May 2012

AN INDUSTRIAL SCALE PLATFORM

FOR ENZYMES AND OTHER PROTEINS

DYADIC INTERNATIONAL, INC.

(Symbol: DYAI)

2

Safe harbor statement

Certain statements contained in this presentation are forward-looking

statements. These forward-looking statements involve risks and uncertainties

that could cause Dyadic’s actual results, performance or achievements to be

materially different from any future results, performance or achievements

expressed or implied by such forward-looking statements. Except as required

by law, Dyadic expressly disclaims any intent or obligation to update any

forward-looking statements.

Company overview

3

Global biotechnology company: Headquarters in

Jupiter, Florida main R&D operations in the

Netherlands

Proprietary enzyme sales: Sells novel products to

the food, animal feed, pulp & paper, textiles and other

end markets in 50 countries

C1 expression technology: Patented and

proprietary system to discover, develop, manufacture

and sell enzymes and other proteins

Tier 1 strategic partners: BASF, Sanofi Pasteur,

Abengoa, Codexis and other blue chip companies

partner with Dyadic or license C1 technology for

product development

Headquarters in Florida

R&D facility the Netherlands

Business model

4

Dyadic revenue ($ millions) Proprietary enzyme sales

C1 licensing and partnerships

Xlyanases, Cellulases, Beta

Glucanases, Amylases, Proteases

Currently sell niche products into food,

animal feed, pulp & paper, textile and

other end markets

Several new products in pipeline

Currently 7 blue chip strategic

partners and licensees

Projects in pharmaceutical, feed, food

and biofuels

Funded R&D from strategic partners

and government projects

Profitable in 2012 and expected profitability in 2013

From Blue Jeans to Genes

5

Founded as Supplier

of Pumice Stones For

Blue Jeans

Dyadic’s C1

Expression System

1979 1992 2013

Search for Fungi

in Russia

A robust and versatile platform for gene discovery,

expression and the production of enzymes and other

proteins

Based on the Myceliophthora thermophila fungus,

a soil-borne saprophyte

Developed in the early 1990’s through a fortuitous

UV-induced mutation and continuously bioengineered

since

Enables new product introduction with less time,

cost and risk by addressing critical bottlenecks of

protein discovery, development scale-up and

commercialization

Validated through over 20 years of R&D, 17 years of

commercial scale manufacturing (up to 150,000 liters)

and 15 years of product sales and partnerships

6

What is C1?

C1 fungus

Wild Type and new strains

WT

LC

HC

Scientific media recognition

“In 2011, a consortium of several worldwide renown organizations suggested that the use of thermostable

enzymes offers economic advantages in the production of many chemicals and biomass-based fuels.

Unfortunately, most of the commercially available enzymes which are produced by fungi like Trichoderma

and Aspergillus are not sufficiently thermostable...The reported findings confirm previous results

obtained by enzyme manufacturer Dyadic, which was the first company to successfully develop a thermophilic

fungal production platform.”

Biofuels International, March 2012

“The best studied and most widely used cellulases and hemicellulases are produced by Trichoderma,

Aspergillus...and they are most effective over a temperature range from 40°C to ~50°C. At these temperatures,

complete saccharification of biomass polysaccharides...requires long reaction times...One way to overcome these

obstacles is to raise the reaction temperature...However, implementing higher reaction temperatures requires

the deployment of enzymes that are more thermostable...Thermostable enzymes and thermophilic cell

factories may afford economic advantages in the production of many chemicals and biomass-based fuels.

Nature Biotechnology, October 2011

“The search for novel and/or improved industrial enzymes and enzyme production systems is intensifying as

market demand increases. One such new system was developed based on a recently discovered fungal isolate,

C1...The filamentous fungus C1 was developed into a mature technology and protein-production platform. C1’s

inherent richness of genes encoding industrially relevant enzymes and its high-producing characteristics

have been a proven starting point for the development of different C1 strains producing enzymes and

enzyme mixtures.”

