Dyadic outlines new commercial focus as first bulk protein sales and Asia expansion accelerate growth trajectory

Earnings Call Insights: Dyadic International, Inc. (DYAI) Q3 2025

MANAGEMENT VIEW

* President & COO Joseph Hazelton highlighted a pivotal shift, stating Dyadic is now operating as a “commercially focused biotechnology company with a growing portfolio of high-value products.” He noted the first commercial bulk sale of a Dyadic-produced protein at the start of Q4, marking the transition from R&D to revenue generation and emphasizing momentum with new product opportunities and expanded global reach into 2026.
* Hazelton announced the company’s rebranding to Dyadic Applied BioSolutions, the launch of a new website, and the acquisition of CRISPR/Cas9 gene editing capabilities through an ERS Genomics license. He explained this will "accelerate strain optimization, improve productivity, and further increase yields and consistency across our proprietary C1 and Dapibus platforms, directly supporting commercialization and profitability."
* Hazelton described new commercial traction, specifically the first bulk purchase order for recombinant bovine fibroblast growth factor (FGF) in the cultured meat market, and detailed the ongoing recombinant human albumin program with Proliant Health and Biologicals, which has brought $1.5 million in milestone payments to date.
* Top product priorities now include animal-free transferrin and DNase1, both in active manufacturing and sampling phases, with transferrin targeting both cultivated meat and biopharmaceutical markets, and DNase1 entering sampling for gene therapy and molecular diagnostics applications.
* Strategic partnership with Intralink was highlighted to drive market penetration in Japan and South Korea, aiming to leverage local expertise for effective entry into the Asia Pacific region.
* Hazelton also noted advances in food nutrition, referencing a term sheet for alpha-lactalbumin in the infant nutrition market and continued progress in the lactoferrin program, with both products expected to reach sampling or research use by early 2026.
* CEO Mark Emalfarb stated, "Our biopharmaceutical programs are accelerating and delivering meaningful advancements in vaccine and therapeutic protein development for both animal and human health through collaborations supported by the Gates Foundation, the Coalition for Epidemic Preparedness and Innovation, CEPI, and our strategic partnership with Dr. Rino Rappuoli and the Fondazione Biotecnopolo di Siena, FBS."
* CFO Ping Rawson reported, "Total revenue for the quarter ended September 30, 2025, decreased to $1.165 million compared to $1,958,000 for the same period a year ago. The decrease was due to decreases in research and development revenue of $183,000 and license and milestone revenue of $1.425 million from the Pine agreement and enzyme agreement in 2024. The decrease is offset by an increase in grant revenue of $815,000 from the Gates Foundation and CEPI grant in 2025."

OUTLOOK

* Hazelton confirmed Dyadic expects momentum to build with additional product opportunities in 2025, accelerating in 2026 as the company scales its portfolio and expands its global market reach. He indicated, “For the rest of 2025, we expect to see growth in product revenue in our life sciences and food and nutrition markets as we launch products in cell culture media and molecular biology while maintaining our operating expenses in line with last year.”
* Management stated continued focus on launching animal-free proteins (transferrin, DNase1, growth factors) and advancing commercialization in the food, nutrition, and bioindustrial segments.

FINANCIAL RESULTS

* Rawson reported total revenue for Q3 2025 was $1.165 million, attributing the year-over-year decrease to lower R&D and license revenue, partly offset by increased grant revenue.
* Cost of research and development revenue and cost of grant revenue for Q3 2025 was $255,000 and $769,000, respectively.
* Research and development expenses increased to $572,000, while G&A expenses rose to $1,481,000, mainly driven by rebranding, business development, and legal/accounting expenses.
* Loss from operations increased to $1,925,000, and net loss for the quarter was $1,976,000 or ($0.06) per share.
* As of September 30, 2025, the company reported a cash position including cash, equivalents, and investment-grade securities of approximately $10.4 million.

