Dyadic has powerful COVID-19 initiatives, six new research alliances and strong cash position in 3Q

Dyadic International Inc (NASDAQ:DYAI) reported third-quarter results after the bell Thursday that revealed R&D revenue as well as cash on hand, thanks to a series of coronavirus (COVID-19) initiatives and six new and expanded research collaborations.  On September 30, 2020, Dyadic had cash and equivalents of $21.9 million, compared to $4.8 million at the end of December 2019. The carrying value of short-term and long-term investment-grade securities, including accrued interest on September 30, 2020, was around $8.7 million.  The Jupiter, Florida-based company’s R&D revenue for the quarter totaled $416,000 from eight ongoing research collaborations, compared to five collaborations a year ago. READ: Dyadic makes swift progress as its C1 protein manufacturing platform is used for COVID-19 initiatives "We continued to advance our proprietary C1 gene expression platform into a safe and efficient expression system, with improved properties and impressive scientific results," said Dyadic CEO Mark Emalfarb. "Our business development pipeline continues to grow with additional interest from both new and previously engaged collaborators, which we believe will accelerate the adoption of our C1 gene expression platform toward the goal of commercialization. In addition to our COVID-19 initiatives, we signed six new and expanded collaborations with human and animal health companies,” he added. Dyadic expanded its presence in the Asia Pacific region by inking a research collaboration agreement with Jiangsu Hengrui Medicine, the largest pharma company in China by market capitalization. It also has a non-exclusive, research collaboration with WuXi Biologics. In the COVID-19 sphere, the company is working with nine groups, including the Israel Institute for Biological Research (IIBR), the European ZAPI scientists, and scientists from Oxford University. “We anticipate that up to 10 animal trials will be completed by, or shortly after, year-end. This is in addition to the Frederick National Laboratory project that we announced in June, which is ongoing and showing encouraging expression data,” said Emalfarb. He pointed out that additional animal data generated would help the firm evaluate the best path forward towards a potential clinical trial in humans. "The results from our animal health programs have been very promising and ZAPI continues to work on antigens for both the Schmallenberg (SBV) and Rift Valley Fever (RVFV) viruses,” said Emalfarb. “On the human health side, we signed four new and expanded collaborations with global pharmaceutical companies during the quarter. In some of these cases, we have moved beyond the proof-of-concept stage and our collaborators have identified specific proteins for which they believe our C1 technology could be very beneficial to their efforts." The Dyadic boss said the company is “successfully” advancing its strategy through fully-funded collaborations with pharma companies complemented by its solid $30.5 million cash position. The firm’s net loss for the quarter was around $2.5 million, or $0.09 per share, compared to $1,7 million, or $0.06 per share for the same period in 2019. In the nine months of 2020, the company’s net loss was $7.8 million. Meanwhile, Nobel Capital reiterated an Outperform rating and $11 price target on Dyadic post-earnings. The research firm looked forward to preclinical data expected near the end of the year and updates in 2021. “We won’t get clinical data from any program until 2022. The management reiterated their preference to partner assets moving into the clinic. We expect further updates sometime in 2021,” said Noble Capital analyst Ahu Demir. “With a strong cash position and pipeline optionality that arguably doesn’t get much credit, we maintain our Outperform rating and $11 price target.” Demir noted that Dyadic had maintained “a strong cash position” of $30 million at the end of the third quarter and “low cash burn, which remains a bright spot for investors.” Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive