Dyadic International Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 10, 2023

There are 6 speakers on the call.

Operator

Evening, and welcome to Dyadic International's First Quarter 2023 Financial Results Conference Call. Currently, all participants are in a listen only mode. Following management's prepared remarks, there will be a brief question and answer session. As a reminder, this conference is being recorded today, May 10, 2023. Would now like to turn the call over to Ms.

Operator

Ping Rawson, Dyadic's Chief Financial Officer. Please go ahead.

Speaker 1

Thank you. Good evening, and welcome, everyone, to Dyadic International's Q1 2023 Conference Call. I hope you have had an opportunity to review Dyadic's press release announcing financial results for the quarter ended March 31, 2023, And the recent company highlights, you may access our press release and Form 10 Q under the Investors section of the company's website atiatic.com. On today's call, our President and CEO, Mark Emalfarb, will give a review of our Q1 business and corporate highlights, including a brief summary of our recent research and business development efforts. Our Chief Business Officer, Joe Hazleton, will join Mark At this time, I would like to inform you that certain commentary made in this conference call may be considered forward looking statements, which involve risks and uncertainties and other factors that could cause Dyadic's actual results, performance, scientific or otherwise, Our achievements to be materially different from those expressed or implied by these forward looking statements.

Speaker 1

Dyadic expressly disclaims any duty to provide updates to its forward looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors Set forth in Dyadic's reports filed with the SEC. It is now my pleasure to pass the call to our CEO, Mark Imafar. Mark?

Speaker 2

Hello, everyone, and thank you for joining Dyadic's Q1 2023 Conference Call. We are off to a great start in 2023. Our C1 technology continues to garner praise and recognition for its speed and efficiencies In the U. S. And internationally from academia, industry and government agencies, we're delivering multiple new research collaborations And strong growth revenue of 50.9% year over year for Q1.

Speaker 2

On today's call, Joe and I will highlight the significant technological advances and recent business development successes we have and continue to achieve We're excited about our current and future prospects for growth in our revenues, While continuing the ongoing long term collaborations with Janssen, fibroavic, Rubik and others While working on bringing in additional collaborations and partnerships like the co development, marketing and commercialization agreement announced earlier this week With FirmBox Bio. The global demand for enzymes and proteins across our core verticals continues to grow exponentially. Our C1 and Dapetus microbial protein production platforms offer differentiating benefits for each of these markets, such as helping overcome gene expression challenges, speed of development, robustness and versatility, Higher productivity, lower cost and flexible commercial scale manufacturing among others. We believe we are at or near the precipice of applying C1 and DAPA best to develop enzymes and proteins across our verticals It will lead to monetization that will significantly increase shareholder value for Dyadic and our collaborators. In our full year 2022 call, I highlighted what makes the C1 filamentous fungal protein production platform Unique versus traditional cell lines that are currently used to manufacture vaccines and biologic drugs.

Speaker 2

In addition, C1 is up to 300 times more productive than baculovirus insect cells, which are being used in both human and animal health to produce vaccines. And C1 also has a 2 or more weeks shorter Fermentation time and no viruses that need to be removed in downstream processing like paclovirus or Chinese hamster ovary cells. The key aspect of these scientific achievements is that C1 can produce recombinant vaccines more rapidly in greater amounts and at lower cost and cell lines currently being used today. These characteristics coupled with the data From our first in human study of a C1 produced antigen has led to increased awareness and interest in the C1 protein production platform For recombinant protein vaccine development and production, this message has resonated with the FDA and BARDA And led to Dyadic being one of 6 companies and the only platform technology company invited to present at the April 27, FDA BARDA led workshop for next generation recombinant protein based COVID-nineteen vaccines. Our inclusion in this workshop validates the growing pharmaceutical interest in our C1 protein production platform.

