DYADIC INTERNATIONAL INC Q3 FY2024 earnings call

• Mark Emalfarb highlighted the business strategy centered on near-term licensing and product candidates, with a dual track strategy focusing on near-term revenue in alternative proteins and mid-to-long-term value in human and animal pharmaceuticals.
• Joe Hazelton discussed alternative protein segments: life science (highest value and margin, including products for cell culture media, diagnostics, etc.), food and nutrition (animal-free dairy products), and industrial recombinant proteins and enzymes. He also talked about the biopharmaceutical pipeline using the C1 platform, with over 15 fully funded human health projects, collaborations with top pharmaceutical companies, and success in expressing various vaccine antigens and antibodies.
• Regulatory requirements for research-grade recombinant proteins involve ISO-certified manufacturing and meeting QA/QC specs, with certificates of analysis for products like DNASE-1, bovine transferrin, and bovine alpha-lactalbumin.

For the quarter ended September 30, 2024, revenue increased to approximately $1,958,000 compared to $397,000 in the same period of 2023. Cost of revenue and development revenue rose to approximately $396,000 from $106,000 year-over-year. Research and development expenses decreased to approximately $460,000 from $716,000. G&A expenses increased by 1.2% to $1,298,000. Loss from operations decreased to $203,000 from $1,720,000. Net loss for the quarter was $203,000 or $0.01 per share compared to $1,614,000 or $0.06 per share in 2023. Cash and investment-grade securities as of September 30, 2024, were $10 million compared to $7.3 million as of December 31, 2023. The company expects total cash burn for 2024 to be approximately $4.7 million.

• Total cash burn for 2024 is expected to be significantly decreased to approximately $4.7 million.
• The company received $1,425,000 in licensing and milestone fees in the third quarter, positioning it for continued revenue growth.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ from expectations.
• Regulatory hurdles beyond certificates of analysis, including ISO-certified manufacturing, are factors to consider.
• Market competition and varying regulatory landscapes in different product segments pose challenges.

Q: How do regulatory requirements work for research-grade recombinant proteins?

A: Joseph Hazelton stated it's not just certificates of analysis; manufacturing must be done at an ISO-certified facility. No regulatory agency review is needed, but QA/QC specs must meet ISO levels.

Q: Can you give a sense of the addressable market and royalty rates?

A: Joseph Hazelton mentioned addressable markets vary by segment (e.g., cell culture media ~$4.7B, DNASE-1 ~$1B). Royalty rates vary by product, application, and contribution, with some being profit-sharing (e.g., with Proliant) and others potentially in ranges like 3%-10% depending on the product and situation.