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Item 1. Business

2024-03-28 compared with 2023-03-29 · 122 added, 175 removed, 104 unchanged (74% of the section changed)

Dyadic International, Inc.

(“Dyadic”, “we”, “us”, “our”, or the “Company”) is a global biotechnology platform company based in Jupiter, Florida with operations in the United States and a satellite office in the Netherlands, and it utilizes several third-party consultants and research organizations to carry out the Company’s activities.

Over the past two plus decades, the Company has developed a gene expression platform for producing commercial quantities of industrial enzymes and other proteins, and has previously licensed this technology to third parties, such as Abengoa Bioenergy, BASF, Codexis and others, for use in industrial (non-pharmaceutical) applications.

and others, for use in industrial (non-pharmaceutical) applications.

This technology is based on the Thermothelomyces heterothallica (formerly known as Myceliophthora thermophila ) fungus, which the Company named C1.

On December 31, 2015, the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE:

DD) (the “DuPont Transaction”).

On December 31, 2015, the Company sold its industrial technology business to Danisco USA (“Danisco”), the industrial biosciences business of DuPont (NYSE:

DD) (the “DuPont Transaction”).

As part of the DuPont Transaction, Dyadic retained co-exclusive rights to the C1-cell protein production platform for use in all human and animal pharmaceutical applications, and currently, the Company has the exclusive ability to enter into sub-license agreements (subject to the terms of the license and to certain exceptions) for use in all human and animal pharmaceutical applications.

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In certain circumstances, Dyadic may owe a royalty to either Danisco or certain licensors of Danisco, depending upon whether Dyadic elects to utilize certain patents either owned by Danisco or licensed in by Danisco.

After the DuPont Transaction, the Company has been focused on building innovative microbial platforms to address the growing demand for global protein bioproduction and unmet clinical needs for effective, affordable, and accessible biopharmaceutical products for human and animal health and for other biologic products for use in non-pharmaceutical applications.

The C1-cell protein production platform is a robust and versatile thermophilic filamentous fungal expression system for the development and production of biologic products including enzymes and other proteins for human and animal health.

Some examples of human and animal vaccines and drugs which have the potential to be produced from C1-cells are protein antigens, ferritin nanoparticles, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins.

The Company is involved in multiple funded research collaborations with animal and human pharmaceutical companies which are designed to leverage its C1-cell protein production platform to develop innovative vaccines and drugs, biosimilars and/or biobetters.

The Company also developed the Dapibus™

thermophilic filamentous fungal based microbial protein production platform to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

We rely on our existing cash and cash equivalents, investments in debt securities, and cash inflows from operating activities to provide the working capital needs for our operations.

We believe that our existing cash position, investments in investment grade securities, and additional cash received from the sale of certain equity and debt investments will be adequate to meet our operational, business, and other liquidity requirements for at least the next twelve (12) months. However, in the event our financing needs for the foreseeable future are not able to be met by our existing cash, cash equivalents and investments, we would seek to raise funds through public or private equity offerings, and/or other means to meet our financing requirements.

The Company has self-funded the development and cGMP manufacturing costs of its proprietary COVID-19 vaccine candidate, DYAI-100, and in February 2023 completed the dosing of all patients related to the Phase 1 clinical trial to demonstrate the safety in humans of a protein produced from our C1-cell protein production platform. The Company does not anticipate the need to spend significant additional capital to support the continued development, manufacturing and testing of DYAI-100 in 2023 and beyond. 

After the DuPont Transaction, the Company has been focused on building innovative microbial protein production platforms to address the growing demand for global protein bioproduction utilizing its advanced microbial platforms to develop and manufacture prophylactic, therapeutic, and nutritional biopharmaceutical products for human and animal health and wellness.

Our Technology

Our mission is to use our proprietary highly productive scalable microbial fungal protein production platforms to meet the growing demand for proteins worldwide for human and animal health and to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

We believe that our C1 cell line is unique compared to traditional filamentous fungal cells, and the C1-cell protein production platform has the potential to be used in the discovery, development and manufacturing of biologic medicines and vaccines, given its anticipated competitive advantages compared to certain other legacy biopharmaceutical expression systems, such as insect cells (i.e., baculovirus) and CHO (“Chinese Hamster Ovary”) cells.

We have also developed the Dapibus™

filamentous fungal based microbial protein production platform to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness. 

We believe that in comparison to other cell lines, our cell line has several significant potential operational advantages, which include but are not limited to:

Our mission is to leverage our proprietary highly productive, and scalable microbial fungal protein production platforms to meet the growing demand for proteins in both human and animal health markets worldwide.

Additionally, we aim to enable the rapid development and large-scale manufacturing of cost-effective proteins, metabolites, and other biologic products, extending beyond pharmaceutical applications in areas such as food, nutrition, and wellness.

The C1-cell protein production platform is a versatile thermophilic filamentous fungal expression system customized for the development and production of biologic products including enzymes and other proteins for human and animal health.

Potential applications to be produced from C1-cells include protein antigens, ferritin nanoparticles, virus-like particles (“VLPs”), monoclonal antibodies (“mAbs”), Bi/Tri-specific antibodies, Fab antibody fragments, Fc-fusion proteins, as well as other therapeutic enzymes and proteins.

The Company participates in multiple funded research collaborations with certain leading animal and human pharmaceutical companies.

These partnerships are strategically engaged to leverage the potential of our C1-cell protein production platform in the development of innovative vaccines and drugs, as well as biosimilars and/or biobetters, which we believe will contribute to advancements in medical science and healthcare.

The Company also developed the Dapibus™ thermophilic filamentous fungal-based microbial protein production platform to enable the rapid development and large-scale manufacture of cost-effective proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, including food, nutrition, and wellness.