Speaker 2

In addition to highlighting the need for rapid, efficient and effective platforms to develop and manufacture for common vaccines For pandemic preparedness and response. At the FDA workshop, I presented alongside major pharmaceutical companies such as Sanofi, Novavax and SK Bio, in efforts to enhance the role that recombinant protein vaccines can have to combat the current COVID-nineteen pandemic, 2 next generation COVID vaccines that have the potential for broader protection and more durable coverage against coronavirus Variants of concern. In today's press release, we provided an update of the status of the first in human Phase 1 trial for DY-eight 100, A recombinant protein RBD COVID-nineteen booster vaccine candidate. Joe will provide more on that later. The data from this trial is helping to establish a safety record with regulatory agencies for proteins produced from our C1 protein production platform.

Speaker 2

We're continuing to expand the traction of the C1 platform and receiving through multiple grant applications submitted in collaboration With U. S. And EU scientists for a wide variety of infectious disease candidates such as the Sudan Ebola virus, The Marburg virus, the Red Valley fever virus, the West Nile virus, Zika, as well as 2nd generation COVID-nineteen vaccine candidates. While we have previously demonstrated that the C1 platform is capable of rapidly producing unparalleled quantities Of complex vaccine antigens efficiently, the addition of first in human data for C1 produced protein provides data For critical evaluation criterion that potential partners utilize when choosing a cell line for their commercialization targets. It is imperative that proteins produced by C1 are equal to or superior to those expressed and other cell lines in terms of quality.

Speaker 2

We've expressed a number of 3rd party monoclonal antibodies, mAbs, which were assayed by multiple third parties, We reported that the neutralizing and binding activity assays demonstrated great similarity between C1 produced mAbs and Chinese hamster ovary produced For Cho Mabs, one of the C1 produced monoclonal antibodies for COVID-nineteen completed a non human primate study Showing comparability to the comparator show produced monoclonal antibody with no signs of antibody mediated enhancement. Again, this is critical for our potential partners as they select cell lines to produce their commercial targets to ensure the products have the quality standards and safety profile required for clinical and regulatory development. We also have been focusing on designing better biomolecules. We've developed C1 cell lines to express complex proteins such as conjugating antigens and ferritin nanoparticles. Additionally, we developed several antigens with the AMHC II targeting system For influenza and COVID-nineteen, as well as an antigen that included a trimerization domain to increase vaccine efficacy and durability.

Speaker 2

In today's release, you may have not seen or may have seen, we're also testing these better molecules with our partners like Verevax, When new and improved adjuvants are being evaluated with C1 produced antigens in relevant disease areas such as COVID-nineteen And seasonal and pandemic influenza such as 85N1 or more commonly known as bird flu in animal trials. These advancements enable Dyadic and its partners the potential to develop more effective and longer lasting vaccines Across a wide range of infectious and other diseases that could be manufactured rapidly in larger quantities more affordably. At the same time, we continue our focus on building and sustaining longer term strategic partnerships with leading pharmaceutical partners Like Hangru, one of the largest Chinese pharmaceutical companies and our collaboration with Janssen Pharmaceuticals as well as advancing commercial products In clinical development of our COVID-nineteen vaccine candidate, DYA-one hundred with Rubik-one Health for the African continent And a bivalent COVID-nineteen vaccine with Epigen in India. Discussions are ongoing with several parties interested and the potential of using and applying SeaOne for additional developed and developing countries. We expect to continue using our technology To obtain equity stakes in smaller companies who can't afford to pay upfront access fees, similar to what we have done with BDI and AlbaZyme.

Speaker 2

This provides us with an opportunity to generate cash from the sale of our equity later as was the case with BDI in 2021 And Alphazyme in Q1 2023. The sale of these two equity positions generated a total of US2.87 million dollars in cash. Additionally, we have the potential to receive milestone and royalty payments based on sales of SeamuneXpress products by Albazyme. Also in 2023, we refined our human health objectives to include a focus on shorter term Product commercialization opportunities that have less time, cost and risk associated with development. We are beginning our shift towards commercializing these opportunities.

Speaker 2

An example of this strategy is our recombinant serum albumin projects, which as we shared in the release today have been expressed at high levels and we've begun to sample potential customers. The global serum albumin market is approximately $5,700,000,000 market, growing at over 6% a year due to the increased use of a multitude of markets in human and animal health. In the Pharmaceutical segment, Ceramalivu is not only being deployed as potential treatment for disease, but is currently used in product development of vaccines, As a diagnostic tool and a common reagent in R and D. There are many different grades of albumin and price points across these markets. Dyadic has potential to produce animal free serum albumin at competitive pricing due to our high productivity C1 and Apivis Microbial platforms using low cost media.

