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It seems that the main objective of reaching the G0 structure is already achieved. The remaining work will be to clean up the remnant byproducts. They are pretty far along the development now. Interesting prospects really. If anyone is interested in understanding the results I suggest reading up on glycoanalysis. I am no expert in this so I may be wrong
I don’t think that the public markets will understand all these, the catalyst will likely come when/if they sign the first bio similar deal. That’s when the market will rally I guess
diamondresearch said this:
@Glopolon Yes this is going to be very challenging, they have to show products are equivalent in clinical trials and will be more difficult when product is already in market as may require additional studies and it is very challenging to change existing processes like this and for companies to also then pay Dyadic money to do so, thus we believe biosimilar market will not be as open to them as management indicates.
Unpopular opinion here, but he's not wrong. this is exactly what one of the PhD whom i talked to told me (that it is challenging to change existing processes like this). I thought this is the risk that investors already know when they invested in this stock.
So this is really a bet on whether big pharma would rather buy a ferrari or a toyota if they have the choice. The odds of a rich guy driving a shitty car is pretty slim I suppose? I don't like to be too attached my investments as new information might surface and i might be wrong,
but C1 is superior to CHO in terms of speed and genomic stability (which C1 has already demonstrated) and if human like glycosylation (which we will know in a few months), it will be one of the only microbial systems/cell line to be able to attain it (other than yeast, which merck paid 400 mil for, for glycofi).
there is certainly the chance that big pharma might choose to ignore it given the obvious risk, but honestly, almost every investment in this industry is risky. lol, and if US companies don't want it, companies from other countries like china would most likely take it, since its aligned with China's made in china 2025 agenda.
I still can't find the actual short report though. all i could find is this, but the link they give is broken lol.
https://stocktwits.com/diamondresearch/message/184420409
Yes you are right ronpopeil. Let me just paste what I wrote on microcapclub over here.
A problem of the mammalian systems such as CHO cell lines and the baby hamster kidney is their doubling time. It takes E. coli around 20 mins for cleavage but the mammalian cell takes around 20 to 30 hours to replicate itself.
This is where C1 has a clear advantage, and if after glycosylation, glycan structures such as G0 is achieved, honestly C1 would likely be worth several times more than the current valuation just based on its speed. As microbial systems (which is what C1 is classified under) are not known to be able to glycosylate in a way that is comparable to the human sugar pattern (other than yeast after Glycofi glycoengineered it). Another advantage C1 has is its genomic stability. It is widely known that CHO cells are not very genomically stable (which means that it is more likely to mutate).
If I am not mistaken, Transgenic system (which as genetically modified plants and animals) was a more likely candidate to replace mammalian system due to their high productivity and ability to glycosylate in a way similar to humans, but they are not as well developed as microbial or mammalian systems.
Yes you are right ronpopeil. Let me just paste what I wrote on microcapclub over here.
A problem of the mammalian systems such as CHO cell lines and the baby hamster kidney is their doubling time. It takes E. coli around 20 mins for cleavage but the mammalian cell takes around 20 to 30 hours to replicate itself.
This is where C1 has a clear advantage, and if after glycosylation, glycan structures such as G0 is achieved, honestly C1 would likely be worth several times more than the current valuation just based on its speed. As microbial systems (which is what C1 is classified under) are not known to be able to glycosylate in a way that is comparable to the human sugar pattern (other than yeast after Glycofi glycoengineered it). Another advantage C1 has is its genomic stability. It is widely known that CHO cells are not very genomically stable (which means that it is more likely to mutate).
If I am not mistaken, Transgenic system (which as genetically modified plants and animals) was a more likely candidate to replace mammalian system due to their high productivity and ability to glycosylate in a way similar to humans, but they are not as well developed as microbial or mammalian systems.
Also, does anyone has the sell side report on PFNX? trying to understand the expression technology
I was reading about GlycoFi, which Merck acquired back in 2006 for 400 mil. GlycoFi successfully engineered the Yeast glycan structure and that is the reason why Merck bought it.
I came across several statements that I believe are relevant to DYAI.
