Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global
biotechnology company focused on further improving and applying its
proprietary C1 expression system to speed up the development and
production of biologic vaccines and drugs at flexible commercial
scales, today announced its financial results for the quarter ended
June 30, 2017.
BUSINESS HIGHLIGHTS AND RECENT
DEVELOPMENTS
- Cash, cash equivalents and investment grade securities,
including interest receivable at June 30, 2017, was
approximately $45.6 million
- On July 6, 2017, received approximately $7.4 million of cash
held in escrow in connection with the previously announced DuPont
Transaction
- Net loss for the second quarter of 2017 was approximately
$(1.3) million, or $(0.05) per basic and diluted share
- As of June 30, 2017, there were approximately 28.7 million
shares outstanding and approximately 10.2 million shares held in
treasury
- On May 4, 2017, the Company entered into a fully funded
research program with one of the world’s largest pharmaceutical
companies, which is focused on demonstrating the potential of the
C1 technology to produce therapeutic proteins
- On June 30, 2017, the Company entered into a strategic research
and collaboration agreement, including a potential
commercialization agreement, with Biotechnology Development for
Industry ("BDI"), a Spanish biotech company, and its subsidiaries,
to advance Dyadic’s proprietary C1 technology in the development of
next generation biological vaccines and drugs
- On August 4, 2017, the Company announced the conclusion of its
formal research services agreement with Danisco US Inc., a unit of
DuPont Industrial Biosciences ("Danisco"). The research
collaboration was part of the previously announced DuPont Sale
Transaction, and will conclude on September 30, 2017.
FINANCIAL RESULTS FOR THE QUARTER AND
SIX MONTHS ENDED JUNE 30, 2017
At June 30, 2017, cash and cash equivalents
were approximately $4.6 million compared to $6.9 million at
December 31, 2016. The carrying value of investment grade
securities, including interest receivable as of June 30, 2017,
was approximately $41.0 million compared to $43.6 million at
December 31, 2016.
On July 6, 2017, the Company received
approximately $7.4 million of cash held in escrow in connection
with the previously announced DuPont Transaction. Such amount was
not included in the cash and cash equivalents balance as of
June 30, 2017.
The net decrease in cash and cash equivalents
for the six months ended June 30, 2017, of approximately $2.3
million principally reflects cash used in the repurchase of common
stock of approximately $5.7 million, the upfront payment for the
BDI R&D agreement of approximately $1.1 million, cash used in
other business operations of approximately $2.2 million, offset by
cash received from a litigation settlement, net of related costs,
of approximately $3.7 million, cash proceeds from maturities of
investment grade securities and interest payment, net of purchases
and premium paid, of approximately $2.8 million, and the favorable
effect of exchange rate changes on cash of approximately $0.2
million.
Net loss for the quarter ended June 30,
2017, was approximately $(1.3) million, or $(0.05) per basic and
diluted share, compared to a net income of $0.6 million, or $0.01
per basic and diluted share, for the same period a year ago. The
quarter ended June 30, 2016 included a litigation settlement of
$2.1 million.
Net income for the six months ended
June 30, 2017, including litigation settlement proceeds of
approximately $4.4 million, was approximately $0.7 million, or
$0.03 per basic and diluted share, compared to a net loss of $(0.4)
million, or $(0.01) per basic and diluted share for the same period
a year ago. The six months ended June 30, 2016 included a
litigation settlement of $2.1 million.
Research and development revenue for the six
months ended June 30, 2017, increased to approximately
$329,000 compared to $102,000 for the same period a year ago. Cost
of revenue for the six months ended June 30, 2017, increased
to approximately $321,000 compared to $99,000 for the same period a
year ago. The increase in research and development revenue, and
cost of revenue reflects the activities of the ZAPI project and two
confidential biopharmaceutical collaborative research projects that
began in December 2016 and June 2017, respectively.
Provision for contract losses for the six months
ended June 30, 2017, increased to approximately $221,000
compared to $0 for the same period a year ago. The amount of
provision for contract losses reflects the increase in the total
estimated research costs due to the Company's extended involvement
in the ZAPI program.
Research and development expenses for the six
months ended June 30, 2017, increased 24.4% to approximately
$739,000 compared to $594,000 for the same period a year ago. The
increase principally reflects the costs of biopharmaceutical
contract research initiatives and personnel related costs.
General and administrative expenses for the six
months ended June 30, 2017, increased 52.4% to approximately
$3,024,000 compared to $1,984,000 for the same period a year ago.