We believe that our microbial cell line possesses distinctive characteristics compared to conventional filamentous fungal cells.

Moreover, we believe that our protein production platforms offer potential competitive advantages in the discovery, development, and manufacturing of biologic medicines and vaccines, compared to certain other legacy biopharmaceutical expression systems, which include but are not limited to:

High retention of target secreted protein through downstream processing

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High Productivity

Robust & versatile growth conditions High yields of secreted protein

Low viscosity due to C1’s unique morphology

Proven at both small and large scale, ranging from laboratory microtiter plates, shaker flasks, single use and/or stainless-steel microbial fermenters Stable and correctly folded monoclonal antibodies (mAbs);

having binding, neutralizing and certain other properties similar to CHO produced mAbs

Robust and versatile growth conditions High yields of secreted protein

Low viscosity due to C1’s unique morphology

Develop stable C1-cell lines for protein production in ~ 60 days

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CHO 41-54 days) Manufacturing ~ 3-4 batches of C1 produced mAbs in the same time it takes to make 1 batch using CHO-cells

Faster Product Release –No requirement for viral (i.e., CHO and Baculovirus) or endotoxin (i.e., E.

Faster product release –No requirement for viral (i.e., CHO and Baculovirus) or endotoxin (i.e., E.

coli) removal allowing for earlier product release

High yields and rapid manufacturing cycle times reduce costs and shrink manufacturing footprint

C1-cells can be grown using low-cost and readily available cGMP media;

C1 media < 1/20 of the cost of CHO cell media

No requirement for viral or endotoxin removal, simplifies processing compared to CHO, Baculovirus & E.

C1-cells can be grown using low-cost and readily available cGMP media; C1 media < 1/20 of the cost of CHO cell media

No requirement for viral or endotoxin removal, which simplifies processing compared to CHO, Baculovirus and E.

coli, saving time and money

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Currently, we are not aware of other companies pursuing a business model similar to what we are developing under our microbial filamentous fungal-based protein production platform.

However, our competitors using other protein production platforms who are significantly larger and better capitalized than us could undertake strategies similar to what we are pursuing and even develop them at a much more rapid rate.

These potential competitors include the same multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, governmental agencies, and other research institutions that are operating in the human health and animal health fields.

In that respect, smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies.

Unlike human and animal health there are other companies who have and are developing filamentous fungal microorganisms for the development and manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

We believe that our microbial fungal based protein production platforms, including C1 and Dapibus™, have great potential to become an alternative to several legacy production technologies currently used in the biopharmaceutical industry to produce vaccines, monoclonal antibodies, and other therapeutic proteins for both the human and animal health markets.

However, our competitors using other protein production platforms who are significantly larger and better capitalized than us, could potentially adopt strategies similar to our and even implement them at a faster pace.

These potential competitors include multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, governmental agencies, and other research institutions that are operating in the human health and animal health fields.

Moreover, smaller or early-stage companies may emerge as significant competitors, particularly through collaborative arrangements with large, established companies.

Unlike in human and animal health, several other companies have and are actively engaged in utilizing filamentous fungal microorganisms for the development and manufacture of low-cost proteins, metabolites, and other biological products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

We believe that our microbial fungal based protein production platforms, including C1 and Dapibus™, have significant potential to become an alternative to several traditional production technologies currently used in the biopharmaceutical industry to produce vaccines, monoclonal antibodies, and other therapeutic proteins for both the human and animal health markets.

C1 has some inherent benefits and potential competitive advantages compared to CHO cells, E.

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Disadvantages include the comparably lower protein yields than C1 and the need for an added viral inactivation step.

We believe that our microbial protein production platforms have the potential to become leading protein production platforms for developing and manufacturing proteins for use in biopharmaceuticals, food, nutrition, wellness and in drug formulation and research diagnostics due to their potential speed of development, high protein yields, scalability, low-cost media, and hence lower production costs.

We believe that our microbial protein production platforms hold the potential to become leading protein production platforms for developing and manufacturing proteins across various sectors, including biopharmaceuticals, food, nutrition, wellness, drug formulation, and research diagnostics, based on our platform's capability to expedite development processes, achieve high protein yields, scale efficiently, utilize low-cost media, and ultimately reduce production costs.

Our Industry and Potential Markets

Based on feedback from our collaborators and our ongoing discussions with leading pharmaceutical and biotech companies, contract manufacturing organizations (CMOs), leading academic institutions, as well as U.S.

Based on feedback received from our collaborators and our ongoing discussions with leading pharmaceutical and biotech companies, contract manufacturing organizations (CMOs), leading academic institutions, as well as U.S.

and foreign governmental agencies, we continue to believe that the biopharmaceutical market is an attractive opportunity to apply our C1-cell protein production platform.

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The Company believes that the biopharmaceutical industry can benefit from an innovative protein production platform that is safe, efficient, reliable, and cost effective.

Such a platform would facilitate the rapid and high titer production of difficult to express proteins resulting in greater patient access and more affordable biopharmaceuticals.

Our C1-cell protein production platform has the potential to be an alternative to CHO, Baculovirus and other legacy expression systems to produce proteins for vaccines, therapeutics, diagnostics, alternative foods, nutrition and wellness and other biological products.

Such a platform could facilitate the rapid and high titer production of difficult to express proteins resulting in greater patient access and more affordable biopharmaceuticals.

We believe that our C1-cell protein production platform has the potential to be an alternative to CHO, Baculovirus and other traditional expression systems to produce proteins for vaccines, therapeutics, diagnostics, alternative foods, nutrition and wellness and other biological products.

