Producing Biologics with C1 Jan 4, 2017 (OTCQX: DYAI) Safe Harbor - PowerPoint PPT Presentation

Producing Biologics with C1 Jan 4, 2017 (OTCQX: DYAI)

Safe Harbor Regarding Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks, uncertainties and other factors 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. Any forward-looking statements speak only as of the date of this presentation and, except as required by law, Dyadic expressly disclaims any intent or obligation to update or revise any forward-looking statements to reflect actual results, any changes in expectations or any change in events. Factors that could cause results to differ materially are discussed in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in our September 30, 2016 Quarterly Report filed with the OTC Markets on November 10, 2016 and our December 31, 2015 Annual Report filed with OTC Markets on March 29, 2016. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. 2

C1 – the most productive fungal expression system for biologics Achieves much higher yields than traditional production systems in 1 Yield CHO, E. coli, S. cerevisiae, P. pastoris Produces batches of proteins that are significantly purer than traditional 2 Purity production methods 1 Time 3 Cuts preparation and production time in half compared to CHO Saving Grows under broader temperature & pH ranges and is easily 4 Robustness scalable compared to CHO Safety & A safe and reliable protein production platform, 5 Reliability C1-derived vaccine showed no adverse clinical effects in mice C1 can minimize CapEx investments, production costs of biologics and overcome the limitations of traditional production systems 1 including CHO, E. coli, S. cerevisiae, P. pastoris 3

Dyadic Overview Revolutionary protein expression technology “C1”: based on Myceliopthora thermophila fungus   Technology covered by over 20 patent families  Listed on the stock exchange (OTCQX: DYAI), liquidity of > 60m USD (1) Experienced management & board  20+ Years of Experience with Fungal Production Systems – 20+ Years in Pharmaceuticals – 20+ Years of Commercial Enzyme Biopharmaceuticals Production  Strategic focus since 2016  Platform optimized 2009 – 2015  Powerful molecular toolbox enables  Hyper productive strain developed with production of complex proteins  Application proven successful: unparalleled purity: >100 g/l with ~80% purity  Production approved as safe by FDA Non- Vaccines Glycosylated mAbs  Produced in up to 500,000l tanks Proteins Dyadic has demonstrated the power of C1 for the production of biologics and is now looking to establish partnerships with biopharmaceutical companies (1) As of September 30, 2016, including ~ $7.4 million of restricted cash held in escrow until July 2017 from the DuPont Transaction. 4

C1 produces more protein High productivity of C1 proven  High cell density attainable  More protein produced  Protein is secreted  Both for small and large scale production  Codon optimization established  For heterologous proteins of both bacterial and mammalian origin Simple/Non-Glycosylated Proteins Complex Proteins, e.g. mAbs < 60 60 40 40 >3 times higher yield 35 50 2 to 10 times Key higher yield 30 40 Highest yield 25 claimed 30 20 20 30 Realistic Yield in g/l 20 estimate 15 15 20 15 10 10 9 10 5 3 2 3 0 0 1 1 3 S. cerevisiae P. pastoris C1 Per.C6 CHO C1 Complex 4 Industrial/Simple Biologics Yield 2 Protein Yield Sources: 1 Boehringer Ingelheim, BioXcellence production: www.bioxcellence.com. & Shane Cox Gad (2007) Handbook of Pharmaceutical Biotechnology. Wiley Interscience, New Jersey. 2 Non-GMP conditions, non purified. 3 Susan Gotensparre (2007) Crucell. InPharmaTechnologist.com. 4 Non-GMP conditions, not purified, expected based on small scale production experience 5

C1 delivers higher purity of protein and is highly robust C1 1 st C1 White CHO 2 E. Coli 1 Generation 2 Strain 2.0 2 Purity C1 delivers  Higher levels of the target protein  Significantly higher purity pH range 1 7 14 C1 maintains high productivity Robustness 5 9  Under a wider temperature than CHO C1 CHO  Under a wider pH range than CHO 40ºC  At scales ranging from laboratory shake flasks to 45ºC 37ºC CHO 3 20,000l tanks and above - - C1 32ºC 25ºC 25ºC 1 After 2 Purification Steps, 2 No purification steps 3 Optimal range 32 - 37ºC. Source: Sellick, C. et al (2009) Optimizing CHO Cell 6 Culture Conditions. Genetic Engineering and Biotechnology News Tutorial.

