Dyadic International, Inc.

Hello, everyone. This is the conference operator. Today's conference call will begin in just a few moments. We ask that you please stand by. And once again, today's call will begin shortly. Thank you. Thank you. We'll be right back. Thank you. The call will begin in just a few moments. We ask that you please stay on the line. Once again, today's call will begin in just a few moments. Thank you for your patience. Thank you. Thank you. Thank you. Good evening and welcome to the Dyadic International's third 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, November 8th, 2023. I would now like to turn the call over to Ms. Peng Roshan, Dyadic's Chief Financial Officer. Please go ahead.

Thank you. Good evening and welcome everyone to Dyadic International's third quarter 2023 conference call. I hope you have had the opportunity to review Dyadic's press release announcing financial results for the quarter ended September 30th, 2023. and the recent company highlights. You may access our release and Form 10-Q 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 third quarter business and corporate highlights, including a summary of our recent research and development efforts. Our Chief Business Officer, Joe Hazleton, will join Mark for the business updates. I will follow with a review of our financial results in more detail. We'll then hold a brief question and answer session. At this time, I would like to inform you that certain commentary made on this conference call may be considered forward-looking statements, which involves risks and uncertainties and other factors that could cause DIADx's actual results, performance, scientific or otherwise, or achievements to be materially different from those expressed or implied by these forward-looking statements. DIADC 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 DIADC's risk report 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 third quarter 2023 conference call. We've accelerated the momentum seen in the first half of 2023 as our C1 technology continues to garner praise and recognition for its speed and efficiency in the U.S. and internationally from academia, industry, and government agencies. We have also gained significant traction with our Dapopis platform, which was launched less than 12 months ago in both the alternative protein and bioindustrial markets. On today's call, Joe and I will discuss a strategic plan for revenue growth, notable technological advances, and recent business development successes we continue to achieve across each of our core markets. We will focus the discussion on not just providing an update on our third quarter scientific and business results, but also expand on our strategy to improve our revenue outlook in the short term and beyond. We are not just excited about our current and future prospects. We believe the success of our corporate strategy is beginning to be realized, as evidenced by our September announcement of an agreement inclusive of upfront fees. The positive data from our first in human phase one study and our recently announced advancements in our own internal recombinant serum albumin projects, which have accelerated opportunities to enter into additional collaborations and partnerships, such as the Memorandum of Understanding with the Italian government's Foundation Biotechnopolo 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 and pandemic pathologies. and the recently announced research collaboration with Vaccine and Immunotherapy Center in Massachusetts General Hospital. We believe that we are at or near the precipice of applying our microbial protein production platforms, C1 and Dapabas, to develop antigens, antibodies, enzymes, and other proteins across each of our core verticals that we believe will lead to monetization that can significantly increase shareholder value for Dyadic and our collaborators. What makes Dyadic unique from other providers of expression platforms is our industrial heritage. The majority of cell lines used for manufacture of biologic vaccines and therapeutics have started at research scales and have tried to improve scale and yield at pharmaceutical price points. Dyadic's microbial platforms have a long history of economically producing large-scale bioindustrial proteins and enzymes, which we are leveraging to manufacture biopharmaceutical proteins with upstream costs and quantities that are closer to industrial margins, providing our collaborators improved pricing flexibility. All platforms used in biomanufacturing must meet certain requirements in order to be commercialized. All platforms must be able to be properly cloned and expressed, correctly modified and folded, functional proteins. What makes a particular platform an ideal choice for commercialization is one that is also rapid, highly productive, and cost-effective. This is why the C1 protein production platform is uniquely suited to meet the rising demand for vaccines, monoclonal antibodies, therapeutics, and other proteins. C1 can produce standard or complex proteins that have been demonstrated to be comparable in function and quality to those produced in other cell lines like Chinese hamster ovary, or CHO cells, and Baclar virus, which are insect cells. C1 has now completed a phase one human trial with favorable preliminary safety data and has the capability to produce larger quantities of proteins at lower cost and in less time than the traditional eukaryotic gene expression platform used today. We have 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 certain vaccines. And C1 also is significantly short of fermentation time and no viruses that need to be removed in downstream processing, such as either baculovirus or Chinese hamster ovary show cells, enabling the production and release over common vaccines more rapidly in greater quantities than lower-class and traditional cell lines currently being used today. This is why we believe our C1 filamentous fungal protein production platform has distinct advantages versus traditional eukaryotic cell lines currently used to manufacture vaccines and biologic drugs. In our human and animal core verticals, we are excited to have entered into a research and development project with another top five pharmaceutical company, a new vaccine project, and a large infectious disease market worth over $4 billion. As previously mentioned, we have signed a memorandum of understanding with the Foundation of Biotechnologies, Ciena, or FBS, whose 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. Reno Raffioli. Prior to his role at FBS, Dr. Raffioli was the Global Head of Vaccines Research for Novartis Vaccines and Diagnostics and most recently served as the Chief Scientific and Head of External R&D at the Vaccines Division of GlaxoSmithKline. FBS is prepared and equipped to conduct research, clinical study, regulatory approval, development, manufacture, and commercialization of vaccines and therapeutic proteins using the company's C1 protein production platform. We also continue to expand the adoption of our C1 protein production platform, such as the recently announced research collaboration with the Vaccine Immunotherapy Center at Massachusetts General Hospital to express vaccines for influenza A, and other infectious diseases as part of a U.S. $5.8 million award from the Department of Defense. NIAIDA continues to strive to stay at