Our Research Partners and Contract Research Organizations (CROs)

Currently, the Company is conducting its C1-cell protein production platform research and other internal and external third-party programs with several contract organizations as follows:

(1) Research and Development Agreement with VTT Technical Research Centre of Finland, Ltd ( “

Research and Development Agreement with VTT Technical Research Centre of Finland, Ltd ( “ VTT ” )

Since September 2016, the Company has been working with VTT Technical Research Centre of Finland, Ltd.

(“VTT”), a third-party contract research organization, to further modify and improve the Company’s C1-cell protein production platform to ensure a safe and efficient expression system for use in speeding up the development and lowering the cost of manufacturing pharmaceutical products and processes.

VTT is one of the leading research and technology organizations in Europe, and it has conducted research and development on fungi and other microorganisms for more than three decades.

VTT is continuing their development work to further develop our C1-cell protein production platform.

On June 28, 2019, and November 9, 2021, the Company extended its research contract with VTT twice to continue developing Dyadic’s C1-cell protein production platform for therapeutic protein production, including C1 host system improvement, glycoengineering, protease deletion, and management of third-party target protein projects.

On September 12, 2022, the Company further extended its research contract (the “Amendment”) through December 2023 with VTT.

A significant portion of the research and development activities at VTT are being funded by the Company’s third-party collaborators. 

The Company has extended its research contract with VTT multiple times to continue developing Dyadic’s C1-cell protein production platform for therapeutic protein production, including C1 host system improvement, glycoengineering, protease deletion, and management of third-party target protein projects.

A significant portion of the research and development activities at VTT are being funded by the Company’s third-party collaborators.

Other CROs and cGMP Manufacturers

The Company works with several other research providers, cGMP manufacturers and contract research organizations from time to time, which are important to achieve the Company’s scientific and business objectives.

These arrangements are typically work for hire on an as need basis, however, certain of these programs, if negatively impacted due to resource availability, disagreements, or for other reasons could lead to delays or inability to realize our research and commercial objectives.

The Company, supplemented by third party funding is also further developing its Dapibus™

protein production platform for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

In March 2021, the Company engaged CR2O, a contract research organization, to manage and support further preclinical and clinical development of DYAI-100.

CR2O engaged Bio-Technology General (Israel) Ltd., (“BTG”), a cGMP subcontractor, to produce the DYAI-100 drug substance and perform certain other analytical tests required to release the final drug product.

Our Research and Development ( “

The Company works with several other research providers, cGMP manufacturers, and contract research organizations from time to time, which are important to achieve the Company’s scientific and business objectives.

These entities include but are not limited to CR2O, a contract research organization, to manage and support further preclinical and clinical development of DYAI-100, and Eleszto Genetika (Budapest, Hungary).

These arrangements are typically work for hire on an as-needed basis, however, certain of these programs, if negatively impacted due to resource availability, disagreements, or for other reasons could lead to delays or inability to realize our research and commercial objectives.

The Company, supplemented by third party funding is also further developing its Dapibus™ protein production platform for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

Our Research and Development ( “ R&D ” ) Programs

Internal Research Programs

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Expressed a number of other types of therapeutic proteins, such as bi-specifics, tri-specifics and Fc-fusion proteins, at relative high yields compared to other production hosts and high quality (e.g., expressed a third party bi-specific antibody which was assayed by the third party in an in vitro cellular activity assay which indicated that dose response curves for the C1 expressed bi-specific antibody were very similar to the CHO expressed bi-specific antibody).

Developed the C1-cell protein production platform to express human and bovine serum albumin and other recombinant proteins with therapeutic, drug formulation, and research diagnostic applications. 

Glycosylated Therapeutic Programs and Potential Nivolumab Commercialization Program

The Company’s longer-term objective, which will require substantially more time and capital is to apply the C1-cell protein production platform for the large therapeutic glycoprotein market.

The Company’s longer-term objective, which will require substantially more time and capital, is to apply the C1-cell protein production platform for the large therapeutic glycoprotein market.

We believe that the rapid advances being made in genomics and synthetic biology, make the C1 fungal cell line a promising candidate to further engineer glycosylation pathways:

(i) to produce therapeutic proteins having human like glycoforms structures such as G0, G2, G0F, and G2F;

(ii) to reduce or eliminate O-glycosylation;

and (iii) to create potentially improved immunogenicity in the case of vaccines.

(i) to produce therapeutic proteins having human-like glycoforms structures such as G0, G2, G0F, and G2F; (ii) to reduce or eliminate O-glycosylation; and (iii) to create potentially improved immunogenicity in the case of vaccines.

The initial steps to develop C1 strains that produce mAbs with mammalian-like glycosylation are progressing at VTT.

Based on research results we have to date;

the Company believes that our C1-cell protein production platform has the potential to become a useful platform for the development and production of therapeutic glycoproteins with human-like or potentially even superior glycan structures.

Based on research results we have to date, the Company believes that our C1-cell protein production platform has the potential to become a useful platform for the development and production of therapeutic glycoproteins with human-like or potentially even superior glycan structures.

We believe that, if successful, the glycoengineering of C1 cells may help to position the C1 protein production platform to be an important production platform for developing and manufacturing glycosylated antibodies and other glycoproteins.

These initial glycoengineered C1 cells have to date shown reduced gene expression levels when compared to the non-glycoengineered C1 cells.

Several approaches are now being applied to reach our main goal –

to develop cell line(s) that resemble the 3 main goals:

Several approaches are now being applied to reach our main goal – to develop cell line(s) that resemble the 3 main goals:

(i) to produce therapeutic proteins having human-like glycoform structures, (ii) to produce therapeutic proteins at high level and (iii) to produce stable therapeutic proteins.

We continue the development of Nivolumab (Opdivo®) as a potential biosimilar/biobetter immunotherapeutic biologic drug for human metastatic cancers, including melanoma, lung, and other cancers.

