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Awesome, great find! One of 4 co's they have equity in. Love the business model. Mark's prez the other day was as compelling as ever, and he gave a bullish update on their glyco-engineering efforts, as well as more strong hints about undisclosed collaborations that they will shortly either continue (with $$$ upfront) or continue on their own. Eagerly awaiting their next news...
My first thought is that it speaks volumes that's they're not planning on getting back into fuel or the industrial space at all -- it means they see more value in bio/pharma. Anyway they have so many potential shots on goal in the bio pharma space alone that they couldn't pursue more.
But thanks for clarifying, it's great they still can leverage C1 in other verticals. Huge huge potential.
I am quite sure that's incorrect. They have licensed their C1 tech to Dupont exclusively for all applications except "human and animal health" which implies bio/pharma space though there is surely some grey area. And even for the pharma space, they share the license with Dupont (meaning Dupont can also develop it for pharma). At least that's my understanding. And of course they can still out-license it again / sell it outright if they choose.
A gamble buy is also what I have done with RDHL recently. I've been invested here for years holding most of my position but increasing and decreasing from time to time, but the fact is we're now very close to a potential inflection point so I've increased my position in the past weeks. Hopefully we're not missing anything in our assessment of the risk here.
RDHL has long been a favorite long-term stock of mine but boy has it tested my patience over the years. Still holding (though presently underwater on my position) as there are many important catalysts coming and I believe the pipeline is robust enough that the downside (should anything be delayed) is limited. Looking out a few years, this still has all the potential of 5-10x upside.
Great summary of the company, and always nice to be reminded of the huge opportunity that C1 represents. Thanks for posting! DYAI is by far my largest holding today and I will not sell anything for at least 2 years of before $15/share.
I would also like to know if they are aware of Pfenex's Expression Platform https://www.pfenex.com/technology/ and how it compares (overlaps or is complementary to) C1. Pfenex also has a deal with the Serum Institute of India and many other commercial agreements in place, some of which are paying them milestone payments. I only discovered this company very recently and excited about DYAI as I am, I find myself getting very interested in PFNX too (under $300MM market cap).
The DD I have done in this space definitely tells a story of how the market is ripe for a replacement of CHO and other legacy expression platforms, and there is ample room for a range of new approaches. I also wouldn't rule out Big Pharma investing their war chests of cash into internal R&D in this space, though with the quality and quantity of existing deals with Dyadic's C1, I am definitely betting somebody will buy them outright sooner or later. Pfenex too, possibly.
emailed you, thanks!
I have also tried to reach them several times by emails listed on their own website, but each time without any reply. Maybe we should send the Q's to them on twitter so in the public all can see their answer (or lack thereof)?
My Q's were around comparisons of C1 to platforms from Amyris, Evolva, Noramco, and Dalton Pharma, as well as potential to use C1 to produce cannabinoids, steviol glycocides, and reservatrol among others. But I would love to hear their answers to your questions, so if you do hear back pls share?
Sorry, I don't, no. Too far over my head and I've not consulted any professionals in the field as you have. Great Q for the company though. My take is simply that with the entire genome of C1 sequenced, and the tools and tech at their disposal today as well as the caliber of R&D partners they have, it's doesn't feel like a moonshot as much as a very reasonable near-term milestone.
I hope they don't settle for less than 2 bn for the platform. But it may take them another few years to get it there.
Thanks for this insight. Indeed the glycoengineering of C1 can change the game for them, but it doesn't have to happen for them to achieve significant commercial success with the platform. I see it as a bonus that could pave the way for biobetters. But with their pipeline of opportunities, R&D partners, cash, and track record, I'm incredibly enthusiastic about the stock price over the next 2-3 years even without success in humanizing C1.
Sure.
Here is one: https://www.ncbi.nlm.nih.gov/books/NBK453027/
There is a long history of engineering glycosylation in mammalian cells, plants, fungi (yeast), and bacteria using genetic strategies, and many well-characterized glycosylation mutants are available. Today, cellular glycoengineering is used extensively to produce recombinant therapeutic glycoproteins that require glycosylation for their efficacy and at the same time must have human-compatible glycosylation to avoid immune responses to nonhuman glycans.
Three decades of glycogene discoveries have resulted in the identification of most genes encoding glycosyltransferases, hydrolases, and other enzymes involved in synthesizing and metabolizing the glycans of “higher” eukaryotic cells and the “rules” of the biosynthetic pathways involved
In principle, there is sufficient knowledge to predict the role of individual enzymes and assign them to specific pathways, allowing in silico prediction of the enzyme repertoire required to generate a particular glycan on a particular glycoconjugate.
