Producing Biologics with C1 Jan 4, 2017 (OTCQX: DYAI) Safe Harbor - - PowerPoint PPT Presentation

Jan 4, 2017 (OTCQX: DYAI)

Producing Biologics with C1

Safe Harbor Regarding Forward-Looking Statements

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Certain statements contained in this presentation 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

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achievements expressed or implied by such forward-looking statements. Any forward-looking statements speak only as of the date of this presentation 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 are discussed

in Dyadic’s publicly available filings, including information set forth under the caption “Risk Factors” in our September 30, 2016 Quarterly Report filed with the OTC Markets on November 10, 2016 and our December 31, 2015 Annual Report filed with OTC Markets on March 29, 2016. 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.

C1 – the most productive fungal expression system for biologics

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A safe and reliable protein production platform, C1-derived vaccine showed no adverse clinical effects in mice

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Safety & Reliability

Produces batches of proteins that are significantly purer than traditional production methods 1

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Purity

Cuts preparation and production time in half compared to CHO

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Time Saving

Achieves much higher yields than traditional production systems in CHO, E. coli, S. cerevisiae, P. pastoris

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Yield

Grows under broader temperature & pH ranges and is easily scalable compared to CHO

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Robustness

C1 can minimize CapEx investments, production costs of biologics and overcome the limitations of traditional production systems

1 including CHO, E. coli, S. cerevisiae, P. pastoris

Dyadic Overview



Revolutionary protein expression technology “C1”: based on Myceliopthora thermophila fungus



Technology covered by over 20 patent families



Listed on the stock exchange (OTCQX: DYAI), liquidity of > 60m USD (1)



Experienced management & board

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20+ Years of Experience with Fungal Production Systems

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20+ Years in Pharmaceuticals

20+ Years of Commercial Enzyme Production

• Platform optimized 2009 – 2015
• Hyper productive strain developed with

unparalleled purity: >100 g/l with ~80% purity

• Production approved as safe by FDA
• Produced in up to 500,000l tanks

Biopharmaceuticals

• Strategic focus since 2016
• Powerful molecular toolbox enables

production of complex proteins

• Application proven successful:

mAbs Vaccines Non- Glycosylated Proteins

Dyadic has demonstrated the power of C1 for the production of biologics and is now looking to establish partnerships with biopharmaceutical companies

(1) As of September 30, 2016, including ~ $7.4 million of restricted cash held in escrow until July 2017 from the DuPont

Transaction.

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5 10 15 20 25 30 35 40 Per.C6 CHO C1 Complex Biologics Yield

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10

30

9 15 < 60 10 20 30 40 50 60

• S. cerevisiae
• P. pastoris

C1 Industrial/Simple Protein Yield

C1 produces more protein

Simple/Non-Glycosylated Proteins Complex Proteins, e.g. mAbs Yield in g/l >3 times higher yield 2 to 10 times higher yield

Sources: 1 Boehringer Ingelheim, BioXcellence production: www.bioxcellence.com. & Shane Cox Gad (2007) Handbook of Pharmaceutical

• Biotechnology. Wiley Interscience, New Jersey. 2 Non-GMP conditions, non purified. 3 Susan Gotensparre (2007) Crucell.

InPharmaTechnologist.com. 4 Non-GMP conditions, not purified, expected based on small scale production experience

 High cell density attainable  More protein produced  Protein is secreted  Both for small and large scale production  Codon optimization established  For heterologous proteins of both bacterial and mammalian origin

High productivity of C1 proven

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1 2 3 4

2 3 20 Key Highest yield claimed Realistic estimate

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40 15 20

C1 delivers higher purity of protein and is highly robust

Purity

C1 White Strain 2.0 2 C1 1st Generation2

• E. Coli 1

C1 delivers

• Higher levels of the target protein
• Significantly higher purity

C1 maintains high productivity

• Under a wider temperature than CHO
• Under a wider pH range than CHO
• At scales ranging from laboratory shake flasks to

20,000l tanks and above

40ºC

37ºC

• 32ºC

25ºC

pH range

7 1

14

5 9

C1 CHO

Robustness

CHO 2

1 After 2 Purification Steps, 2 No purification steps 3 Optimal range 32 - 37ºC. Source: Sellick, C. et al (2009) Optimizing CHO Cell

Culture Conditions. Genetic Engineering and Biotechnology News Tutorial.

