JUPITER, Fla., Nov. 09, 2017 (GLOBE NEWSWIRE) -- Dyadic International, Inc. (“Dyadic”) (OTCQX:DYAI), a global biotechnology company focused on further improving and applying its proprietary C1 gene expression platform to speed up the development and production of biologic vaccines and drugs at flexible commercial scales, today announced its financial results for the quarter ended September 30, 2017.
BUSINESS HIGHLIGHTS AND RECENT DEVELOPMENTS
- Cash, cash equivalents and investment grade securities, including interest receivable at September 30, 2017, was approximately $51.0 million.
- Received approximately $7.4 million of cash held in escrow in connection with the previously announced DuPont Transaction.
- Net loss for the third quarter of 2017 was approximately $(1.5) million, or $(0.05) per basic and diluted share.
- As of September 30, 2017, there were approximately 28.7 million shares outstanding and approximately 10.2 million shares held in treasury.
- On August 16, 2017, the Board of Directors authorized a new one-year stock repurchase program, under which the Company may repurchase up to $5 million of its outstanding common stock. As of November 9, 2017, the Company has purchased a total of 32,500 shares of stock at a weighted average price of $1.40 per share in open market transactions under this new stock repurchase program. The objectives of this program are the same as our prior successfully completed $15 million stock repurchase program, which are the opportunistic use of the Company’s cash and to provide liquidity for shareholders.
- On September 30, 2017, the Company concluded its formal research services agreement with Danisco US Inc., a unit of DuPont Industrial Biosciences ("Danisco"), and successfully transitioned the C1 platform research programs to our two contract research organizations.
- The Company’s R&D effort to engineer the C1 gene expression platform for biopharmaceutical application is progressing. With a new C1 base strain and molecular tool box developed, the Company now has an initial data set to begin to demonstrate C1’s potential ability to express monoclonal antibodies that are secreted, folded and bind in a similar manner as other established cell host technologies commonly used in the industry. C1 has also delivered improving yields of biologically active antibodies.
- Glycoengineering of the C1 cell line to enable production of non-immunogenic human-like glycoforms has begun. Research data achieved to date is better than expected, and it supports the Company’s belief that C1 has the potential to be used for the development and manufacturing of animal and human biopharmaceuticals. In addition to glycoengineering, the Company is continuing its research efforts with a focus on further enhancing protein stability and improving yields.
FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2017
At September 30, 2017, cash and cash equivalents were approximately $5.6 million compared to $6.9 million at December 31, 2016. The carrying value of investment grade securities, including interest receivable as of September 30, 2017, was approximately $45.5 million compared to $43.6 million at December 31, 2016.
On July 6, 2017, the Company received approximately $7.4 million of cash held in escrow in connection with the previously announced DuPont Transaction. Such amount was included in the cash and cash equivalents balance as of September 30, 2017.
The net decrease in cash and cash equivalents for the nine months ended September 30, 2017 of approximately $1.3 million principally reflects cash used in the repurchase of common stock of approximately $5.7 million, upfront payment for the previously announced BDI R&D Agreements of approximately $1.3 million, cash used in operations of approximately $4.2 million, cash used to purchase investment grade securities, net of proceeds from maturities and interest, of approximately $1.5 million, offset by cash received from escrowed funds of approximately $7.4 million, cash received from a litigation settlement, net of related costs, of approximately $3.7 million, and the favorable effect of exchange rate changes on cash of approximately $0.3 million.
Net loss for the quarter ended September 30, 2017, was approximately $(1.5) million, or $(0.05) per basic and diluted share, compared to a net loss of $(1.2) million, or $(0.03) per basic and diluted share, for the same period a year ago.
Net loss for the nine months ended September 30, 2017, including litigation settlement proceeds of approximately $4.4 million, was approximately $(0.8) million, or $(0.03) per basic and diluted share, compared to a net loss of $(1.5) million, or $(0.04) per basic and diluted share for the same period a year ago. The nine months ended September 30, 2016 included a litigation settlement of $2.1 million.
Research and development revenue for the three months ended September 30, 2017, increased to approximately $272,000 compared to $0 for the same period a year ago. Cost of revenue for the three months ended September 30, 2017, increased to approximately $221,000 compared to $0 for the same period a year ago. The increase in research and development revenue, and cost of revenue reflects the activities of the ZAPI project and two confidential biopharmaceutical collaborative research projects that began in December 2016 and June 2017, respectively.
