Dyadic International Inc Q3 FY2022 Earnings Call

Good evening and welcome to Dyadic International’s Third Quarter Fiscal 2022 Financial Results Conference Call. Currently, all participants are in a listen-only mode. Following management’s prepared remarks, there will be a brief question-and-answer session. As a reminder, this conference is being recorded today, November 10, 2022. I'd now like to turn the call over to Ms. Ping Rawson, Dyadic’s Chief Financial Officer. Please go ahead, ma'am.

Thank you. Good evening and welcome everyone to Dyadic International's third quarter fiscal 2022 conference call. I hope you have had the opportunity to review Dyadic's press release announcing financial results for the quarter ended September 30, 2022, and the recent company highlights. You may access our release and Form 10-Q under the Investors section of the company's website at dyadic.com. On today's call, our President and CEO, Mark Emalfarb, will give a review of our third quarter 2022 business and corporate highlights, including a brief summary of our research and business development efforts. Our Chief Business Officer, Joe Hazelton, will join Mark for the business update. I will follow with a review of our financial results in more detail. We'll then hold a brief Q&A session. At this time, I would like to inform you that certain commentary made in this conference call may be considered forward-looking statements, which involve risks and uncertainties and other factors that could cause Dyadic's actual results, performance, scientific or otherwise, or achievements to be materially different from those expressed or implied by these forward-looking statements. Dyadic expressly disclaims any duty to provide updates to its forward-looking statements whether as a result of new information, future events, or otherwise. Participants are directed to the risk factors set forth in Dyadic's reports filed with the SEC. It is now my pleasure to pass the call to our CEO, Mark Emalfarb. Mark?

Thank you, Ping. Hello everyone and thank you for joining Dyadic's third quarter update call. As you will hear on today's call, we are continuing to advance our scientific developments and there is much to be excited about at Dyadic. In Q2, we discussed the company's focus on our core business in achieving commercial agreements in each of its three core verticals: human health, animal health, and alternative proteins. Today, I would like to discuss the progress we've made in expanding opportunities in these areas and how we believe that the progress will accelerate the future potential for Dyadic. As I stated in our Q2 call, the commitment it takes to build a protein production platform to support life sciences manufacturing demands persistence, focus, and the determination to see the process through. It also takes an unwavering belief that the potential monetary and societal impact outweighs the significant investment of not just capital but a yielding dedication to scientific advancement. At Dyadic, our mission is to help make proteins for world health. Our foundation continues to be our science coupled with our highly efficient microbial platforms and commitments to the advancement of that science to create revenue, profits, and long-term shareholder value while helping to increase access to biologic vaccines and drugs across the globe. To help Dyadic achieve this mission, I want to thank the many scientists we continue to work with in academia, industry, and government, our collaborators, shareholders, and board members for their support during this crucial journey. As you hear today, we have achieved some significant milestones since the second quarter and are even closer to several transformational milestones in life sciences as we close in on demonstrating that producing proteins using our C1 technology is safe for use in humans. In addition, we continually strive to improve productivity, quality, and performance of C1-produced proteins. These efforts have led to several scientific breakthroughs this quarter, including increased protein expression levels through the application of our new genetic approaches and engineering C1 cells. The rapid advancements in our science are coming at a time when we are achieving significant development milestones, which we expect will lead to our ability to open additional opportunities within our core verticals and capitalize on existing and new revenues for Dyadic and our collaborators. First, I would like to focus on the significant achievements we have reached in human health. I'm proud to announce that Dyadic has received regulatory approval from the South African Health Products Regulatory Authority, SAHPRA, to initiate a Phase 1 clinical trial to demonstrate clinical safety and antibody response in humans for the DYAI-100 COVID-19 recombinant protein RBD booster vaccine candidate. This is an important step towards establishing C1 as a safe and transformative option as a more efficient protein production platform for the development and manufacture of a growing number of biopharmaceuticals for infectious and other diseases. Our Chief Business Officer, Joe Hazelton, has been overseeing our efforts regarding this submission. I will now turn the call over to Joe to discuss the timing and relevant aspects of this important clinical trial application, CTA for Dyadic.