Knockout of glycosylation genes to eliminate unwanted glycans [this is the method used by Dyadic with C1] has long been a simple task in bacteria and yeast. Although powerful, knockout or knockin strategies have been time consuming and difficult to use in “higher” eukaryotic cells (consider the Fut8 knockout in CHO cells described below), these difficulties were substantially reduced with the introduction of nuclease-based precise gene editing tools including zinc-finger nucleases, transcription activator–like effector nucleases (TALENs), and clustered regularly interspaced short palindromic repeat/targeted Cas9 endonuclease (CRISPR/Cas9), which enable highly specific gene manipulation in all cell types (Figure 56.2; Chapters 27 and 49). Importantly, these tools are not limited to gene knockout or knockin but can also be used to activate endogenous silent genes, edit gene sequences to mimic hypomorphic disease mutations, and insert foreign genes at specific genomic sites.
Yes, this previously announced deal is a game-changer for the company and a huge validation of their products. Murata is the 800lb gorilla in this space.
If in addition to this deal, the handset sales this Q and next are as they'd said they should be (millions --> tens of millions) then we could see the stock rise to $10 or more before the end of the year, and next year could see another doubling, IMO.
Q3 earnings call scheduled for 8am ET Nov 11. Their prev revenue guidance was $1.2 - $2MM for 2019, based on their initial 2 Canadian clinics. They just announced the opening of their fifth. If they increase their guidance and show real traction, I will definitely take advantage of the all-time lows we are seeing lately, and take out a larger position. We should also be hearing soon about CE mark and Australian clearance. And hopefully an update on the path to FDA approval.
and an open label study showing transcranial EM stimulation could help Alzheimers patients:
https://www.medicalnewstoday.com/articles/326401.php
https://www.neuroem.com/
And the past conference visits appear to have been productive:
from: https://technewsobserver.com/news/2019/09/27/bandera-partners-llc-makes-new-9-53-million-investment-in-dyadic-international-inc-nasdaqdyai-updated-updated.html
"Bandera Partners LLC purchased a new position in Dyadic International, Inc (NASDAQ:DYAI) during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm purchased 1,523,036 shares of the biotechnology company’s stock, valued at approximately $9,534,000. Dyadic International accounts for 5.7% of Bandera Partners LLC’s investment portfolio, making the stock its 9th largest position. Bandera Partners LLC owned approximately 5.69% of Dyadic International as of its most recent filing with the Securities and Exchange Commission (SEC).
Several other hedge funds and other institutional investors also recently modified their holdings of the stock. Northern Trust Corp bought a new position in shares of Dyadic International in the second quarter worth $218,000. Pekin Hardy Strauss Inc. acquired a new stake in Dyadic International in the second quarter valued at about $384,000. Northeast Financial Consultants Inc acquired a new stake in Dyadic International in the second quarter valued at about $1,565,000. Acadian Asset Management LLC acquired a new stake in Dyadic International in the second quarter valued at about $50,000. Finally, Cedar Brook Financial Partners LLC acquired a new stake in Dyadic International in the second quarter valued at about $314,000. Institutional investors own 13.09% of the company’s stock."
And from what I have read, this is not such a difficult task in many species of plant/animal/yeast today, the key being mapping the genome of the host, which Dyadic has already done fully years ago. Seems to me the likelihood of success with this is 80% or higher. And while that achievement may be "binary" for contracts and licensing, it may not be so binary for the share price (but it will be a multiplier on long-term value of the platform IMO).
Glycoengineering of the C1 strain, to make it more "human like".
Here is a description: "While most products to date are produced in mammalian cell cultures, namely Chinese hamster ovary cells, plant-based production systems gained increasing acceptance over the last years. Different plant systems have been established which are suitable for standardization and precise control of cultivation conditions, thus meeting the criteria for pharmaceutical production. The majority of biopharmaceuticals comprise glycoproteins. Therefore, differences in protein glycosylation between humans and plants have to be taken into account and plant-specific glycosylation has to be eliminated to avoid adverse effects on quality, safety, and efficacy of the products. "
Essentially, if they can do this, they are dramatically less likely to produce drugs/vaccines/antibodies that will have side-effects: more tolerable, safer, and more effective.
I don't have any saved links.. but while I was researching I learned about (circa 2007?) the passing of their Hong Kong subsidiary's director, subsequent accounting fraud that was uncovered there, a law suit, Mark being forced out as CEO but proclaiming not knowing about it and fighting to get back control of the company he had started 20+ years prior. He persevered, won a (modest) counter-suit settlement against the auditor that recommended halting shares as a result of the HK issue, etc, etc. It seemed all very dramatic.