The aim of this program is to express Nivolumab (mAb) with a glycoprotein structure like Nivolumab produced in CHO cells.

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This project has proved the concept that C1-cell protein production platform can be applied to several very high value therapeutic or preventative monoclonal antibodies.

Animal Health Programs

ZAPI Biologic Vaccines Program

We have completed our participation in the €20 million Zoonosis Anticipation Preparedness Initiative (“ZAPI”) program.

ZAPI (www.zapi-imi.eu) is a five-year research and development project funded as part of IMI EU program (Zoonoses Anticipation and Preparedness Initiative (ZAPI project;

IMI Grant Agreement n°115760)), with the assistance and partial financial support of IMI and the European Commission, and in-kind contributions from EFPIA partners.

This project aims to develop a suitable platform for the rapid development and production of vaccines and protocols to fast-track registration of product developed to combat pandemic Zoonotic diseases that have the potential to affect human and animal populations.

The Company’s C1 recombinant protein production platform has been selected by ZAPI as a production host of antigens for the SBV and RVFV, and ZAPI has expanded its program with the Company and provided additional funding in 2019 and 2021, respectively.

The SBV antigen from C1 was produced at approximately 300 times greater yields than the SBV antigen from baculovirus and was more stable.

Additionally, the C1 SBV antigen was shown to be safe and very effective (full protection) in protecting cattle, sheep and mice from the SBV.

Based on these results, additional fully funded animal trials are continuing in 2021 with C1 expressed antigens for SBV and RVFV and to generate additional safety and efficacy data.

ZAPI brought together experts in human and animal health to create new platforms and technologies that will facilitate a fast, coordinated, and practical response to new pandemic threats as soon as they emerge.

The Company’s C1 recombinant protein production platform was selected by ZAPI as a production host of antigens for the Schmallenberg virus (“SBV”) and Rift Valley Fever virus (“RVFV”).

The C1 expressed SBV antigen was produced in less time and at approximately 300 times greater yield than the SBV antigen expressed from insect (baculovirus) cells and was more stable.

Additionally, the C1 SBV antigen was shown to be safe and effective to provide full protection to cattle, sheep and mice.

Based on these results, ZAPI provided the Company with additional funding in 2021 to produce both the SBV and RVFV antigens in order to perform expanded animal trials with the C1 expressed antigens which is expected to generate additional safety and efficacy data.

In the first quarter of 2021, ZAPI expanded its program with Dyadic by providing additional funding to C1 research and development efforts as well as to conduct additional animal studies using the SBV and RVFV antigens produced from C1.

Phibro Sublicense Agreement

On February 8, 2022, the Company entered into an exclusive sublicense agreement with Abic Biological Laboratories Ltd.

(“Abic”), an affiliate of Phibro Animal Health Corporation (“Phibro”), based off an existing July 1, 2020, non-exclusive sublicense and development agreement (the “Phibro/Abic Agreement”), to provide services for a targeted disease.  

In July 2022, the Company expanded the Phibro/Abic Agreement to include an additional research project to develop an additional animal vaccine for livestock. 

Monoclonal Antibodies Collaboration

In 2022, the Company initiated a fully funded research and development collaboration with a top five animal health company to produce therapeutic monoclonal antibodies for use in treating diseases in companion animals. The project is currently underway and on target to meet development milestones per the research agreement. 

Human Health Programs

COVID-19 DYAI-100 Vaccine Candidate

As a result of the positive results generated from the use of the Company’s C1-cell protein production platform in the ZAPI project, the Company expanded its in-house and third-party vaccine-based antigen research and development efforts.

The Company has invested more than $7.0 million in the development of its proprietary DYAI-100 COVID-19 vaccine candidate to date.

DYAI-100, also known as C1-SARS-CoV-2 RBD vaccine, is a novel receptor binding domain (RBD) recombinant protein booster vaccine candidate, highly expressed in Dyadic's proprietary C1-cell protein production platform for the prevention of COVID-19.

The C1-SARS-CoV-2 RBD vaccine drug product consists of the SARS-CoV-2 RBD adjuvanted with Alhydrogel 85®

The DYAI-100 vaccine candidate has demonstrated excellent results in several pre-clinical animal studies.

In particular, the Company relied on the preclinical animal studies conducted by the Israel Institute for Biological Research (IIBR) who were using the SARS-CoV-2 RBD antigen from the Company’s RBD C1 strain.

The Company also relied on the toxicology study which concluded that the C1 SARS-CoV-2-RBD vaccine was not associated with major systemic adverse effects, and it is considered safe following four repeated vaccination sessions by IM injections at an interval of one week to male and female NZW rabbits.

We noted that germinal centers with increased lymphocytic cellularity (i.e., follicular hyperplasia) seen in the regional lymph nodes were sustained throughout the recovery phase, in addition to the detection of SARS-CoV-2 specific IgG antibodies in the sera of rabbits in the recovery phase, and it demonstrated a long-lasting immunogenic response against RBD.

On October 27, 2022, the Company announced that it has received regulatory approval of a Clinical Trial Application (CTA) from the South African Health Products Regulatory Authority (SAHPRA) to initiate a Phase 1 clinical trial of the DYAI-100 COVID-19 RBD booster vaccine.

The Company’s Phase 1 randomized, double blind, placebo-controlled trial is designed as a first-in-human trial to assess the clinical safety and antibody response of DYAI-100, a C1-SARS-CoV-2 recombinant protein receptor binding domain vaccine, produced using the C1-cell protein production platform, administered as a booster vaccine at two single dose levels (low dose and high dose cohorts) in healthy volunteers. The trial included healthy patients ages 18-55 in a randomization scheme of 4:1 (active:placebo) with 15 subjects per cohort.

