Dyadic(DYAI) - 2024 Q1 - Quarterly Results

First Quarter 2024 Overview Dyadic reported Q1 2024 results, emphasizing C1 and Dapibus™ platforms for pharma/non-pharma, successful DYAI-100 Phase 1 trial, and a $6.0 million convertible note Introduction and Strategic Focus Dyadic announced Q1 2024 results, emphasizing C1 and Dapibus™ platforms for pharma/non-pharma, successful DYAI-100 Phase 1 trial, and a $6.0 million convertible note - Dyadic is a biotechnology company focused on efficient large-scale protein manufacture for human and animal vaccines/therapeutics, and non-pharmaceutical applications (food, nutrition, wellness)[2] - The company's strategy focuses on near-term pharmaceutical and non-pharmaceutical applications for its proprietary C1 and Dapibus™ protein production platforms[3] - A key highlight was the successful completion of a Phase 1 clinical trial for DYAI-100, meeting its primary endpoint of safety and reactogenicity, affirming the safety of C1-produced proteins in humans[3] - Dyadic strengthened its financial position by issuing $6.0 million in convertible notes to accelerate near-term revenue-generating products and commercialization opportunities[3] Q1 2024 Company Highlights Q1 2024 highlights include DYAI-100 Phase 1 report, new pharma collaborations, H5N1 vaccine progress, and a $6.0 million convertible note - Final Clinical Study Report issued for First-In-Human Phase 1 clinical trial of DYAI-100, demonstrating safety and antibody response for COVID-19 vaccine candidate[4] - Entered into several fully funded vaccine and antibody projects covering over twelve targets, with five funded by two of the top ten pharmaceutical companies[4] - Successfully expressed an H1N1 influenza antigen in collaboration with the Vaccine and Immunotherapy Center at Massachusetts General Hospital[4] - Announced strategic partnership to develop affordable rabies prophylactics and vaccines using the C1-cell protein production platform[4] - C1 produced adjuvanted recombinant ferritin nanoparticle H5N1 'Bird Flu' human vaccine candidate demonstrated a strong immune response in animal studies[4] - Closed a $6.0 million convertible note in a private placement with a conversion price of $1.79 and no warrants[4] Cash and Investment Grade Securities | As of Date | Amount (Millions) | | :---------- | :---------------- | | March 31, 2024 | $12.1 | Recent Company Progress Dyadic advanced corporate governance, human and animal health initiatives, and alternative protein developments, securing funding and strategic partnerships Corporate Events Dyadic issued $6.0 million in convertible notes and announced leadership changes, appointing a new Board Chairman and Chief Operating Officer - Issued $6.0 million in 8.0% Senior Secured Convertible Promissory Notes due March 8, 2027, in a private placement, including participation from related parties[9] - Appointed Mr. Patrick Lucy as Chairman of the Board of Directors and promoted Mr. Joe Hazelton to Chief Operating Officer[9] Human Health Sector Developments Dyadic finalized DYAI-100 Phase 1 trial, advanced H5N1 vaccine and C1-produced antibodies, and formed strategic partnerships in human health DYAI-100 Phase 1 Clinical Trial Results DYAI-100 Phase 1 trial successfully met its primary endpoint, demonstrating safety, reactogenicity, and immune response in healthy volunteers - DYAI-100 Phase 1 clinical trial met its primary endpoint, demonstrating safety and reactogenicity of the C1-expressed protein in humans[7] - The vaccine induced immune responses at both dose levels, suggesting potential efficacy against the target virus[7] Vaccine and Antibody Collaborations Dyadic reported strong preclinical H5N1 vaccine results, expressed H1N1 antigen, and advanced collaborations for vaccine and monoclonal antibody development - Pre-clinical animal testing of a ferritin nanoparticle H5N1 bird flu recombinant protein human vaccine candidate demonstrated a strong immune response in rabbits[10] - Successfully expressed H1N1 influenza antigen in collaboration with the Vaccine and Immunotherapy Center at Massachusetts General Hospital, funded by a US $5.88 million DoD award[10] - Entered a funded research collaboration with a top ten pharmaceutical company to develop a vaccine antigen and a monoclonal antibody using C1 technology[10] - A manuscript of preclinical studies on C1-produced monoclonal antibody in non-human primates and hamsters was published in Nature Communications, demonstrating broad neutralization and potential high protection against SARS-CoV-2 Delta virus[10] Strategic Partnerships and Publications Dyadic formed strategic partnerships for rabies vaccine development, bio-threat solutions, C1 Host Cell Protein ELISA Kit, and recombinant protein evaluation - Dyadic Nederland BV partnered with Rabian BV to develop a rabies vaccine using Dyadic's C1 protein production platform, securing approximately €1.7 million in Eurostars funding[10] - Advanced collaboration with the IIBR and LSRI to leverage microbial platforms for flexible scale protein bioproduction and IIBR's discovery capabilities for emerging disease solutions[10] - Announced a strategic