Once the deal closes, Dyadic willfocus solely on the biopharmaceutical sector. Dyadic has positioned itself to retain a stake in the industry by incorporating a co-licensing agreement into the terms of the deal with DuPont.
The agreement gives Dyadic the right to apply the C1 fungal expression system to human and animal biopharma applications. C1 uses the Myceliophthora thermophila fungus to produce enzymes and other proteins.
Dyadic has a long history of working with C1, scaling it up to fermenters as large as 150,000 liters in the process, but biopharma applications of the system have represented just a slice of its business. The deal with DuPont is expected to support the growth of the biopharma operation.
“We believe this infusion of capital will help accelerate our pharmaceutical offerings,” Mark Emalfarb, CEO of Dyadic, told investors on a conference call to discuss the company’s third quarter financial results.
Emalfarb sees C1 claiming a portion of the biopharma production market. “Our C1 technology has the potential to help develop and manufacture drugs and vaccines faster, more efficiently and on a much a larger scale than existing biopharmaceutical production systems,” he said.
Making money
Dyadic sees the post-divestiture biopharma business generating revenues from several sources. The terms of the deal with DuPont give Dyadic the right to sublicense C1 for use in the development of biologics, setting it up to receive upfront and milestone payments, plus royalties.
DuPont represents another potential source of royalties. If DuPont uses C1 in the development and manufacture of biopharma products that come to market, it must pay royalties to Dyadic.
Emalfarb is also looking to an existing vaccine collaboration with Sanofi and grants from the United States government for income. Sanofi has worked for several years with Dyadic’s operation in the Netherlands, which the latter will retain access to after DuPont takes over the site.
By retaining access to the scientists who have worked on C1 for years, Dyadic can continue to carry out biopharma research. Emalfarb said this arrangement is a “significant benefit” of the deal with DuPont.
Dyadic plans to use its research capabilities to develop biosimilars. “We believe we can develop several molecules within a two-year timeframe and within the cost included in our $3 million to $4 million annual operating budget,” Emalfarb said.
The plan is to outlicense the biosimilars before they enter clinical trials.