DYADIC MANAGEMENT PRESENTATION August 2016 (OTCQX: DYAI)
Safe Harbor Statement Certain statements contained in this presentation are forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause Dyadic’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by law, Dyadic expressly disclaims any intent or obligation to update any forward-looking statements. 2
Strategic Opportunity The Company Dyadic (OTC: DYAI) is a global biotechnology company producing enzymes and proteins using a proprietary expression system based on the Myceliopthora thermophila fungus (“C1”) Commercial use of the C1 platform technology in industrial biotechnology culminated in DuPont’s acquisition of Dyadic’s Industrial Biotech business (12/31/2015) for $75 million Market capitalization: $50.9 million (1) Net cash: $62.6 million (2) No debt – Leadership team with a successful track record The Technology The C1 platform technology is a hyper-productive fungal expression system used to develop & manufacture large quantities of desired proteins at industrial scale more affordably The C1 platform technology is proven and has been applied in the industrials sector by multiple market leaders: DuPont – BASF – Abengoa – Codexis/Shell – Active biopharmaceutical partnerships with Sanofi Pasteur and ZAPI Excellent safety profile Dyadic retains exclusive sub-license rights to the C1 platform technology in biopharmaceutical indications The Opportunity Potential to remove a critical bottleneck in protein development and manufacturing processes Allows for rapid scaling – Significantly lower CapEx and OpEx – Potential to improve therapeutic vaccine and drug performance Dyadic is seeking partnerships to sub-license, or partner its C1 platform technology in the vaccine, antibody and biosimilar industries (1) As of August 11, 2016. Share count represents 36.1 million common shares outstanding. (2) As of June 30, 2016. Reflects $0 debt balance. (i) includes investment grade bonds, but (ii) excludes ~$7.4 million held in escrow from DuPont Transaction with expected release in July 2017 3
Dyadic Target Markets The C1 platform technology has the potential speed the development, decrease the CapEx & OpEx, improve therapeutic vaccine and drug performance, and lower the cost of manufacturing biologic vaccines and drugs Recombinant Vaccines Biosimilars / Global vaccine market Global insulin market to to be $100B by 2025 (1) be $42B by 2019 (2) (Human and Biobetters (non-Gly) Veterinary) Global biological drug Biosimilars / Biosimilar market to be market to be $287B by Novel Biologic $26B by 2020 (4) Biobetters (Gly) 2020 (3) Products (1) World Health Organization. (2) Human Insulin Market - Drugs Type, Brands, Delivery Devices, Applications - Forecasts to 2020. (3) Global Market Study on Biological Drugs: North America to Witness Highest Growth By 2020. (4) World Biosimilars Market (follow-on-biologics) Opportunities, and Forecast, 2014-2020. 4
C1 Platform Technology - Commercially Proven C1 platform technology used by industry giants in areas such as ethanol and industrial enzyme production and vaccine development Acquired by Note: Refer to pages 37 and 38 for additional details on commercial applications of C1. 5
Vaccine Applications 6
The Vaccines Market Opportunity Global Vaccine Market The vaccine market has increased from $5B in 2000 to $120 almost $32B in 2014 $100B $100 Influenza vaccine market: estimated to grow from $2.9B – $80 in 2011 to $3.8B by 2018 Need for better patient immunization and lower cost – $60 US: $1.6B in 2011 to $2.2B in 2018 – $32B $40 Global market projected to rise to $100B by 2025 $20 There are more than 120 new products in the $0 development pipeline 2014 2025 60 products are of importance for developing countries U.S. Vaccine Market Vaccines are becoming an engine for both the human – $3.0 and animal pharmaceutical industry Changing status of vaccines within the pharmaceutical $2.5 – $2.2B industry $2.0 $1.6B $1.5 $1.0 $0.5 $0.0 2011 2018 Source: World Health Organization. 7
