Codexis, Inc. (CDXS) Eyes Raizen With Latest Enzymes: Pfizer Inc. (PFE), Teva Pharmaceutical Industries Ltd (ADR) (TEVA)

The improvement is a big step forward in the company’s plans to land a major commercial partner for its cellulase enzymes. In short, it gives Codexis, Inc. (NASDAQ:CDXS) an advantage for maximizing the value of agricultural wastes; especially sugarcane bagasse in Brazil. Xylose is a major component of hemicellulose and lignocellulose, which have been tricky to break down and are often burned to generate electricity. While electricity can be used to power a biorefinery or sold to the grid, the profitability balance often favors value-added products (burning something amounts to the lowest value). The obvious potential partners are Raizen, a major investor in Codexis, Inc. (NASDAQ:CDXS), or the joint venture between Shell and Cosan Limited(USA) (NYSE:CZZ) .

Rooting for energy with Raizen
Raizen produces more than 581 million gallons of ethanol, 4 million metric tons of sugar, and generates close to 900 MW of electricity in Brazil each year. The company also owns over 4,500 fueling stations, 500 convenience stores, 53 fuel distribution terminals, and sells aviation fuel to 54 Brazilian airports. As you can see, there are a number of opportunities awaiting the lucky enzyme producer who partners with the company.

Last year enzyme and cellulosic ethanol producer Iogen — also a former partner of Shell and investment of Raizen — signed a deal to commercialize cellulosic ethanol with the JV. The company shed its enzyme business to competitor Novozymes shortly afterwards to focus on ethanol. Will Codexis, Inc. (NASDAQ:CDXS) be the next to land Raizen and complete the cellulosic ethanol cycle for the four companies? Couple the aligning of the stars outlined above with recent open market purchases by the CEO and it’s easy to see such a scenario resulting.

The article Codexis Eyes Raizen With Latest Enzymes originally appeared on Fool.com and is written by Maxx Chatsko.

Fool contributor Maxx Chatsko owns shares of Codexis. Check out his personal portfolio, his CAPS page, or follow him on Twitter @BlacknGoldFool to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool has no position in any of the stocks mentioned.

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