The increase principally reflects litigation costs for trial of
approximately $468,000, new employment agreements for executives of
approximately $253,000, biopharmaceutical business development
costs of approximately $198,000, financial reporting costs of
approximately $143,000, and other cost increases of approximately
$44,000. These increases were partially offset by a reduction in
insurance costs of approximately $66,000.
Foreign currency exchange gains for the six
months ended June 30, 2017, were approximately $206,000
compared to $32,000 for the same period a year ago. The change
represents the strengthening of the Euro in comparison to the U.S.
dollar.
Interest income for the six months ended
June 30, 2017, increased 25.5% to approximately $246,000
compared to $196,000 for the same period a year ago. The increase
in interest income reflects earnings on the Company's investment
grade debt securities, which are classified as
held-to-maturity.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call
today, Thursday, August 10, 2017, at 5:00
p.m. to discuss the financial results for the quarter ended
June 30, 2017. In order to participate in the conference call,
please dial 888-515-2235 for U.S./Canada callers and +719-325-2177
for International callers, using access code 9865737.
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 Myceliophthora 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; and (8) 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 24, 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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Research
and Development Revenue |
|
$ |
207,402 |
|
|
$ |
14,945 |
|
|
$ |
328,929 |
|
|
$ |
101,836 |
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
Cost of
Revenue |
|
199,794 |
|
|
13,676 |
|
|
321,322 |
|
|
98,822 |
|
Provision
for Contract Losses |
|
10,175 |
|
|
— |
|
|
220,715 |
|
|
— |
|
Research
and Development |
|
419,750 |
|
|
349,380 |
|
|
739,274 |
|
|
594,314 |
|
General
and Administrative |
|
1,233,801 |
|
|
1,091,953 |
|
|
3,024,092 |
|
|
1,983,932 |
|
Foreign
Currency Exchange (Gain) Loss, Net |
|
(178,277 |
) |
|
101,128 |
|
|
(206,113 |
) |
|
(31,671 |
) |
Total Costs and
Expenses |
|
1,685,243 |
|
|
1,556,137 |
|
|
4,099,290 |
|
|
2,645,397 |
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
(1,477,841 |
) |
|
(1,541,192 |
) |
|
(3,770,361 |
) |
|
(2,543,561 |
) |
|
|
|
|
|
|
|
|
|
Other Income: |
|
|
|
|
|
|
|
|
Settlement of Litigation, Net |
|
— |
|
|
2,100,000 |
|
|
4,358,223 |
|
|
2,100,000 |
|
Interest
Income, Net |
|
130,236 |
|
|
131,884 |
|
|
246,429 |
|
|
196,173 |
|
Total Other Income |
|
130,236 |
|
|
2,231,884 |
|
|
4,604,652 |
|
|
2,296,173 |
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
BEFORE INCOME TAXES |
|
(1,347,605 |
) |
|
690,692 |
|
|
834,291 |
|
|
(247,388 |
) |
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes |
|
1,901 |
|
|
133,745 |
|
|
87,457 |
|
|
133,745 |
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(1,349,506 |
) |
|
$ |
556,947 |
|
|
$ |
746,834 |
|
|
$ |
(381,133 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
SHARE |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
Diluted |
|
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
Weighted-Average Number
of Shares: |
|
|
|
|
|
|
|
|
Basic |
|
28,707,289 |
|
|
37,580,900 |
|
|
29,159,363 |
|
|
38,186,194 |
|
Diluted |
|
28,707,289 |
|
|
37,906,553 |
|
|
29,220,108 |
|
|
38,186,194 |
|
Balance Sheet
Information: |
June 30, 2017 |
|
December 31, 2016* |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
Cash and
Cash Equivalents |
$ |
4,611,809 |
|
|
$ |
6,889,357 |
|
Escrowed
Funds from Sale of Assets |
7,367,562 |
|
|
7,364,859 |
|
Investment Securities, Short-term, Long-term and Interest
Receivable |
41,008,916 |
|
|
43,609,849 |
|
Prepaid
Research and Development |
1,124,420 |
|
|
— |
|
Total
Assets |
54,473,957 |
|
|
58,700,420 |
|
Accumulated Deficit |
(24,468,704 |
) |
|
(25,204,314 |
) |
Stockholders' Equity |
$ |
53,231,194 |
|
|
$ |
57,690,183 |
|
|
|
|
|
*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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