Dyadic International, Inc.

Good evening, ladies and gentlemen, and thank you for holding. Welcome to Dyadic International's first quarter 2020 financial results conference call. Currently, all participants are in a listen-only mode. My name is Hector, and I will be your conference coordinator today. As a reminder, please note that this call is being recorded. At this point, I would like to turn the call over to Ping Rawson, Dyadic's chief financial officer. Please go ahead.

Thank you, Hector. Good evening, everyone, and welcome to our first quarter 2020 earnings call. A press release with Dyadic International's first quarter 2020 financial results was issued earlier today. The press release on Form 8K and Dyadic's quarterly report on Form 10Q have been posted to the WebCC and Dyadic's website. On today's call, our President and CEO, Mark Emalfarb, will give a review of the business and corporate accomplishments for our first quarter of 2020, including a brief summary of our research and business development efforts. I will follow with a review of our financial results in more detail. We'll then provide you with an opportunity to ask questions. Matthew Jones and Ronan Shalate will join Mark and I to answer your questions. At this time, I'd like to inform you that certain commentary made in this conference call may be considered forward-looking statements, which involves risks and uncertainties and other factors that could cause dietics actual results, performance, scientific or otherwise, or achievements to be materially different from those expressed or implied by these forward-looking statements. The Addict expressly disclaims any intent or obligation to update any forward-looking statements, except as required by law. For more information about factors that may cause actual results to be materially different from forward-looking statements, please refer to the Repressed Lease we issued today, as well as risks described in our Annual Report on Form 10-K for the year ended December 31, 2019. and our quarterly report on Form 10-Q for the quarter ended March 31, 2020, particularly in the section titled Risk Vectors. This information can be found in our other filings with the SEC when available. With that, I'd like to turn the call over to Mark. Mark?