Following the screening period there are 8 scheduled clinic visits with the first 6 visits occurring within the first 29 days and two follow-up visits on Days 90 and 180.

Safety data will be collected throughout the trial and immunogenicity assessments were scheduled on patient visits 1, 4, 5, 6 and the two follow up visits on Days 90 and 180.

Dosing of both low and high dose groups was completed in February 2023, with no serious adverse events (SAE’s) reported to date.

A full study report is expected to be available in the second half of 2023. 

Other COVID-19 Vaccine Collaborations

The Company is evaluating a number of other approaches where its proprietary and patented C1-cell protein production platform can be used to help develop and manufacture COVID-19 vaccines that have the potential to provide greater efficacy and protection from emerging SARS-CoV-2 variants, including multivalent and nanoparticle vaccine designs.

Rubic One Health, South Africa –

This is a collaboration to develop end-to-end solutions for vaccine discovery, development, and manufacture for the African market.

Tech transfer of C1-cell protein production platform has been completed.

Rubic has begun engineering and growing C1-cells to prepare for the development of affordable vaccines and drugs for the African continent.

Epygen, Indian – In 2020, the Company entered into a non-exclusive technology usage agreement with Epygen Biotech of India, who plans to conduct clinical trials in India using one or more of the COVID-19 antigens that they are manufacturing using the Company’s C1 protein production platform.

Epygen reported that it has procured funding from the government of India, and they are progressing their vaccine development and production using antigens produced from the Company’s C1-cell protein production platform across early-stage pre-clinical studies and to conduct Phase 1 and Phase 2 human clinical trials.

Janssen Agreement

During 2022, progress continues on the Research, License, and Collaboration Agreement (the “Janssen Agreement”) for the manufacture of therapeutic protein candidates using its C1-cell protein production platform with Janssen Biotech, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson (“Janssen”), which was entered into on December 16, 2022.

Pursuant to the terms of the Janssen Agreement:

Janssen will pay Dyadic an upfront payment of $500,000 for a non-exclusive license to utilize the C1-cell protein production platform to develop C1 production cell lines for the manufacturing of Janssen’s therapeutic protein candidates against several biologic targets,

Janssen will provide R&D funding up to €1.6 million to develop and assess C1 production cell lines for its product candidates,

Janssen will have an option to pay a mid-seven figure payment for an exclusive license from Dyadic to use the C1-cell protein production platform for the manufacturing of therapeutic proteins directed to one specific target, and upon exercise, Janssen would have the right to add additional non-exclusive targets to the collaboration and Dyadic would complete the technology transfer of the C1-cell protein production platform, fully enabling Janssen to internally develop C1 cell lines against licensed targets, and upon successful completion of the technology transfer, Dyadic is eligible to receive a milestone payment in the low seven figures,

for each product candidate, Dyadic could receive development and regulatory milestones in the mid-seven figures, and

Dyadic could receive aggregate commercial milestone payments in the low nine figures per product, subject to a limit on the number of such products, with the amount depending on the cumulative amount of active pharmaceutical ingredient produced by Janssen for each product manufactured with Dyadic’s C1-cell protein production platform.

Janssen may terminate the Janssen Agreement in its entirety, or on a country-by-country or other jurisdiction-by-other jurisdiction basis, for any or no reason, upon 90 days’

prior written notice to Dyadic.

IDBiologics Agreement

On July 8, 2020, the Company entered into a Common Stock Purchase Agreement (the “IDBiologics Agreement”) with IDBiologics, Inc (“IDBiologics”).

IDBiologics is a private biotechnology company focused on the development of human monoclonal antibodies for the treatment and prevention of serious infectious diseases.

The Company was founded in 2017 and seeded by Vanderbilt University Medical Center in response to the repeated threats of epidemics around the world, including Ebola in West Africa and Zika in the Americas.

IDBiologics is developing a portfolio of monoclonal antibodies against SARS-CoV-2, influenza and Zika viruses.

Pursuant to the term of the IDBiologics Agreement, on July 8, 2021, Dyadic received 129,661 shares of IDBiologics’

common stock, which represent 0.37% of IDBiologics’

outstanding equity, upon the completion of a feasibility study performed by Dyadic.

Dyadic provided services including the use of Dyadic’s C1-cell protein production platform to express a SARS-CoV-2 monoclonal antibody which IDBiologics licensed from the Vanderbilt Vaccine Center.

On April 25, 2021, the Company entered into a project agreement to provide additional research services to IDBiologics.

Alphazyme Sub-License Agreement

On May 5, 2019, the Company entered into a sub-license agreement (the “Alphazyme Sub-License Agreement”) with Alphazyme, LLC (“Alphazyme”).

Under the terms of the Alphazyme Sub-License Agreement, the Company has granted to Alphazyme, subject to the terms of the license agreement entered into between the Company and Danisco US, Inc.

on December 31, 2015, a sub-license to certain patent rights and know-how related to Dyadic’s proprietary C1-cell protein production platform for the purpose of commercializing certain pharmaceutical products that are used as reagents to catalyze a chemical reaction to detect, measure, or be used as a process intermediate to produce a nucleic acid as a therapeutic or diagnostic agent.

On June 24, 2020, the Company entered into an Amended and Restated Non-Exclusive Sub-License Agreement (the “Amended Sub-License Agreement”) with Alphazyme.

Pursuant to the Amended Sub-License Agreement and in consideration of Dyadic’s transfer of its C1-cell protein production platform, Alphazyme issued 2.50% of the Class A shares of Alphazyme to Dyadic, and Dyadic became a party to the Alphazyme Limited Liability Company Agreement pursuant to which the Company has agreed to certain customary rights, covenants, and obligations.

