Codexis, headquartered in Redwood City, California, USA is a developer of enzymes and processes for the production of pharmaceuticals, biofuels and bio-based chemicals. Following the termination of a funding agreement for research in the biofuels field with Shell in 2012, Codexis went about the hard, but crucial work of strategically realigning the company for its forward growth strategy.

This also included a restructuring of crucial management positions. In parallel, the company was encouraged by solid developments in the pharma business. For fiscal year 2011, the Codexis reported revenues of $124 million, including a 49% increase in Pharmaceutical Product Sales over the prior year. Dr. Michael Reubold asked Codexis' Senior Vice President, Pharmaceuticals, Dr. Peter Seufer-Wasserthal about his take on the business climate and business opportunities.

CHEManager Europe: Dr. Seufer-Wasserthal, will Codexis make changes to its strategy following the recent management restructuring?

Peter Seufer-Wasserthal: The new management and leadership team at Codexis reflects the changing focus of the business. Management is actively developing a new strategy to enter various markets following the business model successfully realized by the company's pharma unit. This unit has been serving leading pharmaceutical customers increasingly over the past years by providing screening tools and services as well as commercial scale enzymes and chemicals made through a network of contract manufacturing partners.

Codexis is a provider of industrial enzymes for pharmaceuticals and biofuels. How do you evaluate the current business climate in these segments and how do you expect these markets to develop?

Peter Seufer-Wasserthal: The biofuels area has seen many changes over the past 12-18 months with great initial success, but also with delays and set-backs. Lack of clear guidelines from governments is adding to the uncertainty of the field. There continues to be great interest, but now paired with a healthy realism that is needed to succeed in such new market.

Codexis is doing well in the pharmaceutical market based on two major factors: first, the outsourcing market in the pharmaceutical industry continues to grow and second, biocatalysis has become much more established as a tool that process chemists are using in development, scale up and production. Both areas are expected to expand the basis for Codexis products and services for future years.

What are the main growth drivers in these markets?

Peter Seufer-Wasserthal: Both markets are driven by cost, and our products lower the production costs for pharmaceutical companies and biorefineries. For pharma, technology has always been a key tool to controlling cost. Codexis' established network of production partners for enzymes and chemicals and a proven ability to produce products at competitive pricing lends credibility to its technology and provides customers with an actionable advantage.

Our technology and commercial operations are leading to new inquiries and projects every day. By supporting Contract Research Organizations - CROs - and Contract Manufacturing Organizations - CMOs - in the field with Codexis screening kits, enzymes and know how, we are increasing the number of projects that utilize Codexis technology and significantly widening our pipeline in the long term.

Codexis has also positioned itself as a developer of cost-advantaged processes for the production of bio-based chemicals. The term "Green Chemistry" is currently en vogue. Do you expect it to become a long-term trend with substantial growth potential?

Peter Seufer-Wasserthal: "Green Chemistry" has become a common term over the last few years, especially working with the Pharmaceutical Round Table, part of the American Chemical Society's Green Chemistry Institute. However, there is no visible pricing premium for "green" products. Any new technology only gets adopted if it is commercially attractive.

Green technologies for chemicals are geared towards minimizing waste, supporting catalytic conversions, using less energy, less solvents, and more benign solvents to create an economic advantage as well. Green Chemistry succeeds by providing more economically advantaged processes!

Will the expected renaissance of the industrial chemistry sparked by the shale gas boom in the U.S. reduce the interest for bio-based chemicals?

Peter Seufer-Wasserthal: Unlikely. Demand for chemicals continues to grow globally. Chemical producers are looking at a variety of feedstocks to supply that demand and many believe it will be a mix of natural gas as well as biomass. Additionally, specific markets are better suited for biobased feedstocks. Detergent alcohol is a key ingredient in many personal care products like toothpaste, shampoo, and body soap. Consumers are demanding these products are "green" and Codexis is working to bring to market a second-generation detergent alcohol from agricultural waste to service this need.

What processes and technologies are you currently offering for pharmaceuticals and biofuels applications and what new processes are you working on?

Peter Seufer-Wasserthal: On the biofuels end we are concentrating on converting cellulosic biomass to sugar and have shown comparable activity of our enzyme package to the leading packages sold in the market today.

We are in the process of scaling up these enzymes to provide samples from commercial production in the first half of 2013.In the pharmaceutical industry, we sell optimized enzymes and intermediates made using the biocatalytic processes with a variety of enzyme platforms at commercial scale: ketoreductases, transaminases, hydrolases, monoamine oxidases, halohydrin dehalogenases and a number of others in development. We have optimized the enzymes, developed the chemical processes, and transferred production either to our customers or to production partners.

We made and sold or used more than 10 metric tons of enzyme last year and sold hundreds of metric tons of enzymatically produced intermediates to pharmaceutical companies. We are working on enhancing a number of new enzyme classes so they can be used for development products, at commercial scale, or for second generation processes for existing APIs.

What are your main customer markets from a geographical perspective?

Peter Seufer-Wasserthal: In biofuels, our efforts are global. For the pharma business, the main end users continue to be in Europe, US, Japan and India for our pharmaceutical market. Innovative pharma companies are starting to shift into the generics markets, holding on to their products for much longer and looking at competitor's products to offer them once off patent. This is a great opportunity for Codexis to speed up development by providing our technologies, services and products.