Dyadic International, Inc.

Good evening and welcome to Dyadic International's second quarter 2023 financial results conference call. Currently, all participants are in a listen-only mode. Following management's prepared remarks, there will be a brief question and answer session. As a reminder, this conference call is being recorded today, August 9, 2023. I would now like to turn the call over to Ms. Ping Rawson, Dyadic's Chief Financial Officer. Please go ahead.

Thank you. Good evening and welcome everyone to Dyadic International's second quarter 2023 conference call. I hope you have had the opportunity to review Dyadic's press release announcing financial results for the quarter ended June 30th, 2023 and the recent company highlights. You may access our release in the form 10Q under the investors section of the company's website at dyadic.com. On today's call, Our president and CEO, Mark Emelfarb, will give a review of our second quarter business and corporate highlights, including a summary of our recent research and business development efforts. Our chief business officer, Joe Hazleton, will join Mark for the business update. I will follow with a review of our financial results in more detail. We'll then hold a brief Q&A session. At this time, I would like to inform you that certain commentary made in this conference call may be considered forward-looking statements, which involve risks and uncertainties and other factors that could cause DADIC's actual results, performance, scientific or otherwise, or achievements to be materially different from those expressed or implied by these forward-looking statements. DADIC expressly disclaims any duty to provide updates to its forward-looking statements. whether because of new information, future events, or otherwise. Participants are directed to the risk factors set forth in DIATIC's reports filed with the SEC. It is now my pleasure to pass the call to our CEO, Mark Imhoff. Mark?

Thank you, Ping. Hello, everyone, and thank you for joining DIATIC's second quarter 2023 conference call. We've continued the momentum seen in the first quarter of 2023 as our C1 technology continues to garner praise and recognition for its speed and efficiency in the U.S. and internationally for academia, industry, and government agencies. In addition, our DAPABIS platform has gained significant traction in both the alternative protein and bioindustrial markets. We're delivering multiple new research collaborations and strong revenue growth of 38.5% year-over-year for the first six months of this year. On today's call, Joe and I will highlight the significant technological advances and recent business development successes we have and continue to achieve across each of our core markets. We're excited about our current and future prospects for growth in our revenues while continuing the ongoing long-term collaborations with Janssen, Fivroevic, Rubic, and others. The continued positive data from our first in-human phase one study and our recently announced advancements in our internal serum albumin projects have accelerated the opportunities to enter into additional collaborations and partnerships like the recently announced two memorandum of understandings with the Italian governments, Fondazione Biotecnopolo di Siena which performs the functions of an anti-pandemic hub with a particular focus on the development and production of vaccines and monoclonal antibodies for the treatment of emerging epidemic pandemic pathologies and also Bangladesh's Essential Drugs Company Limited, EDCL, the state-owned pharmaceutical company under the Ministry of Health and Family Welfare of Bangladesh to facilitate biopharmaceutical research, preclinical development, CGMP production, and clinical development for the prevention and control of diseases and improvement of public health programs in Bangladesh. We believe we are at or near the precipice of applying both of our microbial protein production platforms, C1 and epibus, to develop antigens, antibodies, enzymes, and other proteins across each of our core verticals. that we believe will lead to monetization that will significantly increase shareholder value for Dyadic and our collaborators. What makes the C1 filament and fungal protein production platform unique versus traditional cell lines currently used to manufacture vaccines and biologic drugs is the ability to produce safe and effective therapies in unparalleled quantities with the speed and cost required for pandemic and global healthcare needs. We've repeatedly shown that the C1 platform is up to 300 times more productive than baculovirus insect cells, which are being used in both human and animal health to produce vaccines. And C1 also is significantly shorter fermentation times and no viruses that need to be removed in downstream processing versus either the baculovirus or Chinese hamster ovary CHO cells, enabling the production and release of recombinant vaccines more rapidly in greater quantities and at lower costs than traditional cell lines currently being used today. These characteristics coupled with the data from our first in human study of a C1 produced antigen has led to the increased awareness and interest in our C1 protein production platform for recombinant protein vaccine development and production in human and animal health. Earlier this quarter we provided an update on the first in human phase