Industrial Biotechnology, June 2011

Numerous publications have validated Dyadic’s C1 technology

7

Dyadic’s current licensees and strategic partners

8

Major animal

health &

nutrition

company

Market leading

food and

enzyme

company

Leading animal

health &

nutrition

company

Cellulosic Sugars Industrial Enzymes Biopharmaceuticals

C1 OVERVIEW

9

C1 platform overview

10

Optimized to produce homologous and heterologous enzymes and other

proteins

Programmable to efficiently produce “pure” enzymes and enzyme

mixtures tailored for specific applications

Library of more than 100 individual C1-enzymes are a fertile source for

future high purity products in many industries

Expression

platform

technology

Genome sequenced and annotated: enzymatic potential is known,

explored and exploited

C1 serves as both a research and production host

High-throughput robotic screening (HTRS) can be applied, as C1 can grow

in microtiter plate wells

Cost

effective

R&D

Freedom to

operate

Wide range of plant cell wall degrading enzymes which are active in a

broad pH and temperature range

Excellent safety record and has Generally Recognized as Safe (GRAS)

status acknowledged by the FDA

Well suited for commercial production

Broad

commercial

applications

Dyadic is the sole owner of the C1 fungus and technology and has broad

patent claims are issued covering C1

C1 is not subject to the complex third party patent issues faced by other

technologies

C1 can produce a wide variety of industrial enzymes

C1 is a rich source of industrially relevant enzymes that are now explored and exploited

11

38 million sequenced base pairs

(97% contained in 10 large supercontigs)

>9,500 genes identified

>100 active

enzymes

Sequenced and annotated genome

C1 has been produced at 150,000 liter scale since 1996

Major C1 enzyme manufacturing sites

Year production began Manufacturing site Company Country Fermenter size

1996 FermPro/Martek (now DSM) Dyadic USA 150,000L

2000 Polfa Tarchomin Dyadic Poland 50,000L

2009 EnMex Dyadic Mexico 30,000L

2011 Antibioticos Abengoa Spain 50,000L

2011 Fermic Codexis Mexico 25,000L

2011 Iogen Codexis Canada 150,000L

12

Proven scalability up to 150,000 liters for nearly two decades

C1-cellulase accepted by FDA on

September 29, 2009

GRAS Notification letter is a public

statement by FDA acknowledging Dyadic’s

safety determination for the intended uses

of C1

GRAS Notification letters are broadly

recognized in the food and consumer

products industries as the safety standard

C1 strain non-toxic

Pathogenicity and toxigenicity data:

strain is non-infectious and no

known toxins are produced

Peer-reviewed scientific literature

have confirmed—no known

pathogencity

No mycotoxins found

C1 enzyme testing

In vivo feeding trails:

14 day dose study in rats

13 week subchronic rat study

Genotoxicity testing:

AMES bacterial mutagenesis

Chromosomal aberration test

Genetic mutation test

No adverse effects observed

No foreign DNA

Safety confirmed

C1 has an excellent safety profile

Generally Recognized as Safe (GRAS) status

acknowledged by the FDA

13

C1 has two commercial strain platforms – LC and HC

14

Low Cellulase (LC) Strain and Enzymes

Enables the commercial production of “pure” enzymes

Primary usage in industrial enzyme and biopharmaceutical

applications

Ideal host organism to develop production strains for specific

applications with up to ~80% of target protein overexpressed

>50 g/L yields with 6-day fermentation, up to 100 g/L possible

with longer fermentation times

High Cellulase (HC) Strain and Enzymes

Effective in biofuel and bio-based chemical end markets

Ability to effectively degrade or modify a wide range of

lignocellulosic feedstocks

Low viscosity, thermostable and effective in broad pH range

Over-

HC LC expressed

LC

HC vs. LC

Next generation commercial LC enzymes in development

15

Knowledge of enzyme properties in combination with the LC strain host system leads to

rapid development of high margin enzyme mixtures targeted to various applications

One LC-host expresses

dedicated enzyme mixture

Composition can be easily

adapted for various

applications

High production levels

Large scale fermentations

pending

Still considerable room for

fermentation optimization

Enzyme 1

(20 g/L)

LC-series enzymes

End

Market 1

Enzyme 2

(thermostable)

(12 g/L)

Enzyme 3

(thermostable)

(15 g/L)

LC-1 LC-2 LC-3

End

Market 2

LC-4

CELLULOSIC BIOFUELS AND

BIO-BASED CHEMICALS

16

BP

Clariant / Süd Chemie

C1 is one of only three leading enzymatic platforms

Codexis

Feedstock Pretreatment Enzymatic

Hydrolysis

Sugar

fermentation Distillation Upgrading

Abengoa

POET / DSM

Chemgen

KL Energy

MBI

Chemtex

Inbicon

Dyadic / C1

enabled

Novozymes

DuPont

Amyris

Gevo

LS9

Butamax

Taurus

DSM

enabled

Trichoderma

enabled

17

Production process

18

C1 is highly flexible and feedstock agnostic

Energy crop Sugar Cane Corn Stover Wood Pulp Corn Fiber Wheat Straw DDG’s Paper pulp