6 CHO3

45ºC

• 25ºC

C1

• Reproduction rate of cell 2x higher than for CHO
• Protein production rate at least 1.5 fold
• Higher purity of protein achieved may decrease recovery time

C1 enables shorter production cycles in comparison to CHO

1 1 2 2 3 3 1 2 3 4 5

CHO C1

Duration of Steps in Production

*Note: Protein Recovery may be faster due to higher purity of C1 production

Week 1 Week 2 Week 3 Week 4

Batch Cycle time is reduced by >50% in comparison to CHO, freeing up capacity

Production time reduced by >14 days

1: Biomass Expansion 2: Protein Production 3: Protein Recovery*

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C1’s unique morphology enables non-viscous fungal production

The low viscosity allows C1 to be used in established microbial production facilities, requiring no additional CapEx investment

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Viscosity (cP)

Protein Yield

500 400 300 200 100 100 80 60 40 20 Protein (g/l)

Viscosity Standard Fungal Line C1

Low Viscosity, High Yield

Filamentous fungi face challenges for their use in production due to high viscosity C1 exhibits a unique morphology resulting in low viscosity

*

C1 enables 50 - 85% reduction in manufacturing costs

• Expected OpEx savings of 60 - 85% vis-à-vis CHO
• Possibility of decreasing CapEx investments by 80 %

4 12 5 10 15 Column1

 Decrease direct labor cost by >80%  Decrease indirect labor cost by >80%  Decrease consumables cost by >90%  Decrease capital charge by 60-70%2  Same extraction and purification costs 3

g/1000 US $

1 Depreciation cost of facility over 10 years included, savings increase with increased production need 2 Depending on production requirements, investment into 10,000 l

tanks can be reduced to 1 – 2,000l tanks, 3 Cost savings likely higher due to higher purity of proteins from C1

4 Based on production needs of ~800kg,

Output ~tripled

Cost Efficiency of C1 vs. CHO

(Exemplary ~20kg mAb Production1)  Lower CapEx Investment  Smaller production facilities faster to build

Additional benefits

CapEx Investment of C1 vs. CHO

(Exemplary large scale mAb Production4)

100 200 300 400 500 CHO C1

Million US $

CHO C1

CapEx reduced by 80%

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OpEx upstream savings

Four 10,000l tanks Three 2,000l tanks

C1 is easy to engineer to achieved desired protein profile1

Dyadic has experience with each of the molecular tools necessary to optimize the strain for high productivity and functionality for the targeted protein class

Genetic manipulation

Computational biology

Man9 G0 G2F

Changing the cellular regulatory circuit

✔

Libraries of efficient strong promoters

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Libraries of TF and signal peptides and / or carrier proteins

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Libraries of protease deletion strains

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Glycoengineering to form mammalian-like glycan structures in progress

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• 1. First proof of concept studies have been successful for these tools in Trichoderma.

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Gene 1 Pr Carrier

Trichoderma Reesi Fungal System

Production yields with different target proteins by Trichoderma reesei

Trichoderma Source: PEGS Boston, 2016: (Next - Generation Biotherapeutic Production System: The Filamentous Fungus Trichoderma Reesi)

 Antibodies produced in Δ7 strain, IFN in Δ9 strain, and IGF1 in Δ13 deletion strain as fusion with CBHI carrier  However, this is far from the maximal theoretical output of 29 g/L for MAb01 based upon carrier expression level

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Trichoderma Reesi Fungal System (Cont.)

IgG production by Trichoderma reesei (TR)

Trichoderma Source: PEGS Boston, 2016: (Next - Generation Biotherapeutic Production System: The Filamentous Fungus Trichoderma Reesi)

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Protease deletion strains together with fermentation optimization work improved the IgG

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Antibody production levels up to 7.1 g/l

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The secretion carrier CBHI is produced in the fermentations at levels up to 38 g/l. This theoretically equates to potential antibody expression levels of approximately 29 g/l

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6 18 28 34 41 49 52 60 56 56 58 5.9 13.1 22.4 36.3 31.4 38.5 33.3 32 35.4 5.8 6.2 6.7 6.9 7.1 6.7 4.7 17 27.6 23.9 29.2 25.3 24.3 26.9

10 20 30 40 50 60 70 1 2 3 4 5 6 7 8 9 10 11 12 13

Protein (g/L) Day in culture

TR - Total Protein CBHI TR - MAB01 TR - Theoretical MAB01

6 18 28 34 41 49 52 60 56 56 58 5.9 13.1 22.4 36.3 31.4 38.5 33.3 32 35.4 17 27.6 23.9 29.2 25.3 24.3 26.9 5.8 6.2 6.7 6.9 7.1 6.7 4.7

10 20 30 40 50 60 70 1 2 3 4 5 6 7 8 9 10 11 12 13

Protein (g/L) Day in culture

TR - Total Protein CBHI TR - Theoretical MAB01 TR - MAB01

Higher potential production of IgG with C1

(1) Expression of heterologous fungal protein Trichoderma Source: PEGS Boston, 2016: (Next - Generation Biotherapeutic Production System: The Filamentous Fungus Trichoderma Reesi)

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Total C1 cell protein expression reached a level of >100 g/l.

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The production level is almost 2 fold higher than the total protein production of T. reesei.

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The production phase starts earlier already after 1 day and can proceed to 5 – 7 days.

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Therefore, the potential of reaching much higher antibody productivity than 6.9 g/l is promising with C1 after 5-7 days of optimized fermentation process.