one trial for DYA100, a recombinant protein RBD COVID-19 booster vaccine candidate. The data from this trial is helping to establish a safety record with regulatory agencies for proteins produced from our C1 protein production platform. We're continuing to expand the traction of the C1 platform and receiving through multiple grant applications submitted in collaboration with U.S. and other scientists globally for a wide variety of infectious disease candidates such as seasonal and pandemic influenza, H5N1 bird flu, Sudan Ebola virus, Marburg virus, RVFV, West Nile virus, Powassan, as well as second generation COVID-19 vaccine candidates. To ensure C1 can produce therapeutic proteins such as infectious disease monoclonal antibodies with the appropriate quality, we've expressed a number of third-party monoclonal antibodies, or MABs, which were assayed by multiple independent external parties, from big pharma to biotech to academia. A report of the neutralizing and binding activity assays demonstrated great similarity between C1-produced MABs and CHO-produced MABs. The next step was evaluating these proteins in animal studies, where we observed that a C1-produced Monoclonal antibody for COVID-19 demonstrated comparability to the comparator show produced monoclonal antibody, but no signs of antibody mediated enhancement in a non-human primate study. In June, 2023, a manuscript was submitted to a peer reviewed scientific journal titled Filamentous Fungus Produced Human Monoclonal Antibody Provides SARS-CoV-2 Protection in hamster and non-human primate models. This was done in collaboration with Dr. Albert Osterhaus and several other authors. The manuscript describes the safety and efficacy results with the C1 cell-produced monoclonal antibody obtained from studies in hamsters and non-human primates. This data is critical for our potential partners as they select cell lines to produce their commercial targets to ensure that their products have the quality standards and safety profile required for clinical and regulatory development. DADC must stay at the forefront of scientific advancement. We also have been focusing on designing better performing molecules. We've developed C1 cells to express complex proteins, such as conjugating antigens and ferritin nanoparticles. The interest in ferritin-based vaccines have been increasing due to their safety and ability to enhance immunogenicity. Nanoparticle candidates against a wide range of pathogens are now in clinical trials in diseases such as influenza, Epstein-Barr, and SARS-CoV-2. Manufacturing challenges related to particle heterogeneity, improper folding of fused antigens, productivity and cost still need to be overcome. And we feel that the C1 platform is uniquely positioned to address some of these challenges. We are also developing other technologies to increase vaccine efficacy and durability to improve targeting methods and new, more powerful adjuvants. We developed and are testing several antigens with the AMHC targeting system for influenza and COVID-19, as well as an antigen that included a trimorization domain. With our partner, Verovax, we are evaluating new and improved adjuvants with C1-produced ferritin nanoparticle antigens in relevant disease areas, such as COVID-19, pandemic influenza, as well as encephalitis and meningitis in animal trials. These advancements enable dietics partners with the potential to develop more effective and longer lasting vaccines across a wide range of infectious and other diseases. They have the potential to be manufactured using C1 cells rapidly in larger quantities more affordably. We've continued our focus on building and sustaining longer-term strategic partnerships with leading pharmaceutical companies and partners such as Janssen Pharmaceuticals, which continues to show positive results, as well as advancing commercial products and clinical development of human and animal health vaccines with Rubik One Health for the African continent and the recent production of Seawood-expressed Omicron antigens under CGMP guidelines for potential COVID-19 vaccine with Epigen in India. Furthermore, in today's press release, we announced we signed a Memorandum of Understanding with the Foundation Biotechnology Siena, or FBS. FBS's function is to perform as an anti-pandemic hub with a particular focus on the development and production of vaccines and monoclonal antibodies for the treatment of emerging epidemic pandemic pathologies. Scientific development at FBS is led by one of the world's foremost leading experts in vaccine development, Dr. Rino Rappioli. Dr. Rappioli is known globally for his work in vaccines and immunology. Prior to his role at FBS, Dr. Rappioli was a global head of vaccines research for Novartis vaccines and diagnostics, and most recently served as a chief scientist and head of external R&D at the Vaccines Division of GlaxoSmithKline, GSK. FBS is prepared and equipped to conduct research and development, clinical study, regulatory approval, manufacturing and commercialization of vaccines and therapeutic proteins using the company's C1 protein production platform. Discussions are also ongoing with several parties interested in the potential of C1 for additional developed and developing countries. Our refined human health objectives include a focus on shorter-term product commercialization opportunities that have less time, cost, and