Winding Up Of Sanofi Vaccine Collaboration R&D collaboration terminated by Sanofi, expected to end October 5, 2016 Sanofi Pasteur is one of the largest vaccine companies in the world Entered into a Proof of Concept, Exclusive Option & Technology Transfer Agreement (March, 2011) to evaluate Dyadic’s C1 technology to speed up the development & production of vaccines at a lower cost. Research conducted on and off over 5 ½ years, partially funded by Sanofi – Project Results Successfully demonstrated that the C1 technology is capable of producing vaccines at high levels, with the – potential to improve therapeutic vaccine performance. Initial C1 produced antigen showed an equal or better immune response in mice trials than the existing antigen – Expected Project Benefits We believe that the experience and knowledge obtained from the research is invaluable and expect it will – generate a greater interest in the C1 technology for developing and manufacturing biologic vaccines Sanofi’s prior option rights to the C1 technology previously covered by the Agreement revert back to Dyadic. Upon such reversion, Dyadic expects to leverage the knowledge gained, and the progress made from the meaningful improvements to the C1 expression system across all biologic vaccine and drug indications. 8
ZAPI – New €22 Million Vaccine R&D Program Program sponsored by the EU to develop a platform suitable for the rapid development and production of vaccines and protocols to fast-track registration of developed products to combat epidemic zoonotic diseases that have the potential to effect the human population Dyadic Nederland’s, B.V. is using C1 to express vaccines and neutralizing agents which if such research is successful we anticipate the C1 platform technology may be chosen as a preferred platform within the ZAPI research project Two of the objectives we hope to attain through the ZAPI funded research project are as follows: – Additional examples of vaccines and neutralizing reagents against emerging pathogens expressed from C1 • C1 produced proteins regulatory pathway identified, and carried out at least in part, through collaborative • partnerships between human and veterinary medical institutions, governmental regulatory agencies, expert academic groups and industrial partners ZAPI is a multi year project which full results may not be known for 3-4 years 9
Additional Proof of Concept: Animal & Human Vaccines Leveraging the knowledge gained, and the progress made from the meaningful • improvements to the C1 expression system from the Sanofi collaboration across a variety of biologic vaccine indications. Further demonstrate high level productivity, with the potential to improve therapeutic • vaccine performance for both animal & human vaccines. In discussions with leading Animal Health companies interested in evaluating C1 • Seek additional funding from industry and government • Potentially initiate internally funded research & development programs • Initiated small animal vaccine research program – 10
Biologics Applications 11
Biologics Market Summary Biologics are the fastest growing drug segment Global pharmaceutical sales (US$ billion, list price, ex. rebates and discounts) In 2014, biologics accounted for 21% of total global 930 spending on medicines 21% Biologic spending are expected to grow at 10.1% – CAGR until 2020 to $287B 8% 519 The global biosimilar market is growing due to the 13% 79% need for lower cost biologics $1.9B market in 2014 is expected to reach $25.5B by – 87% 2020, growing at an impressive CAGR of 54.4% Increasingly greater drug pricing pressures along with – competition for biosimilars is expected to reduce drug 2004 2014 pricing by 45% or more New technologies like C1 provide the pharmaceutical industry with a way to insure patient access and affordability to biologic drugs while helping the industry maintain profitability C1 has the potential to: Lower the costs of biologics – Help bring new and improved biologics to market – Help to overcome protein expression challenges of potential biologics stuck in R&D – Expect to begin research project with a big pharma company, beginning Q4 to express antibodies In various stages of discussions with other biotech & pharma companies Source: Global Biosimilar Market Outlook 2020. 12
Case Study: Generic Humira Dyadic produced biologically-active monoclonal antibodies in C1 Expression was achieved of both heavy and light chains Heterodimeric antibody molecules were formed efficiently, allowing simple purification of the protein from the culture fluid using Protein A Cell-based bio-assays performed revealed almost complete bioactivity Production levels of 2 g/L reached after 4 days in fermenter Heavy chain Light chain Source: Peter Punt, TNO. 13
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