Dyadic International (NASDAQ:DYAI) reported a 61% decline in third-quarter revenue as grant and research activity slowed, while executives said the company’s first direct commercial protein sales remain modest and customer adoption is taking longer than expected.
The company reported revenue of approximately $449,000 for the quarter ended Sept. 30, down from $1.165 million a year earlier. Net loss narrowed to approximately $1.4 million, or $0.04 per share, from $2 million, or $0.06 per share.
President and Chief Operating Officer Joe Hazelton said Dyadic is shifting from primarily developing protein-production technology toward building businesses around its C1 and Dapibus platforms. The company is increasingly looking to larger partners to help finance manufacturing and bring products to market.
Commercial Sales Begin, but Adoption Takes Time
Dyadic recorded its first direct commercial protein product sales during the quarter, primarily involving recombinant transferrin and DNase I. Hazelton said the sales were not yet financially material and that converting initial purchases and evaluations into repeat business is a priority.
Customers using proteins in cell culture media need to confirm that substitutes meet quality requirements and work in their existing processes before incorporating them into commercial workflows, Hazelton said. Research products face less regulatory scrutiny and are seeing faster uptake, he added.
“The conversion from sampling to recurring purchases has been slower than anticipated,” Hazelton said in prepared remarks.
Limited capital is also constraining growth. During the question-and-answer session, Hazelton said Dyadic has not been able to build substantial inventory for distribution and is making products to demand. The company is seeking larger customers that can fund manufacturing and enter supply agreements, he said.
Dyadic has expanded its reach through IBT Bioservices, which launched an initial portfolio of six Dyadic-produced recombinant proteins for research use. Partner Proliant Health & Biologicals is commercializing AlbuFree DX, a recombinant human serum albumin produced using C1, and plans additional products for cell culture and cell and gene therapy applications.
Food Protein and Partner Programs Advance
In food and nutrition, partner Inzymes told Dyadic in November that it made its first commercial sale of Dapibus-produced camel chymosin in October. Hazelton said Dyadic expects a $225,000 contractual payment and associated revenue in the fourth quarter. The camel product is Inzymes’ second Dapibus-produced chymosin to reach the market, following bovine chymosin.
Dyadic also expanded a collaboration with BRIG BIO and Strive Nutrition involving animal-free bovine alpha-lactalbumin. Strive is the intended end customer and plans to test the protein for use in nutritional products.
Hazelton described the arrangement as a supply agreement, with an initial purchase of 10 metric tons and up to 200 tons in the following year once economic and regulatory thresholds are met. Further optimization, application testing, regulatory work and scale-up are needed before commercial production can be established, he said. Hazelton did not provide financial guidance for the arrangement.
In bioindustrial applications, partner Fermbox Bio has launched EN3ZYME, a Dapibus-produced enzyme for biomass processing. Hazelton said Dyadic has seen increased sampling and discussions involving industrial enzymes, particularly in biofuels and ethanol.
Antibody Studies and Vaccine Development
Chief Executive Officer Mark Emalfarb said Dyadic’s biopharmaceutical strategy remains focused on externally funded development and collaborations rather than independently financing costly clinical programs.
Under an approximately $3.1 million Gates-funded program, C1 produced RSV and malaria monoclonal antibodies at yields of approximately 12.1 grams and 13.2 grams per liter, respectively, in seven-day fermentations. Emalfarb said independent evaluations showed binding and neutralization activity comparable to corresponding antibodies made using CHO cells in the assays performed.
In October, the Gates Medical Research Institute initiated preclinical animal studies comparing the pharmacokinetics of the C1-produced antibodies with their CHO-produced counterparts. Results are expected in the first quarter of 2027, Emalfarb said. He cautioned that additional validation and development remain necessary.
Emalfarb also said a CEPI-funded program with Fondazione Biotecnopolo di Siena reduced a vaccine antigen development workflow from several months to approximately 15 days. Dyadic used the process to produce two Bundibugyo Ebola antigens for preclinical studies, he said.
Cash Position and Filing
Chief Financial Officer Ping Rawson attributed the quarterly revenue decline to a $538,000 reduction in grant revenue and a $188,000 decline in research and development revenue. Revenue for the first nine months of 2026 was $2.5 million, essentially flat with the prior-year period.
The third-quarter net loss included other income that reflected an approximately $546,000 noncash gain from a change in the fair value of warrant liabilities, net of allocated issuance costs. Rawson said the gain will fluctuate with Dyadic’s share price.
Dyadic ended the quarter with approximately $6 million in cash, restricted cash and investment-grade securities, including accrued interest, compared with $8.6 million at year-end. Operating activities used approximately $5.3 million in cash during the first nine months, and Rawson said usage is expected to continue at a similar level, subject to quarterly variation.
Rawson said a Microsoft Outlook issue had delayed the company’s quarterly Form 10-Q filing. Dyadic expects to file once the system is back online and within the SEC deadline, she said.
About Dyadic International (NASDAQ:DYAI)
Dyadic International, Inc. is a biotechnology company focused on developing and commercializing microbial protein-expression technologies for the production of biologic products. Its platforms are designed to enable the efficient development and manufacture of proteins used in vaccines, therapeutics, food and nutrition products, and industrial applications. The company’s principal technology, the C1 expression platform, is based on a proprietary strain of the fungus Trichoderma reesei . Dyadic has also developed additional microbial systems, including the Dapibus platform, which is intended to support the production of proteins and other biological materials in yeast.
