Eli Casdin backs Codexis' platform tech with $50M equity buy
About a month after Codexis notched a deal with Novartis $NVS, the California company $CDXS on Thursday said long-time investor Casdin Capital is putting up $50 million in a private placement, which puts the New York-based investment firm in control of more than 5% of the protein engineering player’s stock.
Eli Casdin started his eponymous investment firm in 2012 and dates his relationship with Codexis back to at least a decade. About three years ago, Casdin Capital began investing in the industrial biotech company, after it pivoted its focus to the life sciences — under the auspices of new chief John Nicols — away from the energy industry.
“With Codexis, there’s an enormous pace of innovation in sort of the engineering of proteins and enzymes that have applications across a diverse segment of life science continuum. Both in…research tool engineering enzymes for things like DNA sequencing technologies, or diagnostic applications, or even…therapeutics,” Casdin said in an interview with Endpoints News.
“What we appreciate is most of the molecules used in biotech…haven’t been modified since their first usage — for the last 40 years in some cases — and so Codexis is starting to unlock a lot of performance potential in these molecules.”
Codexis’ CodeEvolver platform is designed to usher in “function-driven mutations” to augment a protein’s ability to hit its target — thereby improving the cost and quality of pharmaceuticals and food ingredients; creating biologics; and enabling the sequencing of minute quantities of DNA for in vitro diagnostics. The company counts GSK $GSK and Merck $MRK as its partners.
Casdin Capital largely invests in public companies across the life sciences — from the pick-and-shovel enabling technologies into the applications, including diagnostics and information businesses. About 70% of investments are in drug development, Casdin said. The company has invested big in precision medicine — and has secured exits with acquired companies like Foundation Medicine, Flatiron Health, Loxo and Spark.
Eli Casdin comes from a family where biotech investment was the stuff of dinner table conversation. His father, Jeffrey Casdin, began investing in the space in the 1980s and went on to become the pioneering biotech analyst at Wall Street. Eventually, Jeffrey set up (the now-shuttered) NY life science-focused investment firm Cooper Hill Partners, where Eli and his brother Alexander worked. After his father’s passing, Eli created Casdin Capital where he serves as chief investment officer.
On Thursday, Codexis sold 3,048,780 shares of common stock for $16.40/share to Casdin in the private placement. The company’s shares closed at $18.98 on Wednesday.
“While not…as sexy as sort of the therapeutic stories, companies like Codexis are the ones that are really allowing this industry to explode from a technology enablement perspective,” Casdin added.