Business links between Merck and Codexis have become even stronger with the recent announcement that Codexis will be continuing to supply a vital enzyme used in the manufacturing of Merck’s JANUVIA and JANUMET therapeutics. Both of these therapeutics contain an active pharmaceutical known as sitagliptin, an enzyme inhibitor used in the treatment of diabetic hyperglycemia. Approved by the FDA since 2006, sitagliptin acts to inhibit the enzymatic degradation of two gastrointestinal hormones, increasing insulin release and thus reducing blood sugar levels. A solid earner for Merck, Januvia pulls in almost $4 billion USD in sales per year, with Januvia/Janumet together showing sales in excess of $5 billion.

The initial process for synthesising chiral sitagliptin required a number of complex steps, including one involving rhodium catalysts, crystals of substrates, and high pressure (17 atmospheres) hydrogenation. Attempts by Merck to identify biocatalysts to circumvent this step were unsuccessful, and so they turned to Codexis for assistance. Codexis’ eventual catalyst was able to act as a transaminase, converting ketone precursors directly into sitagliptin without the requirement for high pressure and heavy metals – and in turn boosting yields and productivity by 11 and 56 percent respectively.

The success of this process highlighted the importance of Codexis’ CodeEvolver technology and led to a Presidential Green Chemistry Award from the US Environmental Protection Agency. Perhaps more importantly for Codexis, it led to supply agreement for the proprietary enzyme – obviously, based on the recent announcement, a successful one.

Codexis are one of the major biocatalyst developers for the pharmaceutical/fine chemical industry, being listed on the NASDAQ (CDXS) with a market cap of over $160 million USD. Their work brought in revenues of over $35 million last year, split fairly evenly between contracted research and development (as seen for Merck) and sales of biocatalyst enzymes (as seen for Merck).

Codexis are particularly well known for their CodeEvolver protein engineering technology, which can be thought of as a set of extremely clever in silico enzyme design and modelling tools for developing new biocatalysts. This is matched to procedures designed for rapid scale-up of production, thus setting Codexis up as a rapid contract research/production firm. CodeEvolver has previously been licensed (non-exclusively) to Merck for enzyme development, an agreement which nets Codexis $18 million in tech-transfer fees plus up to $15 million per novel synthesis pathway discovered.

If successful, this will allow Merck to significantly reduce their overall production costs. Merck (known as MSD outside the US/Canada due to the existence of German life-science company Merck KGaA) are a healthcare giant with revenues in excess of $42 billion USD in 2014. With a product listing covering over a hundred therapeutics and another 24 in Phase III, the ability to quickly develop reliable, cheap bioproduction methods is extremely important.

The FDA has previously approved the substitution of Codexis’ biocatalysts for ‘traditional’ synthesis methods, which represents an excellent precedent in the otherwise treacherous field of regulatory affairs and change control. Given this, and Codexis’ success so far, I expect we’ll be seeing another announcement along these lines soon enough.