Thank you, Mark. The primary purpose of the Phase 1 study is to evaluate the safety of a new drug candidate before it proceeds to further clinical studies. Using the C1 platform to produce biopharmaceuticals, we are starting the biomanufacturing process with what we and a growing number of scientists believe is an extremely safe microorganism. In 2009, Dyadic C1 cells were used to produce an enzyme that received generally recognized as safe or GRAS status from the U.S. FDA, which means safe for use as an additive in food and feed for animals and humans. In addition, Dyadic has generated significant preclinical safety data across several animal species regarding the C1 platform, but unlike E. coli, CHO (which are Chinese hamster ovary cells), and insect or baculovirus cells, the C1 cells themselves are free of viruses and endotoxins that must be removed during the downstream processing, impacting productivity, cost of purification, and delaying product release. Data from vaccines produced from C1 proteins have repeatedly demonstrated safety and efficacy in a range of infectious diseases in animal trials with cattle, lambs, chickens, rabbits, hamsters, and mice, again demonstrating the preliminary safety of proteins produced from the C1 protein production system. Specifically with our DYAI-100 vaccine candidate, we have demonstrated safety in multiple mouse studies and, most importantly, in our successful rabbit toxicology study, which showed safety and persistence of antibodies generated from our C1-based DYAI-100 COVID-19 booster vaccine candidate. You may have also seen in today's press release new data presented at the World Vaccine Congress in Europe by Dr. Albert Osterhaus. He is with the University of Veterinary Medicine in Hannover, Germany, who has been collaborating with Dyadic for over five years. Dr. Osterhaus presented preclinical safety and efficacy data from animal studies, including cancers and non-human primates, demonstrating that C1 produced antigens and antibodies are as effective as those produced by common cell lines used for biologic vaccine and drug production platforms like CHO cells. Mark will speak to this in greater detail a bit later, but in summary, the data supporting the overall safety profile of C1 cells, as well as our ability to produce proteins that prevent and/or treat disease, is equivalent to, if not better than, the most commonly used cell lines in production today. You will also hear Mark speak about how C1 continues to demonstrate higher productivity and efficiency, potentially increasing global access and lowering overall manufacturing costs. Dr. Osterhaus' video presentation can be found on Dyadic’s website under our Media Center and the Video Gallery, which brings me to the regulatory approval of our clinical trial application. In addition to establishing a track record of safety in humans for antigens produced from our C1 cells, the Phase 1 trial would be a randomized double-blind placebo-controlled trial to evaluate the safety, reactogenicity, which is the response to vaccination, and immunogenicity, which is the immune response, of the DYAI-100 COVID-19 recombinant protein RBD booster vaccine in 30 healthy adults tested in South Africa. Trial preparations are actively underway, with site initiation expected later this year. There are eight scheduled patient visits over a six-month period, with safety data being collected throughout the trial and immunogenicity assessments scheduled on six of the eight visits. Timing for the results will depend on many factors, including enrollment, and we will share additional data as it becomes available. A successful outcome to the Phase 1 trial for DYAI-100 would bring a new weapon against COVID-19 closer to approval and provide additional safety validation for us and our collaborators, reducing developmental risk for other vaccines against infectious diseases and other diseases. In addition, progress continues to be made by Epygen Biotech, one of Dyadic’s non-exclusive licensees, to advance development, manufacture, and conduct Phase 1 and 2 clinical trials using Dyadic’s C1 protein production platform for their COVID-19 vaccine candidate produced from C1 cells. Our C1 protein expression platform is capable of unparalleled scale and productivity in terms of antigen production, and the proteins produced from our C1 platform continue to demonstrate comparable safety and efficacy to antigens produced from traditional cell lines used in animal studies. We expect that the Phase 1 clinical trial in South Africa and the later Phase 1 trial in India with Epygen will be pivotal points in the many ongoing discussions we're having with top-tier pharma, biotech, and government agencies globally. We have also presented data demonstrating that our innovative approaches and designs to C1 produced proteins generate higher neutralizing antibody activity in preclinical animal studies, with the potential to improve vaccines for influenza, COVID-19, and other diseases. An example is our successful production of Wuhan and Omicron Ferritin RBD nanoparticle antigens, which may have applications as a next-generation pan-coronavirus vaccine candidate. Similarly, last quarter we discussed how our efforts in expressing the neuraminidase antigen, which has broad potential use in the development of better seasonal and pandemic flu vaccines, has historically been difficult to produce reliably at high yields and with the right biological activities. The addition of neuraminidase to standard flu vaccines can enhance the immune response to provide even greater protection to patients. Our current expression level of 800 milligrams per liter in 168 hours has generated interest from academia, government agencies, and large pharmaceutical and biotech companies within the human vaccine industry. Our high-level expression of ferritin gRBD nanoparticle antigens from C1 cells for use in developing potentially better performing COVID vaccines, the potential for neuraminidase in combination with previously expressed hemagglutinin, or HA, which can play an important role in providing broader influenza vaccine-induced protection, and the safety data we expect to generate from the upcoming DYAI-100 Phase 1 trial are just a few examples of the many opportunities we believe will accelerate the adoption of the C1 platform. Mark will now discuss our progress in life sciences.

