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Codexis (CDXS) Transfers Leasing Rights to Vaxcyte, Stock Up

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Codexis, Inc. (CDXS - Free Report) , a commercial-stage enzyme engineering company, announced the swift execution of lease assignment to Vaxcyte Inc. (PCVX - Free Report) . The legal real estate document allows Codexis to transfer the rights and obligations of the lease to PCVX.

Per the Assignment and Assumption of Lease agreement, Vaxcyte has agreed to assume all of Codexis’ rights, title and interest in, under and to the San Carlos, CA location from CDXS. Under the terms of the agreement, Codexis is also entitled to get a refund of approximately $0.4 million of its security deposit for leasing the premises from Vaxcyte.

As a result of consolidating operations to its headquarters facility in Redwood City, CA, Codexis expects to save more than $30 million through 2031. The decision was taken as part of the company’s strategic reprioritization efforts to streamline its focus on programs that have the greatest potential to provide commercial benefits.

Per management, conducting operations at one location will allow close collaboration between teams, while significantly reducing overhead costs. This move is expected to provide Codexis with a projected cash runway to mid-2026.

Shares of the company soared 6.8% in the last trading session in response to the encouraging news. Year to date, shares of Codexis have plummeted 63.1% compared with the industry’s 13.4% fall.

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Vaxcyte withholds the right to terminate the assignment agreement if the transfer of the lease does not occur by Jan 1, 2024.

Codexis is currently developing its enzyme-catalyzed oligonucleotide (ECO) Synthesis technology platform to enable scalable production of RNA interference therapeutics. In its second-quarter earnings release, CDXS reported expecting several key milestone achievements for the technology in the upcoming quarters.

The company is gearing up to demonstrate gram-scale synthesis with its ECO Synthesis technology platform by the end of 2023. The success of the same will validate the technical prowess of the platform, which will make it eligible for pre-commercial customer testing of the platform.

The company anticipates beginning pre-commercial testing of the ECO Synthesis technology platform, with select customers, in 2024.

Currently, Codexis generates revenues from the sale of its novel, high-performance enzymes and other classes of proteins developed using its proprietary CodeEvolver directed evolution platform.

Zacks Rank and Stocks to Consider

Codexis currently has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same industry are Dynavax Technologies (DVAX - Free Report) and Better Therapeutics (BTTX - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, the Zacks Consensus Estimate for Dynavax’s 2023 loss per share has remained constant at 24 cents. The estimate for Dynavax’s 2024 earnings per share is currently pegged at 2 cents. Year to date, shares of DVAX have risen by 26%.

DVAX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 25.78%.

In the past 30 days, the Zacks Consensus Estimate for Better Therapeutics’ 2023 loss per share has narrowed from $1.05 to 98 cents. During the same period, Better Therapeutics’ 2024 loss per share has also narrowed from 83 cents to 80 cents. Year to date, shares of BTTX have lost 44.8%.

BTTX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 24.22%.

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