viewDyadic International Inc

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


The company applies its proprietary C1 gene expression platform to speed up the development of biologic vaccines, drugs

Dyadic's president and CEO Mark A Emalfarb

Quick facts: Dyadic International Inc

Price: 4.93 USD

Market: NASDAQ
Market Cap: $134.88 m
  • The company engages in the large-scale manufacture of low-cost enzymes and proteins for the US and European markets
  • It leverages its proprietary C1 fungal expression technology to help bring vaccines, enzymes, proteins, biosimilars and drugs to market faster
  • Dyadic has teamed up with Serum Institute of India to develop up to 12 antibodies and vaccines

What Dyadic does:

When Mark A Emalfarb started his company, Dyadic International Inc (OTCMKTS: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, 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 this year.

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.

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.

Three 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 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 company’s second quarter saw continued momentum with the expansion of its gene expression technology platform through multiple collaborations and sub-licensing agreements. Dyadic also increased its revenue stream.

For the quarter ended June 30, Dyadic's research and development revenue increased to $391,000 compared to $161,000 for the same period a year earlier.

As of June 30, the company's cash and cash equivalents totaled $4.8 million compared to $2.4 million on December 31, 2018. Meanwhile, the carrying value of investment grade securities, including accrued interest totaled $34 million.

In July, Dyadic extended its R&D pact through June 2022 with VTT Technical Research Centre of Finland Ltd, a leading synthetic biology technology and research company. Dyadic is funding VTT to continue to apply its advanced synthetic biology methods, including its patented synthetic promoters to further engineer the company's C1 cell line.

Through the collaboration the company is ramping up protein production and the initial data has exceeded expectations. A recent example is the very high expression level reached for producing a full-length monoclonal antibody of 22 grams per liter in seven days.

In May, Dyadic teamed up with the Serum Institute of India Private Limited to develop affordable antibodies and vaccines. One of the world's largest vaccine makers, Serum will collaborate with Dyadic on up to 12 antibodies and vaccines (8 MABs and 4 rVaccines) using Dyadic's proprietary C1 gene expression platform.

The company also inked a sub-licensing agreement with Alphazyme LLC, a developer of molecular biology enzymes. The sub-licensing agreement includes an equity stake, milestone payments and royalties upon the commercialization of C1-expressed Alphazyme products.

Additionally, Dyadic inked a pact with Australia’s Luina Bio, a biopharma contract manufacturing organization, for the development of targeted antigen, and biological products for pets using Dyadic's proprietary C1 gene expression platform. The partnership is likely to speed up the development of new animal health medicines and vaccines and lower the cost for such products making them more accessible and affordable for pet owners.

Inflection points:

Dyadic is gaining momentum from all its new partnerships, including nine previously funded proof-of-concept research collaborations secured in 2018.

It has an existing research collaboration with Mitsubishi Tanabe Pharma Corp to express two therapeutic compounds using its C1 production platform. It also has one with Sanofi-Aventis Deutschland GmbH, to express the potential of its C1 technology to produce various types of therapeutic compounds for manufacturing protein-based vaccine and biologic drugs.

Last year, the company also inked a proof of concept research collaboration to produce biologic vaccines for human and animal health with the Israel Institute of Biologic Research.

Dyadic was recently added to the Russell Microcap Index as a result of the annual Russell index reconstitution. The company’s inclusion in the index is likely to expand Dyadic's visibility in the investment community.

What the boss says:

In a recent interview with Proactive, Dyadic CEO Mark A Emalfarb said: “Our C1 expression system is one of a very few commercially available solutions able to efficiently uptake genes and develop highly scalable industrial processes to produce large volumes of affordable enzymes and other protein products.”

“Our C1 gene expression platform can disrupt the status quo in manufacturing biologic vaccines and drugs,” he added.

What the broker says:

In a recent note to clients, Noble Research analysts remained optimistic on Dyadic and said they are maintaining their estimates for revenue of $1.5 million, $1.6 million, and $1.7 million for full-years 2019, 2020, and 2021, respectively.

Noble's analysts said: "The stock gained 200% YTD driven by positive news on partnerships and index up listing. In our view, all these recent developments provide not only more visibility for the company, but also validity for the technology and help expand shareholder base."

"We continue to drive investor's attention to the following key value generating catalysts to validate C1 technology in biologic manufacturing (a) bio-comparability data, (b) C1 glyco-engineering (human-like glycosylation) and (c) additional partnership opportunities throughout 2020," they added.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

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