Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global
biotechnology company focused on further improving and leveraging
the patented and proprietary C1 expression system to help speed up
the development and production of biologic vaccines and drugs at
flexible commercial scales, today announced its financial results
for the year ended December 31, 2016, and recent company
developments.
BUSINESS HIGHLIGHTS OF 2016 AND RECENT
DEVELOPMENTS
- Cash, cash equivalents and investment grade securities,
including interest receivable at December 31, 2016 was
approximately $50.5 million
- Net loss for the year of 2016 was approximately $3.6 million or
$(0.10) per basic and diluted share
- Escrowed funds from the sale of the Company's industrial
business to DuPont of approximately $7.4 million are expected to be
received in July 2017
- Received $2.1 million settlement payment, net of legal fees and
expenses, from Bilzin Sumberg Baena Price & Axelrod LLP in
April 2016
- On March 1, 2017, the Company reached a mid-seven figure
settlement with the last remaining defendant law firm, Greenberg
Traurig, LLP and Greenberg Traurig, P.A., ending our long-standing
professional liability litigation, and we expect to receive the
settlement payment in the second quarter of 2017
- As of December 31, 2016, there were 32,382,265 shares
outstanding
- During 2016, the Company repurchased approximately 8.7 million
shares of common stock, in both open market and private
transactions, at an average price of $1.53 per share
- During 2017 through February 15, 2017, the expiration date of
the 2016 Stock Repurchase Program, the Company repurchased an
additional 3.7 million shares, in both open market and private
transactions, at an average price of $1.55 per share, leaving
approximately 28.7 million shares outstanding subsequently
- Shareholders approved the proposal to effect a reverse stock
split of Dyadic's common stock at a ratio ranging between
1-for-every-2 shares to 1-for-every-4 shares, and effective upon a
date, in each case, to be determined by the Company’s Board of
Directors, who also has the discretion to implement or abandon the
reverse stock split
- Executed a multi-year research agreement with a new contract
research organization to further advance the C1 expression system
for biopharmaceutical product development and production
- Initiated a small research collaboration program with a leading
global pharmaceutical company to demonstrate the potential of C1 to
produce glycosylated therapeutic proteins
FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31,
2016
In connection with the asset sale to DuPont in
2015, we have reclassified the revenues and expenses of our
industrial technology business to income (loss) from discontinued
operations for 2015.
At December 31, 2016, cash and cash equivalents
were approximately $6.9 million compared to $68.6 million at
December 31, 2015. Cash used in the year ended December 31, 2016 of
approximately $61.7 million primarily reflects purchase of
investment grade securities at face value, net of repayments and
maturities of approximately $42.6 million, stock repurchases net of
stock issuances of approximately $13.1 million, and cash used in
operating activities of approximately $6.0 million which includes
cash used in operations of approximately $4.7 million, payment of
DuPont Transaction related liabilities of approximately $2.0
million, premiums and interest paid for investment grade
securities of approximately $0.7 million, and litigation costs of
approximately $0.7 million, offset by cash received from a
litigation settlement of approximately $2.1 million.
Cash and cash equivalents do not include the
approximately $7.4 million of cash held in escrow in connection
with the DuPont Transaction, which we anticipate to be released in
July 2017, if no claims are made prior to such release.
Net loss from continuing operations for the year
ended December 31, 2016 was approximately $3.6 million, or
$(0.10) per basic and diluted share, compared to a net loss of $1.5
million, or $(0.04) per basic and diluted share for the year ended
December 31, 2015.
Research and development revenue from continuing
operations for the year ended December 31, 2016 increased to
approximately $593,000 compared to approximately $316,000 for the
year ended December 31, 2015. The increase in revenue for the
period reflects the final research billing with Sanofi Pasteur
S.A.
For the year ended December 31, 2016, the
Company recorded a $437,000 provision for loss contracts in
connection with two collaboration agreements where anticipated
contract costs are expected to exceed anticipated contract
revenues. The reported loss will be accredited into statement of
operations over the term of the contract.
General and administrative expenses for the year
ended December 31, 2016 increased 19% to approximately $4,562,000
compared to approximately $3,838,000 for the year ended December
31, 2015. The increase principally reflects litigation costs for
trial preparation which began on January 6, 2017 of approximately
$653,000, new employment agreements for executives of approximately
$489,000, non-cash stock compensation in connection with the
Special Committee of the Board and board compensation changes of
approximately $300,000, business development costs for the
biopharmaceutical market of approximately $214,000, and financial
reporting costs of approximately $207,000, partially offset by
lower employee related costs due to the organizational downsizing
in connection with the DuPont Transaction of approximately
$891,000, cost reimbursement received from DuPont for services
rendered in the transition services agreement of approximately
$155,000, and other reductions of approximately $93,000.