There was also an audio interview I listened to with Mark that referenced some of this story though I don't recall the podcast it was from.
Thanks for the update. I wasn't concerned about it but it's nice to have clarity.
Dyadic is currently my largest position - I see so little downside risk for such massive upside potential. The biggest risk to me is how long it may take and what gains I may be able to make with that money elsewhere while DYAI churns sideways. But I love the space, the traction, and the odds of a 10x gain from here. And the soap opera history of the CEO almost getting booted from his own company but clawing it back with dignity and perseverance. (I think Mark even joked that we could see the story made into a movie on Netflix someday).
From the last 10K Dr. Tchelet had 350k options granted at Dec 31, 2018, and given the number granted in 1H2019 I would say it's now more than double that.
I am not certain of this, but I get the impression he and a few other key people at the company (they have very few direct employees) are getting a very healthy supply of shares via the revised Stock Incentive Plan. There are over 7 million stock options still remaining per their last 10Q, and over 1 million were granted in H1 alone. I would guess Ronen got a large chunk of that, and until he exercises them they're not reportable.
These sales may well be the first time Ronen can enjoy any of the fruits of his labors for the past 5 years. A couple hundred grand today, but potentially tens of millions in options down the road.
But that's just my educated guess. Anyone else know something more official?
he and I both I am obscenely overweight in DYAI, and happy to wait another 5 years if needed but I also think before 2022 we'll see an acquisition.
I got it from the audio (in the first 8 mins when he's talking about cash, burn, no debt, no warrants, etc.. Mark's tone is a little different than past presentations.. I like his delivery lately -- he makes a compelling case and effectively illustrates how many irons they have in the fire here.
I particularly like the "binary" nature of the glycoengineering work which, if successful, would give them the "keys to the kingdom". But even without it the C1 platform has tremendous potential.
If I'm not mistaken this is the first time Mark referred to potentially spinning off something in the same way they did with Dupont:
"...we're gonna get deals done with big pharma with up-front cash payments and/or sell off one of the divisions that you'll hear about later for significantly more money than the $75 million we got from Dupont".
Feels like they're in such discussions already.. wonder which application? Certolizumab?
As described, this new collaboration was > 1 year in the making (implying considerable negotiations) and is with a top pharma company that is specifically looking for CHO alternatives (also seems like they're a CDMO in that case). This deal reinforces the idea that alternate expression platforms to CHO and eColi are being actively sought -- very very good news for Dyadic, as their C1 appears not only to be an order (or two) of magnitude more productive in some cases, but cheaper to use.
If the human glycoengineering efforts are successful then C1 instantly becomes [even more of] a game-changer. They indicated they're on schedule for this to be achieved by Q1 2020, but had previously suggested they'd achieved g0 by now.
They don't need the glyco results to be successful with VV's, or animal health products, mind you, and they may not need it at all but it would further de-risk clinical trials for drugs manufactured in C1.
Nothing but great prospects for this company.
From the CC:
"... but what we expect from that project, as I mentioned in the earlier part of the conference call, is not only to expand that collaboration and further research, this big pharma company, the group we're working with, is actually, their microbial fermentation guide that are trying to internally convince their parent to get off of CHO. So they actually have the same goals and objectives as we do, so they're very excited about this and really committed to really push this forward. We actually started our initial call today with them, and was really exciting to hear that from them, that they're fully committed to making this work. But in addition to that, we're working with one of their affiliates, and that could become a major sort of relationship which speeds the adoption, provides more resources, speeds up the technology development, and broadens the adoption and use globally because that affiliate has a global outreach all over the globe. It's one of the largest providers of technology in the biotech industry. So we're affiliated with this pharma company as one of their company's affiliates. So it could be very exciting."
" we hope to get at least one if not more research license and potential commercial license or a research license with an option for commercial license from one or more of these agreements either with Sanofi or one of the ones we just signed. The one we signed this week, for example, so we have our fingers crossed it will be in 2020, it's possible it could be this year."
"
And I indicated earlier in the conference call when we sign one of these top 25 pharma company deals earlier this year, they've already now provided us with a second protein. So they're expanding seeing the results and they're expanding what they're doing with this and potentially that is going to go even further and faster. And as those results come in that potentially could turn into a license agreement as well. So there's a lot going on, a lot of different places. And of course Serum has already started and that could be just earth shattering in terms of the ability to really drive that cost down and do speedy adoption and use and force the industry to a new technology platform that can just change the game."