In addition, and subject to achieving certain milestones, Alphazyme is obligated to pay a potential milestone payment and royalties, based on net sales, if any, which incorporate Dyadic’s proprietary C1-cell protein production platform.

On December 1, 2020, the Company entered into an Amended and Restated Limited Liability Company Agreement with Alphazyme (the “Amended Alphazyme LLC Agreement”).

Under the Amended Alphazyme LLC Agreement, Alphazyme obtained an additional capital contribution and Dyadic’s ownership was diluted to 1.99%.

On January 18, 2023, the Company entered into a Securities Purchase Agreement, under which the Company agreed to sell its equity interest in Alphazyme, LLC (the "Alphazyme Sale Agreement”).

After taking into account the adjustments for the transaction and legal expenses, payments to the Company were approximately $1.27 million in connection with the sale. The Company also has the potential to receive additional payments based on the future sales of Alphazyme’s existing products, pursuant to the Alphazyme Sale Agreement.

The Amended Sublicense Agreement between Dyadic and Alphazyme, which was previously entered on June 24, 2020, remains in effect.

Under the Amended Alphazyme Sub-License Agreement, Dyadic is entitled to potential milestone and royalty payments upon the commercialization of Alphazyme products using Dyadic’s proprietary C1-cell protein production platform.

Other Third Parties Collaborations

NIIMBL Coronavirus Grant – Dyadic received 1 of 32 project grants awarded by the National Institute for Innovation in Manufacturing Biopharmaceuticals ("NIIMBL") funded through the White House's American Rescue Plan ("ARP").

Under the $690,000 NIIMBL grant, the Company has received approximately 75% of the funding to engineer the Company's proprietary and patented C1-cell thermophilic fungal ( Thermothelomyces heterothallica ) protein production platform to produce two different coronavirus antibodies.

Third Party C1 Produced COVID-19 Antibody –

A non-human primate challenge study completed dosing of a C1 produced COVID-19 monoclonal antibody (mAb) that had previously demonstrated broad neutralization and protection against Omicron (BA.1 and BA.2) and the other earlier variants of concern in hamsters.

Pharmaceutical Programs

DYAI-100, a C1-SARS-CoV-2 recombinant protein RBD vaccine candidate, is the first C1-expressed protein tested in humans.

The Phase 1 randomized, double-blind, placebo-controlled trial was designed as a first-in-human trial to assess the clinical safety and antibody response of DYAI-100, produced using the C1 platform and administered as a booster vaccine at two single dose levels in healthy volunteers.

Following the regulatory clearance from the South African Health Products Regulatory Authority (SAHPRA), the trial was initiated in 1Q 2023 with the last patient visit occurring in 3Q 2023.

On November 29, 2023, the Company announced the top-line safety results, indicating that the study had met its primary endpoint that both the low and high dose levels of the vaccine are safe and well tolerated among participants.

Additionally, the vaccine has been shown to induce immune responses at both dose levels, suggesting its potential efficacy in generating protective immunity against the target virus.

On March 25, 2024, the Company entered into a funded research collaboration with a top ten pharmaceutical company to develop a vaccine antigen and a monoclonal antibody produced from the C1 technology.

On March 15, 2024, the Company expanded its collaboration with Phibro Animal Health/Abic Biological Laboratories Ltd to develop vaccines and treatments for companion and livestock animal diseases.

In March 2024, a manuscript of preclinical studies on C1 produced monoclonal antibody in non-human primates and hamsters was published in the prestigious peer-reviewed journal Nature Communications.

A non-human primate challenge study completed dosing of a C1 produced COVID-19 monoclonal antibody that had previously demonstrated broad neutralization and protection against Omicron (BA.1 and BA.2) and the other earlier variants of concern in hamsters.

Preliminary results obtained from the challenge study with the SARS-CoV-2 Delta virus on non-human primates demonstrated potential high protection.

This was the first time a C1-produced monoclonal antibody was used in a non-human primate study validating the safety and efficacy of a C1 produced antibody for infectious diseases.

Recombinant Serum Albumin –

An animal free recombinant serum albumin project was initiated in late 2022 using Dyadic pharmaceutical cell lines for use in potential therapeutic, product development, research, and/or diagnostic human and animal pharmaceutical applications.

C1-cell lines have been developed and Dyadic expects to start sampling potential customers who have expressed interest in Dyadic's C1 serum albumin products. 

University of Oslo – During 2021, Dyadic expanded its influenza vaccine collaboration with the University of Oslo.

Mice vaccinated with C1 antigen combined with an adjuvant (AS03) challenged with a lethal dose of the homologous influenza A/H1N1 showed no clinical signs, no body weight loss, and were fully protected.

Other mice trials are ongoing with C1 produced hemagglutinin (HA) and neuraminidase (NA) antigens for influenza, including H1N1, H5N1 (Bird Flu), H7, NA alone and combined with one or more C1 produced SARS-CoV-2 antigens.

The current and future data is expected to support the development of seasonal and pandemic influenza vaccine candidates alone or in combination with other infectious respiratory diseases such as coronaviruses.

Virovax  – Dyadic has been working with Virovax to develop the next generation vaccine candidates, including COVID-19, that may provide durable and broader protection against COVID-19 variants as they emerge as well as other infectious diseases.

More than a half dozen animal trials have been carried out and additional animal trials are ongoing and/or scheduled with C1 produced antigens for influenza (H5N1/Bird Flu), COVID-19 and other infectious diseases.

UC Davis  

Successful production of the SARS-CoV-2 Spike S2 protein reaching ~1g/L and 97% purity which showed the same ACE2 binding affinity as CHO produced spike S2 protein.

UC Davis is carrying out additional research and development work related to expanding the potential applications of the C1-cell protein production platform including diagnostics.