"Whitehouse Station, NJ-based Merck (NYSE:MRK) revealed in December that it had launched a follow-on biologics unit called Merck BioVentures, capitalizing on GlycoFi’s recombinant yeast technology, to enable the company to develop copies of protein-based drugs faster and cheaper than the competition. And many of the special yeast strains that Merck BioVentures will use to produce the biologics will be engineered right at GlycoFi’s Lebanon laboratories, Barry Buckland, vice president of bioprocess research and development at Merck, tells me. Merck is also using the GlycoFi technology, he notes, to develop novel drugs."
"Yet, as Gerngross told Xconomy in 2014, he had his regrets about the GlycoFi deal. He didn’t agree with Merck’s plan to use GlycoFi to create so-called “bio betters,” or slightly cheaper/structurally similar versions of existing biotech drugs, likening it to buying a calculator and using it to nail in nails. In 2014, Gerngross said Merck had gained a better appreciation over the years of what to do with GlycoFi’s technology, such as harnessing its ability to make new molecules—“that’s where the value proposition is,” he said—though he didn’t provide details. It’s unclear what came of those efforts."
"But by 2010, it became clear that the biosimilars move hadn’t gone as well for Merck as they’d been hoping. In 2013, the company signed another biosimilars deal that seemed to mostly leave it in the regulatory/marketing end of the business, while the R&D was done elsewhere, which made the whole GlycoFi acquisition look less compelling. The InVivo Blog speculated on this situation in 2014, but by then Merck had already been moving the scattered parts of the GlycoFi operation into one new central location at the Dartmouth Regional Technology Center."
My interpretation
- I believe that these 3 statements potentially indicate that Merck is might be interested in DYAI as a potential acquisiton candidate, given that Barry Buckland is a now director in DYAI, and was also involved with GlycoFi.
- given Merck's interest in making Bio Betters and DYAI's potential to make them. As seen from the statement that "it's unclear what came of those efforts", it probably means that Merck's the attempts did not result in anything significant.
- same thing with the biosimilars.
- on the other hand, it could also mean that Merck might be more careful with potential acquisitions after the glycoFi case.
https://xconomy.com/boston/2009/04/23/glycofi-figures-heavily-into-drug-giant-mercks-follow-on-biologics-plans/
https://xconomy.com/boston/2016/05/17/gerngross-mulls-buying-back-glycofi-after-merck-closes-hq/
https://blogs.sciencemag.org/pipeline/archives/2016/05/17/merck-closes-down-glycofi
Paul, do you know where i can find the report?
Taken from the research report by NOBLE life science partners
Progressing Towards Validation of Technology. We continue to believe that the major inflection point for DYAI shares is further validation of C1 technology in biologic manufacturing, data expected by year-end 2019. This will also open doors for additional partnership opportunities
We continue to drive investor's attention to the following key value generating catalysts to validate C1 technology in biologic manufacturing
(a) bio-comparability data,
(b) C1 glycoengineering (human-like glycosylation) and
(c) additional partnership opportunities throughout H2 2019-H1 2020.
googie from microcapclub said this about trump's exec order on the flu vaccine. I think it's really good and detailed, so I've copied and pasted it here. I also read from nature that "A highly effective seasonal flu vaccine, produced rapidly at the start of an influenza pandemic, would save the United States an estimated US$953 billion by preventing deaths and hospitalizations, according to the White House Council of Economic Advisers."
https://www.nature.com/articles/d41586-019-02831-x
Googie:
given the cost savings that could be achieved, there's no reason that they would settle for a less efficient method I think
"Dyadic views President Trump's executive order to improve flu vaccines as a major opportunity." I knew almost nothing about flu shots, but Dyadic was calling it a "major opportunity" so I googled around a bit. Here's some thoughts for anybody that's interested.
A decision is made in February every year as to what strains should be included in the next fall's flu shot. The decision is made so early because it takes a long time to produce enough flu virus. Incubation in eggs is the primary means, although a second method allowing the virus to reproduce inside cells can also be used. Flu shot makers sometimes start growing virus in eggs in January if they have some confidence some virus strain will be included in the February decision. It takes 6 months or so to produce enough virus. Some virus variants don't grow well in eggs and others mutate while reproducing in the eggs. These two problems sometimes limits production of the needed virus strain resulting in a less effective flu shot.
Another source of ineffectiveness is that between the February decision and the fall flu season, the virus mutates in the population. Some new strain arises that the flu shot doesn't protect against. This can result in a pandemic, and the flu can be deadly as it was in 1919. If such a pandemic arose, it would take 6 months to create a new flu vaccine that would protect against it.