Q&A

* Matthew Hewitt, Craig-Hallum Capital Group LLC: Asked about the impact of the new CRISPR commercial license on Dyadic’s portfolio. Hazelton responded that the ERS Genomics license provides a stronger genetic toolbox, helping accelerate product development and improve optimization yields, and offers a competitive advantage in markets where CRISPR licensing is a concern.
* Hewitt followed up on DNase1 market ramp. Hazelton explained the DNase1 market is roughly $250 million for recombinant products and $1.5 billion overall, targeting bulk sales to distributors and OEMs, with initial lab-grade sales expected to ramp up to higher-margin segments over time.
* John Vandermosten, Zacks Small-Cap Research: Inquired about the Intralink partnership in Asia. Hazelton detailed targeting cell and gene therapy manufacturers and suppliers in Japan and Korea for bulk purchase orders, not academic centers or labs. Emalfarb and Hazelton discussed how Dyadic’s global presence and ability to transfer technology offer protection from U.S. market turmoil and tariff issues.
* Robert Hoffman: Asked about financial structure of the ERS Genomics CRISPR agreement. Emalfarb explained the agreement is focused on engineering fungal cell lines, not human therapeutics, and that the financial terms are modest compared to clinical CRISPR licenses.
* Tony Bowers, IntroAact: Asked about the endgame for Gates/CEPI grants and commercialization of core products. Emalfarb said the endgame is to "save hundreds of thousands, if not millions of lives, and getting rewarded for it financially." Hazelton noted the grants also open doors for cell culture media products. Bowers also asked about commercial bottlenecks, with Hazelton confirming there are no current CDMO capacity issues.
* Hoffman asked about future headcount and cost structure. Hazelton indicated the business model scales without significant added infrastructure, relying on outsourced manufacturing and distribution.

SENTIMENT ANALYSIS

* Analysts were generally positive but probing, seeking clarity on commercialization timelines, market potential, and operational bottlenecks, especially regarding CRISPR, DNase1, and Asian expansion.
* Management conveyed confidence in the company’s commercial strategy and partnerships, using phrases like “the indicators for growth are clear,” and “Dyadic...is well positioned to deliver sustainable revenue and growth.” The tone remained consistent with prior quarters, but with heightened emphasis on near-term execution and global expansion.
* Compared to the previous quarter, analyst tone was similar—constructive and inquisitive regarding strategy and scalability—while management displayed increased assurance in commercial execution and new partnerships.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter featured the first commercial bulk sale and more pronounced messaging around the transition from platform to product company, compared to the previous quarter’s focus on strategic foundation and rebranding.
* Guidance language shifted from cautious optimism to executing on specific near-term product launches and commercial sales, with greater detail on product market entry, especially for DNase1, transferrin, and FGF.
* Analysts continued to focus on scalability, addressable markets, and cost structure, but pressed further on commercial ramp, Asia strategy, and licensing agreements.
* Management’s confidence has grown, bolstered by new commercial milestones, global partnerships, and a strengthened balance sheet. The tone of execution and revenue focus was more prominent this quarter.

RISKS AND CONCERNS

* Management identified challenges related to scaling product revenues, regulatory hurdles for infant nutrition and medical nutrition products, and the need for continued technological advancement to maintain cost and quality advantages.
* Mitigation strategies include leveraging partnerships for market access (Intralink in Asia), utilizing CRISPR to accelerate strain development, and employing an outsourced manufacturing model to avoid heavy infrastructure investment.
* Analysts expressed concerns about the pace of revenue growth, commercialization bottlenecks, and the sustainability of operating expenses amid expansion.

FINAL TAKEAWAY

Dyadic’s third quarter marked a significant step in its commercial evolution, highlighted by the first bulk protein sale, expanded product launches, and new global partnerships. Management emphasized the company’s transition to a product-driven model, the integration of advanced gene editing capabilities, and its robust cash position as key enablers for scalable growth. With multiple products advancing toward commercialization and strategic initiatives underway in Asia and food nutrition, Dyadic Applied BioSolutions is positioning itself to capture recurring revenue opportunities in high-growth markets while maintaining a disciplined approach to operating expenses and infrastructure.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/dyai/earnings/transcripts]

MORE ON DYADIC INTERNATIONAL

* Dyadic International, Inc. (DYAI) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4842882-dyadic-international-inc-dyai-q3-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Dyadic International [https://seekingalpha.com/symbol/DYAI/ratings/quant-ratings]
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