May 2012
AN INDUSTRIAL SCALE PLATFORM
FOR ENZYMES AND OTHER PROTEINS
DYADIC INTERNATIONAL, INC.
(Symbol: DYAI)
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Safe harbor statement
Certain statements contained in this presentation are forward-looking
statements. These forward-looking statements involve risks and uncertainties
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. Except as required
by law, Dyadic expressly disclaims any intent or obligation to update any
forward-looking statements.
Company overview
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Global biotechnology company: Headquarters in
Jupiter, Florida main R&D operations in the
Netherlands
Proprietary enzyme sales: Sells novel products to
the food, animal feed, pulp & paper, textiles and other
end markets in 50 countries
C1 expression technology: Patented and
proprietary system to discover, develop, manufacture
and sell enzymes and other proteins
Tier 1 strategic partners: BASF, Sanofi Pasteur,
Abengoa, Codexis and other blue chip companies
partner with Dyadic or license C1 technology for
product development
Headquarters in Florida
R&D facility the Netherlands
Business model
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Dyadic revenue ($ millions) Proprietary enzyme sales
C1 licensing and partnerships
Xlyanases, Cellulases, Beta
Glucanases, Amylases, Proteases
Currently sell niche products into food,
animal feed, pulp & paper, textile and
other end markets
Several new products in pipeline
Currently 7 blue chip strategic
partners and licensees
Projects in pharmaceutical, feed, food
and biofuels
Funded R&D from strategic partners
and government projects
Profitable in 2012 and expected profitability in 2013
From Blue Jeans to Genes
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Founded as Supplier
of Pumice Stones For
Blue Jeans
Dyadic’s C1
Expression System
1979 1992 2013
Search for Fungi
in Russia
A robust and versatile platform for gene discovery,
expression and the production of enzymes and other
proteins
Based on the Myceliophthora thermophila fungus,
a soil-borne saprophyte
Developed in the early 1990’s through a fortuitous
UV-induced mutation and continuously bioengineered
since
Enables new product introduction with less time,
cost and risk by addressing critical bottlenecks of
protein discovery, development scale-up and
commercialization
Validated through over 20 years of R&D, 17 years of
commercial scale manufacturing (up to 150,000 liters)
and 15 years of product sales and partnerships
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What is C1?
C1 fungus
Wild Type and new strains
WT
LC
HC
Scientific media recognition
“In 2011, a consortium of several worldwide renown organizations suggested that the use of thermostable
enzymes offers economic advantages in the production of many chemicals and biomass-based fuels.
Unfortunately, most of the commercially available enzymes which are produced by fungi like Trichoderma
and Aspergillus are not sufficiently thermostable...The reported findings confirm previous results
obtained by enzyme manufacturer Dyadic, which was the first company to successfully develop a thermophilic
fungal production platform.”
Biofuels International, March 2012
“The best studied and most widely used cellulases and hemicellulases are produced by Trichoderma,
Aspergillus...and they are most effective over a temperature range from 40°C to ~50°C. At these temperatures,
complete saccharification of biomass polysaccharides...requires long reaction times...One way to overcome these
obstacles is to raise the reaction temperature...However, implementing higher reaction temperatures requires
the deployment of enzymes that are more thermostable...Thermostable enzymes and thermophilic cell
factories may afford economic advantages in the production of many chemicals and biomass-based fuels.
Nature Biotechnology, October 2011
“The search for novel and/or improved industrial enzymes and enzyme production systems is intensifying as
market demand increases. One such new system was developed based on a recently discovered fungal isolate,
C1...The filamentous fungus C1 was developed into a mature technology and protein-production platform. C1’s
inherent richness of genes encoding industrially relevant enzymes and its high-producing characteristics
have been a proven starting point for the development of different C1 strains producing enzymes and
enzyme mixtures.”
