Dyadic releases annual results, calls 2014 a turning point

By Erin Voegele | March 16, 2015

Dyadic International Inc. recently released 2014 financial results, reporting revenue of $12.5 million, down from $17.1 million the prior year. The decrease is primarily attributed to a $6 million BASF upfront license fee in 2013. The decrease, however, was partially offset by 53 percent growth in research and development revenue of $710,000. The company also received $700,000 in milestone payments from Abengoa and BASF. Excluding 2013 upfront BASF license fee, revenue increased $1.4 million, or 12 percent.

Net product-related revenue was flat at $9.8 million. Dyadic indicated sales for last year were driven by growth in the starch and alcohol markets, offset by lower sales to the textile market. Research and development revenue increased to $2 million, up from $1.3 million in 2013. The increase is attributed to a higher number of externally funded projects performed at the company’s expanded research facility in the Netherlands.

Gross profit was $4.3 million, down from $7.4 million the previous year. Dyadic attributed the decrease to the reduction of the 100 percent margin BASF upfront license fee. The decrease in license fee revenues was partially offset by higher gross profits from product related sales, research and development revenues, and the first payments for the Abengoa Hugoton facility and a research milestone from BASF. Excluding the upfront BASF license fee, gross profit increased $2.9 million, or 208 percent.

Dyadic reported a net loss of $6 million, or 18 cents per basic and diluted share, compared to a net loss of $480,000, or 1 cent per basic and diluted share, in 2013.

During an investor call to discuss the annual results, Mark Emalfarb, president and CEO of Dyadic, called 2014 a turning point for the company. “We improved the operations of our enzyme business to enhance manufacturing processes, cost controls, higher-margin, product mix, resulting in higher margins, he said, adding that the company has also expanded its leadership team over the past two years.

According to Emalfarb, Dyadic has begun the second expansion of its research facility in the Netherlands. He also noted the science behind the company’s C1 technology has never been better. “The C1 expression system continues to prove itself as one of the industry-leading system for turning DNA into products,” he said.

Dyadic’s C1 LC strain is achieving record high yields in some research programs, Emalfarb continued, noting the company has achieved more than 50 grams per liter of the target protein using that strain. Dyadic’s GC strain, which is used to produce the CMAX product for second-generation biofuel applications, continues to reach record productivity, he continued, with more than 100 grams per liter of total protein. “These high yields translate directly into lower-cost manufacturing processes for ourselves, our licensees and collaborators,” Emalfarb said.