Codexis CEO Alan Shaw wants to make his company a leader in a new age, ‘Biotech 2.0’, in which biotechnology contributes as much to non-pharma applications (such as fuels) as it has to healthcare. Mr Shaw has been regarded as a contrarian – he has publicly spoken out against biodiversity in biocatalysts, which is currently the conventional wisdom – and views directed evolution as the best way to enhance new manufacturing technologies.

And Codexis, which creates ‘super enzymes’ (biocatalysts) for greener and more cost-effective pharmaceutical manufacture and for the development of post-ethanol fuels, says it is different from other small companies in the sector because it has a broad focus with few constraints. Instead of limiting the focus to one particular area, Codexis, based in Redwood, California, has deals with major companies (Merck, Schering-Plough, Shell) across a range of industries.

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Singapore facility

But if it is atypical in its business strategy, its choice of location for a research and development (R&D) facility, slated to open in late October, was less so: Singapore.

The facility – which will involve an investment of an estimated S$100m ($65.6m) over five years and will eventually employ 80 scientists – will help Codexis to “establish an R&D beachhead” in the region, Mr Shaw says. “South-east Asia is very important to us.”

In the short term, the Singapore operation will focus mainly on generics but there is the possibility of expanding its brief to include biofuels (Codexis’ three business areas are bio-industrials, pharmaceutical services and generics).

“The generics market is expanding rapidly in Asia, especially in India and China, and we needed to establish an R&D facility that would do what we do in California but nearer the market and cheaper,” Mr Shaw explains.

Right location

For Codexis, the city-state presented just the right cost-quality ratio and offered the best security. China, and to a lesser extent India, was deemed too risky from an intellectual property standpoint (although Codexis has relationships with several Indian companies and Mumbai-based Arch Pharmalabs manufactures its flagship product, and Mr Shaw says there is a “distinct possibility” that the company will look to do partnerships to manufacture bio-industrials in China at some point). “Intellectual property is critical to us,” Mr Shaw says.

After all, he points out: “The success of the whole company hinges on the technology. We didn’t want to compromise the quality of the technology. And Singapore is a third of the cost of the US.”

Grants and other investment incentives were also helpful. Codexis received ‘pioneer’ status because of the high level of technology it would be bringing, entitling it to a tax holiday. Bio*One Capital, the dedicated biomedical sciences investment arm of the Singapore Economic Development Board, made a significant investment in Codexis’ Series D financing and led the round.

So far Codexis has hired 15 people for the Singapore facility and plans to have 30 by the end of the year. Thirteen scientists are being trained in Redwood and will arrive in Singapore in the autumn.

The company’s corporate headquarters is in expansion mode as well and will have doubled its headcount over last year’s by the end of 2007, from 100 to 200 (currently there are 150 employees). “The next six months will be quite telling in how fast we will expand and what size we will be ultimately,” Mr Shaw says. “We are very much a global company now.”