partnership with Cygnus Technologies® for the development and availability of the C1 Host Cell Protein ELISA Kit[10] - Signed a fully funded evaluation agreement with an undisclosed leading global biopharmaceutical company to design and produce recombinant proteins using Dyadic's C1 platform[10] Animal Health Sector Developments Dyadic expanded animal health collaborations, with its H5N1 'Bird Flu' vaccine candidate showing strong immune responses in livestock - Expanded collaboration with Phibro Animal Health/Abic Biological Laboratories Ltd to develop vaccines and treatments for companion and livestock animal diseases[10] - C1 produced adjuvanted recombinant ferritin nanoparticle H5N1 'Bird Flu' human vaccine candidate demonstrated a strong immune response in animal studies for potential use in poultry, cattle and other animals[10] - The H5N1 C1 produced bird flu ferritin nanoparticle vaccine elicits high neutralizing antibodies against all three virus isolates (including Texas) of the H5 virus in livestock[11] Alternative Proteins Sector Developments Dyadic advanced its Dapibus™ platform for alternative proteins, securing albumin agreements, developing cell culture supplements, and progressing dairy enzymes Dapibus™ Platform and Product Pipeline Dyadic's Dapibus™ platform pipeline includes recombinant serum albumin, cell culture supplements, dairy enzymes, and whey proteins, with active sampling and development - Executed a term sheet with a large global albumin manufacturer and distributor to develop and license Dyadic's recombinant serum albumin[22] - Entered into a co-promotion agreement with Biftek Co. for the promotion of growth media supplement for cell culture[22] - Undergoing projects to produce recombinant transferrin and recombinant bovine albumin for use in cell culture media and as growth media for the cultured meat industry[22] - Achieved the specified target yield level for a non-animal dairy enzyme and is progressing with the development of a second enzyme[22] - Developed a highly productive strain and is actively sampling recombinant alpha-lactalbumin, a whey protein, and negotiating development and commercialization agreements[22] - Recombinant beta-lactoglobulin and lactoferrin projects are underway, with sampling expected in late Q3 and late Q2/early Q3, respectively[22] Financial Highlights for Q1 2024 Dyadic's Q1 2024 financials show increased cash, decreased revenue and R&D expenses, but higher G&A, leading to a larger net loss Cash Position Dyadic's cash, cash equivalents, and investment-grade securities increased to $12.1 million as of March 31, 2024, from $7.3 million at year-end 2023 Cash Position | Metric | March 31, 2024 | December 31, 2023 | | :------------------------------------------ | :------------- | :---------------- | | Cash, cash equivalents, and investment-grade securities | $12.1 million | $7.3 million | Revenue Performance Q1 2024 total revenue decreased to $335,000 from $934,000 year-over-year, primarily due to the conclusion of large research collaborations Revenue (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Research and development revenue | $335,000 | $934,000 | -64.1% | | License revenue | $0 | $44,118 | -100% | | Total revenue | $334,617 | $978,052 | -65.8% | - The decrease in revenue was primarily due to the winding down of several large research collaborations conducted in 2023[17] - Revenue was generated from ten collaborations in Q1 2024, compared to seven collaborations in the same period a year ago[17] Costs and Expenses Dyadic saw decreased R&D costs due to collaboration wind-downs, but increased G&A expenses from business development and audit fees Cost of Research and Development Revenue Cost of research and development revenue decreased significantly to $144,000 in Q1 2024, reflecting the winding down of collaborations Cost of Research and Development Revenue (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | | Cost of research and development revenue | $144,000 | $727,000 | -80.2% | - The decrease was due to the winding down of several large research collaborations conducted in 2023[18] Research and Development Expenses R&D expenses decreased by 35.5% to $523,000 in Q1 2024, due to the conclusion of DYAI-100 Phase 1 trial activities Research and Development Expenses (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------- | :----------- | :----------- | :----------- | | Research and development expenses | $523,000 | $811,000 | -35.5% | - The decrease reflected the winding down of activities related to the Company's Phase 1 clinical trial of DYAI-100 COVID-19 vaccine candidate and a decrease in the amount of ongoing internal research projects[19] General and Administrative Expenses G&A expenses increased by 20.9% to $1,789,000 in Q1 2024, driven by higher business development, investor relations, and audit fees General and Administrative Expenses (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------------- | :------------- | :------------- | :----------- | | General and administrative expenses | $1,789,000 | $1,480,000 | +20.9% | - The increase reflected increases in business development and investor relations