viewDyadic International Inc

Dyadic on course to disrupt the status quo in manufacturing biologic vaccines and drugs


The company's C1 gene expression platform has a utility across the pharma, biotechnology and industrial markets

Dyadic's president and CEO Mark A Emalfarb

Quick facts: Dyadic International Inc

Price: 5.89 USD

Market: NASDAQ
Market Cap: $161.87 m
  • Engaged in the large-scale manufacture of low-cost enzymes and proteins for the US and European markets
  • Leverages proprietary C1 fungal expression technology to help bring vaccines, enzymes, proteins, and biosimilars to market faster
  • Teamed with the Israel Institute for Biological Research to help combat coronavirus (COVID-19)

What Dyadic International does:

When Mark A Emalfarb started his company, Dyadic International Inc (NASDAQ:DYAI), it was cashing in on a 1980s trend — supplying pumice stones to denim manufacturers to make stonewashed jeans. Forty years later, it is a trendy biotechnology platform company listed on the tech-laden Nasdaq.

Founded in 1979, the Jupiter, Florida-based biotechnology company, engages in the large-scale manufacture of low-cost enzymes and other proteins for markets in the United States and Europe. Dyadic started trading on the Nasdaq on April 17, 2019, after an uplisting.

It leverages its proprietary C1 expression system - a fungal expression technology for producing enzymes - to help bring biologic vaccines, therapeutic enzymes, proteins, biosimilars and drugs to market faster and at a lower cost.

Dyadic has patented its proprietary filamentous fungus, Myceliophthora thermophila, nicknamed C1 and the associated molecular tools used to engineer the C1 cells to express and manufacture large volumes of low-cost biologic products such as enzymes and proteins. The C1 fungus is a living cell that has been bioengineered by Dyadic scientists for more than two decades.

The fungus has been shown in initial results from a ZAPI animal study to help protect cattle and mice from the devastating Schmallenberg virus, which causes congenital malformations in certain animals, although this is not the limit of its applications.

Dyadic boss Emalfarb has presided over Dyadic’s evolution from 'jeans to genes' and is a named inventor on more than 25 US and international biotech patents and patent applications linked to the C1 microorganism.

Around four years ago, Emalfarb sold Dyadic’s industrial technology business to DuPont Inc’s (NYSE:DWDP) industrial biosciences business for $75 million in cash. According to the deal, DuPont granted Dyadic co-exclusive rights to the C1 technology for use in human and animal pharmaceutical applications, with the exclusive ability to enter into sub-license agreements.

DuPont now enjoys the rights to utilize the C1 technology for use in pharmaceutical applications for which it will make royalty payments to Dyadic upon commercialization. DuPont cut the deal with Dyadic as it was launching its cellulosic ethanol business and was supplying enzymes to Jilin Province New Tianlong Industry Co.

Dyadic has conducted extensive enzyme research relationships in the biofuels area which support DuPont in the cellulosic space.

How is it doing:

The second quarter of 2020 was a busy one for Dyadic, with the firm adding new top tier collaborations in both the animal and human health fields. Lately, Dyadic has turned its C1 gene technology toward addressing the coronavirus (COVID-19) pandemic.

The company was selected by the Frederick National Laboratory to engineer its C1 cell lines to produce COVID-19 vaccine candidates, which will be utilized by the Vaccine Research Center (VRC) of the National Institute of Allergy and Infectious Diseases (NIAID), at the National Institutes of Health.

Additionally, the Israel Institute for Biologic Research (IIBR) is exploring the potential of Dyadic's C1 gene expression platform to express a recombinant SARS-CoV-2 vaccine candidate based on the receptor-binding domain of the virus’ spike protein. SARS-CoV-2 is the virus that causes COVID-19. The interim results of the mice trials using the C1 SARS-CoV-2 RBD vaccine candidate generated high levels of neutralizing antibodies. The company now expects IIBR to start hamster studies earlier than originally forecasted.

The company’s financial position is also stronger now, with cash and equivalents increasing to $11.8 million from $4.8 million at the end of 2019. Research and development revenue was roughly $524,000 in the three months ended June 30, 2020. The firm’s net loss shrunk to $2.65 million, compared to 2.7 million over the same period a year earlier.

Dyadic currently has nine research collaborations, up from four last year. It has two new fully-funded alliances with top animal health companies to channel its C1 platform for production of therapeutic proteins for companion and farm animal diseases. The regulatory pathway in animal health is shorter with costs being a critical factor. Dyadic is now working with all four leading animal health care companies in the world.

In July, Dyadic revealed that it has entered a fully funded collaboration with a top-five global pharmaceutical company. The company plans to utilize its C1 platform for manufacturing protein-based biologics. Dyadic expects to produce two different types of therapeutic compounds as part of the collaboration.

Dyadic has over the past year focused its expertise and financial resources on enhancing its core C1 technology and has made progress in reducing background protease activity and developing a library of differentiated strains, including glycoengineered strains. These developments are likely to open new doors to apply C1 to a broader array of glycosylated biopharmaceuticals and extend the company's market opportunities for biologic vaccines and drugs.

Inflection points:

  • There’s massive upside potential from the collaborations with big pharma, and the COVID-19 vaccine program
  • Significant cash flow-ramp from rapid progress in animal health market
  • Growth potential from enhancing its core C1 technology and developing a library of differentiated glycoengineered strains 

What the boss says:

In an interview with Proactive, CEO Mark Emalfarb said: “We have been able to demonstrate the broad applications of our C1 technology, which in turn has resulted in many new wide-ranging opportunities. Dyadic's pipeline of opportunities with top tier, global animal and human health pharmaceutical companies continues to get larger and more diverse as the C1 technology becomes more widely applicable."

What the broker says: 

In a note on August 25, Dawson James Securities reiterated a Buy rating with a price target of $12, saying Dyadic’s second-quarter results showed a “modest” burn rate and ample cash reserves. It also noted that Dyadic and Frederick National Lab were likely to develop C1 cell lines for COVID-19 vaccine candidates at “warp speed.”

“As the world works feverishly to develop and test a vaccine for COVID-19, we look down the road at the scale that is required. We are talking not about millions of doses but billions. Dyadic’s C1 expression platform may hold the key,” said Dawson James analyst Jason H. Kolbert

“The company’s C1 technology-expression platform may have the potential to produce a vaccine candidate, once identified at the scale required and at a lower cost and a higher potency than traditional expression platforms.”

Kolbert also drew attention to Dyadic's participation in the European Union's ZAPI Project, noting that Dyadic’s C1 biomanufacturing technology helps to “speed the development, lower the manufacturing cost,” and potentially improve the performance of biologic vaccines and drugs, including vaccines against Zoonotic diseases, which are caused by germs that spread between animals and people.

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