It's all uphill from here.

Codexis reported relatively strong Q1 2026 revenue of $15.2 million, although that included the final $6.3 million in service revenue from the Merck licensing deal announced at the end of last year. Still, the business notched $7.2 million in product revenue, $0.3 million from ECO Synthesis, and a product gross margin (excluding services revenue from the denominator) of 71.3%. Product gross margin has been as choppy as product revenue in recent years – bouncing between 44.7% and 71.6% in the prior eight quarters – so investors might not expect it to hold above 70% for the rest of the year.

The industrial enzymes specialist burned $13.1 million in cash from operations in the opening frame of 2026, leaving it with $65.1 million in cash at the end of March. Management believes that will fund operations through the end of 2027, but investors can expect Codexis to raise capital before the end of this year.

A public offering of common stock would lead to painful dilution. A credit facility isn't out of the question, which might be the most likely considering the business is overhauling a new GMP facility for ECO Synthesis. Debt and capex for hard assets often go hand-in-hand. Codexis has teased another possibility: an equity investment from a major RNAi drug developer in 2H 2026.

Pure plays like Alnylam and Arrowhead are flush with cash. The latter wields a wholly-owned RNAi manufacturing facility in Wisconsin and multiple assets for massive indications like obesity and heart disease, which may give it added incentive to explore next-generation production technologies like ECO Synthesis. Codexis and Arrowhead also teamed up for a fireside chat about enzymatic synthesis of siRNA molecules at the recent TIDES meeting.

Fortunately, the ascendence of RNAi as a therapeutic modality – AbbVie, CRISPR Therapeutics, Moderna, Novartis, Amgen, Takeda, and many others are developing drug candidates – means investors don't need to worry about which company might tie-up with Codexis. They only need a research or licensing deal to be announced as a meaningful sign development is progressing in the right direction.