"There is a third production technology for flu vaccines that was approved for use in the U.S. market in 2013 and that involves using recombinant technology. This production method does not require an egg-grown vaccine virus and does not use chicken eggs at all in the production process. Instead, manufacturers isolate a certain gene (the hemagglutinin or “HA” gene) from a naturally occurring (“wild type”) recommended vaccine virus. This HA gene is then combined with portions of another virus that grows well in insect cells. This “recombinant” vaccine virus is then mixed with insect cells and allowed to replicate in these cells. The flu HA protein is then harvested from these cells and purified. The purified protein is packaged while waiting for FDA testing and approval to release lots. Currently, recombinant flu vaccine is the only 100% egg-free vaccine on the U.S. market.
The recombinant flu vaccine marketed by Sanofi as "Flublock Quadrivalent" is produced using the baculovirus (an insect cell) platform that they purchased (for $600+ million) from Protein Sciences. An advantage of recombinant technology is that the HA gene of the flu variant can be transferred to the baculovirus which can then produce flu vaccine relatively quickly. One could perhaps delay the decision on which flu strains to include until the summer instead of February. Recombinant vaccines should not suffer from the problems with getting some strains to grow in eggs or with the virus mutating so much as to become significantly different from the virus prevalent in the human population. Most importantly, in a pandemic, it should be possible to create an effective flu vaccine perhaps in a few weeks (my guess) instead of 6 months.
Sanofi evaluated using C1 instead of the baculovirus in 2015. Dyadic's slides (http://www.dyadic.com/wp-content/uploads/2018/01/Sanofi-Pasteur-C1-Presentation.pdf) show the C1 version to create superior immune response in mice than the baculovirus version even at a lower dose. C1 is also highly productive with the company projecting they can create the global demand of 146 million doses with just three 1000 liter fermentations. There was no weight loss or other adverse reactions observed in the mice. Getting FDA approval obviously would require human testing and who knows what else.
But slide 32 of this presentation https://www.dyadic.com/wp-content/uploads/2019/01/NOBLECON15-January-2019.pdf) hints at possibly the most important reason one might use C1 instead of baculovirus, "the potential to speed the development time". This comment probably reflects that C1 ferments in just 3 to 7 days, important in a pandemic. That quick incubation time may be more important than you'd think if several tries are required before the genetic modifications are verified to produce the right stuff. Maybe there's other reasons it could be quicker such as the genetic engineering can be done faster than for baculovirus. Dyadic doesn't elaborate on "the potential to speed development time" comment.
Sanofi has the only quick to produce recombinant flu vaccine that is approved in the USA. I'd think they would be all over Trump's executive order to modernize the flu vaccine. Recombinant seems the way to go because of quicker production times allowing more effective vaccines and effective responses to Pandemics. Whether Sanofi would want to propose C1 instead of their owned baculovirus is a fine question. If Sanofi doesn't propose C1, perhaps a competitor's proposal would.
googie from microcapclub said this about trump's exec order on the flu vaccine. I think it's really good and detailed, so I've copied and pasted it here. I also read from nature that "A highly effective seasonal flu vaccine, produced rapidly at the start of an influenza pandemic, would save the United States an estimated US$953 billion by preventing deaths and hospitalizations, according to the White House Council of Economic Advisers."
https://www.nature.com/articles/d41586-019-02831-x
Googie:
given the cost savings that could be achieved, there's no reason that they would settle for a less efficient method I think
"Dyadic views President Trump's executive order to improve flu vaccines as a major opportunity." I knew almost nothing about flu shots, but Dyadic was calling it a "major opportunity" so I googled around a bit. Here's some thoughts for anybody that's interested.
A decision is made in February every year as to what strains should be included in the next fall's flu shot. The decision is made so early because it takes a long time to produce enough flu virus. Incubation in eggs is the primary means, although a second method allowing the virus to reproduce inside cells can also be used. Flu shot makers sometimes start growing virus in eggs in January if they have some confidence some virus strain will be included in the February decision. It takes 6 months or so to produce enough virus. Some virus variants don't grow well in eggs and others mutate while reproducing in the eggs. These two problems sometimes limits production of the needed virus strain resulting in a less effective flu shot.