" The good thing with Serum is in addition to working with Serum, I can't get into it with you but it's not just Serum that's involved in these programs which probably can somebody that you can look online and there's certain people like the AIDS Foundation, funds research to Serum, WHL, the Gates Foundation, so as Serum succeeds and if we're successful in moving these products forward with them where we're getting more and more eyeballs with some of the big funding opportunities to provide us even more and more opportunities and just up to 12 proteins which are eight antibodies and four vaccines which are what we've talked about in the past. So it's much broader, much deeper there's a lot more eyeballs from the NIH from these big institutes and big funding organizations that are getting a peek. And we might have actually met with some of them in conjunction with that Serum deal and otherwise."
I believe there was a video/interview/article recently where somebody from the company said they'd been producing record daily volumes of oils in July, does anyone remember that source (or what the numbers were)?
Wow, very understated conf call just now. $10MM raised at above mkt price (at time of announcement), $7MM of which comes from their new partner. Partner has between 30 and 70% market share, and will pre-pay $9MM in exchange for lower royalties. This all bodes very very well for the company.
They would not come out and say it, but with the latest raise and $ potential from warrants, they seem to imply they'll turn the corner and get cashflow positive before EOY. And the new partnership alone could provide significant revs, albeit down the road several Q's.
Kinda disappointing, and yet.. soo tempting to jump in here at these prices. I would have said "oversold" before I saw the PP. Nevertheless it seems like a terrific entry point for those who have sat on the sidelines over the past couple of years, as I have.
I take it the meeting is in Jupiter FL? It's still not listed in their Event section, oddly. Anyway... I would l have liked to go actually, given the oversized position it represents in my portfolio.
I am pretty sure they've been saying "over 100" since late last year, never a specific number given (that I've heard or read).
Next potential milestones I think we can expect are whether any of their R&D programs turns into a commercial license (this would be the most promising), the results of their glyco-engineering efforts, new R&D or licensing deals, IP filings made public, or the disclosing of one of their undisclosed partners/customers.
In the meantime, the shares can drop to $4 again and I won't bat an eyelid. $160MM market cap for a platform that is worth 5-20x more than that. Fortune favors the .. patient.
Not that I know of, no. Nothing on their website either.
New Investor Presentation posted just now: https://www.dyadic.com/wp-content/uploads/2019/06/DYAI-June-25-2019-Shareholder-Meeting-Presentation.pdf
Shorter version of the long deck, and the only change I noted was the mAbs production rated has increased 29% from 2.4 to 3.1 g/l/day
It seems to be just a "dba" (doing buinsess as) for BDI. The deal with BDI is in their SEC filings from long ago. It remains to be seen in addition to owning equity in BDI, Dyadic will strike new/expanded deals with them for specific applications.
I just received a reply to my inquiry about them:
---
53Biologics is a brand recently created by BDI biotechnology specifically to offer our services in the pharma sector.
Dyadic International did a strategic investment on BDI (16% of BDI belongs to Dyadic) two years ago to develop C1 (https://www.dyadic.com/dyadic-announces-important-multi-year-research-development-arrangement-advance-proprietary-c1-technology/). We have been working with C1 during more than 10 years when we, as part of Abengoa Bioenergy R&D team, developed strains and production processes for cellulolytic cocktails to be used in the 2G bioethanol.
---
I find it very encouraging that they'd spin-off a separate brand to focus on pharma with C1. Looking forward to a steady flow of progress on both the scientific and commercial fronts.
What intrigued me was how new the entity is. New website (and private registration), new Twitter account, not yet even listed on the list of companies at the techno Park in Spain, etc. And yet they claim to have been instrumental in promoting the success of C1.
Maybe a BDI spin-off that has been in sleath mode until now? Or perhaps simply a name change?
Yeah, it looks like he sold the full set of options he was issued. I guess they were the instant-vesting kind I expect he has more coming.
But the CEO who holds a huge % of the company hasn't been selling yet, so that's a great indication ... esp since he could carve out a sizable windfall and still be left with tons of equity.
I have also carved out small amounts of profits from my DYAI gains, to place chips on some other numbers. But I still hold a large chunk and am happy to hold for years if needed.
Thanks. More hints from Matthew about big negotiations ongoing behind closed curtains.
There is a lot of noise out there (esp on social media) about how PoNS is a scam, so I though I'd include a few other unrelated resources about different applications of neurostimulation in general:
UK company with FDA cleared device to alleviate migraines:
https://www.gammacore.com/
Study about stimulating creativity:
https://www.economist.com/science-and-technology/2019/06/15/zapping-the-brain-improves-creativity
https://www.sciencedaily.com/releases/2016/04/160414095949.htm
For Epilepsy:
https://www.sciencedaily.com/releases/2016/09/160919220132.htm
For Schizophrenia:
https://www.sciencedaily.com/releases/2015/05/150527180148.htm