Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global
biotechnology company focused on further improving and applying its
proprietary C1 gene expression platform 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 September 30, 2017.
BUSINESS HIGHLIGHTS AND RECENT
DEVELOPMENTS
- Cash, cash equivalents and investment grade securities,
including interest receivable at September 30, 2017, was
approximately $51.0 million.
- Received approximately $7.4 million of cash held in escrow in
connection with the previously announced DuPont Transaction.
- Net loss for the third quarter of 2017 was approximately $(1.5)
million, or $(0.05) per basic and diluted share.
- As of September 30, 2017, there were approximately 28.7
million shares outstanding and approximately 10.2 million shares
held in treasury.
- On August 16, 2017, the Board of Directors authorized a new
one-year stock repurchase program, under which the Company may
repurchase up to $5 million of its outstanding common stock. As of
November 9, 2017, the Company has purchased a total of 32,500
shares of stock at a weighted average price of $1.40 per share in
open market transactions under this new stock repurchase program.
The objectives of this program are the same as our prior
successfully completed $15 million stock repurchase program, which
are the opportunistic use of the Company’s cash and to provide
liquidity for shareholders.
- On September 30, 2017, the Company concluded its formal
research services agreement with Danisco US Inc., a unit of DuPont
Industrial Biosciences ("Danisco"), and successfully transitioned
the C1 platform research programs to our two contract research
organizations.
- The Company’s R&D effort to engineer the C1 gene expression
platform for biopharmaceutical application is progressing. With a
new C1 base strain and molecular tool box developed, the Company
now has an initial data set to begin to demonstrate C1’s potential
ability to express monoclonal antibodies that are secreted, folded
and bind in a similar manner as other established cell host
technologies commonly used in the industry. C1 has also delivered
improving yields of biologically active antibodies.
- Glycoengineering of the C1 cell line to enable production of
non-immunogenic human-like glycoforms has begun. Research data
achieved to date is better than expected, and it supports the
Company’s belief that C1 has the potential to be used for the
development and manufacturing of animal and human
biopharmaceuticals. In addition to glycoengineering, the Company is
continuing its research efforts with a focus on further enhancing
protein stability and improving yields.
FINANCIAL RESULTS FOR THE QUARTER AND
NINE MONTHS ENDED SEPTEMBER 30, 2017
At September 30, 2017, cash and cash
equivalents were approximately $5.6 million compared to $6.9
million at December 31, 2016. The carrying value of investment
grade securities, including interest receivable as of
September 30, 2017, was approximately $45.5 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
included in the cash and cash equivalents balance as of
September 30, 2017.
The net decrease in cash and cash equivalents
for the nine months ended September 30, 2017 of approximately
$1.3 million principally reflects cash used in the repurchase of
common stock of approximately $5.7 million, upfront payment for the
previously announced BDI R&D Agreements of approximately $1.3
million, cash used in operations of approximately $4.2 million,
cash used to purchase investment grade securities, net of proceeds
from maturities and interest, of approximately $1.5 million, offset
by cash received from escrowed funds of approximately $7.4 million,
cash received from a litigation settlement, net of related costs,
of approximately $3.7 million, and the favorable effect of exchange
rate changes on cash of approximately $0.3 million.
Net loss for the quarter ended
September 30, 2017, was approximately $(1.5) million, or
$(0.05) per basic and diluted share, compared to a net loss of
$(1.2) million, or $(0.03) per basic and diluted share, for the
same period a year ago.
Net loss for the nine months ended
September 30, 2017, including litigation settlement proceeds
of approximately $4.4 million, was approximately $(0.8) million, or
$(0.03) per basic and diluted share, compared to a net loss of
$(1.5) million, or $(0.04) per basic and diluted share for the same
period a year ago. The nine months ended September 30, 2016
included a litigation settlement of $2.1 million.
Research and development revenue for the three
months ended September 30, 2017, increased to approximately
$272,000 compared to $0 for the same period a year ago. Cost of
revenue for the three months ended September 30, 2017,
increased to approximately $221,000 compared to $0 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.
Research and development revenue for the nine
months ended September 30, 2017, increased to approximately
$601,000 compared to $102,000 for the same period a year ago. Cost
of revenue for the nine months ended September 30, 2017,
increased to approximately $542,000 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 nine
months ended September 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. There were no provision for contract losses
for the three months ended September 30, 2017 and 2016.
Research and development expenses, including
related party, for the three months ended September 30, 2017,
increased 114.6% to approximately $792,000 compared to $369,000 for
the same period a year ago. The increase principally reflects the
costs of biopharmaceutical contract research initiatives, research
and development costs related to the BDI R&D Agreements, and
personnel related costs.
Research and development expenses, including
related party, for the nine months ended September 30, 2017,
increased 58.8% to approximately $1,531,000 compared to $964,000
for the same period a year ago. The increase principally reflects
the costs of biopharmaceutical contract research initiatives,
research and development costs related to the BDI R&D
Agreements, and personnel related costs.
General and administrative expenses for the
three months ended September 30, 2017, increased 20.0% to
approximately $1,127,000 compared to $939,000 for the same period a
year ago. The increase principally reflects professional service
costs associated with BDI R&D Agreements of approximately
$257,000. This increase was offset by other cost reductions of
approximately $69,000.
General and administrative expenses for the nine
months ended September 30, 2017, increased 42.0% to
approximately $4,151,000 compared to $2,923,000 for the same period
a year ago. The increase principally reflects litigation costs for
trial of approximately $372,000, financial reporting and
biopharmaceutical business development resource costs of
approximately $376,000, professional service costs associated with
BDI R&D Agreements of approximately $314,000, and new
employment agreements for executives of approximately $267,000.