Speaker 2

Another application for ceramalbuimin is in cell culture media, the alternative protein segment, providing Dyadic with additional opportunity for near term product commercialization across our verticals. In a similar vein, in 2022, we issued the publication of a poster that showed C1 potentially being the first filamentous fungal cell line to produce an active CYP450 enzyme. CYP450 enzyme is a part of a $17,000,000,000 global enzyme market for use as a diagnostic, therapeutic, research and product development enzymes. Achieving high enzymes and other protein yields are a major challenge in the pharmaceutical industry, specifically to enhance the production of vaccines In Biologics, our enzymes required for the chiral synthesis of small molecule drugs, diagnostics and other uses. This is another example of a potential near term opportunity that adheres us to our corporate strategy to identify enzyme and protein targets Our technology can have the greatest impact.

Speaker 2

We're improving our capability to have an internal pipeline of proteins And Enzymes with commercial potential across our core verticals, whose utilization is not dependent on lengthy clinical development programs or human trials. This decreases our timeline to revenue potential and commercialization opportunities. In addition to the clinical data being generated, We are protecting our technology with a robust IP estate. I'm pleased to say that last month, Dyadic received a notice of alliance The U. S.

Speaker 2

Patent and Trademark Office for a patent application whose claims cover the development and manufacture of seasonal And pandemic influenza vaccines on the company's C1 protein production platform. This timely patent allows And comes as we announced earlier this year that Dyadic is at the forefront of vaccine development with more than a half dozen animal trials being carried out last year And additionally, animal trials are ongoing and are scheduled with C1 produced antigens for influenza such as 85N1 or the bird flu and other infectious diseases. There is a global unmet need for more effective and more available flu vaccines. It's been reported that the human influenza market is currently valued at approximately US8 $1,000,000,000 and expected to grow to over US12 $1,000,000,000 By 2028 with multivalent vaccines leading the market. The recognition, data And scientific advancement we are generating have not only accelerated our efforts in human health, but they are translating into increased interest And other core verticals such as animal health.

Speaker 2

There are many similarities in the needs between the human and animal health markets For vaccines and therapeutic proteins, we are leveraging our science across these core verticals. What makes animal health an attractive segment for Dyadic It's the margin sensitivity of this market and the significant impact that an outbreak can have on the global supply chain and potentially human health. The ongoing avian flu outbreak serves as one such example and has an immense impact on the global poultry supply chain and ripple impacts into other markets as well. This is why we believe the C1 production platform can be a global solution To pandemic response and not just human, but also in animal health. Late last year, we announced that we'd achieved a record antigen production level of 10 grams per liter of a livestock antigen.

Speaker 2

We can produce very large quantity of antigens for infectious disease Rapidly and at low cost making C1 a potential pandemic preparedness platform for response or stockpiling. Our 3rd vertical of alternative proteins is an area of great excitement for Dyadic and one which we believe also holds Near term potential promise in terms of opportunity and revenue. Exploiting this segment does not require a significant departure From our human and animal health pursuits in terms of technical capability or resource requirements. The alternative protein vertical is anchored Our fully funded joint development agreement with our Global Food Ingredients collaborator. We have received the 1st milestone payment from our joint development agreement this quarter based on our achievement of the scientific data in this project.

Speaker 2

Dyadic is continuing to dedicate resources and support for the existing and future projects within this rapidly growing market. Tyattic has launched its DAPA BIS platform, a filamentous fungal based microbial gene expression and protein production platform, which is further designed and customized to enable the rapid development and large scale manufacture of low cost enzymes, Proteins, Metabolates and other biologic products for use in non pharmaceutical applications such as food, nutrition, health and wellness. I will now turn the call over to our Chief Business Officer, Joe Hazleton to provide a more detailed update on our Phase 1 trial progress and to discuss our business development efforts across core verticals. Joe?

