CDXS

Codexis ($CDXS) Major Shareholder Accumulates 660,000 Shares Following Earnings-Driven Plunge - Betting on Long-Term Value

04/03/2025 23:51

Biotechnology firm Codexis Inc ($CDXS) has attracted investor attention as major shareholder Opaleye Management has consistently accumulated substantial positions during recent price weakness over the past several months. Codexis specializes in enzyme engineering technology for pharmaceutical, food, and medical applications, leveraging its proprietary CodeEvolver® technology platform to deliver innovative enzyme solutions across various industries. Based in Redwood City, California, the company has been expanding into RNA therapeutics manufacturing. Opaleye Management has steadily purchased Codexis shares since September 2024, making a particularly aggressive move on September 20, 2024, when it acquired 1,055,000 shares in a single transaction (approximately $3.175 million). The fund continued periodic purchases throughout October, December, and January. The most notable buying activity began in late February 2025. After Codexis reported disappointing Q4 results on February 27, 2025, which missed analyst expectations, the stock plummeted approximately 27% from $4.18 to $3.04 on the following trading day (February 28). Opaleye responded with immediate buying, purchasing 147,649 shares (about $440,000) on February 28 alone, followed by almost daily additional purchases throughout March and early April, accumulating over 660,000 shares during this concentrated period. Looking at Codexis's 2024 financial performance, total revenue decreased 4% year-over-year to $59.3 million, though product revenue increased by 6% to $36.8 million. Net loss improved to $65.3 million from $76.2 million in 2023. The company has provided 2025 revenue guidance of $64-68 million, projecting double-digit growth. Quarterly performance has shown significant volatility. Q2 2024 saw revenue decline 62.6% year-over-year, while Q3 showed a 38.3% increase, followed by a 19.2% decrease in Q4. This performance volatility has been reflected in the stock price, which has ranged from $2.49 to $5.81 over the past year. Codexis is currently focused strategically on expanding in RNA therapeutics manufacturing and securing a GMP scale-up partner. In July 2024, the company announced the completion of a purchase agreement with Crosswalk Therapeutics for gene therapy assets, making it eligible to receive future development and commercial milestone payments along with low-to-mid single-digit percentage net sales-based royalties. Opaleye Management's persistent buying activity can be interpreted as a strong signal of confidence in the company's long-term value. Particularly telling is the concentrated buying immediately following disappointing earnings results and the subsequent stock decline, suggesting the major shareholder views the current price as undervalued relative to the company's intrinsic worth. Analyst sentiment toward Codexis is generally positive, with 11 buy ratings, 4 hold ratings, and no sell ratings. The average price target stands at $6.67, more than double the current share price. However, investors should note the stock's weekly price volatility of 12.8%, which exceeds the market average of 6.4%, and the negative gross margin of -5.4%, indicating continued profitability challenges. Considering the insider trading pattern alongside the company's growth outlook, Codexis may experience high volatility in the short term, but the major shareholder's aggressive buying activity and the company's strategic expansion into RNA therapeutics could yield positive results over the medium to long term. The consistent accumulation by a major shareholder during price weakness may be a meaningful signal for long-term investors.

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