Thank you, Joe. As Joe mentioned in today's press release, we highlighted several areas of scientific and regulatory advancement. When we undertake a project, it is with a specific objective to either further the scientific advancement or enhance the breadth and scope of where we and our collaborators may be able to apply the technologies being developed, such as our C1 protein production platform. These projects and collaborations help to validate the application of C1 as a differentiated biomanufacturing platform for the prevention and treatment of infectious and other diseases, such as rabies, oncology, arthritis, and diabetes. For example, data presented recently by Dr. Albert Osterhaus from the University of Veterinary Medicine in Hannover for C1 produced COVID-19 monoclonal antibody, mAb, in a challenge study with the SARS-CoV-2 Delta virus on non-human primates demonstrated potential high protection and preventative effects. He also presented preclinical safety and efficacy data from animal studies, including hamsters and non-human primates, demonstrating that C1 produced antigens and antibodies are as effective as those produced by reference platforms like CHO cells. To further accelerate the adoption of our platform for the prevention and treatment of infectious and other diseases, research and development is ongoing with various collaborators in key therapeutic areas where the strength of our experience and our technologies coincide. In addition to the successful high-level expression of ferritin gRBD nanoparticle antigens from C1 cells for use in pan-coronavirus applications, we also have collaborators conducting animal trials on mono and multivalent RBD-based blended COVID-19 vaccines for potential next-generation pan-coronavirus vaccine candidates that may provide broader protection and longer-lasting prevention against a wide variety of coronaviruses than what is currently available on the market. Beyond our continuing work on COVID vaccines, we believe that our neuraminidase and hemagglutinin influenza antigens will anchor and further support our business development opportunities in infectious diseases. In collaboration with Oslo University, we have additional animal trials ongoing with C1 produced HA and COVID-19 antigens for potential more effective influenza and/or combined influenza-coronavirus vaccines. There are other preclinical animal studies also ongoing, including C1 produced antigens being evaluated for intranasal and oral applications. Now just a few words on the key life science growth market of therapeutic proteins. Therapeutic protein drugs in the market were valued at over $280 billion in 2020 and are estimated to reach over $560 billion by 2030. These drugs have already shown potential for significantly improving human health and are used to treat a variety of diseases such as cancer, immunological, hormonal, genetic, infectious diseases, and others. Global demand for therapeutic proteins is growing at unprecedented levels due to the rising prevalence and diagnosis of chronic and infectious diseases, a demand that has been further accelerated by the COVID-19 pandemic and rising concerns for concurrent pandemics involving other infectious diseases such as influenza. As we saw with COVID, the supply of therapeutic proteins during heightened demand was hampered due to the high cost and timelines required for developing and manufacturing protein-based therapeutics like monoclonal antibodies. Beyond cost and timing, there is a clear need for more productive manufacturing platforms that can meet this growing demand and the timeframe needed by patients all over the world. As Joe discussed, our progress on vaccines combined with various preclinical animal model