Different

Pretreatments

EG’s Xylanases βG Accessory

Enzymes CBH’s

Dedicated

CMAX enzyme

cocktails

High yield of

fermentable

sugars

C1 has more enzyme-encoding genes than competing

systems for biofuels and bio-based chemicals

Number of lignocellulosic enzyme-encoding genes

19

Large variety of lignocellulolytic enzymes enables development of efficient dedicated enzyme

mixtures (produced by a single engineered C1-strain)

Genes encoding Number

in C1

Number in

Trichoderma

Endo-glucanases, Cellobiohydrolases, β-glucosidases/ β-xylosidases

(GH1, GH3, GH5, GH6, GH7, GH12, GH45)

~ 32 ~ 32

Cellulose binding domains (CBM1-type) ~ 46 ~ 15

Xylanases/Xylosidases (GH10, GH11, GH30,

GH43)

~ 13 ~ 10

Polysaccharide monooxygenases (GH61) ~ 26 ~ 3

Oxidoreductases (Secreted flavin-, heme-

and copper-dependent)

~ 69 ~ 24

Source: Literature and JGI database searches

Improved bioethanolenzyme mixtures

0 20 40 60 80 100

2 - fold reduction

4 - fold reduction

8 - fold reduction

C1 - G3

C1 - G5

CMAX CMAX 2

CMAX 3

CMAX 4

Time (months)

CMAX 5

♦

Re

lative

en

zym

e lo

ad

ing

20

Over 5-fold decrease in enzyme use/costs in 5 years

Enzyme dose reduction curve (glucose release)

CMAX is more robust than other enzymes

Higher temperatures

21

Re

lative

activity (

%)

Temperature (°C)

05

101520253035404550556065707580859095

100

35 50 55 60 65 70

re

lativ

e a

ctiv

ity

(%

)

temperature (°C)

Relative activity after 72 hours of saccharification

G7 B7

G7 D9

Cellic Ctec 2

CMAX

Competitor

(Trichoderma-

based) 0

10

20

30

40

50

60

70

80

90

100

35 50 55 60 65 70

05

101520253035404550556065707580859095

100

35 50 55 60 65 70

re

lativ

e a

ctiv

ity

(%

)

temperature (°C)

Relative activity after 72 hours of saccharification

G7 B7

G7 D9

Cellic Ctec 2

T= 55˚C;

pretreated corn

stover (10% dry

matter)

Ability to add enzyme in early stage after

thermo-pretreatment

Broader pH

CMAX3

hours

22

0

5

10

15

20

25

30

35

50 100 150

% inhib

itio

n

glucose (g/L)

CMAX3

Competitor

Gen. 3

Viscosity reduction occurs during the

first hour of saccharification

0

10

20

30

40

50

60

70

80

90

0

5

10

15

20

25

30

35

40

45

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75

Perc

enta

ge d

ecre

ase

[%]

Torq

ue [%

cont

]

Time [h] Torque [cont%] Decrease [%]

0

10

20

30

40

50

60

70

80

90

0

5

10

15

20

25

30

35

40

45

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75

Perc

enta

ge d

ecre

ase [

%]

Torq

ue [%

cont

]

Time [h] Torque [cont%] Decrease [%]

Torq

ue [

% C

ont.]

Torq

ue d

ecre

ase (

%)

Time (hours)

Glucose test: T=50°C; pretreated corn stover

(10% dry matter); 72 hour fermentation

Viscosity test: Pretreated corn stover (20%

dry matter)

Production of CMAX is highly scalable

Lower glucose inhibition Rapid viscosity reduction

Illustrative biofuel enzyme production costs

19

25

54

On-site Off-site

Shipping and distribution

Downstream processing and stabilization

Quality assurance

Utilities

Labor and overhead

Materials

Assumes 5 mg/g loading to 10% dry matter, molasses-based medium; sorbitol stabilization agent

On-site production cost advantage

23

24

Dyadic advantages for lignocellulosic enzymes

Robustness Proven at the large scale (Abengoa, Codexis, Dyadic)