Another source of ineffectiveness is that between the February decision and the fall flu season, the virus mutates in the population. Some new strain arises that the flu shot doesn't protect against. This can result in a pandemic, and the flu can be deadly as it was in 1919. If such a pandemic arose, it would take 6 months to create a new flu vaccine that would protect against it.
"There is a third production technology for flu vaccines that was approved for use in the U.S. market in 2013 and that involves using recombinant technology. This production method does not require an egg-grown vaccine virus and does not use chicken eggs at all in the production process. Instead, manufacturers isolate a certain gene (the hemagglutinin or “HA” gene) from a naturally occurring (“wild type”) recommended vaccine virus. This HA gene is then combined with portions of another virus that grows well in insect cells. This “recombinant” vaccine virus is then mixed with insect cells and allowed to replicate in these cells. The flu HA protein is then harvested from these cells and purified. The purified protein is packaged while waiting for FDA testing and approval to release lots. Currently, recombinant flu vaccine is the only 100% egg-free vaccine on the U.S. market.
The recombinant flu vaccine marketed by Sanofi as "Flublock Quadrivalent" is produced using the baculovirus (an insect cell) platform that they purchased (for $600+ million) from Protein Sciences. An advantage of recombinant technology is that the HA gene of the flu variant can be transferred to the baculovirus which can then produce flu vaccine relatively quickly. One could perhaps delay the decision on which flu strains to include until the summer instead of February. Recombinant vaccines should not suffer from the problems with getting some strains to grow in eggs or with the virus mutating so much as to become significantly different from the virus prevalent in the human population. Most importantly, in a pandemic, it should be possible to create an effective flu vaccine perhaps in a few weeks (my guess) instead of 6 months.
Sanofi evaluated using C1 instead of the baculovirus in 2015. Dyadic's slides (http://www.dyadic.com/wp-content/uploads/2018/01/Sanofi-Pasteur-C1-Presentation.pdf) show the C1 version to create superior immune response in mice than the baculovirus version even at a lower dose. C1 is also highly productive with the company projecting they can create the global demand of 146 million doses with just three 1000 liter fermentations. There was no weight loss or other adverse reactions observed in the mice. Getting FDA approval obviously would require human testing and who knows what else.
But slide 32 of this presentation https://www.dyadic.com/wp-content/uploads/2019/01/NOBLECON15-January-2019.pdf) hints at possibly the most important reason one might use C1 instead of baculovirus, "the potential to speed the development time". This comment probably reflects that C1 ferments in just 3 to 7 days, important in a pandemic. That quick incubation time may be more important than you'd think if several tries are required before the genetic modifications are verified to produce the right stuff. Maybe there's other reasons it could be quicker such as the genetic engineering can be done faster than for baculovirus. Dyadic doesn't elaborate on "the potential to speed development time" comment.
Sanofi has the only quick to produce recombinant flu vaccine that is approved in the USA. I'd think they would be all over Trump's executive order to modernize the flu vaccine. Recombinant seems the way to go because of quicker production times allowing more effective vaccines and effective responses to Pandemics. Whether Sanofi would want to propose C1 instead of their owned baculovirus is a fine question. If Sanofi doesn't propose C1, perhaps a competitor's proposal would.
I think I made a mistake in saying that the FDA is pushing for non-cho cell means of production. After talking to the antibody engineer friend of mine, I realised that the adoption of non-cho cell may not be a given. I guess that's another risk to take into account.
it's a company called GAN PLC. i can send the thesis to u if u want it. just email me at dennisinvesting@gmail.com
Yea Ronpopeil, to add on to the subject of glycoengineering. I remember that the PhD guy told me that the probability of glycoengineering C1 cells is high because even if they fail on the first attempt, they can just keep trying until they succeed since they have the time and money. I can't seem find the conversation that I had with him on that.
Also, given the DYAI is working with VTT which is the best synthetic biology lab or something (I don't know what its called) when it comes to dealing with fungus cells (please refer to the recent presentation). I think that the probability of success is even higher.
The implications of what i've said is that C1 is more likely to be bought out by big pharma than other platforms because it is superior in the aspects that i've mentioned earlier.