(4) Alternative Protein Programs

Dyadic’s newly developed Dapibus™

filamentous fungal based microbial protein production platform is reengineered to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

Given Dyadic’s industrial heritage, the expertise to rapidly achieve commercial scale within margin sensitive markets such as food and nutrition enzymes, provides our partners with the ability to move from demonstration to commercial production quickly and efficiently.

We are actively applying our proprietary Dapibus™

platform and other technologies to address the unmet need of reducing the production cost in the global market for non-pharmaceutical recombinant proteins.

Food and Nutrition:

In May 2022, we launched a strategic partnership with a global food ingredient company. The Company is making progress with the joint development agreement to develop and manufacture several animal free ingredient products using the Company’s biotechnology.

The Company has achieved the first milestone, for which payment is expected in the second quarter of 2023.

We are exploring internal and partnership opportunities for enzymes, growth factors, and cell culture media components for food industries, such as the dairy and cultured meat markets.

Health and Wellness:

Development work has been established for select primary and secondary metabolites, such as nicotinamide riboside, which may have potential cardiovascular and other health benefits.

Dyadic has also developed Intellectual Property regarding the production of cannabinoids in its technology, with a focus on the production of rare cannabinoids unfeasible from plants.

Product Development in Alternative Proteins:

We are currently expanding our portfolio of recombinant proteins and media components for use in food and other applications.

At the NIIMBL conference in February 2024, the Company showcased our project data and research results generated from the NIIMBL Grant received by the Company under the previously announced White House’s American Rescue Plan.

On February 28, 2024, the Company’s Dutch subsidiary, Dyadic Nederland BV, entered into a strategic partnership agreement and collaboration with Rabian BV (“Rabian”), a Dutch innovative SME founded by experienced entrepreneurs and vaccine scientists.

Awarded by Eurostars for the AVATAR project, a part of the European Partnership on Innovative SMEs, and co-funded by the European Union through Horizon Europe, Rabian will use the total funding leveraging its expertise in virology to develop a rabies vaccine using Dyadic’s C1 protein production platform to tackle the challenges posed by rabies, particularly in lower- and middle-income countries.

Dyadic is expected to receive an equity stake in Rabian, fully funded research and development costs, and specified product milestones and royalties upon commercialization.

On February 21, 2024, the Company announced it has advanced its collaboration with the Israel Institute for Biological Research (IIBR) and its commercial arm Life Science Research Israel (LSRI), to target emerging disease solutions.

This partnership aims to leverage Dyadic’s expertise in microbial platforms for flexible scale protein bioproduction and the IIBR’s antibodies and antigens discovery capabilities to develop and manufacture innovative solutions for addressing emerging diseases and potential bio-threats.

Through this collaboration, both parties are working towards the development of effective treatments and vaccines to combat global health challenges with the intention of future commercialization (to date, the framework is non-binding and subject to the execution of a binding agreement to be negotiated by the parties) through collaborative out-licensing initiatives.

On February 13, 2024, the Company announced a strategic partnership with Cygnus Technologies®, part of Maravai LifeSciences® (Nasdaq:

MRVI), which has developed the C1 Host Cell Protein ELISA Kit for the quality release of products produced using Dyadic’s protein expression platforms.

On February 6, 2024, the Company announced it has signed a fully funded evaluation agreement including a commercial option with an undisclosed leading global biopharmaceutical company to design and produce recombinant proteins using Dyadic’s C1 filamentous fungal-based microbial protein production platform.

On October 25, 2023, the Company announced that it has entered into a new research collaboration with the Vaccine and Immunotherapy Center (“VIC”) at Massachusetts General Hospital to express vaccine antigens for influenza A and other infectious diseases, as part of VIC's $5.88 million award from the Department of Defense (“DoD”).

On September 26, 2023, the Company entered into a development and commercialization agreement with bYoRNA combining bYoRNA’s novel eukaryotic “bio” RNA platform with Dyadic’s industrially proven C1 protein production platform to provide the pharmaceutical industry with a potentially more cost-efficient platform for manufacturing large quantities of lower cost mRNA, enabling access to mRNA vaccines and drugs to a broader global population.

Rubic One Health, South Africa

In April 2023, the Company expanded the license agreement with South Africa’s Rubic One Health (“Rubic”) to include vaccines and therapeutic proteins beyond COVID-19 for both human and animal health markets.

This is a collaboration to develop end-to-end solutions to develop, manufacture, commercialize, and distribute affordable vaccines and biologics for human and animal health in underserved African countries.

Tech transfer of the C1-cell protein production platform has been completed.

Under the license agreement, Dyadic is expected to receive certain marketing rights and other considerations, including milestones and royalty payments, from Rubic.

Phibro/Abic Sublicense Agreement

On February 8, 2022, the Company entered into an exclusive sublicense agreement with Abic Biological Laboratories Ltd.

(“Abic”), an affiliate of Phibro Animal Health Corporation (“Phibro”), based on an existing July 1, 2020, non-exclusive sublicense and development agreement (the “Phibro/Abic Agreement”), to provide services for a targeted disease.

Since then, the Company has expanded the Phibro/Abic Agreement to include additional research projects to develop vaccines and treatments for companion and livestock animal diseases.

Non-pharmaceutical Programs

Dyadic’s newly developed Dapibus™ filamentous fungal based microbial protein production platform is reengineered to enable the rapid development and large-scale manufacture of low-cost proteins, metabolites, and other biologic products for use in non-pharmaceutical applications, such as food, nutrition, and wellness.

We are actively applying our proprietary Dapibus™ platform and other technologies to address the unmet need to reduce the production cost in the global market for non-pharmaceutical recombinant proteins.