Broad temperature and pH range

Versatile genetic

make-up

More genes encoding for lignocellulosic enzymes

Feed stock tailored enzyme mixtures produced by a single strain

Large potential still to be realized

Enzyme library in place

Highly scalable

production

Low viscosity enzyme production hosts

Higher yields with lower energy input

Greater uniformity in fermentation process

Greater flexibility of raw materials

Broad patent

ownership

Broad patents related to C1 are owned by Dyadic

Less litigation risk from crowded playing field of overlapping

Trichoderma patents

On-site licensing

model

Reduced or eliminated downstream processing, stabilization,

logistics and distribution costs

Customers in full control of supply chain

BIOPHARMACUTICALS

25

26

Antiviral (HIV)

Antiviral

(influenza)

Influenza vaccine

(human and

veterinary)

Viral influenza

vaccine

(veterinary)

Therapeutic

proteins

Antibodies, and

other therapeutic

proteins

C1 has many high-potential opportunities in biologics

Potential applications in vaccines, Rx proteins and mAbs

27

C1’s advantages in biologics and vaccine development

leads to low scientific risk

Discovery

Short time to

develop molecular

cell biology

Direct and single

step

transformation

with minimum strain

selection (fast

clone-to-clinic)

Can be used for

various high-value

Rx proteins today

Already proven for

human antibodies

Process validation

upfront for

biosimilars and

streamlining first-in-

class molecules

Expression

High expression

level, allowing for

smaller reactors

Adaptable to

current reactors

and/or to new,

single use reactors

Low cost of media

Defined media

Short fermenter

times

Wide range of

growth conditions

Lower capex by

using smaller

facilities

Downstream

processing

Target protein

secreted into

media

Secretion at high

titer (no microbial

inclusion bodies)

Low host cell

protein in

supernatant

No viral

inactivation/removal

/ validation

Low viscosity

Product

attributes

Glycoprofile

needs little

modification to

become ‘human

neutral’

Naturally

afucosylated

GRAS designation

“Simpler”

glycoprofile

Homogeneity of

glycoforms can

enhance drug

profile

Linear scalability allows rapid development from discovery

to clinical trails

28

Optimize expression at 1L scale Produce at 1L scale Produce at 15,000L scale

Competing

expression

technologies

C1’s ability to linearly scale substantially accelerates drug development, and reduces costs

Fully defined media of simple (inexpensive) salts (no animal or complex components; no viral

inactivation or validation required)

Rapid scale-up and upfront process development due to linear scalability — quality unique to C1

Linear scalability saves 1 year of preclinical development time — enter PI trail with a process robust

enough for commercial manufacturing

Advantages of C1 scaling

C1

Optimize expression at 1L scale

Produce at 1L scale

Re-optimize

expression at 10L scale

Produce at 10L scale

Re-optimize

expression at 100L scale

Produce at 100L scale

Re-optimize

expression at 1,000L

scale

Produce at 1,000L scale

Re-optimize

expression at 15,000L

scale

Produce at 15,000L

scale

Competitive advantages

29

Pichia1

CHO (Chinese

hamster ovary)

Overview of benefits and competitive advantages

Immunogenic glycosylation

Limited expression of eukaryotic

proteins

Yeast cells can yield lower levels of

secretion than fungal cells

High viscosity

Takes a year or more for fermentation

optimization

Ever diminishing returns on protein

expression levels

Concerns about mammalian viral or

mycoplasma contamination

Capable of intron processing

Able to express a wide range of

eukaryotic proteins

Close to human glycosylation & easy

glycoengineering possible

High expression levels

Linearly scalable

Fermenter time is less than a week

C1 High-Throughput Screening (HTS)

technology could speed up the discovery

and development process

C1 is non-mammalian, and therefore

requires no viral inactivation or validation

1 Owned by Merck, acquired in its 2006 purchase of GlycoFi

Competitor weaknesses Corresponding C1 strengths

E-coli

No intron splicing

No glycosylation

Can’t express antibodies

Targets are frequently insoluble

(inclusion bodies)

Targets not secreted

Intron splicing

Glycosylation

Excellent mAb expression

All targets secreted

THANK YOU

30

Contact:

Danai Brooks

Dyadic International, Inc.

E-mail: dbrooks@dyadic.com

Mobile: (646)325-1147

Office: (561)743-8333