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1.7 10.1 41 66 82 95 105 6 18 28 34 41 49 52 60 56 56 58 10 22 34 55.2 47.8 58.4 50.6 48.6 53.8 5.9 13.1 22.4 36.3 31.4 38.5 33.3 32 35.4 5 11 17 27.6 23.9 29.2 25.3 24.3 26.9 11.6 12.4 13.4 13.8 14.2 13.4 9.4 5.8 6.2 6.7 6.9 7.1 6.7 4.7

20 40 60 80 100 120 1 2 3 4 5 6 7 8 9 10 11 12 13

Protein (g/L) Day in culture

C1 - Total Protein TR - Total Protein C1 - Theoretical CBHI TR - Theoretical MAB01 C1 - Expected TR - MAB01

C1 for vaccine production – lower costs & higher efficacy

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Easy scale up, lower production costs due to higher yield (in comparison to CHO/yeast/ E. coli)

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C1 produced antigen generated an equal, or better, immune response in mice than the industry standard antigen

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International collaboration ongoing in vaccine development

Key Advantages

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The C1 technology platform: A leap in technology that shows the potential to change the way in which both Human and Animal Health Biopharmaceutical companies bring their biologic vaccines and drugs to market faster, in greater volumes, at lower cost, and with newer beneficial properties.

C1 has the potential to address several of the challenges facing the Diabetes market 1. High demand

• Insulin production needs are expected to exceed 16 tons by 2025. Current Insulin

production methods will not suffice to meet demand.1 1. Lower margins

• Published insulin CoGS lie at about 61 USD per gram, leaving a profit margin of about

35%.2 1. Payer pressures

• US payer pressures are driving down profit margins even further.

C1 for production of non-glycosylated proteins*

Based on production yields alone, cost savings of > 50% may be achieved. C1 exhibits higher production flexibility than

• S. cerevisiae or E. coli

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* With no to minimal post-translational modifications needed to functionality

Sources: 1. Baeshen et al. Cell factories for insulin production. Microbiol Cell Factories 2014. 13:141.

2 Harrison et all, Bioseparations Science and Engineering. Oxford University Press 2nd Edition, 2015. Note: Large scale manufacturers operating at highest efficiency

levels achieve lower costs (1/2 to 1/3 of cited cost).

Example Case: C1 for Insulin Production

C1 for mAb production shows promising initial results

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Production of heavy & light chain successful

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MS/MS data reveals correct structure

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Binding to target confirmed via ELISA

Heavy chain Light chain

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Production of Fab successful

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The structure was confirmed by MS analysis

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Specificity of binding confirmed via ELISA

Lucentis

72h 96h Control

Case Study 1: Humira Case Study 2: Lucentis  C1 has produced biologically-active monoclonal antibodies  Protease deficient strains with no mAb degradation successfully generated  Codon use for fungal expression optimized  Glycosylation controllable and glycoengineering is expected to begin in 2017 Successful Initial Engineering of C1 for mAb Production

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C1 production of mAbs could dramatically alter economics

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42 18 124 60 110 360 50 100 150 200 250 300 350 400 C1 - 2000l tank C1 - 10,000l tank Standard Manufacturing

Annual OpEx Initial CapEx Investment

Comparative Manufacturing Costs

(Example: Humira for US market)

* OpEx cost include depreciation cost that assume depreciation of facility over 10 years, costs from active ingredient production only, no further processing

1 requires two 2,000l tanks to satisfy annual production needs, 2 requires one 10,000l tank that will retain 10 months of production capacity, 3 requires three

10,000l tanks

CHO - 10,000l tank 3

Cost in Million USD

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Potential savings over current production methods warrant further engineering to realize mAb production in C1

Biobetter mAbs Robust strain engineering and Glycoengineering Novel mAbs

H1 2017 H2 2017 H1 2018 H2 2018

New Product Platform Development New Product Development mAb Biobetter Development

H1 2019

Estimated timeline for Further C1 Strain Engineering

* C1 - 2,000l tank 1 C1 - 10,000l tank 2

C1 production is safe

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Non-Pathogenic Not Genotoxic

• Strain is non-toxic and non-

infectious

• No toxic byproducts are

generated during production

• In vivo trials demonstrated:
• No adverse effects
• No foreign DNA
• Safety confirmed

 C1-cellulase accepted by FDA on

September 29, 2009

 GRAS notification letters are

broadly recognized in the food and consumer products industries as the safety standard

For Enzyme Production: Generally Recognized as Safe (GRAS) Status

No Adverse Effects

• Mice experiments showed:
• No adverse clinical

effects induced by C1 produced vaccines

Summary - Key Advantages of C1

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Dyadic is looking for partners in the biopharmaceutical space to exploit the potential of C1.

For further inquiry, please contact mjones@dyadic.com

Further benefits:  Unique properties that can be engineered for the desired product profile  A toolbox for strain engineering to

• ptimize production of different

biologics (vaccines, simple proteins, antibodies) Short production cycles

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High purity of produced protein Robust and reliable manufacturing

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First product shown to be safe in animal studies

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Unprecedented protein yields

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