Speaker 3

Thank you, Mark. I'm happy Report that the Phase 1 trial for DYAI-one hundred is progressing as planned. For background, in order to establish a track record of safety in humans For antigens produced from our C1 protein production platform, the ongoing Phase 1 trial is a randomized double blind placebo controlled trial To evaluate the safety and immune response of the DYA-one hundred COVID-nineteen recombinant protein or RBD Booster vaccine in 30 healthy adults in South Africa. Regulatory approval was received in late 2022 and the first patients were dosed in January of this year. There are 8 scheduled patient visits over a 6 month period with safety data being collected throughout the trial and immunogenicity assessment Scheduled on 6 of the 8 visits.

Speaker 3

Dosing of all patients was completed in late February and to date no serious adverse events and local or systemic events have been reported. Patients completed their first six visits with the remaining two visits taking place at days 90180 from initial dosing. This timing projects the last patient last visit to take place near the end of August with the clinical study report being available in the late 3rd or early 4th quarter. We're currently working with Rubik One Health, our South Africa partner to evaluate the next development phase of the DY-one hundred COVID-nineteen booster vaccine candidate Pending the results of the study as well as the regulatory and market outlook. With the expected full study results later We continue to validate the C1 platform to reduce development risk for our partners.

Speaker 3

Over the last 5 years, Dyadic Developed a strong repository of safety, efficacy and productivity data regarding the C1 protein production system across a wide range of vaccines and antibodies. Dyadic has also developed a suite of genetic tools to improve the ability to rapidly and accurately engineer the C1 cell line to achieve quality That is comparable or better than traditional cell lines, while demonstrating speed and yield results that are significantly higher than typical cell lines in use today. For the human and animal health markets, the overall result is that for recombinant vaccine development and production, The C1 platform is ready for full commercialization. To this point, Mark mentioned earlier, multiple grant applications have already been submitted in collaboration with U. S.

Speaker 3

And EU scientists for a wide variety of infectious disease candidates such as Sudan and Ebola and Marburg virus, Rift Valley fever, West Nile virus and Zika and 2nd generation COVID-nineteen vaccine candidates. We anticipate additional grant applications will continue to be submitted and We expect to further expand our research development and commercial collaborations globally. We continue to make great strides in antibodies And we believe that the C1 platform is ready for use in human trials for monoclonal antibodies, by and tri specific antibodies, Fc fusion and other types of therapeutic proteins. While this is encouraging news, development and While this is encouraging news, development and approval of pharmaceutical products take years to complete, which also means that we must continue to focus our efforts commercialization targets that drive revenue in the near term as well. The increased recognition the C1 platform is generating Coupled with the continued advancements of our scientific data is leading to business opportunities across our core verticals.

Speaker 3

The Expanded licensing agreement with Rubik One Health announced in April is one such example. The agreement goes beyond COVID vaccines and encompasses not just human Health, vaccines and therapeutic proteins, but also animal health pharmaceutical products as well. This provides Rubik the potential for a broader number of commercial We've also reevaluated our research and development approach, focusing mainly on those projects that have potential commercial One such example is a recently announced new collaboration with a top 5 pharmaceutical company to express And produce a vaccine antigen from C1 for human health. This agreement is different from our traditional research projects and enzyme involved in biosimilar development for human health. However, we will continue to prioritize projects with near term commercial potential.

Speaker 3

We're leveraging our science across our core verticals as the need for a cost effective way to produce large quantities of recombinant proteins and enzymes exists In human and animal health as well as alternative proteins. Within the animal health vertical, we've continued to advance our business development objectives in the Q1. As previously mentioned, we've expanded our licensing agreement with Rubik to include animal vaccines and therapeutics that will help accelerate potential commercial opportunities. We've also expanded our research program with Abic Biological Laboratories, an affiliate of Fibrro Animal Health Corporation, based on the successful expression of our combat livestock antigen using C1. This is in addition to the research project we started in 2022 Currently underway with a top 5 animal health company to produce therapeutic monoclonal antibodies for treating diseases in companion animals and is on target to meet development milestones per the research agreement.

