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By John Vandermosten, CFA

NASDAQ:DYAI

READ THE FULL DYAI RESEARCH REPORT

Dyadic Applied BioSolutions, Inc. (NASDAQ:DYAI) announced second quarter 2025 results and held its first conference call under its new name. As we look ahead to the remainder of 2025, we expect C1-derived product sales in three key markets: life sciences, food & nutrition and bio-industrial. President and Chief Operating Officer Joe Hazelton sat down for a series of interviews to discuss Dyadic’s new strategy and to provide more detail on product revenue generating partnerships. Links are included to these conversations. Dyadic conducted an equity raise of $5.3 million after the end of the quarter which is expected to fund the company until it reaches positive cash flow status. Work in global health continues with fully funded grant awards from the Gates Foundation and the Coalition for Epidemic Preparedness Innovation (CEPI). In the cell culture media market, Dyadic is focused on the trinity of albumin, transferrin and fibroblast growth factors that stabilize and transport nutrients, deliver iron for cell growth and trigger cell expansion. Additionally, the company is developing and validating prototypes for additional enzymes including RNase Inhibitors and T7 RNA Polymerase with results expected by year end 2025.

Second Quarter 2025 Operational & Financial Results

On August 13^th, 2025, Dyadic published 2Q:25 operational and financial results in a press release and a Form 10-Q filing with the SEC. Further detail was provided in a conference call held with investors. Below are financial results for the three months ending June 30^th, 2025, compared to the same prior year period:

• Revenues were $1.0 million, up 150% from $0.4 million. The increase comes from the recognition of grant revenue related to the Gates Foundation and CEPI awards and milestone revenue from the Inzymes Agreement;
• Cost of revenue totaled $0.6 million, doubling from $0.3 million;
• Research and development expense was up 22% to $0.6 million from $0.5 million with increases in outside contracted services, personnel and overhead all contributing to the change. The increases were related to a rise in the number of active internal research initiatives undertaken to expedite product development;
• General and administrative expenses were $1.4 million vs. $1.6 million, falling 11%. The change was largely due to lower business consulting expenses and other G&A expenses, with small declines in legal and professional services and compensation also contributing;
• Net loss amounted to ($1.8) million versus ($2.0) million. On a per share basis, net loss was ($0.06) compared with ($0.07).

As of June 30^th, 2025, cash, equivalents and short-term securities totaled $6.6 million compared to $9.3 million at the end of 2024. Cash burn during the first half of 2025 was ($2.1) million compared with ($3.1) million for 1H:24. There were minimal financing cash flows in the first half compared to a net $5.8 million in the same prior year period reflecting the net proceeds from the $6.0 million convertible note issuance. Following the end of the quarter in July, Dyadic issued 6,052,000 shares of its stock, offered at $0.95 per share. This generated gross proceeds of $5.75 million and net proceeds of $5.3 million. Funds will be used for product development, sales and marketing.

Chief Operating Officer Joe Hazelton Discusses Dyadic’s New Strategy

In a series of interviews, Dyadic’s Chief Operating Officer discusses the company’s refined strategy to focus on product revenues in the life sciences, food & nutrition and bio-industrial markets. He shares some of the most important applications for C1 and Dapibus products. While Dyadic is centered on these new markets, it will work with partners in the biopharmaceuticals space that fully fund products and intend to take their project to commercialization. Click on the links below to access these podcast segments with Joe.

EN3ZYME

Dyadic announced that its partner Fermbox Bio, with whom it had announced a deal back in May 2023, will fill a purchase order for a Dapibus-produced product called EN3ZYME. It is a cellulase enzyme cocktail designed for the cost-efficient conversion of pre-treated lignocellulosic biomass into fermentable sugars. It allows for conversion of pre-treated biomass to generate fermentable sugars that can be used as an energy source such as ethanol and cellulosic sugars. Feedstock appropriate to EN3ZYME includes bagasse, cotton stalks, straw, corn husks, cane residue and certain kinds of woods. Fermbox’s delivery of EN3ZYME to the customer is expected in 2H:25.

Competitive Advantage of C1 Produced Proteins

Consumers in the life sciences industry prefer recombinant proteins over animal derived product for their consistency, lack of impurities and sustainability. However, the barrier to wider use has been cost. With C1’s efficient production ability, Dyadic asserts that recombinant bovine serum albumin can be manufactured at expense levels competitive with animal-based product. This has the potential of attracting market share from traditional sources as customers of these products recognize the value. In addition to the proteins that Dyadic has licensed to Proliant, there are others^[1] that have received a certificate of analysis^[2] and are exposed to attractive markets.

Deoxyribonuclease I (DNase I) is a critical and expensive input into manufacturing messenger RNA, producing proteins and enzymes, removing genomic DNA contamination and cell isolation procedures. In mRNA manufacturing, it helps ensure the purity and quality of the final mRNA product. Dyadic’s C1 produced DNase I holds a certificate of analysis and the product is ready for non-GMP production and cGMP process development. Dyadic is seeking a partner to manufacture and commercialize DNase I. It is working with a contract development and manufacturing organization (CDMO) to produce it and sell into small markets itself. This is estimated to be a $300 to $500 million total addressable market. On the second quarter call, COO Hazelton noted that Dyadic had completed scale up and it is manufacturing research grade product with its CDMO. It is also negotiating OEM and supply agreements with potential customers.

Transferrin is next in line after DNase I and recent work has shown reliable performance metrics for withstanding temperature extremes in applications. Dyadic is reviewing scale up options and is producing small amounts of the glycoprotein for the research market. Before sales start in earnest, the company must complete the commercial manufacturing process.

Other raw material inputs to the mRNA enzyme market include another $825 million in total addressable market such as TdT terminal transferase, T4 DNA ligase, RNase Inhibitor and T7 RNA polymerase. These markets are served by high-cost e. coli expression systems or natural sources, each of which has purity and cost limitations that are largely solved using the C1 expression system. Dyadic has enumerated many of the key products in human health where it can contribute significant benefits.

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