Industrial Biotechnology, June 2011
Numerous publications have validated Dyadic’s C1 technology
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Dyadic’s current licensees and strategic partners
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Major animal
health &
nutrition
company
Market leading
food and
enzyme
company
Leading animal
health &
nutrition
company
Cellulosic Sugars Industrial Enzymes Biopharmaceuticals
C1 platform overview
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Optimized to produce homologous and heterologous enzymes and other
proteins
Programmable to efficiently produce “pure” enzymes and enzyme
mixtures tailored for specific applications
Library of more than 100 individual C1-enzymes are a fertile source for
future high purity products in many industries
Expression
platform
technology
Genome sequenced and annotated: enzymatic potential is known,
explored and exploited
C1 serves as both a research and production host
High-throughput robotic screening (HTRS) can be applied, as C1 can grow
in microtiter plate wells
Cost
effective
R&D
Freedom to
operate
Wide range of plant cell wall degrading enzymes which are active in a
broad pH and temperature range
Excellent safety record and has Generally Recognized as Safe (GRAS)
status acknowledged by the FDA
Well suited for commercial production
Broad
commercial
applications
Dyadic is the sole owner of the C1 fungus and technology and has broad
patent claims are issued covering C1
C1 is not subject to the complex third party patent issues faced by other
technologies
C1 can produce a wide variety of industrial enzymes
C1 is a rich source of industrially relevant enzymes that are now explored and exploited
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38 million sequenced base pairs
(97% contained in 10 large supercontigs)
>9,500 genes identified
>100 active
enzymes
Sequenced and annotated genome
C1 has been produced at 150,000 liter scale since 1996
Major C1 enzyme manufacturing sites
Year production began Manufacturing site Company Country Fermenter size
1996 FermPro/Martek (now DSM) Dyadic USA 150,000L
2000 Polfa Tarchomin Dyadic Poland 50,000L
2009 EnMex Dyadic Mexico 30,000L
2011 Antibioticos Abengoa Spain 50,000L
2011 Fermic Codexis Mexico 25,000L
2011 Iogen Codexis Canada 150,000L
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Proven scalability up to 150,000 liters for nearly two decades
C1-cellulase accepted by FDA on
September 29, 2009
GRAS Notification letter is a public
statement by FDA acknowledging Dyadic’s
safety determination for the intended uses
of C1
GRAS Notification letters are broadly
recognized in the food and consumer
products industries as the safety standard
C1 strain non-toxic
Pathogenicity and toxigenicity data:
strain is non-infectious and no
known toxins are produced
Peer-reviewed scientific literature
have confirmed—no known
pathogencity
No mycotoxins found
C1 enzyme testing
In vivo feeding trails:
14 day dose study in rats
13 week subchronic rat study
Genotoxicity testing:
AMES bacterial mutagenesis
Chromosomal aberration test
Genetic mutation test
No adverse effects observed
No foreign DNA
Safety confirmed
C1 has an excellent safety profile
Generally Recognized as Safe (GRAS) status
acknowledged by the FDA
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C1 has two commercial strain platforms – LC and HC
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Low Cellulase (LC) Strain and Enzymes
Enables the commercial production of “pure” enzymes
Primary usage in industrial enzyme and biopharmaceutical
applications
Ideal host organism to develop production strains for specific
applications with up to ~80% of target protein overexpressed
>50 g/L yields with 6-day fermentation, up to 100 g/L possible
with longer fermentation times
High Cellulase (HC) Strain and Enzymes
Effective in biofuel and bio-based chemical end markets
Ability to effectively degrade or modify a wide range of