Speaker 3

We're also in discussion with several other interested parties in animal health. To further support our business development efforts across the animal, human and alternative protein verticals, Dyadic is building a portfolio of proteins and enzymes with commercial potential applicable across those verticals whose utilization are not solely dependent on lengthy clinical development programs or human trials. We've expressed human serum albumin and bovine serum albumin stably and at high levels. It is important to note that the process Commercialize a non therapeutic version of either albumin product for pharmaceutical use does not necessarily require human clinical trials depending on the end use of the albumin. These types of products are analytically tested against reference samples to ensure that they meet quality control requirements for potential purchasers.

Speaker 3

This is a much shorter and less costly development process than a human vaccine or therapeutic protein. We are currently beginning to sample our ceramaldinib products and in discussions with several This is also where our strategy of pursuing opportunities for products that transect our curve articles become Clear as bovine cerebellumab is currently being used in cell culture media within the cultured or lab grown meat industry. This and other high value and high cost targets for non pharmaceutical applications will require further development to reduce manufacturing to satisfy the margin requirements for the food industry, which is where our DAPOBIS platform is rapidly generating increasing market attention. DAPOBIS, which literally means protein in Latin, is designed and customized to enable the rapid development and large scale manufacture of low cost enzymes, proteins, metabolites and other biologic products for use in non pharmaceutical applications such as food, nutrition and wellness. To help Dyadic accelerate our commercialization efforts and increase the potential for DATABUS in the alternative protein segment, We announced a fully funded co development marketing and commercialization agreement with FirmBox Bio to help accelerate our ability to exploit the Dapobis platform And expand Dyadic's non pharmaceutical product offerings for animal free recombinant protein products to develop animal free recombinant protein targets for non pharmaceutical applications, which can then be co marketed enhancing the breadth and scope of each company's Product portfolio.

Speaker 3

This partnership will further improve the DAPAVIS platform and will also provide Dyadic with an experienced biomanufacturing partner, which can be leveraged for future projects. The Fermbox Bio partnership is an example of how we are actively pursuing opportunities with The target list of proteins and enzymes we've identified that have applicability across our core verticals that currently need an alternative lower cost recombinant protein production system with shorter development and commercialization timelines and a higher probability of success. We believe this can be an accelerator for Dyadic as both our C1 and DABOSIS microbial cell lines have the potential to provide our partners The ability to meet time lines, scale and cost demands for recombinant proteins and enzymes within their respective pharmaceutical or non pharmaceutical Market applications. Hopefully, what I shared today is demonstrating that Dyadic is executing and delivering on a business strategy to build revenue while being mindful with shareholder dilution. We've identified target products with high unmet needs such as price or productivity that transact our core business verticals, And we are actively engaging with partners who have broader capability to commercialize quickly and effectively within key markets and we're exploring agreements for market segments that benefit both companies.

Speaker 3

I'll now turn the call back to Mark for some final comments on the Q1. Mark?

Speaker 2

Thank you, Joe. We will continue to leverage our decades of commercial scale industrial manufacturing knowledge and experience to accelerate the development process across our core verticals. In parallel, we remain fiscally responsible with our research and development spending and being strategically focused with our partnerships and collaborations to help fund advancements of our science in critical areas. We believe that our C1 platform is well positioned to be an alternative platform in developing next generation vaccines for public health and future pandemics. And we're happy to see C1 is gaining more recognition globally within academia, government and industry.

Speaker 2

We have refined our business development objectives to focus on core areas where our technologies can have the greatest impact in the shortest amount of time. And we are evaluating new opportunities aligned with our verticals in targeted markets of high potential return such as alternative proteins. With that, I'll turn the call over to our CFO, Ping Rawson to run through our financials.

Speaker 1

Thank you, Mark. Thank you, everyone, again for joining our call today. Before I discuss our financial results, I want to comment on our recent change in auditors. On April 10, 2023, we issued an 8 ks and announced a change in auditors from Mayor Hoffman McCain, PC to Crowe LLP. Mayor Hoffman McCain MHN resigned due to their internal staff resource constraints and their inability to continue to serve their public As I mentioned on the year end call, there was no disagreement with MHM on any accounting or audit matters.

