Dyadic International Inc (DYAI) Q2 2024 Earnings Call Highlights: Strategic Positioning Amid ...
Revenue: Decreased to approximately $386,000 from $837,000 year-over-year.
Cost of Research and Development Revenue: Decreased to approximately $302,000 from $793,000 year-over-year.
Research and Development Expenses: Decreased to approximately $516,000 from $918,000 year-over-year.
General and Administrative Expenses: Increased to approximately $1,608,000 from $1,403,000 year-over-year.
Loss from Operations: Decreased to $2,043,000 from $2,290,000 year-over-year.
Net Loss: Approximately $2,045,000 or $0.07 per share, compared to $2,153,000 or $0.07 per share year-over-year.
Cash and Investment-Grade Securities: $10.1 million as of June 30, 2024, compared to $7.3 million as of December 31, 2023.
Convertible Notes: $400,000 of the $6 million notes converted into common shares during the second quarter.
Cash Burn Projection: Approximately $3 million for the second half of 2024.
Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Dyadic International Inc (NASDAQ:DYAI) is strategically positioned to achieve multiple revenue streams and significant milestones over the next 24 months through product commercialization, technology licensing, and collaborations.
The company's C1 technology is gaining widespread recognition for its speed and productivity, with endorsements from academia, government agencies, and top pharmaceutical collaborators.
Dyadic's Dapibus protein expression platform is generating revenue in the alternative protein and bioindustrial sectors, showcasing its commercial potential.
The partnership with Proliant Health and Biologicals for recombinant serum albumin is expected to unlock opportunities in a $6 billion market, with anticipated recurring revenue starting in 2025.
Dyadic is actively expanding its presence in the alternative protein sector, with developments in recombinant products like DNASE-1 and transferrin, targeting high-growth markets.
Negative Points
Revenue for the quarter ended June 30, 2024, decreased significantly to approximately $386,000 from $837,000 a year ago, due to the winding down of large research collaborations.
Research and development expenses decreased, reflecting the winding down of activities related to the company's Phase 1 clinical trial and internal projects, indicating a potential slowdown in R&D activities.
General and administrative expenses increased, driven by higher share-based compensation, legal, and business development expenses, impacting overall profitability.
The company reported a net loss of approximately $2,045,000 for the quarter, consistent with the previous year's loss, highlighting ongoing financial challenges.
There was a delay in achieving success in the non-animal dairy enzymes project, impacting the timeline for receiving a success fee and potential revenue.
Q & A Highlights
Q: What is the size of the alpha-lactalbumin market, and who are the customers for the product? A: The alpha-lactalbumin market is approximately $700 million, including milk-derived products. The recombinant segment is smaller, around $30 million to $40 million. Customers include large dairy companies like Danone and Nestle, as well as newer precision fermentation companies.
Q: Is there a clear pathway to revenues outlined in the joint development agreement with the dairy company, similar to the albumin deal with Proliant? A: Yes, there are milestones and royalty payments associated with the development, based on the performance of the strain and hitting certain commercial targets.
Q: Can you expand on the transferrin opportunity? A: The transferrin market is high growth for recombinant products due to its high price point, with costs around $400,000 to $500,000 per kilogram. Producing it recombinantly can significantly reduce costs. Transferrin and albumin make up 95% of cell culture media costs, and 70% of transferrin used today is already recombinant.
Q: How has the C1 expression system evolved over the last five years? A: The C1 system has transitioned from industrial to biopharmaceutical applications, with significant improvements in stability and production levels. It has demonstrated safety and efficacy in human trials, opening up opportunities for vaccine antigen production.
Q: What is the relative attractiveness of the recombinant C1-produced product versus Proliant's current animal-based albumin in terms of margins? A: Proliant currently produces bovine albumin, not human albumin. The recombinant human serum albumin is a new market opportunity for them. The use case for human and bovine albumin can be similar, but cost and application needs drive the choice. The recombinant product aims to be cost-effective, but specific margin details are not disclosed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.