tests and impending Phase 1 trials are expected to demonstrate to big pharma, biotech companies, government, and academia worldwide the safety profile for recombinant antigens produced using our C1 platform for the commercial production of recombinant vaccines and antibodies. We are generating data to support our science regarding therapeutic proteins. While we are excited about rapid advancements in our technologies to improve the productivity of our therapeutic proteins, we’re equally focused on the quality aspects of our monoclonal antibodies. In the second quarter, we announced the dosing and completion of a fully funded non-human primate study of a C1 produced COVID-19 monoclonal antibody. This monoclonal antibody 87G7, which is developed by the EU ZAPI scientists, already demonstrates broad utilization and protection against Omicron BA.1 and BA.2 as well as all other earlier variants of concern in hamsters. In today’s release, we highlighted Dr. Osterhaus' recent presentation at the World Vaccine Congress Europe in Barcelona, where he presented some preliminary results from the non-human primate challenge study with the SARS-CoV-2 Delta virus, which demonstrated protection. Equally important is that the C1 produced COVID-19 monoclonal antibody was as effective as a comparator antibody produced on the mammalian cells reference platform. The importance of this data is that we are obtaining safety and efficacy of a C1 produced therapeutic protein in a non-human primate study, demonstrating that C1 produced proteins are safe and just as effective as those produced in today’s commonly used platforms. This provides further validation of the C1 platform beyond high productivity and efficiency. This is a fully funded initiative with one of our third-party collaborators, and this non-human primate study is anticipated to lead to a funded GLP toxicology study and potentially CGMP manufacturing of drug substance in a Phase 1 clinical trial, this time demonstrating safety for therapeutic proteins from a C1 manufacturing cell. Establishing safety and efficacy in these Phase 1 trials for both vaccines and potentially monoclonal antibodies is a key gating item for big pharma, biotech, and government agencies, and we expect this to accelerate the application of our C1 platform to produce safe and effective vaccines and therapeutic proteins. While we still have work to do, the interest we are generating in therapeutic proteins, combined with the knowledge we are gaining, along with our collaborators, is rapidly expanding interest not only in nivolumab but also in many areas where our C1 platform can be applied for rapid development in production of large quantities of antibodies across large and mid-sized pharmaceutical companies in both human and animal health. Our collaboration with Janssen to develop C1 cell lines to produce targeted therapeutic protein candidates demonstrates our ability to attract the attention of large pharmaceutical partners. Progress is growing on time and we anticipate it will lead to development milestones and eventually commercial revenues generated from one or more of the Janssen targeted proteins. Regarding animal health and the expanding opportunity for business development that exists within this core vertical, we’re leveraging our scientific innovation and new designs in animal health to enhance the potential for monetization in this core vertical. You may have noted in today’s press release that we’ve successfully expressed a recombinant livestock antigen at titers up to 10 grams per liter in seven days, which is significantly higher than what has traditionally been produced with the reference platforms. Joe will provide more detail on Dyadic’s efforts in this market.