These increases were partially offset by reductions in insurance
and other costs of approximately $101,000.
Foreign currency exchange gain, for the three
months ended September 30, 2017, was approximately $37,000
compared to $47,000 for the same period a year ago. The change
represents the currency fluctuation of the Euro in comparison to
the U.S. dollar.
Foreign currency exchange gains for the nine
months ended September 30, 2017, were approximately $243,000
compared to $79,000 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 three months ended
September 30, 2017, increased 4.8% to approximately $154,000
compared to $147,000 for the same period a year ago. The change was
not material.
Interest income for the nine months ended
September 30, 2017, increased 16.9% to approximately $401,000
compared to $343,000 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.
REVERSE STOCK SPLIT UPDATE
On December 7, 2016, the Company received
shareholders' approval for a potential reverse stock split in order
to meet one of the requirements for a potential up-listing of the
Company's common stock from the OTC Markets to NASDAQ. Our Board of
Directors has concluded that the significant expense and
distraction of an up-listing would not be in the best interest of
the Company or its shareholders. Accordingly, the Company has
decided not to effectuate a reverse split prior to the December 6,
2017 shareholder approved deadline. Management and the Company’s
Board of Directors will continue to evaluate if such an action
would be the in the best interest of the Company and its
shareholders in the future.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call
today, Thursday, November 9, 2017, at 5:00
p.m. to discuss the financial results for the quarter ended
September 30, 2017. In order to participate in the conference
call, please dial 800-839-7875 for U.S./Canada callers and
+719-325-2484 for International callers, using access code
1728852.
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 gene expression
platform 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, lower production costs and
improve the 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
and development collaborations, licensing arrangements and other
commercial opportunities with its partners and collaborators to
leverage the value and benefits of using these technologies in the
development and manufacture of biopharmaceuticals. 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 save 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 third-party and related party research organizations,
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.
Contact:
Dyadic International, Inc.Thomas L.
DubinskiChief Financial OfficerPhone:
561-743-8333Email: tdubinski@dyadic.com
DYADIC INTERNATIONAL, INC. AND
SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(Unaudited) |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Research
and Development Revenue |
|
$ |
272,491 |
|
|
$ |
— |
|
|
$ |
601,420 |
|
|
$ |
101,836 |
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
Cost of
Revenue |
|
220,526 |
|
|
— |
|
|
541,848 |
|
|
98,822 |
|
Provision
for Contract Losses |
|
— |
|
|
— |
|
|
220,715 |
|
|
— |
|
Research
and Development |
|
624,969 |
|
|
369,359 |
|
|
1,364,243 |
|
|
963,673 |
|
Research
and Development - Related Party |
|
167,082 |
|
|
— |
|
|
167,082 |
|
|
— |
|
General
and Administrative |
|
1,126,641 |
|
|
939,195 |
|
|
4,150,733 |
|
|
2,923,127 |
|
Foreign
Currency Exchange Gain, Net |
|
(37,371 |
) |
|
(46,897 |
) |
|
(243,484 |
) |
|
(78,568 |
) |
Total Costs and
Expenses |
|
2,101,847 |
|
|
1,261,657 |
|
|
6,201,137 |
|
|
3,907,054 |
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
(1,829,356 |
) |
|
(1,261,657 |
) |
|
(5,599,717 |
) |
|
(3,805,218 |
) |
|
|
|
|
|
|
|
|
|
Other
Income: |
|
|
|
|
|
|
|
|
Settlement of Litigation, Net |
|
— |
|
|
— |
|
|
4,358,223 |
|
|
2,100,000 |
|
Interest
Income, Net |
|
154,146 |
|
|
146,930 |
|
|
400,575 |
|
|
343,103 |
|
Total Other
Income |
|
154,146 |
|
|
146,930 |
|
|
4,758,798 |
|
|
2,443,103 |
|
|
|
|
|
|
|
|
|
|
NET LOSS BEFORE
INCOME TAXES |
|
(1,675,210 |
) |
|
(1,114,727 |
) |
|
(840,919 |
) |
|
(1,362,115 |
) |
|
|
|
|
|
|
|
|
|
(Benefit) Provision for
Income Taxes |
|
(160,437 |
) |
|
50,694 |
|
|
(72,980 |
) |
|
184,439 |
|
|
|
|
|
|
|
|
|
|
NET
LOSS |
|
$ |
(1,514,773 |
) |
|
$ |
(1,165,421 |
) |
|
$ |
(767,939 |
) |
|
$ |
(1,546,554 |
) |
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE |
|
|
|
|
|
|
|
|
Basic and
Diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
Weighted-Average Number
of Shares |
|
|
|
|
|
|
|
|
Basic and
Diluted |
|
28,709,266 |
|
|
36,185,164 |
|
|
29,007,682 |
|
|
37,514,315 |
|
Balance Sheet
Information: |
September 30, 2017 |
|
December 31, 2016* |
|
(Unaudited) |
|
(Audited) |
|
|
|
|
Cash and
Cash Equivalents |
$ |
5,590,273 |
|
|
$ |
6,889,357 |
|
Escrowed
Funds from Sale of Assets |
— |
|
|
7,364,859 |
|
Investment Securities, Short-term, Long-term and Interest
Receivable |
45,454,406 |
|
|
43,609,849 |
|
Prepaid
Research and Development |
1,162,099 |
|
|
— |
|
Total
Assets |
52,858,638 |
|
|
58,700,420 |
|
Accumulated Deficit |
(25,983,477 |
) |
|
(25,204,314 |
) |
Stockholders' Equity |
$ |
51,792,762 |
|
|
$ |
57,690,183 |
|
|
|
|
|
*Condensed from audited
financial statements |
|
|
|
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