Dyadic highlights biofuel, biogas business during investor call

By Erin Voegele | August 18, 2015

Dyadic International Inc. has released second quarter financial results, reporting increased revenue and gross profit for the first half of this year. The company also announced progress with its C1 Technology Platform.

“Our investment in the expansion of our research and development center over the past year and a half continues to pay off, as our C1 Technology has become more productive and versatile as further validated by the receipt of $800,000 in milestone payments from BASF in the first half of this year,” said Mark Emalfarb, CEO of Dyadic. “Our C1 White Strain 2.0 is now two times more productive than it was when we first licensed the technology to BASF two years ago, and our CMAX biofuel strains are 40 percent more productive than the previous generation. We have now achieved very high levels of protein expression, 100 grams per liter, which has been verified by third parties, using both our C1 High Cellulase and C1 Low Cellulase (White Strain 2.0) strains. What is even more remarkable is that the White Strain 2.0 has shown to be able to produce an enzyme from a heterologous gene with approximately 80 percent purity or 80 g/l.”

“Our C1 Technology Platform is recognized by the biotechnology industry as a leading expression system which is being used by ourselves, our licensees and our collaborators to turn genes into products to help feed, fuel and heal humankind,” Emalfarb continued. “We anticipate that many of the application trials we have ongoing in animal feed, baking, brewery, biogas and other industries, along with the expected continued improvements in our science, should help us to realize our business objectives in 2016 and beyond.”

During an investor call, Emalfarb indicated Dyadic is exploring several transactions with regard to its business, including, but not limited to, licensing the C1 Technology to new collaborators, expanding or modifying the rights of existing licensees, other strategic alternatives and monetizing its assets, including potentially selling certain parts of the  business and technology, and extending the maturity dates of its subordinated convertible debts and notes payable to the stockholders, as the company has done in the past. Emalfarb also briefly discussed Dyadic’s business in the vaccine and pharmaceutical spaces.

Danai Brooks, chief operating officer of Dyadic, addressed the company’s initial biogas product launch of the FibreZyme G4 enzyme in Europe. “We believe our product has the potential to decrease viscosity, which is expected to increase biogas yields at customer facilities,” he said.

Brooks also said Dyadic is making progress with its next-generation advanced biofuel strains, with its last generation CMAX product being 40 percent more productive than last year. “We have begun a small, early-stage research project with a third potential partner or licensee to add to Abengoa and CIMV. Work in collaboration with the EU-funded 2G BIOPIC program has also begun,” he said. “The objective is to demonstrate advanced biofuel technologies with building a demonstration-scale facility that can process 24 tons of biomass per day.”

Net loss for the second quarter was $400,000, or 1 cent per basic and diluted share, compared to a net loss of $1.7 million, or 5 cents per basic and diluted share, for the same period of the prior year. Revenue for the quarter increased 24 percent, reaching approximately $3.8 million, compared to $3.1 million reported for the same period of last year. Net product related revenue for the second quarter was $2.8 million, up 12 percent from the $2.5 million reported for the same three-month period of 2014. License fee revenue was $600,000 during the second quarter. Research and development revenue for the quarter was $500,000, down 21 percent from the $600,000 reported for the second quarter of last year. Gross profit for the quarter was $1.5 million, up 48 percent from $1 million during the same period of the previous year.