Thank you, Mark. As you noted, we are leveraging our science across core verticals, and there are many similarities and needs between the human and animal health markets for vaccines and therapeutic proteins, making the animal health market an attractive segment for Dyadic. The global animal health vaccines market is estimated at $15 billion, with the supply of those vaccines making up just another $8 billion. The productivity levels that have the potential to increase production at lower costs are crucial in this very margin-sensitive segment of the animal vaccine market, and we’re just beginning to penetrate this segment. These scientific advancements are driving further development of our expanded research projects in animal health for the development of animal vaccines for livestock, a new proof-of-concept project for a top animal health company targeting a specific companion animal disease, and the initiation of two additional recombinant protein projects to support vaccine research and development. As with the human health market, the increase in the prevalence and diagnosis of chronic and infectious diseases has significantly driven demand for therapeutic proteins within the animal health sector, specifically companion animals. The global companion animal antibody market was over $680 million and growing in 2021, and we are currently in discussions with several partners regarding therapeutic proteins for livestock and companion animals. Our focus is on the acceptance of the C1 protein platform, which we believe can serve as an accelerator for drug and vaccine development and commercialization, shortening the time from preclinical to phase trials, increasing productivity, and improving cost efficiencies within animal health. Mark, back to you.

Thank you, Joe. Our alternative proteins core vertical is home to our nutrition and wellness initiatives in partnerships. Driven by our fully funded joint development agreement with our global food ingredients collaborator, Dyadic is dedicating resources and support for existing projects within this rapidly growing market. Dyadic launched its Dapibus platform, a filamentous fungal-based microbial gene expression and protein production platform designed and customized to enable the rapid development and large-scale manufacture of low-cost enzymes, proteins, metabolites, and other biological products for use in non-pharmaceutical applications within our alternative protein core vertical. Alternative proteins represent another core vertical where we are able to leverage the advancements, innovation, and advantages of Dyadic technologies across a broad and growing market opportunity. As with vaccines and biologics, there is a clear market opportunity and a need for alternative proteins in both the human and animal health and nutritional segments. The animal alternative protein market that includes livestock and companion animals is a $9 billion market and growing. The human alternative protein market is a $7 billion market currently driven by plant-based proteins and further accelerated by the introduction of cultured or lab-grown meats. Despite still being smaller in scale, over $1 billion was invested in this market in 2021. There is a common shared need across the diverse alternative protein segment for the rapid production of high-quality yet affordable proteins and enzymes. To further accelerate our opportunity in this core vertical, I’m very excited to announce that we have initiated projects for animal-free recombinant serum albumin and other ventures to support the Dapibus platform to meet the growing demand and unmet needs of alternative proteins in emerging markets like cultured meat. These projects can also provide us with additional revenue-generating opportunities, particularly around serum albumin applications in research and product development. This will remain a key focus for Dyadic, as we believe our Dapibus microbial cell line provides our partners the ability to meet scale and cost demands for recombinant proteins and enzymes within the respective alternative protein markets. Additionally, we are actively seeking partnerships and collaborations for non-animal food proteins, nutraceuticals, and metabolites. Hopefully, what Joe and I have been able to share with you today illustrates how Dyadic is working to expand and accelerate our monetizable opportunities across our core business segments by focusing our business development efforts on those areas where our scientific advancements have the greatest potential to drive results. We will continue to leverage the learning from C1 in commercial scale industrial manufacturing to expedite the development process. In parallel, we remain fiscally responsible in our R&D partnerships and collaborations to fund advancements in critical areas of our science. As a result, C1 is much further along in its lifecycle development for life sciences than many industrial cell lines are within the same timeframe and at a fraction of the cost, with equally high prospects for success. Our focus is starting to yield results as Dyadic is gaining industry recognition globally, further enhancing our platform for human and animal health organizations. With that, I would like to turn the call over to our CFO, Ping Rawson, to take us through our financials.