the forefront of scientific advancement, and we've been focusing on designing better-performing biomolecules. In addition to advancing the C1 technology, we produce new commercial products. We've now developed C1 cell lines to express complex proteins such as conjugating antigens and ferritin nanoparticles. The interest in ferritin-based nanoparticle vaccines has been increasing due to their ability to enhance immunogenicity and C1 can produce these ferritin nanoparticles in a one-step manufacturing process as opposed to the current two-step method used by other technologies. potentially improving the speed and cost effectiveness of the production process. We currently have ongoing animal studies with C1 express adjuvanted ferritin nanoparticle H5N1 antigen targeting endemic influenza H5N1 bird flu. That has demonstrated high neutralizing antibody and hemagglutinin inhibition HI levels. In other animal studies, C1 express adjuvanted AMHC2 H1N1 antigen targeting seasonal influenza showed high neutralizing antibody levels. Additionally, the C1 express adjuvanted full spike SARS-CoV-2 antigen has shown high neutralizing antibody levels after single dose and ongoing animal trial. In the area of therapeutic proteins, we've signed additional fully funded research projects for the development and commercialization of therapeutic antibodies in the third quarter. One such agreement is with a multinational pharmaceutical company to develop multiple C1 cell lines and produce monoclonal antibodies targeting infectious diseases, as well as another fully funded project to develop a C1 cell line for monoclonal antibodies against fibroviruses such as Ebola and Marburg. We have also endeavored to expand our portfolio with potential new commercial products. This quarter, Diatica entered into a development commercialization agreement with a European company, Biorne, to develop messenger RNAs using our C1 technology. Messenger RNAs help to quickly develop active COVID-19 vaccines critical for pandemic response. But the therapeutic applications extend beyond infectious disease. In areas such as cancer, where mRNAs encoding cancer antigens may help immune cells destroy tumors and substantially extend survival in rare diseases, where RNA-based gene therapy is potentially capable of delivering a healthy copy of the faulty gene to the cell. In this project, we are combining Bjorna's novel eukaryotic bioRNA platform with Dyadic's industrially proven C1 protein production platform to provide the pharmaceutical industry with a potentially more cost-efficient platform for manufacturing large quantities of lower-cost messenger RNAs, enabling access to mRNA vaccines and drugs to a broader global population. We've continued our focus on building and sustaining longer-term strategic partnerships with our pharmaceutical partners, such 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 C1 expressed human infectious disease vaccine antigens under CGMP guidelines, as well as other non-GMP products with Epigen in India. We believe the C1 production platform can be a global solution to emerging infectious disease threats and pandemic response in not just humans, but also in animal health. In addition to the production of large quantities of antigens, antibodies, and complex biomolecules, These products can also be made rapidly and cost-effectively for developed and emerging countries, making C1 a potential pandemic preparedness platform for response or stockpiling. In addition to what we shared today, discussions are ongoing with several parties interested in the potential adoption of the C1 platform across countries of all income levels. In addition to Rubik, we are increasing our penetration of the animal health markets for vaccines and therapeutic proteins. Animal health continues to be an attractive segment for dyadic due to the higher margin sensitivity of pharmaceutical biologics and the significant impact that an outbreak can have on the global supply chain and potentially human health. The recognition, data, and scientific advancements we are generating have accelerated our efforts in animal health as well as we have expanded our collaboration with Fibro, Abbott, and have initiated the fully funded research and development project with a new animal health company for development of a C1 expressed livestock vaccine antigen. Our third vertical of alternative proteins continues to be an area of great excitement for Dyadic, and one which we believe also holds their term potential promise in terms of opportunity and revenue. Dyadic is continuing to dedicate resources and support for the existing and future projects within this rapidly growing segment. Roughly one year ago, Dyadic launched the Dapibus platform, a filamentous, fungal-based, microbial gene expression and protein production platform, which is further designed and customized to enable the rapid development and large-scale manufacturing of low-cost enzymes, proteins, metabolites, and other biologic products. for use in non-pharmaceutical applications such as food, nutrition, health, and wellness. The agreement we signed in September to utilize our DAPOBIS platform to develop and commercialize certain non-animal dairy enzymes used in the production of food products demonstrates the potential for our DAPOBIS platform to deliver results as well as the increased interest in this segment. In this agreement, we received an upfront payment of $600,000 in October for product development and are eligible to receive certain potential success fees as early as the first half of 2024 in addition to future milestones and royalties. Also in the third quarter, DADEC signed a fully funded research collaboration for the development of an enzyme for dispersion and absorption of injected drugs to reduce tissue damage. This enzyme alone accounts for a $900 million market across multiple applications. These are just a few of the examples of how our focus on shorter-term product commercialization opportunities that have less time, cost, and risk associated with development is beginning to show results. This focus has accelerated our capability to develop an internal pipeline of proteins and enzymes with commercial potential across our core verticals. whose utilization is not dependent on lengthy and expensive clinical development programs. We have made further progress in developing animal-free recombinant serum albumin products that have demonstrated analytical comparability to commercially available reference samples, bringing us another step closer to commercialization and monetization. We are currently providing samples of recombinant serum albumin and enzyme catalysts in order to accelerate commercialization with potential collaborators, while we complete additional functional testing for different grades of products that can be offered. To further support revenue growth, we've initiated development of additional pipeline projects, such as cell culture media and other proteins and enzymes across our core verticals at different grades and price points for multiple applications in pharmaceutical and non-pharmaceutical markets, which we believe will improve our capability to drive near-term revenues. I will now turn the call over to our Chief Business Officer, Joe Hapleton, to provide an update on our Phase 1 trial progress and discuss the IAI Strategy Plan for Revenue and Growth and Potential. Joe?