lignocellulosic feedstocks
Low viscosity, thermostable and effective in broad pH range
Over-
HC LC expressed
LC
HC vs. LC
Next generation commercial LC enzymes in development
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Knowledge of enzyme properties in combination with the LC strain host system leads to
rapid development of high margin enzyme mixtures targeted to various applications
One LC-host expresses
dedicated enzyme mixture
Composition can be easily
adapted for various
applications
High production levels
Large scale fermentations
pending
Still considerable room for
fermentation optimization
Enzyme 1
(20 g/L)
LC-series enzymes
End
Market 1
Enzyme 2
(thermostable)
(12 g/L)
Enzyme 3
(thermostable)
(15 g/L)
LC-1 LC-2 LC-3
End
Market 2
LC-4
BP
Clariant / Süd Chemie
C1 is one of only three leading enzymatic platforms
Codexis
Feedstock Pretreatment Enzymatic
Hydrolysis
Sugar
fermentation Distillation Upgrading
Abengoa
POET / DSM
Chemgen
KL Energy
MBI
Chemtex
Inbicon
Dyadic / C1
enabled
Novozymes
DuPont
Amyris
Gevo
LS9
Butamax
Taurus
DSM
enabled
Trichoderma
enabled
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Production process
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C1 is highly flexible and feedstock agnostic
Energy crop Sugar Cane Corn Stover Wood Pulp Corn Fiber Wheat Straw DDG’s Paper pulp
Different
Pretreatments
EG’s Xylanases βG Accessory
Enzymes CBH’s
Dedicated
CMAX enzyme
cocktails
High yield of
fermentable
sugars
C1 has more enzyme-encoding genes than competing
systems for biofuels and bio-based chemicals
Number of lignocellulosic enzyme-encoding genes
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Large variety of lignocellulolytic enzymes enables development of efficient dedicated enzyme
mixtures (produced by a single engineered C1-strain)
Genes encoding Number
in C1
Number in
Trichoderma
Endo-glucanases, Cellobiohydrolases, β-glucosidases/ β-xylosidases
(GH1, GH3, GH5, GH6, GH7, GH12, GH45)
~ 32 ~ 32
Cellulose binding domains (CBM1-type) ~ 46 ~ 15
Xylanases/Xylosidases (GH10, GH11, GH30,
GH43)
~ 13 ~ 10
Polysaccharide monooxygenases (GH61) ~ 26 ~ 3
Oxidoreductases (Secreted flavin-, heme-
and copper-dependent)
~ 69 ~ 24
Source: Literature and JGI database searches
Improved bioethanolenzyme mixtures
0 20 40 60 80 100
2 - fold reduction
4 - fold reduction
8 - fold reduction
C1 - G3
C1 - G5
CMAX CMAX 2
CMAX 3
CMAX 4
Time (months)
CMAX 5
♦
Re
lative
en
zym
e lo
ad
ing
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Over 5-fold decrease in enzyme use/costs in 5 years
Enzyme dose reduction curve (glucose release)
CMAX is more robust than other enzymes
Higher temperatures
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Re
lative
activity (
%)
Temperature (°C)
05
101520253035404550556065707580859095
100
35 50 55 60 65 70
re
lativ
e a
ctiv
ity
(%
)
temperature (°C)
Relative activity after 72 hours of saccharification
G7 B7
G7 D9
Cellic Ctec 2
CMAX
Competitor
(Trichoderma-
based) 0
10
20
30
40
50
60
70
80
90
100
35 50 55 60 65 70
05
101520253035404550556065707580859095
100
35 50 55 60 65 70
re
lativ
e a
ctiv
ity
(%
)
temperature (°C)
Relative activity after 72 hours of saccharification
G7 B7
G7 D9
Cellic Ctec 2
T= 55˚C;
pretreated corn
stover (10% dry
matter)
Ability to add enzyme in early stage after
thermo-pretreatment
Broader pH
CMAX3
hours
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0
5
10
15
20
25
30
35
50 100 150
% inhib
itio
n
glucose (g/L)
CMAX3
Competitor
Gen. 3
Viscosity reduction occurs during the
first hour of saccharification
0
10
20
30
40
50
60
70
80
90
0
5
10
15
20
25
30
35
40
45
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75
Perc
enta
ge d
ecre
ase
[%]
Torq
ue [%
cont
]
Time [h] Torque [cont%] Decrease [%]
0
10
20
30
40
50
60
70
80
90
0
5
10
15
20
25
30
35
40
45
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75
Perc
enta
ge d
ecre
ase [
%]
Torq
ue [%
cont
]
Time [h] Torque [cont%] Decrease [%]
Torq
ue [
% C
ont.]