Speaker 1

Mhmm's report on our financial statements for fiscal year 2022 and the previous years contained clear opinions without any significant deficiencies or material weaknesses on internal controls. As we announced our Q1 financial results today, I am pleased to let you know that we had a smooth transition to our new auditor Crowe, which has an excellent reputation and extensive experience in the biotech industry. I will now comment on our financial results for the quarter ended March 31, 2023. You can find additional information in our earnings press release and Form 10 Q, which we filed earlier today. Our research and development revenue and the license revenue for the quarter ended March 31, 2023, Increased to approximately $978,000 compared to $648,000 for the same period a year ago, which represents an increase of 50.9% year over year.

Speaker 1

Cost of the research and development revenue for the quarter increased to approximately $727,000 comparing to $405,000 for the same period a year ago. The increase in revenue and cost of revenue year over year represents The increase in licensing revenues and the several larger ongoing research collaborations conducted in 2023. Research and development expenses for the quarter ended March 31, 2023 decreased by 39.6 percent to approximately $811,000 compared to $1,343,000 for the same period a year ago. The decrease in research and development expenses was due to the winding down of activities of CRO and the consultants to manage and support the preclinical and clinical development as well as a decrease in cGMP manufacturing As the company completed a dosing of Phase 1 clinical trial of its CYA-one hundred RBD COVID-nineteen booster vaccine candidates in February 2023. G and A expenses for the quarter ended March 31, 2023, decreased by 10.6 percent to approximately $1,480,000 compared to 1,600 and $56,000 for the same period a year ago.

Speaker 1

The decrease principally reflected decreases in management incentives of $86,000 insurance expenses of $36,000 business development and Investor Relations expenses of $61,000 and other decreases of $48,000 offset by an increase in legal expenses of $55,000 Other income for the quarter ended March 31, 2023 was from the sale of the minority interest In Alphazone, LLC. Net loss for the quarter ended March 31, 2023 was approximately $956,000 or $0.03 per share, comparing to $2,492,000 0 $0.09 per share for the quarter ended March 31, 2022. Our cash, cash equivalents And the carrying value of investment grade securities as of March 31, 2023, including accrued interest, were approximately $11,800,000 compared to $12,700,000 on December 31, 2022. We expect our cash burn for 2023 will be approximately $6,000,000 to $7,000,000 And we expect that our existing cash position will be sufficient to fund our operations into mid to late 2024. With that, I will now ask the operator to begin our Q and A session.

Speaker 1

Joe Hazelton will be joining Mark and I to If time permits, the operator will allow additional questions from those who have already spoken. Operator?

Operator

Thank you. We will now conduct a question and answer session. We ask that you limit to one question and one follow-up to provide all callers opportunity to participate. One moment while we poll for questions. Our first question comes from John Vandermosten with Zacks.

Operator

Please proceed.

Speaker 4

All right. Thank you and good afternoon everyone. I was reading about Nimble And it seems like it's a good organization to work with, but I'm wondering what's expected after the research work is complete. Does the organization find a commercial partner and pass on the work or what happens to that, I guess, IP that's developed?

Speaker 2

Yes. So in the case of Nimble, It's a the National Institute of I guess Manufacturing Biologics here in the U. S, I think is somewhere around 300 to 400 Members, including, I don't know, most or the majority of the big pharma companies. So the data gets shared With those members in posters and presentations, and in fact, I'm going to be making a poster and a presentation And nimble, I think it's in June, somewhere in the middle of June, sometime this year, I don't remember June 25th, something like that, Where there's an annual meeting every year and a lot of the big pharma customers are there and clients and we go through the data. So that's what happens with the data.

Speaker 2

That was more of a funding to demonstrate the power, the yield, the speed In which we could produce. In this particular case, it was a fab, the same fab that Regeneron used in the COVID-nineteen At a higher level quicker and faster and then also a NIST antibody they use as a standard to show for quality in terms of productivity and speed. So that's what happens with the nimble program in terms of that. It leverages hopefully into larger deals, higher credibility and more opportunity for us to move the technology forward.

Speaker 4

Okay. Thanks, Mark. And also wanted to ask about India, the clinical trials there, I mean, now that you've already done a vaccine trial using C1 in South Africa, does that Smoothed away and then where do we or when do we expect that trial to start based on what you see now and what are the gating or what are the milestones you need to complete before

Speaker 2

We enrolled all the patients in final Finished dosing in February, remember?

