How One Biotech Stock Is Trying To Reduce A Big Hidden Cost

Biologic medicine is becoming an increasingly important part of modern medicine, including vaccines, antibodies, and even certain cancer treatments.

Unlike conventional medicines, which are generally made through chemical processes, biologic medicines use living cells or biological processes to produce complex substances such as proteins and antibodies.

But producing these medicines can be expensive and technically challenging.

Another major challenge is in how to scale up the production of these medicines without compromising quality.

This does pose an opportunity, however, for those who could find ways to manufacture biologic medicines faster, more efficiently, and less costly.

Why making biologic medicines is so expensive

Conventional medicines are generally easier to manufacture consistently. Their chemical structures are clearly defined, making them relatively straightforward to reproduce. Think of it like following a simple recipe: use the same ingredients and process, and you can produce the same result.

Biologic medicines, on the other hand, are made using living cells or other biological processes.

Their larger, more complex structures make them harder to fully characterise and more sensitive to changes in how they are produced. Even small changes in manufacturing conditions can affect the final product’s quality, safety, or effectiveness.

Producing these medicines is a complex process and requires significant testing. Given the sensitivities to conditions and processes, as well as the complexity in the manufacturing process, scaling the production of these medicines is a challenge.

All of this comes at a cost to get right.

Could we make biologic medicines more cheaply?

Of course, if you can find a way to make biologic medicines more efficiently without any loss in quality.

Traditional manufacturing methods often use mammalian cells, essentially cells derived from animals. These can be costly to grow and maintain.

An alternative being explored is to use microorganisms, such as certain fungi or bacteria, to produce proteins through fermentation. If successful, this could offer a more efficient route to production, as these microorganisms can be grown using relatively simple, low-cost nutrients and, under the right conditions, produce large quantities of a target protein.

This is just one of many opportunities being explored to improve the efficiency and cost of producing biologic medicines.

Of course, no single approach will work for every biologic, as different proteins have different requirements. Even so, alternative protein-producing technologies could create opportunities to make some biologic medicines more efficiently.

If a new approach can combine competitive yields with reliable quality and commercial-scale production, it could help ease some of the constraints facing the industry.

Dyadic’s approach to more efficient production

One biotech stock working to address these challenges is Dyadic International (Nasdaq:DYAI).

Dyadic has developed microbial technology platforms designed to produce proteins for pharmaceutical, food, and industrial applications.

Its core platform is called C1.

C1 targets biopharmaceutical applications, including vaccines, therapeutics, and complex biologics. It centres on engineering microorganisms to produce target proteins efficiently, with, as discussed above, the aim of improving productivity and reducing manufacturing costs.

Dyadic claims that its technology can develop stable production strains in around seven weeks and support fermentation at scales ranging from one liter to more than 100,000 litres, which would allow for commercial scalability. It also highlights the ability to produce proteins that are secreted into the surrounding liquid, which could simplify the process of separating and purifying them.

Such features could help address several challenges, including development time, production yields, purification costs, and the ability to scale up.

The key question is whether Dyadic can translate its technology into reliable, commercially competitive production for customers. If it can, its platforms could offer another way to make certain proteins more efficiently.

If C1 delivers at commercial scale, the prize could be large. Ask Charlie what success could look like for Dyadic.

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