Torq
ue d
ecre
ase (
%)
Time (hours)
Glucose test: T=50°C; pretreated corn stover
(10% dry matter); 72 hour fermentation
Viscosity test: Pretreated corn stover (20%
dry matter)
Production of CMAX is highly scalable
Lower glucose inhibition Rapid viscosity reduction
Illustrative biofuel enzyme production costs
19
25
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On-site Off-site
Shipping and distribution
Downstream processing and stabilization
Quality assurance
Utilities
Labor and overhead
Materials
Assumes 5 mg/g loading to 10% dry matter, molasses-based medium; sorbitol stabilization agent
On-site production cost advantage
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Dyadic advantages for lignocellulosic enzymes
Robustness Proven at the large scale (Abengoa, Codexis, Dyadic)
Broad temperature and pH range
Versatile genetic
make-up
More genes encoding for lignocellulosic enzymes
Feed stock tailored enzyme mixtures produced by a single strain
Large potential still to be realized
Enzyme library in place
Highly scalable
production
Low viscosity enzyme production hosts
Higher yields with lower energy input
Greater uniformity in fermentation process
Greater flexibility of raw materials
Broad patent
ownership
Broad patents related to C1 are owned by Dyadic
Less litigation risk from crowded playing field of overlapping
Trichoderma patents
On-site licensing
model
Reduced or eliminated downstream processing, stabilization,
logistics and distribution costs
Customers in full control of supply chain
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Antiviral (HIV)
Antiviral
(influenza)
Influenza vaccine
(human and
veterinary)
Viral influenza
vaccine
(veterinary)
Therapeutic
proteins
Antibodies, and
other therapeutic
proteins
C1 has many high-potential opportunities in biologics
Potential applications in vaccines, Rx proteins and mAbs
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C1’s advantages in biologics and vaccine development
leads to low scientific risk
Discovery
Short time to
develop molecular
cell biology
Direct and single
step
transformation
with minimum strain
selection (fast
clone-to-clinic)
Can be used for
various high-value
Rx proteins today
Already proven for
human antibodies
Process validation
upfront for
biosimilars and
streamlining first-in-
class molecules
Expression
High expression
level, allowing for
smaller reactors
Adaptable to
current reactors
and/or to new,
single use reactors
Low cost of media
Defined media
Short fermenter
times
Wide range of
growth conditions
Lower capex by
using smaller
facilities
Downstream
processing
Target protein
secreted into
media
Secretion at high
titer (no microbial
inclusion bodies)
Low host cell
protein in
supernatant
No viral
inactivation/removal
/ validation
Low viscosity
Product
attributes
Glycoprofile
needs little
modification to
become ‘human
neutral’
Naturally
afucosylated
GRAS designation
“Simpler”
glycoprofile
Homogeneity of
glycoforms can
enhance drug
profile
Linear scalability allows rapid development from discovery
to clinical trails
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Optimize expression at 1L scale Produce at 1L scale Produce at 15,000L scale
Competing
expression
technologies
C1’s ability to linearly scale substantially accelerates drug development, and reduces costs
Fully defined media of simple (inexpensive) salts (no animal or complex components; no viral
inactivation or validation required)
Rapid scale-up and upfront process development due to linear scalability — quality unique to C1
Linear scalability saves 1 year of preclinical development time — enter PI trail with a process robust
enough for commercial manufacturing
Advantages of C1 scaling
C1
Optimize expression at 1L scale
Produce at 1L scale
Re-optimize
expression at 10L scale
Produce at 10L scale
Re-optimize
expression at 100L scale
Produce at 100L scale
Re-optimize
expression at 1,000L
scale
Produce at 1,000L scale
Re-optimize
expression at 15,000L
scale
Produce at 15,000L
scale
Competitive advantages
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Pichia1
CHO (Chinese
hamster ovary)
Overview of benefits and competitive advantages
Immunogenic glycosylation
Limited expression of eukaryotic
proteins
Yeast cells can yield lower levels of
secretion than fungal cells
High viscosity
Takes a year or more for fermentation
optimization
Ever diminishing returns on protein
expression levels
Concerns about mammalian viral or
mycoplasma contamination
Capable of intron processing
Able to express a wide range of
eukaryotic proteins
Close to human glycosylation & easy
glycoengineering possible
High expression levels
Linearly scalable
Fermenter time is less than a week
C1 High-Throughput Screening (HTS)
technology could speed up the discovery
and development process
C1 is non-mammalian, and therefore
requires no viral inactivation or validation
1 Owned by Merck, acquired in its 2006 purchase of GlycoFi
Competitor weaknesses Corresponding C1 strengths
E-coli
No intron splicing
No glycosylation
Can’t express antibodies
Targets are frequently insoluble
(inclusion bodies)
Targets not secreted
Intron splicing
Glycosylation
Excellent mAb expression
All targets secreted
THANK YOU
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Contact:
Danai Brooks
Dyadic International, Inc.
E-mail: [email protected]
Mobile: (646)325-1147
Office: (561)743-8333