Speaker 4

I mean, India, I'm asking about India. Now that you've done South Africa and Have that precedent underway and we kind of understand it. How will that help the, any future vaccine work in India?

Speaker 2

Well, I think it helps future vaccine words on a global basis, not just in India, where we're having incredible inbound Reaches into us from academia, industry and government agencies, I think that the Phase 1 trial kickoff and the fact that we've had To date, no adverse effects has brought the attention of BARDA and the FDA. And I think led to potentially Why we were selected as only 1 of 6 companies to present in the recombinant protein vaccine next generation COVID vaccines. So I think it's much broader, wider and deeper than just India. And I think that the whole thing of India is They're working on a bivalent because they came second and the bivalent like Moderna and Pfizer where they had the Wuhan and the Omicron 5. They're working on a WAN and Omicron 5 bivalent.

Speaker 2

So that's a blessing in disguise that they were a little behind us Because we're able to pivot with them to move towards that. So it took a little longer and then moving towards cGMP manufacturing of that product And then getting the tox study started and kicked off to go into human clinical trials. And that's what's happening there in India. And the other thing that's really in that particular case is that factory can do everything from taking the master cell bank, Producing cGMP material all the way from drug substance into drug product and they put it in vials and ready to go. So they can do everything from the beginning So all the way to the end, where in the case of the African trial, we made the cGMP material with BTG in Israel, which is part of Ferring Pharmaceutical As a drug product and then had to ship it to Holland, where we used a company to put it into vials as drug product.

Speaker 2

So this way, it's all in one house. It's a simpler process and they've got a lot of experience. They've run multiple cGMP

Speaker 3

But John, to your point, the major benefit we've already received from The African clinical trial in terms of Epigen is the fact that we've already done the cGMP process. So we've already leveraged the key learnings for that transition. So The data that's coming in obviously would be helpful from many different regards to Mark's earlier point, but we've actually already leveraged the key learnings that we To accelerate the program in India.

Speaker 4

Great, Dion. I appreciate the extra detail.

Speaker 2

And then furthermore, as I mentioned, we're getting inbound traction from not just academia and government agencies, but big pharma. We announced today in our press release that we have a collaboration with 1 of the top 5 pharmaceutical companies. That's a new project. It's sort of confusing because we had a top 5 pharmaceutical project, but it was in animal it was for animal health, but with big pharma, this one's for human health. And this is a very, very big opportunity in a very, very big market.

Speaker 2

So unfortunately, we couldn't put out a press release on it Because of the relationship and the restriction in our NDA with them. But this is a really, Really big opportunity and if we can succeed and they launch this and move it forward, this is another potential game changer just like Janssen.

Speaker 4

Yes. It sounds like they're watching what you're doing with the DYA-one hundred right now.

Speaker 2

John, I think the world is watching what we do with PY300. But more importantly, with our C1 protein production platform, With the presentation, there was about 400 plus people on the call with the FDA and BARDA, and we're getting a lot of inbound excitement about where we are. As people are seeing, if you go to our slide deck, if you guys haven't done that yet and to our website That's recorded on there. You go to Slide 11. Joe put a slide together that showed the advantage of speed, not just yield, but we can get Product produced much faster and much higher yields and much lower cost.

Speaker 2

So I think and if you look at all the parameters of what you need, if and when a pandemic would occur, Speed, yield, cost, global access, ease of transferability to Joe's point about how we At the CGM in Israel now brought it over to India. So I think we're primed with the recombinant vaccine platform To help the world with public health, which is just traditional vaccines for all kinds of applications and also potentially for To address this pandemic with the next generation, which is what the Bard and FDA workshop was. In fact, today we got an email that on May 17th, They have a follow-up to that, where we can ask more questions and get more definitions as to how and when we can apply and what we need to apply for to get potential government grants for the next generation COVID-nineteen vaccine. Got it.

Speaker 4

Thank you,

Operator

Our next question comes from Dick Williams with Williams Resource. Please proceed.