Research and development expenses from
continuing operations for the year ended December 31, 2016
increased to approximately $886,000 compared to $0 for the year
ended December 31, 2015. The increase reflects contract research
organization (“CRO”) service agreements with DuPont and the new CRO
that the Company engaged in September 2016 to support our ongoing
biopharmaceutical and internally funded projects, and other
governmental and commercial projects, as well as internal R&D
personnel costs.
The Company received the settlement payment from
one of the defendant law firms, Bilzin Sumberg Baena Price &
Axelrod LLP, in its ongoing professional liability litigation, in
the amount of $2.1 million, net of legal fees and expenses.
Interest income for the year ended December 31,
2016 increased to approximately $486,000 compared to approximately
$11,000, for the year ended December 31, 2015. The increase
reflects the returns earned on the Company's investment grade debt
securities, which are classified as held-to-maturity.
The Company has successfully completed its 2016
Stock Repurchase Program. During 2016, the Company purchased a
total of approximately 8.7 million shares of its common stock in
both open market and private transactions at an average price of
$1.53 per share. Through February 15, 2017, the expiration
date of the 2016 Stock Repurchase Program, the Company purchased an
additional 3.7 million shares in both open market and private
transactions at an average price of $1.55 per share.
On December 7, 2016, at the special meeting of
Dyadic shareholders, Dyadic’s shareholders approved the proposal to
amend Dyadic’s Restated Certificate of Incorporation to effect a
reverse stock split of the Company’s issued and outstanding shares
of common stock at a ratio between 1-for-every-2 and 1-for-every-4
and effective upon a date, in each case, to be determined by the
Company’s board of
directors.
The reverse stock split, if effected, may, among other things,
increase the per share trading price of the Company’s common stock.
Dyadic’s board of directors has the discretion to implement the
reverse stock split, at any time prior to December 6, 2017 (up to
12 months after the special meeting), or abandon the reverse stock
split if it determines that implementing a reverse stock split is
not in the best interests of Dyadic and its shareholders.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call
today, Wednesday, March 15, 2017 at 5:00 p.m.
to discuss the financial results for the year ended December 31,
2016. In order to participate in the conference call, please dial
888-277-7115 for U.S./Canada callers and +913-312-0724 for
International callers, using access code 9165439.
A replay of the conference call will be
available on Dyadic’s website (www.dyadic.com) within 24 hours
after the live event.
About Dyadic International,
Inc.
Dyadic International, Inc. is a global
biotechnology company which is developing what it believes will be
a potentially significant biopharmaceutical protein production
system based on the fungus Myceliopthora thermophila, nicknamed C1.
The C1 microorganism, which enables the development and large scale
manufacture of low cost proteins, has the potential to be further
developed into a safe and efficient expression system that may help
speed up the development, production and performance of biologic
vaccines and drugs at flexible commercial scales. Dyadic is
using the C1 technology and other technologies to conduct research,
development and commercial activities for the development and
manufacturing of human and animal vaccines, monoclonal antibodies,
biosimilars and/or biobetters, and other therapeutic proteins.
Dyadic pursues research & development collaborations, licensing
arrangements and other commercial opportunities with its partners
and collaborators to leverage the value and benefits of these
technologies in developing and manufacturing biopharmaceuticals
which these technologies help produce. In particular, as the aging
population grows in developed and undeveloped countries, Dyadic
believes the C1 technology may help bring biologic drugs to market
faster, in greater volumes, at lower cost, and with new properties
to drug developers and manufacturers and, hopefully, improve access
and cost to patients and the healthcare system, but most
importantly saving lives.
Please visit Dyadic’s website at
www.dyadic.com for additional information, including details
regarding Dyadic’s plans for its biopharmaceutical business.
Dyadic trades on the OTCQX tier of the OTC
marketplace. Investors can find real-time quotes, market
information and financial reports for Dyadic in the Company’s
annual and quarterly reports which are filed with the OTC markets.
Please visit the OTC markets website at
www.otcmarkets.com/stock/DYAI/quote.
