BASF SE, the world’s biggest chemical maker, plans to cooperate with Dyadic International Inc. to gain access to the U.S. company’s enzyme technology for markets including animal and human nutrition.
Dyadic will receive an up-front licensing fee of $6 million, with additional payments for reaching certain research and commercial goals and for royalties, the two companies said today in a statement.
BASF, based in Ludwigshafen, Germany, is using the Dyadic agreement to try to break the dominance of enzyme market leaders Novozymes A/S, DuPont Co. and Royal DSM NV. For Jupiter, Florida-based Dyadic, allying with BASF is another milestone in a 20-year effort to broaden the use of its technology, derived from a fungus found in Russia in the early 1990s, to industries beyond biofuels, chemicals and drugs.
“Royalties, commercial milestones, that’s where the big money is,” Dyadic Chief Executive Officer Mark Emalfarb, the biotechnology firm’s founder, said by phone. “This is the leading chemical company recognizing the ability we have.”
Dyadic has similar licensing agreements with six other parties, including one in the food and beverage industry. It’s currently in talks on an additional accord that would be a significant boost to the company, Emalfarb said, declining to disclose possible the potential partner.
The license agreement with Dyadic should result in “promising long-term opportunities,” Carsten Sieden, head of fine chemicals and biocatalysis research at BASF, said in the statement.
BASF hasn’t taken a financial stake in Dyadic, though the licensing agreement would be a way for the German chemical producer to “test drive the car,” Emalfarb said, adding that, while being emotionally attached to the biotechnology company he founded, at heart he’s an entrepreneur.
Dyadic hired Danai Brooks, a former investment banker at JPMorgan Chase & Co., as chief operating officer last month to oversee the U.S. business. Brooks, who takes the position in June, has been an adviser to the biotechnology company and will also manage business development and licensing efforts, Dyadic said on May 7.