In 2008, Codexis was one of several biofuel firms to backtrack on an IPO when the market went moribund. Instead, the company chose to tap existing investors like Royal Dutch Shell (NYSE:RDS-A) as it advanced its pursuit of biocatalysts that can turn cellulosic materials into fuel.
With the cleantech IPO market slowly regaining its footing -- two steps forward with A123 Systems (NASDAQ:AONE) and one step back with Trony Solar -- Codexis appears ready to give a public listing another shot. The catalyst company is once again seeking a listing on the Nasdaq, and to raise perhaps as much as $100 million from the public.
One thing I noticed in the new filing was how much turnover there's been in the ranks of key executives since March 2008. The CFO, the president of pharmaceuticals, and the VP of operations are all gone. Bob Lawson has come over from Intuit to take the CFO reins, while a veteran of DuPont's (NYSE:DD) biofuels program has been promoted to head up company-wide R&D. Codexis has also poached a researcher from LS9, one of the most intriguing synthetic biology startups.
Also interesting is that Maxygen (NASDAQ:MAXY), the biopharmaceutical company that spun off Codexis in 2002, still owns more than 20% of the common stock. Other investors include Chevron (NYSE:CVX), Pfizer (NYSE:PFE), and General Electric (NYSE:GE). That's an impressive roster, but let's stay focused on Maxygen. This firm trades for less than the sum of cash on the books plus the implied value of the firm's recently formed drug-development joint venture, Perseid Therapeutics.
That's not an uncommon situation for a cash-burning biotech to find itself in, but the Codexis stake has clear value that could soon be crystallized by an IPO. Management may have been partially motivated by this apparent mispricing in conducting its recent Dutch tender auction, in which Maxygen agreed to repurchase over 18% of its outstanding shares.
Buying Maxygen today to get Codexis exposure on the cheap isn't a foolproof plan. The IPO could be pulled, or some negative event could tank Maxygen shares even further. Still, if you can determine that Maxygen's cash is largely unencumbered and not about to get vaporized (the aforementioned joint venture should reduce cash burn going forward), the company's other assets might make this an interesting value proposition.
