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

• 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:

For most of 2020, Dyadic has refocused its energies on using its C1 gene technology to help forward the battle against the coronavirus (COVID-19).

Most recently, the company announced that its C1 Rapid Recombinant Protein Manufacturing platform has demonstrated the ability to produce monoclonal antibodies more efficiently and faster than existing technology. Dyadic is currently working on a SARS-CoV-2 monoclonal antibody with a biotech company developing antibody cocktails to treat COVID-19 patients.

Dyadic also has developed a COVID-19 vaccine antigen from its C1 cell line. The C1 expressed receptor-binding domain (RBD) of the SARS-CoV-2 spike protein is being used in animal trials by several research groups, governmental agencies, and biopharma companies. This includes the Israel Institute for Biological Research (IIBR) and a collaboration of European Union scientists.

A recently completed IIBR mice study showed that the C1 RBD has the potential to generate “excellent immunogenicity responses” against the coronavirus. That has already inspired the Frederick National Laboratory to select Dyadic to engineer its C1 cell lines to produce COVID-19 vaccine candidates, which will be utilized by the Vaccine Research Center (VRC) at the National Institutes of Health.

Dyadic also has collaborations with Jiangsu Hengrui Medicine and other third parties using the C1 platform to come up with their own COVID-19 and other vaccine candidates for humans and animals. And the company recently struck an agreement with Epygen Biotech of India, which expects to conduct clinical trials in India using Dyadic’s C1 expressed RBD antigen.

Outside of the COVID-19 space, it has two new fully-funded alliances with top animal health companies to channel its C1 platform for the production of therapeutic proteins for companion and farm animal diseases. Dyadic is now working with the world’s four leading animal health care companies.

The company has also entered into a fully funded collaboration with a top-five global pharmaceutical company that 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.

The company’s financial position has strengthened since 2019. It has $30.5 million in cash and investment securities, no debt, and is complemented by partner funded R&D collaborations. 

Inflection points:

• Expects completion of 10 global animal trials (COVID-19) by late 2020 or early 2021
• Strengthen collaborations with European, Israeli, and US governments
• Growth potential enhancing C1 technology and developing a library of differentiated glycoengineered strains 

What the boss says:

“We continued to advance our proprietary C1 gene expression platform into a safe and efficient expression system, with improved properties and impressive scientific results,” Dyadic CEO Mark Emalfarb said recently.

“Our business development pipeline continues to grow with additional interest from both new and previously engaged collaborators, which we believe will accelerate the adoption of our C1 gene expression platform toward the goal of commercialization. In addition to our COVID-19 initiatives, we signed six new and expanded collaborations with human and animal health companies.”

What the broker says: 

Dawson James Securities analyst Jason Kolbert recently noted Dyadic’s strong capital runway — more than $30 million — to fund the advancement of the C1 platform while working with nine different groups on coronavirus (COVID-19) vaccine development.  

“Our hope early last year was that we might see the company’s C1 platform be utilized by one of the major vaccine platforms,” Kolbert wrote. ”In the short term, that hasn’t happened, but we still believe it could happen in the future as awareness of the technology and the need is now in our conscious.” (sic)

Nevertheless, the analyst reiterated his buy rating and a 12-month price target of $12 a share, which would translate into a doubling of the current stock price. 

Story by ProactiveInvestors