Dyadic: Biofuels Digest’s 2015 5-Minute Guide

Dyadic International, Inc. is a global biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries. Dyadic’s C1 platform technology enables the development and large scale manufacture of low cost enzymes and other proteins for diverse market opportunities.

Rankings

50 Hottest Companies in Bioenergy: 2014/15, #45

40 Hottest Small Companies in the Advanced Bioeconomy: 2014/15, #17

The Situation

It’s been a comeback year for the company — a long road back, but in August 2014, Dyadic International filed a Form 10 with the SEC. If accepted by the SEC (they have 60 days to respond with questions), Dyadic will become a fully reporting public company again.

For those newer to the scene, Dyadic imploded in 2006-07 over a series of mishaps relating to an Asian venture, which resulted in CEO and founder Mark Emalfarb being dismissed — before regaining his position in June 2008.

How bad did it get? As key T. Rowe Price exec Herb Stiles observed in 2009 to Mark Emalfarb:

In June, 2008, it was essentially insolvent.  Maybe enough cash to last three months, max.  All of the company’s top officers had resigned, along with its legal counsel and outside accountants.  Nearly the entire Board of Directors had to be replaced.  The departing execs had dumped accusations and innuendo on you as a parting gift, and the company’s reputation in the biofuels industry had been demolished. Its business prospects, and its operations,  had been ignored for longer than one year.  There were no reliable financial statements, even going back to the beginning of 2007.   In short, a helluva mess. You had been frozen out of the company for more than one year.

Major Investors

OTC: DYAI

Type of Technology

Patented and proprietary C1 platform technology based on a unique fungal microorganism which is programmable and scalable in producing enzymes and proteins in large quantities

Feedstocks:

Dyadic’s C1 platform technology is effective in producing enzymes from a broad variety of feedstocks

Fuel Type 

Dyadic’s C1 platform technology can be used to produce many types of biofuels including, but not limited to, cellulosic ethanol, biobutanol and biodiesel.

Partners

• Abengoa Bioenergy
• Codexis Inc
• BASF

Co-products (if applicable)

Industrial Enzymes

Top Past Milstones

In August 2014, Dyadic International announced that it has signed a collaboration agreement to commercialize second generation biofuel and bio-based chemical technology with Compagnie Industrielle de la Matière Végétale (“CIMV”), a pioneer in developing processes for the production of biofuels and bio-based chemicals.

CIMV’s patented approach of separating the three main components of plant material allows both production of high quality cellulose and hemicellulose, especially well-suited for the enzymatic process, and Biolignin™, a pure form of lignin that may be sold commercially as a high value, environmentally friendly alternative to petroleum-derived chemicals. The technology has garnered industry acclaim in winning the Pierre Potier Prize for Innovation in Chemistry and Frost & Sullivan’s 2013 French Visionary Innovation Award.

In July 2014, Dyadic announced details regarding its new Bakenzyme project. In collaboration with several industry partners, the Bakenzyme project seeks to develop a novel, pure and widely applicable xylanase-oxidase enzyme product for the baking industry. Dyadic’s Chief Operating Officer, Danai Brooks, stated, “The aim of this project is to create an enzyme product that improves the structure of bread and increases the bioavailability of health components naturally present in flour. Baking enzymes are a large and growing market. We expect the global baking enzyme market to approach $700 million in five years and believe there is a distinct need for dedicated enzyme mixtures without the negative side activities of products currently available to bakeries.”

In March 2014, Dyadic received a US patent for its C-1 technology that is currently being implemented at Abengoa’s cellulosic ethanol plant that’s getting read to start up in Hugoton, Kan. As Abengoa goes to license its technology package, Dyadic’s C-1 would be the enzyme component. The patent is Dyadic’s 14th.

In January 2014, Dyadic International, Inc. announced that the expansion of its research laboratory in The Netherlands is now complete. Floor space at Dyadic Netherlands has significantly increased allowing for the installation of a wide range of state-of-the-art research equipment including a new fermentation lab.

In addition, the expansion will facilitate the housing of new scientists who were recently hired for the new C1-technology projects. Dyadic increased its scientific staff by 40% in 2013 and plans to continue hiring molecular biologists, enzymologists and fermentation specialists through 2014.

Also in January 2014, Dyadic International, Inc. announced that the expansion of its research laboratory in The Netherlands is now complete. Floor space at Dyadic Netherlands has significantly increased allowing for the installation of a wide range of state-of-the-art research equipment including a new fermentation lab.

In their 2013 results, total revenue for the company increased 10% for the year compared to FY2012, with net product-related revenue increasing 25% to $9.8 million. The increase was driven primarily by increases in the animal health and nutrition segments, the addition of two major customers and additional registration by a customer of an animal feed product containing a Dyadic enzyme in Europe. Dyadic’s President and CEO, Mark Emalfarb, stated, “We continue to lay the foundation for our continued success including increasing available capital, signing a broad license agreement with BASF, joining the OTCQX U.S. Premier marketplace and expanding our state-of-the-art Dutch research center.  Our strategic objectives have always been to unlock the enormous potential of our technologies, including the C1 platform.  We think we are remarkably well positioned to continue to grow and exploit new opportunities in 2014 and beyond.”

Future Milestone Goals

• Consummate additional licensing and other strategic collaborations to monetize Dyadic’s technologies
• Increase sales of industrial enzymes
• Consummate additional research and development collaborations

Business Model: (e.g. owner-operator, technology licensor, fee-based industry supplier, investor)

• Technology licensor
• Industrial enzyme sales

Competitive Edge(s):

• Patented and proprietary C1 technology
• C1 platform technology is programmable (genome has been sequenced and annotated)
• C1 technology can produce enzymes and proteins on commercial scale (up to 150,000 liter fermentors)
• Dyadic provides partners with ability to license the C1 platform technology for in-house/on-site manufacturing of customized enzymes and proteins

Distribution, Research, Marketing or Production Partnerships or Alliances. 

• Non-Exclusive License Agreement with Codexis Inc. for use of C1 technology for biofuels, chemicals and pharmaceutical intermediate production
• Non-Exclusive License Agreement with Abengoa Bioenergy New Technologies, Inc. for use of C1 technology for biofuels, chemicals and/or power production
• Non-binding term sheet with EnGen Bio, Inc. for potential outlicense of C1 technology for biopharmaceutical applications
• Multiple research partnerships

Stage:

Dyadic has been producing enzymes in up to 150,000 liter fermentors for over a decade

Demonstration and soon-to-be commercial stage through Dyadic’s licensees and partners

Website 

www.dyadic.com