expenses (approx. $138,000), audit fees ($99,000), management incentives ($59,000), and other increases ($59,000)[20] - These increases were partially offset by decreases in insurance expenses ($29,000) and legal expenses ($17,000)[20] Operating and Net Loss Operating loss slightly increased to $2,126,000, while net loss significantly rose to $2,010,000 due to a non-recurring gain in 2023 Operating and Net Loss (Three Months Ended March 31) | Metric | 2024 | 2023 | Change (YoY) | | :-------------------------------- | :------------- | :------------- | :----------- | | Loss from operations | $(2,126,000) | $(2,050,000) | +3.7% | | Net loss | $(2,010,000) | $(956,000) | +110.2% | | Basic and diluted net loss per common share | $(0.07) | $(0.03) | +133.3% | - The increase in net loss was derived from the sale of the Company's equity interest in Alphazyme LLC for $989,000 in 2023, which did not recur in 2024[21] Consolidated Financial Statements Consolidated financial statements show decreased revenue, increased net loss, higher total assets and liabilities, and reduced stockholders' equity Consolidated Statements of Operations Q1 2024 Statements of Operations show decreased total revenue and increased net loss, influenced by winding down collaborations and non-recurring gains Consolidated Statements of Operations (Three Months Ended March 31) | Metric | 2024 | 2023 | | :-------------------------------- | :----------- | :----------- | | Total revenue | $334,617 | $978,052 | | Costs of research and development revenue | $143,955 | $726,918 | | Research and development | $522,723 | $810,566 | | General and administrative | $1,788,594 | $1,480,040 | | Loss from operations | $(2,125,558) | $(2,050,494) | | Net loss | $(2,009,596) | $(956,444) | | Basic and diluted net loss per common share | $(0.07) | $(0.03) | Consolidated Balance Sheets Q1 2024 Balance Sheets reflect increased total assets and liabilities due to convertible notes, alongside a decrease in total stockholders' equity Consolidated Balance Sheets (As of March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $10,569,814 | $6,515,028 | | Short-term investment securities | $1,468,002 | $748,290 | | Total current assets | $12,541,312 | $8,067,335 | | Total assets | $12,681,266 | $8,219,236 | | Total current liabilities | $2,262,119 | $2,251,781 | | Convertible notes, net of issuance costs | $3,884,967 | $0 | | Convertible notes, net of issuance costs - related party | $1,942,484 | $0 | | Total liabilities | $8,165,464 | $2,340,651 | | Total stockholders' equity | $4,515,802 | $5,878,585 | Company Information and Disclosures This section provides conference call details, an overview of Dyadic's biotechnology focus, forward-looking statement disclaimers, and contact information Conference Call Details Dyadic scheduled a conference call for May 14, 2024, at 5:00 p.m. ET, to discuss Q1 financial results and business updates - Conference call scheduled for Tuesday, May 14, 2024, at 5:00 p.m. ET[23] - Dial-in numbers: Toll Free: 877-407-0784; International +1-201-689-8560; Conference ID: 13743568[23] - Webcast link: https://viavid.webcasts.com/starthere.jsp?ei=1650831&tp_key=0f89478e24, with an archive available within 24 hours[23] About Dyadic International, Inc. Dyadic International, Inc. is a biotechnology company specializing in large-scale protein manufacture for human/animal health and non-pharmaceutical uses - Dyadic International, Inc. is a biotechnology company focused on efficient large-scale protein manufacture for human/animal vaccines and therapeutics, and non-pharmaceutical applications (food, nutrition, wellness)[24] - Its gene expression and protein production platforms are based on the highly productive and scalable fungus Thermothelomyces heterothallica[25] - The lead technology, C1-cell protein production platform, is used to speed development, lower production costs, and improve performance of biologic vaccines and drugs[25] - The Dapibus™ filamentous fungal based microbial protein production platform is developed for rapid, large-scale, low-cost protein manufacture for non-pharmaceutical applications[25] Safe Harbor Regarding Forward-Looking Statements This section provides a standard disclaimer for forward-looking statements, outlining inherent risks and uncertainties that may cause actual results to differ - The press release contains forward-looking statements subject to risks, uncertainties, and other factors beyond Dyadic's control[28] - Risk factors include history of net losses, market and regulatory acceptance, competition, clinical trial results, capital needs, global economic conditions, reliance on IT, dependence on third parties, government regulations, and intellectual property risks[28] - Dyadic assumes no obligation to publicly update any forward-looking statements after the date of the press release, except as required by applicable law[28] Contact Information Investor inquiries can be directed to Ping W. Rawson, CFO of Dyadic International, Inc., via phone or email - Contact: Ping W. Rawson, Chief Financial Officer, Dyadic International, Inc.[29] - Phone: (561) 743-8333; Email: ir@dyadic.com[29]