CDXS

Major Shareholder Accelerates Buying as Codexis Inc($CDXS) Shares Plunge - Undervaluation Signal for RNA Therapeutics Tech Firm?

04/09/2025 20:11

Amidst a sharp decline in the share price of biotechnology company Codexis Inc ($CDXS) over recent months, major shareholder Opaleye Management Inc has been consistently increasing its position, drawing significant investor attention. Codexis, a small-cap company with a market capitalization of approximately $176 million, has seen its stock price plummet to a 52-week low of $1.97 (as of April 8, 2025). This represents a dramatic 66% decline from its 52-week high of $5.81 recorded in mid-December last year. Particularly concerning has been the precipitous drop since late February 2025, which sent the stock tumbling from the $4 range to below $2. What's notable, however, is that despite this significant price deterioration, major shareholder Opaleye Management Inc has maintained a steady buying pattern. According to SEC filings, Opaleye has executed a total of 24 purchase transactions between September 2024 and April 2025, acquiring substantial blocks of shares. The largest single transaction occurred on September 20, 2024, when Opaleye purchased 1,055,000 shares at $3.01 per share, totaling $3,175,550. Most recently, on April 8, 2025, the firm acquired another 100,000 shares at $1.98 each, for a total investment of $198,380. Particularly striking is Opaleye's accelerated buying activity following the stock's sharp decline in late February 2025. After the share price dropped from $3.93 to $3.04 in a single day on February 28, Opaleye purchased over 500,000 shares between February 28 and March 21 alone, and has continued buying into April despite further price weakness. This aggressive purchasing behavior from a major shareholder suggests a belief that the current market price significantly undervalues the company's intrinsic worth. Indeed, Codexis has positioned itself as a key player in the biopharmaceutical industry with its ECO Synthesis™ platform, which leverages enzyme engineering technology for RNA therapeutics manufacturing. Examining the company's financials, Codexis reported revenue of $59.3 million in 2024, down from $70.14 million in 2023. However, the net loss improved to -$65.3 million from -$76.2 million in the previous year. Earnings per share (EPS) also showed improvement at -$0.89 compared to -$1.12 in 2023. The company maintains a relatively strong cash position with $73.46 million in cash and short-term investments, which is substantial relative to its current market capitalization. Recent performance has been challenging, with the company reporting disappointing Q4 2024 results in February 2025. The quarterly loss of $0.13 per share missed analyst expectations of a $0.04 loss, while revenue of $21.46 million fell short of the anticipated $27.41 million. This earnings miss appears to have contributed significantly to the subsequent share price decline. Looking forward, however, Codexis has provided revenue guidance of $64-68 million for 2025, suggesting a return to growth. The company has also stated its goal of achieving positive cash flow by the end of 2026 and has demonstrated cost-cutting efforts, reducing R&D expenses to $46.3 million in 2024 from $58.9 million in 2023. On the industry front, Codexis is focused on improving RNA therapeutics manufacturing processes through enzyme-based solutions and aims to secure a GMP (Good Manufacturing Practice) scale-up partner in 2025. The RNA therapeutics market is experiencing rapid growth, and technological leadership in this space could provide significant long-term growth potential. Analysts maintain an average 'buy' rating on Codexis shares, with a 12-month price target of $7.00, suggesting substantial upside potential from current levels. This bullish outlook aligns with Opaleye Management's continued share purchases. It's worth noting that in almost all transactions, Opaleye Management Inc has disclosed that the securities are owned directly by Opaleye, L.P., with disclaimers of beneficial ownership except to the extent of its pecuniary interest. This appears to be standard disclosure language related to the firm's legal status as an investment fund manager. In conclusion, while Codexis Inc ($CDXS) has experienced a significant share price decline in recent months, the consistent buying activity from major shareholder Opaleye Management Inc suggests a belief that the current price fails to reflect the company's long-term value and growth potential. However, investors should remain mindful that the company is not yet profitable and faces the inherent risks associated with the biotechnology sector when making investment decisions.

You can receive notifications when news is published.