risk associated with development. We're continuing to improve our capability to have an internal pipeline of proteins and enzymes with commercial proteins and potential across our core verticals, whose utilization is not dependent on lengthy clinical development programs or human trials. This is expected to decrease our timeline to revenue, potential, and commercialization opportunities. Earlier this week, we provided an update on one of these internal projects, namely the recombinant serum albumin. The global serum albumin market is an approximate $5.7 billion market, growing at over 6% a year due to the increased use across a multitude of markets in human and animal health. In the pharmaceutical segment, serum albumin is not only being developed as a potential treatment for disease, but it's currently used in product development of vaccines as a diagnostic tool and a common reagent in R&D. There are many different grades of albumin and price points across these and other markets. Dyadic has the potential to produce animal-free serum albumin at competitive pricing due to our highly productive C1 and dapabis microbial platforms. using low-cost media. In addition to the clinical data being generated, we are protecting our technology with a robust IP estate. Earlier this year, Dyadic received a notice of allowance from the US Patent and Trademark Office for a patent application whose claims cover the development and manufacture of seasonal and pandemic vaccines from the company's C1 protein production platform. This timely patent allowance comes As we announced earlier this year, the diet is at the forefront of vaccine development with more than a half dozen animal trials being carried out last year and additional animal trials which are ongoing or scheduled with C1 produced antigens for influenza, for example, H5N1 bird flu and other infectious diseases. There's a global unmet need for more effective and more available flu vaccines. It has been reported that the human Seasonal influenza vaccine market alone is currently valued at approximately 8 billion U.S. dollars and expected to grow to over 12 billion by 2028 with multivalent vaccines leading the market. There are many similarities in the needs between the human and animal health market for vaccines and therapeutic proteins, and we are leveraging our science across these core verticals. What makes animal health an attractive segment for dyadic is the margin sensitivity of this market and the significant impact and the outbreak can have on the global supply chain and potentially human health. The recognition, data, and scientific advancements we are generating have not only accelerated our efforts in human health, they're translating into increased interest in our other core verticals, such as animal health, as demonstrated in today's announcement that we've expanded our collaboration with FibroAbrac and started another collaboration with a new animal health partner on a fully funded project targeting a livestock antigen to be produced in a C1 platform. This is why we believe the C1 production platform can be a global solution to emerging infectious disease threats and pandemic response, and not just humans, but also in animal health. As we mentioned late last year, we announced that we'd achieved a record antigen production level of 10 grams per liter of a livestock antigen, demonstrating that our platforms can produce very large quantities of antigens for infectious disease. In addition to the production of large quantities of antigens, antibodies, and therapeutic proteins, these products can also be made rapidly and at low cost, making C1 a potential pandemic preparedness platform for response or stockpiling. Our third vertical of alternative proteins is yet another area of great excitement for Dyadic and one which we believe also holds near-term potential promise in terms of opportunity and revenue. Exploiting this segment does not require a significant departure from our human and animal health pursuits in terms of technical capability or resource requirements. Dyadic is continuing to dedicate resources and support for the existing and future projects. within this rapidly growing market. Dyatik has launched its Dapavis platform, a filamentous fungal-based microbial gene expression and protein production platform. Dapavis is further designed and customized to enable the rapid development and large-scale manufacture of low-cost enzymes, proteins, metabolites, and other biologic products for use in non-pharmaceutical applications. such as food, nutrition, health, and wellness. One area of focus within this segment is the dairy protein and enzyme market. We announced today initial positive analytical results for the successful expression of casein proteins using the APOBIS, our non-pharmaceutical protein production platform. Growing global demand for protein-enriched foods is expected to drive casein market growth while the use of casein for industrial applications such as plastics, chemicals, and synthetic fibers in driving market expansion. This further demonstrates our commitment to developing commercial opportunities that transect more than one core vertical. I will now turn the call over to our Chief Business Officer, Joe Hazelton, to provide a more detailed update on our Phase I trial progress and discuss our business development efforts across our core verticals. Joe?