The last time we heard from Codexis, we took a look at the firm’s financials, which all kept pace with estimates. Codexis offers an interesting business model in that the firm focuses solely on developing custom yeasts and other biocatalysts. Currently Codexis is paying the bills by producing high-dollar petrochemicals for the pharmaceutical industry, but has been actively trying to enter the biofuel market by developing yeasts that break biomass down into sugar as part of a research agreement with Royal Dutch Shell.

That research has paid off in Codexis’ newly announced CodeXyme cellulase enzyme product line. The new enzymes are designed to produce sugar from cheap, local feedstock sources. A cheap sugar supply is key for Codexis, whose other biocatalyst work is focused on producing high-value, sugar-alcohol-based industrial petrochemicals.

It also means a potential new source of revenue for Codexis’ customers. Codexis has a partnership with Raizen, Brazil’s largest sugar producer and a massive ethanol producer. With Codexis’ new enzymes, Raizen will be able to convert leftover biomass from sugar production into ethanol, freeing up more of its sucrose to sell in the sugar market. According to Biofuels Digest, Codexis CEO Alan Shaw has priced the leftover biomass from traditional sugar production at $50 a ton, or as low as $10 in Raizen’s case, which, in his eyes, is like “making gold from dirt.”

This is the one to watch. The technology is just about there. With Congress failing to renew the corn ethanol subsidies, that competition is gone, leaving the door wide open to CDXS and its competitors, which aren’t that many.

With the backing of Royal Dutch Shell, capital is not an issue, nor is the risk of bankruptcy, failure to raise working capital etc. This one is fast reaching its time.