As for the valuation, I asked the antibody engineer (PhD candidate) what the company would likely be worth if the C1 platform is successful. He told me this “ One antibody production run currently costs somewhere in the ballpark of 10-30 million and there are about 60 approved antibodies and 300 in clinical trials and multiple runs per antibody in a year, so do the math. Depending on the model but between 10 bil to 50 bil. That’s the numbers I got I can check with my friends in production the last I spoke to them"
I believe that a non-cho cell platform was sold recently for around 1.7 bil (I forgot where I got it from, maybe its from this forum). Given that C1 is a superior platform and the strong financial position of DYAI which gives it bargaining power and the ability to self fund itself even if negotiations break down, it is likely that it would be sold more than that.
The range would likely be between 2 bil to 10 bil. I personally think that 3 to 5 bil is pretty likely. The missing part of the puzzle would be that the lack of public interest (probably because the science is pretty hard to understand) and successful glycoengineering of C1.
This actually happens a lot in the microcap world even for microcaps with great fundamentals. As an example, there's this other SAAS company that I am invested in trading at 2x EV/sales, >100% yoy sales growth, and is net income positive and no cash burn, in a sector with secular tailwind of which it is a dominant player simply because it is trading on the wrong stock exchange and thus has the wrong shareholder base. While other much bigger SAAS companies trading at the "right" exchange are trading at >10x EV/sales, ~50% sales growth, net income negative with significant cash burn.
But again, I am painting a pretty rosy picture here and I may not be right, so please take my words with a pitch of salt.
Hi Monolith, I share your concerns at first, which is why I consulted a few people and read up on my own. I am not bio trained (so please take it with a pinch of salt and I may have made some mistakes) but from what i've read. I don't know about the other uses of the C1 platform, as I have been reading up mainly on glycoengineering and biologics drugs.
As you know FDA is pushing for non cho cells way of production for biologics drugs right now. For non cho cell ways of production, there are a few alternatives, but can be classified into Mammalian and non mammalian cells. Mammalian cells ways of production are not scalable, because they face similar problems as CHO cells, so that leaves us with non-mammalian cells means of production.
For non-mammalian cells means of production, the problems are that either you can't perform glcoengineering to make them more "human like" because their glycan structure are too different or they haven't been proven be able to be utilised on an industrial scale.
For C1, it has a very human like glycan structure (maybe even the most human like glycan structure amongst fungi and yeasts as stated below) and it also has a proof of concept in its scalability due to years of industrial use.
I urge you to read this report, it explains a lot of things, and I have confirmed this with a PhD friend who said that he agree with the commentary if true that this sets it apart from other fungi:
https://wfn1.com/financial-news/columns/zacks-research/dyai-dyadic-supplementary-information/
"CHO cells are most often used as production hosts when glycosylation is needed. Competing viral, yeast and bacterial systems that are evolutionarily distant from humans have glycosylation patterns that are largely incompatible with human use.
Dyadic is now performing glycoengineering work with C1 to knock in and knock out specific genes in the glycosylation pathways that are expected to produce human-like glycostructures. The glycoengineering work benefits from the fact that the glycoform structure of C1 more closely resembles the human glycan structure than that of other fungi and yeasts. Unlike most fungi and yeasts, C1 does not appear to have ‘high’ mannose (branched 30-50 mannose species), but rather has ‘oligo’ mannose and hybrid-type structure. None of the proteins analyzed to date contain the O-glycosylation structure commonly found in yeast and other fungi that is difficult to eliminate through glycoengineering steps.
Dyadic is focused on expressing proteins with specific glycoforms including G0, G1, G2, G0F, G1F and G2F which will improve the immunogenicity of vaccines via its glycoform structure. The company’s timeline anticipates achieving G1F and G2F structures by 2020, which will provide the necessary technology to manufacture glycosylated antibodies and other glycoproteins."
But please feel free to correct me if I am wrong in my understanding of this matter.
Thanks, appreciate your help.
emailed her on sunday. hope that shes gonna reply soon.
Sure, I will keep you posted if i get a reply from them. Unfortunately, I am not living in the States, and its crazy expensive to call overseas.
I am not sure about the platforms from Amyris, Evolva, Noramco, and Dalton Pharma that you mentioned, but if they are based on mammalian cells, it is likely that the production volume will be very little as compared to C1. If it is based on non-mammalian cells, c1 is likely the human like non mammalian cell out there, so the competition is likely not too stiff i guess. This is what i gathered from asking the PhD and reading an old article.