Research and development revenue for the nine months ended September 30, 2017, increased to approximately $601,000 compared to $102,000 for the same period a year ago. Cost of revenue for the nine months ended September 30, 2017, increased to approximately $542,000 compared to $99,000 for the same period a year ago. The increase in research and development revenue, and cost of revenue reflects the activities of the ZAPI project and two confidential biopharmaceutical collaborative research projects that began in December 2016 and June 2017, respectively.
Provision for contract losses for the nine months ended September 30, 2017, increased to approximately $221,000 compared to $0 for the same period a year ago. The amount of provision for contract losses reflects the increase in the total estimated research costs due to the Company's extended involvement in the ZAPI program. There were no provision for contract losses for the three months ended September 30, 2017 and 2016.
Research and development expenses, including related party, for the three months ended September 30, 2017, increased 114.6% to approximately $792,000 compared to $369,000 for the same period a year ago. The increase principally reflects the costs of biopharmaceutical contract research initiatives, research and development costs related to the BDI R&D Agreements, and personnel related costs.
Research and development expenses, including related party, for the nine months ended September 30, 2017, increased 58.8% to approximately $1,531,000 compared to $964,000 for the same period a year ago. The increase principally reflects the costs of biopharmaceutical contract research initiatives, research and development costs related to the BDI R&D Agreements, and personnel related costs.
General and administrative expenses for the three months ended September 30, 2017, increased 20.0% to approximately $1,127,000 compared to $939,000 for the same period a year ago. The increase principally reflects professional service costs associated with BDI R&D Agreements of approximately $257,000. This increase was offset by other cost reductions of approximately $69,000.
General and administrative expenses for the nine months ended September 30, 2017, increased 42.0% to approximately $4,151,000 compared to $2,923,000 for the same period a year ago. The increase principally reflects litigation costs for trial of approximately $372,000, financial reporting and biopharmaceutical business development resource costs of approximately $376,000, professional service costs associated with BDI R&D Agreements of approximately $314,000, and new employment agreements for executives of approximately $267,000. These increases were partially offset by reductions in insurance and other costs of approximately $101,000.
Foreign currency exchange gain, for the three months ended September 30, 2017, was approximately $37,000 compared to $47,000 for the same period a year ago. The change represents the currency fluctuation of the Euro in comparison to the U.S. dollar.
Foreign currency exchange gains for the nine months ended September 30, 2017, were approximately $243,000 compared to $79,000 for the same period a year ago. The change represents the strengthening of the Euro in comparison to the U.S. dollar.
Interest income for the three months ended September 30, 2017, increased 4.8% to approximately $154,000 compared to $147,000 for the same period a year ago. The change was not material.
Interest income for the nine months ended September 30, 2017, increased 16.9% to approximately $401,000 compared to $343,000 for the same period a year ago. The increase in interest income reflects earnings on the Company's investment grade debt securities, which are classified as held-to-maturity.
REVERSE STOCK SPLIT UPDATE
On December 7, 2016, the Company received shareholders' approval for a potential reverse stock split in order to meet one of the requirements for a potential up-listing of the Company's common stock from the OTC Markets to NASDAQ. Our Board of Directors has concluded that the significant expense and distraction of an up-listing would not be in the best interest of the Company or its shareholders. Accordingly, the Company has decided not to effectuate a reverse split prior to the December 6, 2017 shareholder approved deadline. Management and the Company’s Board of Directors will continue to evaluate if such an action would be the in the best interest of the Company and its shareholders in the future.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call today, Thursday, November 9, 2017, at 5:00 p.m. to discuss the financial results for the quarter ended September 30, 2017. In order to participate in the conference call, please dial 800-839-7875 for U.S./Canada callers and +719-325-2484 for International callers, using access code 1728852.
A replay of the conference call will be available on Dyadic’s website (www.dyadic.com) within 24 hours after the live event.
About Dyadic International, Inc.