Thank you, Ping. Welcome, everyone, and thank you for joining us in our 2020 first quarter conference call. I hope that everyone is staying safe and healthy during this challenging time amid the COVID-19 pandemic. We've taken all necessary steps to ensure the safety of our staff, and for the most part, they are all telecommuting. And please report that COVID-19 has not had a significant impact on our company. In fact, to date, the pandemic has provided us with additional opportunities. Tonight, I'll focus my comments on several areas. I will discuss the progress we are making regarding our ongoing partnerships, as well as some new collaborations and other potential collaborations. I will also discuss several notable scientific achievements during the quarter. Finally, I will update you on our initiatives related to the seasonal flu. All of our efforts are increasingly aligned with global healthcare trends and industry challenges being faced. During the quarter, we increased potential range of Commercial Opportunities for Dyadic in several areas. In late February, we announced an expansion of our collaboration with the Israel Institute for Biological Research, IIBR, to support their efforts to combat the coronavirus. We have already received certain gene sequences from the IIBR and have successfully constructed C1 cell lines expressing potential SARS-CoV-2 vaccine candidates. Assuming the IIBR determines one of the C1 expressed SARS-CoV-2 antigens effectively elicit COVID-19 neutralizing antibodies, we anticipate the IIBR will quickly start animal trials. A second COVID-19 vaccine opportunity is being pursued in collaboration with scientists from Erasmus Medical Center, Utrecht University, and the University of Veterinary Medicine, Hanover-Tehoe, with whom Dyadic previously worked with on the EU ZAPI project. I'm happy to share with you that we've developed a potential COVID-19 vaccine candidate, which based on preliminary results, has demonstrated successful engineering of C1 to express high levels of a potential SARS-CoV-2 vaccine candidate. This consortium has submitted proposals for funding to pharmaceutical organizations and government agencies. Dyadic is a co-lead of this program and is working with the group to develop a COVID-19 vaccine candidate which we can express at high levels of stable protein in C1. The group is now working to determine productivity, but preliminary results due in late May. We also initiated collaboration with UfaVax, a Scripps research spin-out. who has provided Dyatic with certain gene sequences, including potential SARS-CoV-2 and HIV vaccine candidates. To begin protein expression from C1, UFOvax in conjunction with Dyatic has also submitted proposals for funding SARS-CoV-2 program to pharmaceutical organizations and governmental agencies. On the animal health side, we are actively working with three of the top four global animal health companies by revenue in the discussions and several others. Recently, the company announced that it expanded a third collaboration with one of these three and final work proposal is being expanded and reviewed right now as well. In addition, the first two projects have been expanded with additional funding and have entered the second phase of development. One of these collaborators has expanded our initial agreement to enter into second phase of our first two projects in addition to signing on for third. Animal health for both companion animals and farm animals is a large and growing addressable market. We are gaining increasing traction here. On the human health side, we currently have active programs with two top 10 human pharmaceutical companies and are in various stages of discussions with other top 10 and top 25 pharmaceutical and biotech companies and anticipating signing one or more of these collaborations in the second or third quarter. We entered into a non-exclusive research collaboration with Wuxi Biologics, one of the global top 10 CDMOs, which provide development and manufacturing services to pharmaceutical and biotechnology companies globally. While these types of agreements don't generate immediate revenue, there are several potential benefits to Dyadic. We are aligned with a globally recognized industry leader with significant presence in China, Singapore, Europe, and the U.S., which provides development and manufacturing services to leading pharma and biotech companies. Wuxi will invest its own resources to evaluate our C1 technology for research for their customers. Ultimately, we see this as an intermediate step to potentially larger license deals or other collaborative revenue. Wuxi as a CGMP manufacturer is an important conduit as they can manufacture biologic vaccines and drugs potentially produced with C1 for the biotech and pharmaceutical companies. In 2019, we signed a research and commercialization collaboration with the Serum Institute of India, one of the largest global vaccine producers. To date, we have received more than half of the 12 proteins under the Serum Agreement. And based on our initial success to date, We are moving into a second phase with them for six proteins. Regarding our collaboration with Sanofi Aventis, we have completed a feasibility study in which we demonstrated we could express all seven of the therapeutic and vaccine proteins with more than half at or exceeding the production levels initially set by Sanofi. We've been speaking with them on a regular basis, discussing the breadth and scope of what we've produced, including blinded data showing antibodies and vaccines produced in other studies that are awaiting their decision. The substantial progress we are making is further reinforced by the several notable scientific accomplishments during the first quarter. Specifically, we've accelerated our self-funded glycoengineering initiatives with excellent success, developing a diverse library of C1 strains that impart human-like glycosylation with greater purity and stability. In February, we presented data at the 15th European Conference on Fungal Genetics, where we highlighted a reduction in the extracellular protease background by 50 times in C1. Importantly, these results demonstrate that we've made the C1 cell line more efficient and stable, leading to higher expression levels at lower cost. We continue to refine these strains, making them more robust, glycan homogeneous, and stable. and are working closely with our collaborators to pick the best strains to match their objectives. For dyadic, making a stable protein is a one-step process compared to choke. As a result, we have a shorter cell line development time. Through this research, we can produce more specific and more refined classes and types of stable proteins faster and for less cost. As a result of these scientific advances, we are receiving increased levels of interest from the pharmaceutical industry. We recently entered into a new feasibility study with a highly regarded group of flu experts at the University of Oslo regarding an influenza vaccine. The company has begun expression of a targeted influenza virus antigen protein provided by Oslo University. The annual season flu affects millions of people globally each year and causes hundreds of thousands of deaths. A flu vaccination is either not accessible or affordable in many other parts of the world. Our efforts in this area further support our vision of creating more efficient and commercially cost-effective healthcare solutions for society globally. As you may recall, we worked with Sanofi Pasteur in the past on seasonal flu programs with excellent results. Sanofi's data essentially showed that the C1 Express HA New Caledonia was tested in mice trials was safe and was at least as immunogenic as the baculovirus recombinant HA. In fact, the limited data from the Sanofi mice study leads us to believe C1 has the potential to produce far greater quantities of lower cost, potentially more effective seasonal flu vaccines. This thesis is further supported from the animal trial data reported by ZAPI. related to the SPV antigen produced from C1, which also showed excellent safety and efficacy in mice and cattle. As previously reported, the SPV antigen produced from C1 was more stable and was produced at 17 times initial target level set by Zafi and significantly higher levels than the SPV antigen produced from baculovirus. We believe that these two data points along with the expression data we are seeing in our COVID-19 programs and other vaccine research programs with ZAPI and from our third-party animal health collaborations that it is possible C1 may be a help to address certain shortcomings in seasonal flu and other vaccine production. In regards to metabolites, we completed a funded first-phase research project which was funded by a third party where we developed the C1 strains and produced a certain and David Lowe. We are currently in discussions about the next phase of this project, which would include strain optimization and a manufacturing agreement to determine if the C1 strain could match the productivity and be cost-effective versus chemical synthesized products now on the market. Additionally, we continue to self-fund the secondary metabolite project and are exploring the market opportunity for certain secondary metabolite products that may be produced from C1 for a variety of applications. Underpinning all these achievements is a highly opportunistic and disciplined approach to our business development efforts in further building our pipeline. With our approach, dyadic shareholders are getting many shots on goal in a cost efficient manner with partners who are well established, top tier, and have a global presence. With that, I will now turn the call over to Ping for a financial review.