Thank you, Mark. In addition to the financial results I’ll be discussing now, you can find additional information in our Form 10-Q, which we filed earlier today. Research and development revenue and license revenue for the third quarter of 2022 increased to approximately $880,000 compared to $693,000 for the same period a year ago. Research and development revenue and license revenue for the nine months ended September 30, 2022, increased to approximately $2,187,000 compared to $2,091,000 for the same period a year ago. Cost of research and development revenue for the third quarter increased to approximately $603,000 compared to $393,000 for the same period a year ago. Cost of research and development revenue for the nine months ended September 30, 2022, decreased to approximately $1,419,000 compared to $1,613,000 for the same period a year ago. Research and development expenses for the third quarter decreased to approximately $744,000 compared to $1,902,000 for the same period a year ago. Research and development expenses for the nine months ended September 30, 2022, decreased to approximately $3,917,000 compared to $5,919,000 for the same period a year ago. The decrease in research and development expenses was due to the winding down of activities from contract research organizations and pharmaceutical quality and regulatory consultants to manage and support the preclinical and clinical development, as well as a decrease in CGMP manufacturing costs as the company moves toward its anticipated Phase 1 clinical trial of its DYAI-100 RBD COVID-19 booster vaccine candidates. G&A expenses for the third quarter decreased to approximately $1,383,000 compared to $1,693,000 for the same period a year ago. G&A expenses for the nine months ended September 30, 2022, decreased to approximately $4,753,000 compared to $4,994,000 for the same period a year ago. Net loss for the third quarter was approximately $1,809,000 or $0.06 per share compared to $1,715,000 or $0.06 per share for the same period a year ago. Net loss for the nine months ended September 30, 2022, was approximately $7,589,000 or $0.27 per share compared to $8,856,000 or $0.32 per share for the same period a year ago. Our cash, cash equivalents, and the carrying value of investment-grade securities as of September 30, 2022, including accrued interest, were approximately $14.2 million compared to $20.4 million on December 31, 2021. Based on our current plans, the company’s cash burn for 2022 will be much lower than the original estimated range of $10 million to $11 million announced in March this year. We reiterate our expectations that our existing cash, cash equivalents, and investment-grade securities will be sufficient to fund our Phase 1 clinical trials of DYAI-100 and our operating expenses into 2024. With that, I will now ask the operator to begin our Q&A session. Each caller will be allowed one question and one follow-up question to provide all callers an opportunity to participate. If time permits, the operator will allow additional questions from those who have already spoken.

Thank you. The first question comes from John Vandermosten from Zacks SCR. Please proceed with your question, John.

Hello, Ping, Mark, Joe. How are you guys doing? Let me start out with a question on the scientific conferences that have recently happened. Mark, I think you attended several of those. When you’re going to these, what are some of the trends that you’ve heard in the industry that might be favorable or maybe even unfavorable? And then also does it give you a chance when you’re there to talk with potential companies or individuals who might be interested in C1?

Yes, so to the second half of your question, which is the easiest one to answer, is obviously I’ve met with numerous big pharma scientists and business development people that are key to big pharma and getting doors open to further collaborations and license agreements. I would say that the level of interest in C1 on the recombinant vaccine platform has significantly increased on many fronts between several of the top 10 pharmaceutical companies, including different divisions in companies we work with like Janssen. We’re currently working with the therapeutic side, but also the vaccine side which has expressed great interest. I’m going to get into more details regarding that due to confidentiality, but I can go on and on about it. At least five out of the top 10 pharmaceutical companies have had recent discussions at some of those conferences. In terms of the trends, it’s crystal clear that the world has been in turmoil regarding access and affordability in health equity. Now, whether that actually plays out in the real world over time can be uncertain, but I can tell you that people are starting to recognize and realize that there’s a need beyond the west and in more affluent countries for not only vaccines but treatments for COVID-19, cancer, rheumatoid arthritis, diabetes, and all kinds of other diseases. I think quite frankly that these conferences are much more important for us in the long-term for developing strategic relationships and scientific collaborations while putting us on higher levels within these companies to get deals done and going to investor conferences.

Right, okay. And that kind of leads me to my next question, which is one of the areas that might be of interest to you. I think the NIH did some work on this monoclonal antibody that would treat malaria fairly successfully. I don’t know if you’ve seen that or not. But is that something that you might pursue? I’m not sure who owns the mAb, but I mean it seems like with your relationships in Africa and just the prevalence of malaria there, that might be something that be of interest. Does that sound like something similar to that or if that in particular came up, would you jump on that to try to see if you could work something out?

