Dyadic reports increase in product-related revenue

By Erin Voegele | November 18, 2014

Dyadic International has released third quarter financial results, reporting increases in net product revenue and gross profit. “The past quarter continues to be an extremely exciting time at Dyadic,” said Dyadic CEO Mark Emalfarb. 

Revenue for the first nine months of the year was $9.8 million, down from $13 million during the same period of 2013. Dyadic attributed the decrease to licensing revenue of $700,000 versus $5 million, reflecting the BASF upfront license fee. The decrease, however, was partially offset by an 8 percent increase in product related revenues and a 60 percent increase in research and development revenue.

Net product related revenue for the nine-month period, however, was $7.6 million, up from $7.1 million during the same period of last year. According to Dyadic, the increase in sales was driven by growth in the animal nutrition, brewing, starch and alcohol markets.

License fee revenue for the quarter was $700,000, which included a $500,000 license payment from Abengoa following the opening of its new facility and a $200,000 payment from BASF for reaching a project milestone.

Research and development revenue for the first nine months of the year was $1.5 million, up from $941,000 for the same period of 2013. Dyadic attributed the increase to a higher number of externally funded projects performed at its research facility in the Netherlands. In addition, the company said a number of other projects accounted for on the completed contract basis met technological milestones and deliverables.

Gross profit for the first nine months of the year was $3.5 million, down from $6.4 million during the same period of 2013. Net income was $4.3 million, or 13 cents per basic and diluted share, compared to $121,000, or 0 cents per basic and diluted share for the first nine months of last year.

During an investor call to discuss the quarterly results, Emalfarb congratulated Abengoa on the recent opening of its cellulosic ethanol plant, and the commercial success the company has had with Dyadic’s C1 enzyme technology. He also indicated Dyadic is having continued success with the ongoing BASF research project in the Netherlands, noting the company expects to enter an expanded phase of the project later this year or in early 2015. According to Emalfarb, Dyadic is also seeing promising preliminary results from its internal C1 research and product development efforts, with product launches possible as soon as 2017. Emalfarb also said that Dyadic is continuing to engage in active dialog with additional commercial parties for potential licensing, partnership, and joint venture opportunities.

The day before Dyadic released its third quarter financial results, the company announced it has been issued a new U.S. Patent that provides broad and extensive intellectual property rights related to the company’s C1 Expression System. The patent, No. 8,871,493, is titled “Transformation system in the field of filamentous fungal hosts.”

"This patent provides wide-ranging and comprehensive intellectual property protection to our C1 Expression System. The applications and methods claimed in this patent further protects Dyadic’s rights to the C1 technology for gene discovery, product development and commercialization of enzymes and other protein products for use in energy, pharmaceutical and industrial markets,” Emalfarb said in a statement.