"C1 produces glycan structures more similar to the human glycan forms than most other non-mammalian production hosts, making the glycoengineering work carried out in the project quicker and easier. Dyadic has developed and used its C1 production platform to produce industrial enzymes since the late 1990's."
https://phys.org/news/2018-11-fungal-production-platform-c1-vaccines.html
I see. Thanks for the reply. I tried contacting the company at this email info@dyadic.com, but got no reply. Would love to ask them a few questions, including the one i asked you about.
Mark, did mention that they are playing the long game, and with their strong balance sheet, they have significant bargaining power. I believe that this is a pretty rare combination where you have a good business man with lots of skin in the game who is in control of a valuable asset that no one else has.
do you know about the N vs O glycosylation which differentiates C1 from other fungi? it seems to be important from what the phd told me.
the PhD further said this
"The company’s timeline anticipates achieving G1F and G2F structures by 2020, which will provide the necessary technology to manufacture glycosylated antibodies and other glycoproteins. This is their goalpost ...
probably a sale after that because I highly doubt they will take it into clinical trial on their own ... I looked a bit at COGS+yield/time savings of biosimilars vs rNPV - don't have a lot of visibility there but development cost/capex around 200M (not something they will want to undertake)"
Thanks for your insight as well. your views are consistently with another guy that i talked to who is a doctor "I don't see any obvious reason why the capability to glycoengineer to specs, either in C1 or as a post-secretory process that is performed on the C1 product, can not be achieved in time but I am not knowledgeable in the field. I don't see glycoengineering as make or break though, many other fish in the sea FWIW."
Thanks! I consulted a PhD in immunology to ask about the probability of success regarding glycoengineering of C1. he said that theoretically all possible with synthetic bio but not sure until proven.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6070867/
he also pointed this out:
this is different from typical biopharma risk because there's no target risk or disease biology risk - they're trying to make existing famous antibodies. their timeline seems realistic ... haven't read enough about what's limiting tech but given time and partnership they're more likely to achieve goal
I consulted another anitbody engineer who is a PhD candidate in immunology (but notably he didn't look at the source material much) and he said that the 6 year time line is very optimistic.
Hi, can you post some of the materials that you have read that led you to the conclusion that glycoengineering of C1 fungus is not that difficult. I would like to understand more about the science behind it too.
janicen, do you have any insights on this?
Where did you get that piece of news from?
Hey Rado,
very insightful post. I have been a shareholder since $3.60/share and I am still holding on to it (though I've sold some). I've invested in medical equipment companies in the past with a very similar profile to ZYXI, to give an example, I invested in IRMD when it was trading at $8/share a few years back, so I hope that I provide some credibility there.
Just to add to your bull case,
From my conversations with management teams of medical equipment companies, doctors and therapists. I understand that doctors generally do not change the brand of medical devices that they are familiar with and this includes the TENS devices that they are currently prescribing which results in customer lock-in. However, for big hospitals, both the doctors and a purchase committee make the purchase decisions. Thus, my point is, even if a medical equipment company suddenly appears today with a TENS device that is 10x more effective than ZYXI's, it won't make as big of a difference as having a large sales force. When EMPI filed for bankruptcy, ZYXI poached almost all of the sales people out there, and if you go on glassdoor, u would see that ZYXI CEO's approval is unusually high.
Furthermore, I don't see big companies entering this niche as it is too small. International Rehabilitative Sciences (doing business as RS medical) is ZYXI’s primary competitor in the TENS space. RS medical is a private company, so information is hard to get a hold of. According to Owler, it has an annual revenue of $ 20.4 million (USD) with an estimated employee count of 47. ZYXI has a TTM revenue of 30.7 million and 109 employees (I think they have more now). It is worth mentioning that ZYXI’s hiring strategy would make it hard for RS medical to gain a significant foothold in the industry. In the 2018 Q3 conference call, ZYXI’s CEO said that there are targeting cities where they do not have a significant sales presence. Their goal is to blanket the entire country with high quality sales reps to make it difficult for competition to break in, and given ZYXI’s larger scale, this should provide barriers to entry of competitors. Beyond RS Medical, there are some smaller competitors, but they do not have as much scale.