C1 enables shorter production cycles in comparison to CHO Duration of Steps in Production Production time reduced 1: Biomass Expansion 2: Protein Production 3: Protein Recovery* by >14 days C1 1 2 3 *Note: Protein Recovery may be faster due to CHO 1 2 3 higher purity of C1 production 0 1 2 3 4 5 Week 1 Week 2 Week 3 Week 4  Reproduction rate of cell 2x higher than for CHO  Protein production rate at least 1.5 fold  Higher purity of protein achieved may decrease recovery time Batch Cycle time is reduced by >50% in comparison to CHO, freeing up capacity 7

C1’s unique morphology enables non-viscous fungal production Low Viscosity, High Yield 500 100 400 80 Viscosity (cP) Protein (g/l) Filamentous fungi face challenges 300 60 for their use in production due to 200 40 high viscosity 100 20 Protein Yield Viscosity Standard Fungal Line C1 The low viscosity allows C1 to be used in established microbial production facilities , requiring no additional CapEx investment C1 exhibits a unique morphology resulting in low viscosity * 8

C1 enables 50 - 85% reduction in manufacturing costs Cost Efficiency of C1 vs. CHO CapEx Investment of C1 vs. CHO (Exemplary ~20kg mAb Production 1 ) (Exemplary large scale mAb Production 4 ) 15 500 Output 12 CapEx reduced by g/1000 US $ ~tripled 400 Million US $ 80% 10 300 200 4 5 100 0 0 CHO C1 CHO C1 Column1 Four 10,000l Three 2,000l OpEx upstream savings tanks tanks  Decrease direct labor cost by >80%  Decrease indirect labor cost by >80%  Decrease consumables cost by >90% Additional benefits  Decrease capital charge by 60-70% 2  Lower CapEx Investment  Same extraction and purification costs 3  Smaller production facilities faster to build  Expected OpEx savings of 60 - 85% vis-à-vis CHO  Possibility of decreasing CapEx investments by 80 % 1 Depreciation cost of facility over 10 years included, savings increase with increased production need 2 Depending on production requirements, investment into 10,000 l tanks can be reduced to 1 – 2,000l tanks, 3 Cost savings likely higher due to higher purity of proteins from C1 9 4 Based on production needs of ~800kg,

C1 is easy to engineer to achieved desired protein profile 1 Dyadic has experience with each of the molecular tools necessary to optimize the strain for high productivity and functionality for the targeted protein class Man9 G0 G2F Computational biology Genetic manipulation Pr Carrier Gene 1 Libraries of TF Glycoengineering to Changing the Libraries of Libraries of and signal form mammalian-like cellular efficient strong protease peptides and / or glycan structures in regulatory circuit promoters deletion strains progress carrier proteins ✔ ✔ ✔ ✔ ✔ 10 1. First proof of concept studies have been successful for these tools in Trichoderma.

Trichoderma Reesi Fungal System Production yields with different target proteins by Trichoderma reesei  Antibodies produced in Δ7 strain, IFN in Δ9 strain, and IGF1 in Δ13 deletion strain as fusion with CBHI carrier  However, this is far from the maximal theoretical output of 29 g/L for MAb01 based upon carrier expression level Trichoderma Source: PEGS Boston, 2016: (Next - Generation Biotherapeutic Production System: The Filamentous Fungus Trichoderma Reesi) 11

Trichoderma Reesi Fungal System (Cont.) IgG production by Trichoderma reesei (TR)  Protease deletion strains together with fermentation optimization work improved the IgG Antibody production levels up to 7.1 g/l   The secretion carrier CBHI is produced in the fermentations at levels up to 38 g/l . This theoretically equates to potential antibody expression levels of approximately 29 g/l 70 70 TR - Total Protein TR - Total Protein 60 58 CBHI 60 60 58 56 56 60 56 56 CBHI 52 52 TR - Theoretical MAB01 49 50 TR - MAB01 49 50 TR - MAB01 41 41 TR - Theoretical MAB01 38.5 Protein (g/L) 38.5 Protein (g/L) 40 40 36.3 35.4 36.3 35.4 34 34 33.3 33.3 31.4 31.4 32 32 29.2 29.2 28 28 26.9 30 30 26.9 27.6 27.6 25.3 25.3 24.3 24.3 23.9 23.9 22.4 22.4 18 18 20 20 17 17 13.1 13.1 10 6.9 7.1 10 6 6.7 6.7 7.1 6.2 6 5.8 6.9 6.2 6.7 6.7 5.8 4.7 5.9 5.9 4.7 0 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Day in culture Day in culture Trichoderma Source: PEGS Boston, 2016: (Next - Generation Biotherapeutic Production System: The Filamentous Fungus Trichoderma Reesi) 12