Dyadic International, Inc. Q3 FY2025 earnings call

• The third quarter was pivotal as the company transitioned to a commercially focused biotechnology company with a growing product portfolio.
• First commercial bulk sale of a Dyadic protein marked a new chapter. Rebranded to Dyadic Applied Biosolutions and launched a redesigned website.
• Secured CRISPR Cas9 gene editing license with ERS Genomics to accelerate strain optimization.
• In life sciences, made progress in recombinant human albumin, DNase I, transferrin, and FGF programs.
• In food nutrition, recombinant alpha-lactalbumin and lactoferrin programs advanced, with milestone payments from Enzymes.
• Bioindustrial segment collaborated with Fermbox Bio on enzyme cocktails for industrial applications.
• Biopharmaceutical programs had partnerships with Gates Foundation, CEPI, etc., validating the C1 platform.

The third quarter was a pivotal period as Dyadic International continued its transformation. In the life sciences segment, there was the first commercial bulk sale of a Dyadic protein, with progress in recombinant human albumin program with ProLiant, DNase I in molecular biology reagents, and transferrin for cell culture media. In food nutrition, the recombinant alpha-lactalbumin and human lactoferrin programs advanced, and there was a milestone payment from Enzymes. The bioindustrial segment had collaboration with Fermbox Bio on enzyme cocktails. Biopharmaceutical programs had partnerships with Gates Foundation, CEPI, etc., validating the C1 platform.

• Expect growth in product revenue in life sciences and food nutrition markets in the rest of 2025.
• Aim to maintain operating expenses in line with last year.
• Anticipate further progress in product launches in cell culture media and molecular biology.

Certain commentary made in the call are forward-looking statements which involve risks and uncertainties. Factors could cause actual results to differ from forward-looking statements. Participants are directed to risk factors in Dyadic International, Inc.'s SEC filings.

Q: What does the CRISPR license with ERS Genomics bring to the portfolio? How does it help drive incremental growth and sign new contracts?

A: The license grants a more powerful genetic toolbox to accelerate product development, improve optimization yields, and gives a competitive advantage in markets like food and nutrition. It helps expand and accelerate internal programs and assist partners.

Q: How should we think about the DNase I opportunity ramping in '26 and beyond, and how big could it ultimately become?

A: The DNase I market is significant. Targets bulk sale opportunities with distributors, suppliers. Starts with lab-grade material, anticipates scaling as quality improves and moves to higher margin segments.

Q: What characteristics of customers in Asia for DNase I and transferrin?

A: Target cell and gene therapy manufacturers, suppliers, and distributors in Asia. Not looking to be a wholesale distribution network but hit where products are pulled from.

Q: Details on the CRISPR ERS agreement structure?

A: Confidential financials, but the license helps engineer cells for higher efficiency, quicker development, and lower costs. Opens new areas for ERS Genomics too.

Q: How is the infant nutrition product marketed?

A: Aims to mimic human breast milk. Bovine products may be accepted first, with human alpha-lactalbumin in medical nutrition first. Works with partners with industry experience.

Q: Positive endgame from Gates Foundation and CEPI grants?

A: Could save lives and lower cost of biologics. Validates platform for biopharmaceutical use and provides opportunities for cell culture media products.

Q: Concerns about CDMO market bottleneck for commercializing products?

A: No bottleneck currently as there's plenty of capacity, though cost of production at certain grades is a consideration.

Q: Business model scaling in terms of headcount and expenses?

A: Scales easily with focus on distributors, wholesalers, and suppliers. No significant infrastructure changes anticipated in next two to three years; growth depends on manufacturing capacity and product availability.