Dyadic International, Inc. is a global biotechnology company which is developing what it believes will be a potentially significant biopharmaceutical gene expression platform based on the fungus Myceliophthora thermophila, nicknamed C1. The C1 microorganism, which enables the development and large scale manufacture of low cost proteins, has the potential to be further developed into a safe and efficient expression system that may help speed up the development, lower production costs and improve the performance of biologic vaccines and drugs at flexible commercial scales. Dyadic is using the C1 technology and other technologies to conduct research, development and commercial activities for the development and manufacturing of human and animal vaccines, monoclonal antibodies, biosimilars and/or biobetters, and other therapeutic proteins. Dyadic pursues research and development collaborations, licensing arrangements and other commercial opportunities with its partners and collaborators to leverage the value and benefits of using these technologies in the development and manufacture of biopharmaceuticals. In particular, as the aging population grows in developed and undeveloped countries, Dyadic believes the C1 technology may help bring biologic drugs to market faster, in greater volumes, at lower cost, and with new properties to drug developers and manufacturers and, hopefully, improve access and cost to patients and the healthcare system, but most importantly save lives.
Please visit Dyadic’s website at www.dyadic.com for additional information, including details regarding Dyadic’s plans for its biopharmaceutical business.
Dyadic trades on the OTCQX tier of the OTC marketplace. Investors can find real-time quotes, market information and financial reports for Dyadic in the Company’s annual and quarterly reports which are filed with the OTC markets. Please visit the OTC markets website at www.otcmarkets.com/stock/DYAI/quote.
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press release 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. Investors are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements speak only as of the date of this press release 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 include, but are not limited to: (1) general economic, political and market conditions; (2) our ability to carry out and implement our biopharmaceutical research and business plans and strategic initiatives; (3) Dyadic’s ability to retain and attract employees, consultants, directors and advisors; (4) our ability to implement and successfully carry out Dyadic’s and third parties research and development efforts; (5) our ability to obtain new license and research agreements; (6) our ability to maintain our existing access to, and/or expand access to third party contract research organizations in order to carry out our research projects for ourselves and third parties; (7) competitive pressures and reliance on key third-party and related party research organizations, customers and collaborators; and (8) other factors discussed in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in our December 31, 2016, Annual Report filed with OTC Markets on March 24, 2017. 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.
Dyadic International, Inc.
Thomas L. Dubinski
Chief Financial Officer
|DYADIC INTERNATIONAL, INC. AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months Ended|
|Nine Months Ended|
|Research and Development Revenue||$||272,491||$||—||$||601,420||$||101,836|
|COSTS AND EXPENSES:|
|Cost of Revenue||220,526||—||541,848||98,822|
|Provision for Contract Losses||—||—||220,715||—|
|Research and Development||624,969||369,359||1,364,243||963,673|
|Research and Development - Related Party||167,082||—||167,082||—|
|General and Administrative||1,126,641||939,195||4,150,733||2,923,127|
|Foreign Currency Exchange Gain, Net||(37,371||)||(46,897||)||(243,484||)||(78,568||)|
|Total Costs and Expenses||2,101,847||1,261,657||6,201,137||3,907,054|
|LOSS FROM OPERATIONS||(1,829,356||)||(1,261,657||)||(5,599,717||)||(3,805,218||)|
|Settlement of Litigation, Net||—||—||4,358,223||2,100,000|
|Interest Income, Net||154,146||146,930||400,575||343,103|
|Total Other Income||154,146||146,930||4,758,798||2,443,103|
|NET LOSS BEFORE INCOME TAXES||(1,675,210||)||(1,114,727||)||(840,919||)||(1,362,115||)|
|(Benefit) Provision for Income Taxes||(160,437||)||50,694||(72,980||)||184,439|
|NET LOSS PER SHARE|
|Basic and Diluted||$||(0.05||)||$||(0.03||)||$||(0.03||)||$||(0.04||)|
|Weighted-Average Number of Shares|
|Basic and Diluted||28,709,266||36,185,164||29,007,682||37,514,315|
|Balance Sheet Information:||September 30, 2017||December 31, 2016*|
|Cash and Cash Equivalents||$||5,590,273||$||6,889,357|
|Escrowed Funds from Sale of Assets||—||7,364,859|
|Investment Securities, Short-term, Long-term and Interest Receivable||45,454,406||43,609,849|
|Prepaid Research and Development||1,162,099||—|
|*Condensed from audited financial statements|
Source:Dyadic International, Inc.