NASDAQ:DYAI
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Proliant Health and Biologicals Partnership
Dyadic International Inc. (NASDAQ:DYAI) announced a development and commercialization partnership with Iowa-based Proliant Health and Biologicals to sell animal-free recombinant albumin products produced by C1. The deal includes a $1.5 million upfront payment, part of which will be used to support Dyadic’s technology transfer, scale up and commercialization responsibilities. According to the data collection firm Global Market Research Matrix, the global albumin market size was $6.4 billion in 2023 growing at a mid-single digit rate. Proliant is a dominant player in the albumin market and has a facility in New Zealand to source bovine blood product. The initial focus of the partnership will be on the production and commercialization of recombinant human serum albumin products with launch expected in 1H:25. We expect terminal profitability to be achieved quickly as assets are already in place.
Details of the arrangement were included in a June 28th press release.
Recombinant serum albumin has several important uses in medicine and biotechnology. Below we enumerate several but not all of the key areas where it is used:
➢ Stabilizer and carrier for drugs, particularly biologics;
➢ Supplement to cell culture media providing nutrients and growth factors;
➢ Plasma expander for patients with severe blood loss;
➢ Stabilizer for vaccine formulations;
➢ Protein purification;
➢ Diagnostic tests;
➢ Cryopreservation;
➢ Medical device coatings for stents and tubing to improve biocompatibility.
In many cases, recombinant albumin is more attractive than animal-based product because it has fewer contaminants and no animal-borne viruses that may be present in naturally derived product. Supply of recombinant albumin is more reliable, avoids ethical issues related to animal use, is preferred by regulatory agencies and customers and is more sustainable than animal-derived product.
C1-produced recombinant albumin offers the additional advantage of being less expensive to produce compared to other expression systems. Based on our analysis and feedback from Dyadic, the cost of producing recombinant serum albumin using C1 versus other popular expression systems would be from 25 to 30% lower.
Based on our conversations with management and details released in the press, first product sales could be in 1H:25. Between now and then the Dyadic and Proliant teams must complete the technology transfer, scale up and commercialization activities. We believe that the marketing team that will sell this product is already informing customers and prospects of animal-derived albumin about the benefits of recombinant product, in preparation for first sales.
The deal between the two companies will provide an undisclosed share of Proliant’s profits to Dyadic. We estimate this could be from 10 – 15% of total C1 derived recombinant albumin revenues. While this deal is an exclusive for recombinant human albumin, it does not prevent Dyadic from signing other deals in the albumin space from other animal hosts such as canine albumin.
Proliant
Proliant Health & Biologicals is a private manufacturer of proteins that serves companies in the microbiological, life sciences, biopharmaceutical and veterinary sciences around the world. The company has two production plants that host its closed-loop manufacturing process with one located in Boone, Iowa and the other in Feilding, New Zealand. The facilities produce product according to FDA cGMP standards. The New Zealand facility provides bovine blood product for processing in Iowa and subsequent global distribution. Proliant provides products in the Diagnostics, Cell Culture and Nutrition space. This includes bovine serum albumin, bovine gamma globulin, purified proteins, and digestive and gut health products. Proliant works with many leading health science companies including Veritas, Biophyll and J Sights Corporation.
Proliant now only produces animal-based albumin, but it recognizes the preference for human and especially recombinant human albumin that can be used in more applications. Up until now, the more expensive classes and grades of albumin which include human and recombinant human albumin are not used due to cost constraints. C1 produced product is expected to have substantially lower product costs compared with competitors due to the efficiency of C1 as a production system and due to reduced purification demands that are necessary for Chinese hamster ovary (CHO) or e. coli production.
Summary
Dyadic makes a bold move into the animal-free recombinant albumin space with a partnership announcement. The deal, which offers a small upfront to cover the costs of technology transfer and scale up, should set up the partners to have first sales of recombinant human albumin in C1 by 1H:25. The arrangement offers many benefits to the production of recombinant serum albumin including faster production, fewer contaminants compared with animal derived product and lower cost. Combined with Proliant, which has a deep bench of customers, we think that Dyadic and its C1-derived product can make headway into the space. The superior product can potentially take share from other animal-sourced and recombinant albumin and possibly expand the market as the lower cost product will support development of new uses.
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