Cell Culture Media Products

Recombinant Serum Albumin:

In March 2024, the Company executed a term sheet with a global albumin manufacturer and distributor to develop and license Dyadic’s recombinant serum albumin initially for diagnostic and research-grade purposes.

The Company’s animal-free recombinant serum albumin projects were initiated in late 2022 using Dyadic pharmaceutical cell lines for use in potential therapeutic, product development, research, and/or diagnostic human and animal pharmaceutical applications.

Animal-free recombinant serum albumin projects were initiated for use in potential non-pharmaceutical applications such as a component of cell culture media in nutrition, health, and food.

The Company has completed the initial analysis of its recombinant albumin products and has Certificates of Analysis for recombinant human and bovine albumin that demonstrate comparability to reference standards used in the testing.

In March 2024, the Company entered into a co-promotion agreement with Biftek Co.

for the promotion of growth media supplement for cell culture.

The Company has commenced a development program to produce recombinant transferrin for use in cell culture media for the alternative protein industry, and initial production via our microbial platform was successful.

The Company is currently providing samples of recombinant bovine serum albumin for application testing as growth media for the cultured meat industry.

Non-animal Dairy Products

In September 2023, the Company entered into a development and exclusive license agreement to commercialize certain non-animal dairy enzymes used in the production of food products using Dapibus™ and received an upfront payment of $0.6 million in October 2023.

The Company believes it has achieved the specified target yield level required for a milestone payment.

The Company has developed a highly productive strain and is providing samples of recombinant alpha-lactalbumin, a whey protein, to interested collaborators.

The Company has initiated a beta-lactoglobulin animal-free recombinant whey protein project in early 2024.

The Company has commenced a recombinant lactoferrin development program and expects to provide samples of the product in the third quarter of 2024.

The Company has expressed four casein proteins and is in active discussions with potential collaborators.

Bio Industrial Products

The Company has developed several enzymes that have the potential for use in multiple industries, such as nutrition, biofuels and biorefining.

On March 8, 2024, the Company issued an aggregate principal amount of $6.0 million of its 8.0% Senior Secured Convertible Promissory Notes due March 8, 2027 (the “Convertible Notes”) in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

The purchasers of the Convertible Notes include immediate family members and family trusts related to Mark Emalfarb, our President and Chief Executive Officer and a member of our Board of Directors, including The Francisco Trust, an existing holder of more than 5% of the Company’s outstanding common stock.

For the year ended December 31, 2023, the Company received approximately $1.3 million from the sale of its equity interest in Alphazyme LLC (“Alphazyme”).

Dyadic previously received its equity as part of the consideration for the grant of a non-exclusive license to certain of Dyadic's technology.

Dyadic has the right to receive milestone and royalty payments based on potential sales of C1-expressed products by Alphazyme.

Dyadic also has the potential to receive additional payments based on future sales of Alphazyme's existing products.

In April 2023, the Company received a Notice of Allowance from the U.S.

Patent and Trademark Office (USPTO) for patent application 16/640,483, titled “PRODUCTION OF FLU VACCINE IN MYCELIOPHTHORA THERMOPHILA” (the “Patent”), and is expected to provide patent protection through 2038.

The Patent will cover claims for the development and manufacture of seasonal and pandemic influenza vaccines from the Company’s C1 protein production platform.

Government Regulation and Product Approval

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Generally, our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the United States, although there can be important differences.

For additional discussion on the effect of existing or probable governmental regulations on our business, see “Risk Factors—Risks Related to Government Regulations and Environmental, Social, and Governance Issues.”

As of December 31, 2023, the Company had 7 full-time employees, all of whom are located in the United States.

Intellectual Property

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FDA regulatory review or because of U.S.

Patent and Trademark Office (“USPTO”) delays in prosecuting the application.

The duration of foreign patents varies similarly, in accordance with local law.

Currently, Dyadic owns or has exclusive rights to seven (7) patent families, of which four (4) entered the national phase.

The other three (3) applications are at the international (Patent Cooperation Treaty, PCT) phase.

There are currently four (4) pending patent applications in the United States, and nineteen (19) additional patent applications in a variety of jurisdictions including Europe and China. 

Our success is significantly dependent on our ability to obtain and maintain patent protection for C1 and Dapibus™, both in the United States and abroad.

Currently, Dyadic owns or has exclusive rights to seven (7) patent families, of which five (5) entered the national phase.

The other two (2) applications are at the international (Patent Cooperation Treaty, PCT) phase.

There are currently one (1) patent and five (5) pending patent applications in the United States, one patent in South Africa, and eighteen (18) additional patent applications in a variety of jurisdictions including Europe and China.

Our success is significantly dependent on our ability to obtain and maintain patent protection for C1 and Dapibus™, both in the United States and abroad.

Our patent position and proprietary rights are subject to various risks and uncertainties.

Please read the “Risk Factors”

in Item 1A of this Annual Report for information about certain risks and uncertainties that may affect our patent position and proprietary rights.

Please read the “Risk Factors” in Item 1A of this Annual Report for information about certain risks and uncertainties that may affect our patent position and proprietary rights.

We also rely upon unpatented confidential information to remain competitive.

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In the case of our employees, these agreements also provide, in compliance with relevant law, that inventions and other intellectual property conceived by such employees during their employment shall be our exclusive property.

Available Information

Information that we furnish to or file with the SEC, including the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are made available for download, free of charge, through the Company’s website at www.dyadic.com as soon as reasonably practicable.

The Company’s SEC filings, including exhibits filed therewith, are also available directly on the SEC’s website at www.sec.gov.

The Company may use its website as a distribution channel of material company information.

Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website.

Accordingly, investors should monitor this channel, in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts.

Information contained on the Company’s website is not part of this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business