Well, we certainly would jump on it. The question is, who’s going to fund it? So the issue there is, I’ve already reached out to that individual scientist—I think his name was Bob Seder from that paper you're talking about. However, the RUBIC Consortium is not just interested in COVID-19. In fact, their main interest is in the development of antibodies and vaccines for both animal and humans, including HIV and malaria as well as others, and they’re not alone.

Right, right. Exactly. All right, well, thank you, Mark. Appreciate that.

The next question comes from Lewis Titterton, who is a Private Investor. Please proceed with your question, Lewis.

Thank you. Hi, Mark. Congratulations on a number of things: number one, getting your burn down and getting your revenues up—that’s absolutely terrific. It gives you a much longer runway. Congratulations on all the good scientific work you’re doing. I have a pretty simple question. You’ve talked about Janssen and J&J and what’s going on there? It’s been about a year, I think, roughly a year since you announced that collaboration. Can you give us a little more color on the timing of this so we can see when we could expect some results to look at?

Yes, so I think it's been about nine months since we've started the actual project with Janssen. We’re talking about Janssen on the therapeutic side, not the vaccine side, which I alluded to as something else that we're working on as well. We've improved the yield of all the proteins in this project significantly on the science perspective, and the R&D teams of Janssen and Dyadic are working well together. The progress made so far in these projects is advancing towards reaching the milestones outlined in our agreement with Janssen. This includes the potential for multiple seven-figure milestone payments and potential nine-figure payments if the projected volumes of these products are achieved. The collaboration is going very well. It is very difficult with these big pharmaceutical companies, though, as there's a difference between the scientific and business developments, and those timelines have to align. But reaching these scientific milestones will ultimately lead to those milestones and the larger payments we’re all looking for. Janssen has a strong relationship with us on the scientific side. We met with their business development team and the individuals who made the deal, so they are certainly engaged on this.

Thank you, that's very useful. I appreciate it. Do you think that within the next 12 months we’ll start seeing them? If I remember correctly, they’re going to pay us $5 million for each of those two projects we’re working on. Where would that sit?

Well, I'm not quite sure what you mean by where would it sit? But if you remember, they gave us $500,000 cash upfront. They're funding up to $1.6 million in R&D revenue. To your point on the exercise of an option, we would receive a mid-seven-figure payment for an additional non-exclusive target and then another mid-seven-figure for bringing the technology in for transfer. Then, single-digit seven figures for executing the technology transfer for the first project going in. Of course, there are also potential nine-figure payments over time on the backend if they achieve certain productivity goals and sales from the produced products. However, we don't expect that this technology will end with just a few different proteins; we hope they’ll adopt it and potentially expand its use in different areas.

Okay. Thank you very much. I appreciate it.

Thank you. There are no further questions. I'll now turn the call over to Dyadic’s CEO, Mr. Emalfarb, for closing remarks. Thank you, sir.

We are proud of our scientific advancements and achievements in 2022. Most significantly, Dyadic has received regulatory approval to initiate a Phase 1 clinical trial to demonstrate clinical safety and antibody response in humans for the DYAI-100 COVID-19 recombinant protein RBD booster vaccine candidate. We believe this first-in-human safety data for C1 produced proteins from the C1 platform, in addition to the continued advances in productivity, quality, and efficiency, will help to accelerate the adoption and use of the C1 protein production platform within the human pharmaceutical industry for the benefit of patients around the globe. We're not only focused on improving the value of Dyadic for the life science industry, which will in turn improve value for shareholders, but will also enhance access to affordable vaccines and therapeutics for populations in developed and emerging nations. Our reorganization of our infrastructure and strategic focus has prepared Dyadic for leveraging both existing and new commercialization opportunities, enabling us to fulfill our mission as a global biotechnology company aimed at improving the way we feed, fuel, and heal the world. Thank you once again for joining us on today's Q3 2022 conference call. We look forward to keeping you updated as we advance our commercial and scientific initiatives across the company and our collaborators' programs. We also look forward to seeing you on the next call and hope you keep an eye out for our periodic updates.

Thank you very much, sir. This conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines at this time.