JUPITER, FL – March 15, 2017 (GLOBE NEWSWIRE) – Dyadic International, Inc. (“Dyadic”) (OTCQX: DYAI), a global biotechnology company focused on further improving and leveraging the patented and proprietary C1 expression system to help speed up the development and production of biologic vaccines and drugs at flexible commercial scales, today announced its financial results for the year ended December 31, 2016, and recent company developments.
BUSINESS HIGHLIGHTS OF 2016 AND RECENT DEVELOPMENTS
- Cash, cash equivalents and investment grade securities, including interest receivable at December 31, 2016 was approximately $50.5 million
- Net loss for the year of 2016 was approximately $3.6 million or $(0.10) per basic and diluted share
- Escrowed funds from the sale of the Company’s industrial business to DuPont of approximately $7.4 million are expected to be received in July 2017
- Received $2.1 million settlement payment, net of legal fees and expenses, from Bilzin Sumberg Baena Price & Axelrod LLP in April 2016
- On March 1, 2017, the Company reached a mid-seven figure settlement with the last remaining defendant law firm, Greenberg Traurig, LLP and Greenberg Traurig, P.A., ending our long-standing professional liability litigation, and we expect to receive the settlement payment in the second quarter of 2017
- As of December 31, 2016, there were 32,382,265 shares outstanding
- During 2016, the Company repurchased approximately 8.7 million shares of common stock, in both open market and private transactions, at an average price of $1.53 per share
- During 2017 through February 15, 2017, the expiration date of the 2016 Stock Repurchase Program, the Company repurchased an additional 3.7 million shares, in both open market and private transactions, at an average price of $1.55 per share, leaving approximately 28.7 million shares outstanding subsequently
- Shareholders approved the proposal to effect a reverse stock split of Dyadic’s common stock at a ratio ranging between 1-for-every-2 shares to 1-for-every-4 shares, and effective upon a date, in each case, to be determined by the Company’s Board of Directors, who also has the discretion to implement or abandon the reverse stock split
- Executed a multi-year research agreement with a new contract research organization to further advance the C1 expression system for biopharmaceutical product development and production
- Initiated a small research collaboration program with a leading global pharmaceutical company to demonstrate the potential of C1 to produce glycosylated therapeutic proteins
FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2016
In connection with the asset sale to DuPont in 2015, we have reclassified the revenues and expenses of our industrial technology business to income (loss) from discontinued operations for 2015.
At December 31, 2016, cash and cash equivalents were approximately $6.9 million compared to $68.6 million at December 31, 2015. Cash used in the year ended December 31, 2016 of approximately $61.7 million primarily reflects purchase of investment grade securities at face value, net of repayments and maturities of approximately $42.6 million, stock repurchases net of stock issuances of approximately $13.1 million, and cash used in operating activities of approximately $6.0 million which includes cash used in operations of approximately $4.7 million, payment of DuPont Transaction related liabilities of approximately $2.0 million, premiums and interest paid for investment grade securities of approximately $0.7 million, and litigation costs of approximately $0.7 million, offset by cash received from a litigation settlement of approximately $2.1 million.
Cash and cash equivalents do not include the approximately $7.4 million of cash held in escrow in connection with the DuPont Transaction, which we anticipate to be released in July 2017, if no claims are made prior to such release.
Net loss from continuing operations for the year ended December 31, 2016 was approximately $3.6 million, or $(0.10) per basic and diluted share, compared to a net loss of $1.5 million, or $(0.04) per basic and diluted share for the year ended December 31, 2015.
Research and development revenue from continuing operations for the year ended December 31, 2016 increased to approximately $593,000 compared to approximately $316,000 for the year ended December 31, 2015. The increase in revenue for the period reflects the final research billing with Sanofi Pasteur S.A.
For the year ended December 31, 2016, the Company recorded a $437,000 provision for loss contracts in connection with two collaboration agreements where anticipated contract costs are expected to exceed anticipated contract revenues. The reported loss will be accredited into statement of operations over the term of the contract.
General and administrative expenses for the year ended December 31, 2016 increased 19% to approximately $4,562,000 compared to approximately $3,838,000 for the year ended December 31, 2015. The increase principally reflects litigation costs for trial preparation which began on January 6, 2017 of approximately $653,000, new employment agreements for executives of approximately $489,000, non-cash stock compensation in connection with the Special Committee of the Board and board compensation changes of approximately $300,000, business development costs for the biopharmaceutical market of approximately $214,000, and financial reporting costs of approximately $207,000, partially offset by lower employee related costs due to the organizational downsizing in connection with the DuPont Transaction of approximately $891,000, cost reimbursement received from DuPont for services rendered in the transition services agreement of approximately $155,000, and other reductions of approximately $93,000.
