic diagnostics, next-gen sequencing. So to determine whether a sample has a targeted cancer gene or contains a viral load that the doctors are looking to diagnose, you have to go from a biological sample, a solid tumor or a liquid blood sample, and you have to do a lot of conversion and you have to do a lot of work on that sample to make it presentable to the next generation -- the NGS machine. That conversion is largely enzymatic. There's a whole range of different enzymes that are needed. Companies that sell NGS machines call them reagents. We call them a range of different enzymes. And the world is -- of next-gen sequencing-based diagnostics has been tapping into just natural enzymes to enable this -- the sample processing, library preparation and amplification for next-gen sequencing. So we saw this as a target opportunity to create more high-fidelity diagnostic results using an engineered enzyme for engineer -- for enzymes in this workflow. Our first enzyme was a DNA ligase, which does the library prep conversion. We came up with a substantially better, higher conversion, especially for low sample content like liquid biopsy. We promoted this and we struck a partnership deal with Roche, Roche's Diagnostic Solutions division in -- a couple of years ago. And through that process, we learned other enzyme opportunities. We launched a DNA polymerase. We call it HiFi DNA polymerase, which enhances significantly the fidelity of NGS results. We launched that at the beginning of last year. And similar to the HiCap RNA polymerase, we now have a range of different customers who are taking up our newly engineered launched HiFi DNA polymerase. So in just 3 or 4 years' time, we have identified a growing range of applications in the life science tools area. And I've just showcased some of the developments that we've publicized and launched in just these last few years. We also have a range of custom partnerships with some of the leaders in the space, working on specialized enzymes for those partners. So this area is really taking off for Codexis. In 2018, '19, we had 0 sales. Last year, we generated $8 million of sales. We're targeting 50% growth from that in 2022. And we see a growing percentage of our enzyme discovery being applied into the life science tools area, really exciting. We're showcasing that we can commercialize our discoveries very quickly in this area as well. So look for us to continue to grow the percentage of sales in this sector this year and beyond.

Great. Well, John, thank you for that. I think, with that, we're out of time. I really appreciate it, and appreciate everyone in the audience for listening in. Yes, thank you.

Thanks a lot, John.