Analysts at Dawson James Securities initiated coverage Monday on Dyadic International Inc (NASDAQ:DYAI) with a Buy rating citing the effectiveness of the biotechnology company’s C1 gene expression platform.
The boutique investment bank also set a $14 price target for Dyadic which currently trades in the $6.61 range.
In a note to clients, Dawson James analyst Jason H Kolbert said the Jupiter, Florida, biotechnology company’s C1 platform specializes in enzymes and protein production more “efficiently than competing methods.”
“Starting out as a gene expression platform for the production of commercial quantities of industrial enzymes and proteins, C1 has proven to have the ability to produce greater quantities of enzymes and proteins in large quantities with high priority all while maintaining a relatively low cost,” said Kolbert.
READ: Noble Research repeats Outperform rating and $9 target on Dyadic following second quarter results
“C1 is now poised to branch out into the biomedical market, aiming to develop products such as innovative vaccines and drugs, biosimilars and biobetters,” he added.
Dyadic 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’s C1 technology is aimed at improving the development and manufacturing of human and animal vaccines (such as virus-like particles and antigens), monoclonal antibodies (mAbs), Bi-specific antibodies, Fab antibody fragments, Fc-Fusion proteins, and other therapeutic enzymes and proteins,” said Kolbert.
“Dyadic’s exclusive sublicensing rights allow for low risk, high reward royalties with other companies,” he added.
A wide range of applications
The analyst said C1’s ability to “efficiently produce” enzymes allows Dyadic to develop this platform for a “wide range of major markets.” Dyadic plans on expanding C1’s industrial enzyme production in areas such as animal feed, paper production, and textiles.
“Dyadic has non-exclusive license agreements for C1 to Codexis, Royal Dutch Shell, Cosan, and Raizen with the goal of utilizing C1 as a platform to develop and manufacture biofuels and chemicals, such as ethanol, from agricultural feedstocks,” noted Kolbert.
“At the same time, (there is) a research and commercialization collaboration agreement with Serum Institute of India for the development and manufacture of up to 12 antibodies and vaccines using Dyadic's C1 gene expression system,” he added.
Dyadic has agreed to grant Serum the option to obtain an exclusive commercial sublicense for each of the proteins expressed from its C1 technology. In return for these sublicenses, Dyadic will receive research funding, milestone payments, and royalties for 15 years from the date of the first commercial sale.
“C1 is a natural fit for collaboration with many pharma, biotech, and biosimilars, as the platform can be adapted to produce whatever enzyme each company would need,” Kolbert noted. "A few partnerships out of the many prospective biotech companies would be massively impactful for Dyadic.”
The Dupont deal
The analyst pointed out that in 2015, Dyadic sold an industrial business segment to Dupont for $75 million.
“The company has come a long way in the four decades that its founder and CEO, Mark Emalfarb, founded a pumice stone process for blue jeans,” said Kolbert.
Contact Uttara Choudhury at [email protected]
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