Research and development expenses from continuing operations for the year ended December 31, 2016 increased to approximately $886,000 compared to $0 for the year ended December 31, 2015. The increase reflects contract research organization (“CRO”) service agreements with DuPont and the new CRO that the Company engaged in September 2016 to support our ongoing biopharmaceutical and internally funded projects, and other governmental and commercial projects, as well as internal R&D personnel costs.
The Company received the settlement payment from one of the defendant law firms, Bilzin Sumberg Baena Price & Axelrod LLP, in its ongoing professional liability litigation, in the amount of $2.1 million, net of legal fees and expenses.
Interest income for the year ended December 31, 2016 increased to approximately $486,000 compared to approximately $11,000, for the year ended December 31, 2015. The increase reflects the returns earned on the Company’s investment grade debt securities, which are classified as held-to-maturity.
The Company has successfully completed its 2016 Stock Repurchase Program. During 2016, the Company purchased a total of approximately 8.7 million shares of its common stock in both open market and private transactions at an average price of $1.53 per share. Through February 15, 2017, the expiration date of the 2016 Stock Repurchase Program, the Company purchased an additional 3.7 million shares in both open market and private transactions at an average price of $1.55 per share.
On December 7, 2016, at the special meeting of Dyadic shareholders, Dyadic’s shareholders approved the proposal to amend Dyadic’s Restated Certificate of Incorporation to effect a reverse stock split of the Company’s issued and outstanding shares of common stock at a ratio between 1-for-every-2 and 1-for-every-4 and effective upon a date, in each case, to be determined by the Company’s board of directors.
The reverse stock split, if effected, may, among other things, increase the per share trading price of the Company’s common stock. Dyadic’s board of directors has the discretion to implement the reverse stock split, at any time prior to December 6, 2017 (up to 12 months after the special meeting), or abandon the reverse stock split if it determines that implementing a reverse stock split is not in the best interests of Dyadic and its shareholders.
CONFERENCE CALL INFORMATION
Dyadic management will host a conference call today, Wednesday, March 15, 2017 at 5:00 p.m. to discuss the financial results for the year ended December 31, 2016. In order to participate in the conference call, please dial 888-277-7115 for U.S./Canada callers and +913-312-0724 for International callers, using access code 9165439.
A replay of the conference call will be available on Dyadic’s website (www.dyadic.com) within 24 hours after the live event.
About Dyadic International, Inc.
Dyadic International, Inc. is a global biotechnology company which is developing what it believes will be a potentially significant biopharmaceutical protein production system based on the fungus Myceliopthora thermophila, nicknamed C1. The C1 microorganism, which enables the development and large scale manufacture of low cost proteins, has the potential to be further developed into a safe and efficient expression system that may help speed up the development, production and performance of biologic vaccines and drugs at flexible commercial scales. Dyadic is using the C1 technology and other technologies to conduct research, development and commercial activities for the development and manufacturing of human and animal vaccines, monoclonal antibodies, biosimilars and/or biobetters, and other therapeutic proteins. Dyadic pursues research & development collaborations, licensing arrangements and other commercial opportunities with its partners and collaborators to leverage the value and benefits of these technologies in developing and manufacturing biopharmaceuticals which these technologies help produce. In particular, as the aging population grows in developed and undeveloped countries, Dyadic believes the C1 technology may help bring biologic drugs to market faster, in greater volumes, at lower cost, and with new properties to drug developers and manufacturers and, hopefully, improve access and cost to patients and the healthcare system, but most importantly saving lives.
Please visit Dyadic’s website at www.dyadic.com for additional information, including details regarding Dyadic’s plans for its biopharmaceutical business.
Dyadic trades on the OTCQX tier of the OTC marketplace. Investors can find real-time quotes, market information and financial reports for Dyadic in the Company’s annual and quarterly reports which are filed with the OTC markets. Please visit the OTC markets website at www.otcmarkets.com/stock/DYAI/quote.
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press release are forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks, uncertainties and other factors that could cause Dyadic’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Investors are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements speak only as of the date of this press release and, except as required by law, Dyadic expressly disclaims any intent or obligation to update or revise any forward-looking statements to reflect actual results, any changes in expectations or any change in events. Factors that could cause results to differ materially include, but are not limited to: (1) general economic, political and market conditions; (2) our ability to carry out and implement our biopharmaceutical research and business plans and strategic initiatives; (3) Dyadic’s ability to retain and attract employees, consultants, directors and advisors; (4) our ability to implement and successfully carry out Dyadic’s and third parties research and development efforts; (5) our ability to obtain new license and research agreements; (6) our ability to maintain our existing access to, and/or expand access to third party contract research organizations in order to carry out our research projects for ourselves and third parties; (7) competitive pressures and reliance on key customers and collaborators; (8) the receipt of the settlement payment by Dyadic from Greenberg Traurig, LLP and Greenberg Traurig, P.A. and; (9) other factors discussed in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in our December 31, 2016 Annual Report filed with OTC Markets on March 15, 2017. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us.
Dyadic International, Inc.
Thomas L. Dubinski
Chief Financial Officer