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Sometimes it helps to be lucky. Two days after I started this position Codexis announced the first-ever ECO Synthesis supply deal for a drug candidate. Investors shouldn't expect the company to name customers outside large collaborations where there might be joint-marketing efforts.

That said, the company disclosed this was a 50 gram (g) supply deal for a preclinical RNAi drug candidate in a cardiovascular indication. It's not much – 50 g of Redemplo could treat 500 patients for a year, 50 g of Rivfloza could treat 25 patients for a year – but cardiovascular indications tend to have larger patient populations. If the customer's asset advances into clinical trials, then the revenue potential will gradually increase. But revenue won't be meaningful unless the asset earns regulatory approvals, which are at least seven years away.

That's fine with me. After all, Codexis wouldn't be valued at $90 million if the business and technology platform were firing on all cylinders.

I plan to build a small starter position of about $3,000 to $5,000 in Codexis in 1H 2026, which would represent roughly 6% to 10% of the total principal invested in Finch Trades to date. This will be a higher-risk position than even a precommercial drug developer, as explained in the earnings preview for Q4 2025.

I'm attracted to Codexis because ECO Synthesis could be one of the only ways to manufacture RNAi therapeutics targeting larger indications, such as cardiometabolic indications, obesity, and asthma. The new management team could give the business and technology platform a fighting chance. However, there remains a lot to prove and significant uncertainty about the commercial viability of enzymatic production of short-interfering RNA (siRNA).

The Trade

Codexis is considered a Future Compounder position. I purchased 1,000 shares at $1.00 per share on March 2, 2025. The total transaction value was $1,000. #roundnumbers

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Outperformance Scenarios

Investing in individual stocks can be reduced to a simple question: "If I invest $1 in this individual stock at this price, will it outperform an equal passive investment in the S&P 500 at this level?" If you keep emotions and expectations in check, then you might be surprised to learn you don't need to swing for the fences.

Here's how shares of Codexis will need to perform for the money invested in this Finch Trade to outperform passive investing in the S&P 500 in the next five years.

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Assumptions:

• The S&P 500 index gains 10% per year with dividends included – its historical average since 1990.
• Codexis averages 10.5% dilution per year in the next five years – equivalent to a standard 17.5% dilutive event every 18 months. This means shares need to gain 61% in the next five years, but the market cap would need to grow by 131% in that span from $90 million to $208 million.
• S&P 500 closing level on March 2, 2025 = 6,862
• Codexis closing price on March 2, 2025 = $1.02 per share

Margin of Safety & Allocation

Codexis is considered a Future Compounder position. The estimated fair valuation based on my current model is below:

• Market close March 2: $1.02 per share
• Modeled Fair Valuation: $3.07 per share
• Allocation Range: Up to 5%

Codexis reported 90.324 million shares outstanding as of November 3, 2025. The modeled fair valuation above assumes 103.873 million shares outstanding, which is equivalent to 15% dilution.

Further Reading

• March 2026 press release announcing the first ECO Synthesis supply deal for an RNAi drug candidate
• January 2026 research note discussing recent management changes