Speaker 5

Terrific job. We've had a lot of calls together with a lot of the people who have been stockholders of this company and some of them were underwhelming and this one was particularly Very overwhelming. So, Mark, I have a question for you regarding BARDA. Can you hear me?

Speaker 2

Yes, I can hear you.

Speaker 5

Okay. There's a date of that, I'm a little confused. The 17th date Was a day that I presumed was for the submission of grants to BARDA Based on the $5,000,000,000 budget that has recently been created for the pandemics And future pandemics. So are we applying to them for A grant, Several grants in terms of partners singly by ourselves. Can you give some color on that part of the deal, forgetting the workshop per But the grant in BARDA with the funding that's available and also if you have any color As to when, since it's a due date of 17th or 16th

Speaker 2

of the month, when

Speaker 5

Would they be in a position to give out the grants and advise who they're giving them to?

Speaker 2

First of all, they've extended the 17th to 26th. And so By doing that a week earlier on 17th, they're trying to like vet questions people like us may have about Submittals that we intend on submitting, in some cases, we may have already submitted one of those applications in conjunction with other partners. And then there's another even bigger opportunity, which is another BARDA call that is not due for several months. It's a deeper, longer potential for greater funding than the what do you call the now the May 26 application. So BARDA, we don't know if and when we're going to get a grant from them.

Speaker 2

But what we do know is, We were put on center stage because they see what we have and the capabilities of what we have. And I think they're going to try to work with us We try to fit a square peg in a square hole where we can bring the greatest help to the U. S. Government and the world at large. Maybe Joe, you want to add something to that, I don't know.

Speaker 3

No, I think Dick to your point, obviously, we are looking to submit multiple applications. But to Mark's point, the 2 different Processes, the May date is more an accelerator project to accelerate early stage development. The September date BARDA that actually has the larger grants associated with it are for products that are a little further along in development That actually have Phase 1 data associated with it and those that are looking to fund all the way potentially into Phase 2 or 2b. So those are just some of the highlights that we'll be obviously trying to get some of that funding if we can And in conjunction with some of our partners or even on our own if we're able to. So appreciate the question.

Speaker 5

Okay, guys. That's all I had. Thanks.

Operator

Our next Question comes again from John Vandermosten with Zacks. Please proceed.

Speaker 4

Thanks again. And you had that Additional work with Rubik. Are there any milestones there that are associated with that if you meet what you're targeting?

Speaker 2

Milestone Qumon, I mean.

Speaker 3

Yes, John, great question. There are commercialization milestones and obviously Royalty payments associated with this contract as well for both human and animal health.

Speaker 2

Maybe give more color on the animal health part of the deal And why that's important?

Speaker 3

Why it's important. I mean, obviously, in Africa, there's very few actually, there's only one major pharmaceutical partner that's Manufacturing vaccines in Africa, most of their animal vaccines are imported, which is leading to very low vaccination rates among their livestock. So it's a very big need in Africa, specifically South Africa, and it's one that has actually caught the attention of Safra. So it's a good partnership between Safra and Rubik, but it's one where we think we can actually drive a significant amount of benefit for the obviously entire continent. So It's also a shorter developmental timeline, shorter development cycle and shorter clinical trial program when you're looking at animal vaccines and they've identified Five targets that they're going to be looking for.

Speaker 4

Okay. Thank you, Joe.

Operator

There are no further questions. I will now turn the call over to Dyadic's CEO, Mr. Emil Fad for closing comments.

Speaker 2

Thank you. 2023 is off to a great start for Dyadic. We're focused on improving the value of Dyadic for the life science industry, which will in turn improve value for our shareholders. And we are improving access to affordable vaccines and therapeutics globally. We've refined our focus and revised our business strategies to exploit existing and new commercialization opportunities in the near term, while enabling us to fulfill our mission as a global biotechnology company to improve the way we feed, fuel and heal the world.

Speaker 2

Thank you for joining us in today's Q1 2023 conference call, and we look forward to keeping you updated as we advance our commercial and scientific initiatives on the next call. Please keep an eye out for our other periodic updates.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this

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Earnings Conference Call
Dyadic International Q1 2023
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