Safe Harbor Regarding Forward-Looking
Statements
Certain statements contained in this press
release are forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements involve
risks, uncertainties and other factors that could cause Dyadic’s
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Investors
are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. Any forward-looking
statements speak only as of the date of this press release and,
except as required by law, Dyadic expressly disclaims any intent or
obligation to update or revise any forward-looking statements to
reflect actual results, any changes in expectations or any change
in events. Factors that could cause results to differ materially
include, but are not limited to: (1) general economic, political
and market conditions; (2) our ability to carry out and implement
our biopharmaceutical research and business plans and strategic
initiatives; (3) Dyadic’s ability to retain and attract employees,
consultants, directors and advisors; (4) our ability to implement
and successfully carry out Dyadic’s and third parties research and
development efforts; (5) our ability to obtain new license and
research agreements; (6) our ability to maintain our existing
access to, and/or expand access to third party contract research
organizations in order to carry out our research projects for
ourselves and third parties; (7) competitive pressures and reliance
on key customers and collaborators; (8) the receipt of the
settlement payment by Dyadic from Greenberg Traurig, LLP and
Greenberg Traurig, P.A. and; (9) other factors discussed in
Dyadic’s publicly available filings, including information set
forth under the caption “Risk Factors” in our December 31, 2016
Annual Report filed with OTC Markets on March 15, 2017. New risks
and uncertainties arise from time to time, and it is impossible for
us to predict these events or how they may affect us.
|
DYADIC INTERNATIONAL, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
Year Ended December 31, |
|
|
2016 |
|
2015 |
|
|
|
|
|
REVENUES: |
|
|
|
|
Research
and Development Revenue |
|
$ |
592,886 |
|
|
$ |
315,712 |
|
COSTS AND
EXPENSES: |
|
|
|
|
Costs of
Revenue |
|
516,162 |
|
|
124,012 |
|
Provision
for Contract Losses |
|
436,916 |
|
|
— |
|
General
and Administrative |
|
4,562,115 |
|
|
3,837,955 |
|
Research
and Development |
|
885,602 |
|
|
— |
|
Foreign
Currency Exchange Loss |
|
147,338 |
|
|
— |
|
Total
Expenses |
|
6,548,133 |
|
|
3,961,967 |
|
|
|
|
|
|
LOSS
BEFORE OTHER INCOME (EXPENSE) |
|
(5,955,247 |
) |
|
(3,646,255 |
) |
|
|
|
|
|
Other
Income (Expense): |
|
|
|
|
Settlement of Litigation, Net |
|
2,100,000 |
|
|
2,170,000 |
|
Interest
Income |
|
485,490 |
|
|
11,156 |
|
Interest
Expense |
|
(909 |
) |
|
— |
|
Total
Other Income |
|
2,584,581 |
|
|
2,181,156 |
|
|
|
|
|
|
LOSS
BEFORE INCOME TAXES |
|
(3,370,666 |
) |
|
(1,465,099 |
) |
|
|
|
|
|
Income
Tax Expense |
|
(238,073 |
) |
|
— |
|
|
|
|
|
|
NET LOSS
FROM CONTINUING OPERATIONS |
|
(3,608,739 |
) |
|
(1,465,099 |
) |
|
|
|
|
|
NET
INCOME FROM DISCONTINUED OPERATIONS, Net of Income Taxes of
$1,076,100 |
|
— |
|
|
67,252,417 |
|
|
|
|
|
|
NET
(LOSS) INCOME |
|
$ |
(3,608,739 |
) |
|
$ |
65,787,318 |
|
|
|
|
|
|
BASIC AND
DILUTED NET (LOSS) INCOME PER SHARE: |
|
|
|
|
Basic and
Diluted Net Loss from Continuing Operations per Share |
|
$ |
(0.10 |
) |
|
$ |
(0.04 |
) |
Basic and
Diluted Net Income from Discontinued Operations per Share |
|
— |
|
|
1.95 |
|
Basic and
Diluted Net (Loss) Income per Share |
|
$ |
(0.10 |
) |
|
$ |
1.91 |
|
|
|
|
|
|
Weighted-Average Number of Shares: |
|
|
|
|
Basic and
Diluted |
|
36,538,444 |
|
$ |
34,367,723 |
|
Balance Sheet
Information: |
December 31, 2016* |
|
December 31, 2015* |
|
|
|
|
|
|
|
|
Cash and
Cash Equivalents |
$ |
6,889,357 |
|
|
$ |
68,601,138 |
|
Escrowed
Funds from Sale of Assets |
7,364,859 |
|
|
7,361,182 |
|
Investment Securities, Short-term and Long-term and Interest
Receivable |
43,609,849 |
|
|
— |
|
Total
Assets |
58,700,420 |
|
|
76,667,425 |
|
Accumulated Deficit |
(25,204,314 |
) |
|
(18,713,096 |
) |
Stockholders' Equity |
$ |
57,690,183 |
|
|
$ |
73,794,505 |
|
|
|
|
|
*Condensed from audited
financial statements |
|
|
|
Contact:
Dyadic International, Inc.
Thomas L. Dubinski
Chief Financial Officer
Phone: 561-743-8333
Email: tdubinski@dyadic.com
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