The Perfect Storm - More and more chemical and pharmaceutical companies are recognizing the need to make their processes more environmentally sustainable, a trend that is right at the heart of Codexis. As an industrial biotech, the U.S.-based organization develops enzymes and processes for the production of pharmaceuticals, biofuels and bio-based chemicals. But this isn't the only trend that is boosting business. "We believe industry forces and technology are coming together to create an extremely positive environment for Codexis," said Senior Vice President, Pharmaceuticals, Dr. Peter Seufer-Wasserthal in an interview with Brandi Schuster.

CHEManager Europe: How do enzymes promote sustainability in chemical/pharma processes?
Peter Seufer-Wasserthal: Enzymes, which are manufactured by Codexis for use as biocatalysts, promote environmental sustainability in a number of ways.

First, in contrast to metal or rare earth catalysts, which must typically be mined in an extremely non-environmentally friendly fashion, enzymatic biocatalysts are manufactured via fermentation using sustainable nutrients. The fermentation process produces a low carbon footprint. This contrasts greatly with the large carbon footprint associated with manufacturing of metal catalysts.

Second, since biocatalysts can be improved or evolved to make them more effective in a chemical manufacturing process, this can result in chemical manufacturing processes which have fewer manufacturing steps, typically require ambient temperatures and pressures, use fewer and more benign solvents, and can increase volumetric throughput. Any one of these improvements would yield a greener process - and Codexis has examples where all of these improvements can be seen, compounding the power of green technology.

What role do enzymes play in pharmaceutical manufacturing?
Peter Seufer-Wasserthal: They are used as biocatalysts in the manufacture of a number of active pharmaceutical ingredients and intermediates. These enzymes allow the APIs and intermediates to be made more economically than comparable processes not using biocatalysts, with fewer steps and greater throughput.

What markets and applications have the most potential for enzymes?
Peter Seufer-Wasserthal: Enzymes used as biocatalysts have seen a robust uptake in the pharmaceutical arena. Codexis' work with Merck & Co. to manufacture Januvia is a terrific example where enzymes have made a positive difference in manufacturing. In the Januvia case, Codexis and Merck were able to increase throughput of an existing manufacturing plant. This is the type of win/win/win we believe biocatalytic enzymes offer: they offer greater throughput, allowing market demand to be met; greater throughput and more flexibility for production (in-house or outsourced production); and no expansion, which means a smaller carbon footprint.

Enzymes are also playing a major role in the production of cellulosic ethanol and other biofuels. Codexis has played a significant role in this area.

Also, Codexis has recently demonstrated that detergent alcohols can be made from biomass using Codexis' biocatalysts. This was done most recently at scale, and we are very excited about this demonstration of our CodeXol technology at commercial scale.

The fine chemicals area, another place where biocatalytic transformations can help reduce steps and costs, is an area for future expansion. Many manufacturers in that field are not used to thinking about biocatalysts - and it is our job at Codexis to make sure the process chemists in those companies look at every available tool, including biocatalysts, as they strive to drive down costs and manufacture their products in a more environmentally friendly way.

And finally, enzymes are used in many other industries, as feed additives, for treatment of paper and pulp, in the food industry for baking, beverages and other areas.

How has the patent cliff and the growth of generics affected your business?
Peter Seufer-Wasserthal: The patent cliff can actually be a very positive factor for a company developing new technology, e.g. a manufacturer of biocatalysts. It creates an opportunity for companies to reevaluate the process for making an API or intermediate. This allows a generic, but also the innovator company, to think outside the box and look at every available alternative to lower manufacturing costs. Codexis has on-going programs with many companies as a result of opportunities caused by the patent cliff.

How do your customers drive innovation within Codexis?
Peter Seufer-Wasserthal: Codexis works very closely with the innovators, generic companies and CMOs to drive innovation. Codexis is uniquely situated as a "helper company."  We are in a position to help the pharma company with their own internal manufacturing resources, the generic company seeking to find a more cost effective route or the CMO seeking to provide a green and cost effective route for its customers.

The confluence of a strong biology and microbiology group at Codexis, along with a team of process chemists who have faced the processing challenges of our customers, leads to a very collaborative environment.

Recently during an extended meeting with one of our large customers, the company colleagues showed us a number of challenges in their pipeline that may benefit from our ability to evolve a biocatalyst. The result of the meeting, which was extraordinarily collaborative, are a number of programs where Codexis believes it can provide either an enzyme off the shelf to solve an immediate need, or for us to enter into an enzyme evolution program to help solve the problem.

And the other optimal point of a collaborative relationship comes with the issue that biocatalysts can't do certain transformations - and some transformations they simply don't do well, at least not yet. In these cases, in a collaborative and open environment based on mutual trust, Codexis will seek to solve the problem by developing a new enzyme platform and letting the client know what will or will not most likely work.

Where have you seen the most interest regionally for enzymes, particularly in pharma?
Peter Seufer-Wasserthal: This is a tough question as there is very strong interest in many regions of the world, from the Far East to the U.S. During our recent visit to CPhI China in Shanghai, we met with several manufacturers with an interest in enzymes. We have recently announced a partnership with the custom manufacturer AMRI, where this is strong interest. Our meetings with large pharma, specialty pharma, biotech and generic companies have also been quite compelling, and we expect to see continuing positive developments from these types of companies for Codexis.

What trends have you observed in contract manufacturing?
Peter Seufer-Wasserthal: The trend that has been getting a lot of press and where there has been significant discussion at the trade shows is the re-shoring to the U.S. that is occurring. What is behind this trend is very significant, and our customers are continuing to talk about this - and it is the security and safety of the supply chain.

Our customers have developed a strong relationship to key suppliers in Asia and get very good results there, but the concerns about the safety and security of the global pharmaceutical market, as articulated by the U.S. Food and Drug Administration, the UK Medicines and Healthcare Products Regulatory Authority and the European Medicines Agency, continue to place pressure on the weaker parts of the supply chain. With the passage of Generic Drug User Fee Act (GDUFA), which provides more resources and inspectors, this trend will likely continue at manufacturing locations, primarily in Asia.

The other part of the trend, in addition to the regulatory pressure, is simply market forces at work. Costs are increasing rapidly in Asia and India, and those markets are seeing increased labor costs, high turnover in the labor forces, in addition to the increased regulatory costs, not only GMP compliance, but worker safety and environmental costs.

All these factors have resulted in significant re-shoring of work to the U.S., as well as increased activity at the well-run CMOs in Europe, and will lead to a more balanced outsourcing strategy going forward.

How are you positioned for this trend?
Peter Seufer-Wasserthal: Codexis has kilogram-scale enzyme manufacturing capability at our Redwood City, California, campus, as well as a trusted partnership for large scale enzyme manufacturing at Lactosan in Austria. Our U.S.-based enzyme manufacturing typically provides enough enzyme to allow a pharma partner to manufacture material for up to phase III trials and partners like Lactosan enable Codexis to supply enzyme for commercial scale production.

Recently, Codexis further demonstrated its commitment to the security and safety of the supply chain by joining the international pharmaceutical consortium Rx-360. Codexis will be an active member of this consortium and is committed to helping all of its clients to ensure the safety and security of the pharma supply chain.

Visit Codexis at the CPhI 2013 in Frankfurt Oct. 22-24 in hall 3.1, booth A53