Abengoa teams up with Dyadic on cellulosic ethanol.

Here's some big news which could help speed up the commercial production of 'cellulosic ethanol,' considered by many to be the key to the future of biofuels.

Abengoa, the Spanish company which is one of the world leaders in ethanol, has invested $10 million in the Florida company, Dyadic International, in its quest to bring cellulosic ethanol to market.

It's a huge step for Dyadic, a relatively small Jupiter-based company, that has been making a name for itself through its pioneeering fungal enzyme research (Click here to read my story in the St Petersburg Times, and another recent story by Michael Oneal in the Chicago Tribune.)

"We believe this validates the work we have been doing for a decade to make cellulosic ethanol a commercial reality," says Dyadic's CEO, Mark Emalfarb.

Abengoa claims to be the world's second largest ethanol producer with $3 billion in revenues. It has major investment in the corn-for-ethanol industry in the United States. Abengoa is widely considered to be at the forefront of the industry's efforts to boost the production efficiency of ethanol (and thereby its cost) by using plant waste (fibrous stalk material) which is currently discarded as residue in the production of ethanol.
The technology already exists to convert the plant waste into ethanol, by extracting the cellulose. The challenge lies in pre-treatment of the tougher, fibrous waste material into a manageable form for the extraction of the cellulose. Until now this energy intensive phase in the process has been cost prohibitive.

Several other companies are working on different methods to breakdown the fibrous plant matter, including Iogen and Cellunol. But Abengoa's size, coupled with Dyadic's proven technology, could prove to be the winning combination.

The deal between Abengoa and Dyadic is a three-year research and development agreement involving a $10 million purchase of Dyadic stock by Abengoa Bioenergy R&D, Inc. Dyadic hopes to use the proceeds to develop a cost-effective enzyme production system using its patented C1 enzyme technology for commercial application in Abengoa's cellulosic ethanol production process.

A press release announcing the deal includes this ringing endorsement of Dyadic's scientific work. "We recognized that Dyadic's enzyme technology, especially in the field of cellulosic ethanol, is state-of-the-art," said Gerson Santos-Leon, R&D Director of Abengoa Bioenergy. "Abengoa Bioenergy is looking forward to working with Dyadic in the development of large-scale enzyme production systems and manufacturing processes for use in the production of abundant low cost fermentable sugars from biomass, with initial focus on cellulosic ethanol production."

Emalfarb described the deal as a win-win for both partners. "We have brought the academic effort close to commercialization," he told me in a phone conversation today. He described it as a two-pronged attack, designed to improve the technology while at the same time applying it to the specific type of plant materials Abengoa believes are best suited to cellulosic ethanol production.
"They (Abengoa) are interested in helping the core technology get better and applying it to make the enzymes they need to get their plant material to produce ethanol," Emlafrab said. "They find a partner to get to where they want to go. That's great for them, and its great for us."

The deal is non-exclusive meaning that Dyadic is also free to seek other investors. The deal with Abengoa will certainly make Dyadic a lot more attractive to others interested in cellulosic ethanol technology. Emalfarb says several companies have shown interest, including big oil and agricultural firms. "This should be a catalyst, just as enzymes are, to other deals. The door is wide open."

Dyadic has been involved for a number of years in the research and manufacture of biological products using fungal strains to produce enzymes and other biomaterials. Its efforts have focused on a system for protein production based on the patented 'Chrysosporium lucknowense' fungus, known as C1. Besides ethanol, Dyadic's C1 technology also is being developed to facilitate the discovery and development of human antibodies and other high-value therapeutic proteins.  Dyadic currently sells more than 45 liquid and dry enzyme products to more than 200 customers in about 50 countries.

Abengoa Bioenergy, headquartered in St Louis, Missiouri, is one of the five business units of Abengoa, a listed company on the Madrid Stock Exchange and a presence in more than 70 countries.

- David Adams

Comments

[Adam Smith]

Is Dyadic a spin off from Novozyme?

[David Adams]

Adam, Dyadic is not a spin-off of Novozymes, but several former Novozymes employees left to join Dyadic I believe. I will check for you?

[David Adams]

Adam, in answer to your question, I received this response from Dyadic CEO, Mark Emalfarb:

"No we are not a spin off from Novozymes, but we are a little Novozymes with what we believe are equal if not better technological capabilities (e.g. high throughput fungal screening utilizing our production host organism -- (sse: http://www.dyadic-group.com/wt/dyad/pr_1161262926)

You are right, our Chief Scientific Officer, and President of our BioSciences Business and Board Member, Dr. Glenn Nedwin co founded and was President of Novozymes, Inc in Davis, Ca for 14 years (Novozymes, Inc is a subsidiary of Novozymes in Denmark) (See:http://www.dyadic-group.com/wt/dyad/pr_1142980564)
Glenn's built up Novozymes, Inc to approx 70 people and this subsidiary was responsible for a variety of commercial products that Novozymes brought to market and developed and improved a a variety of their expression systems."