Applied DNA Sciences Stock

Applied DNA Sciences, Inc., a biotechnology company, develops and commercializes technologies to produce and detect deoxyribonucleic acid (DNA) and ribonucleic acid (RNA).

Using polymerase chain reaction (PCR) to enable the production and detection of DNA and RNA, the company operates in three primary business markets: the enzymatic manufacture of synthetic DNA for use in the production of nucleic acid-based therapeutics (including biologics and drugs) and, through its recent acquisition of Spindle , the development and sale of a proprietary RNA polymerase (RNAP) for use in the production of mRNA therapeutics (Therapeutic DNA Production Services); the detection of DNA and RNA in molecular diagnostics and genetic testing services (MDx Testing Services); and the manufacture and detection of synthetic DNA for industrial supply chain security services (DNA Tagging and Security Products and Services).

Therapeutic DNA Production Services

Through LineaRx, Inc. (LRx) its 98% owned subsidiary the company is developing and commercializing its Linea DNA and Linea IVT platforms.

Linea DNA Platform

The company's Linea DNA platform is its core enabling technology, and enables the rapid, efficient, and large-scale cell-free manufacture of high-fidelity DNA sequences for use in the manufacturing of a broad range of nucleic acid-based therapeutics. The Linea DNA platform enzymatically produces a linear form of DNA the company calls LineaDNA that is an alternative to plasmid-based DNA manufacturing technologies that have supplied the DNA used in biotherapeutics for the past 40 years.

As of the third quarter of calendar year 2023, there were 3,866 gene, cell and RNA therapies in development from preclinical through pre-registration stages, almost all of which use DNA in their manufacturing process. The company's Linea DNA platform holds several important advantages over existing cell-based plasmid DNA manufacturing platforms.

Preclinical studies conducted by the company have shown that Linea DNA is substitutable for plasmid DNA in numerous nucleic acid-based therapies, including DNA vaccines; DNA templates to produce RNA, including messenger RNA (mRNA) therapeutics; and adoptive cell therapy (CAR-T) manufacturing.

Linea IVT Platform

In August 2022, the company launched DNA IVT templates manufactured via its Linea DNA platform and has since secured proof of concept contracts with numerous mRNA manufacturing customers. In response to this demand, the continued growth of the mRNA therapeutic market, and the unique abilities of the Linea DNA platform, the company acquired Spindle in July 2023 to potentially increase its mRNA-related total addressable market (TAM).

Through its acquisition of Spindle, the company launched its Linea IVT platform, which combines Spindle's proprietary high-performance RNA polymerase (RNAP), marketed by the company as Linea RNAP, with its enzymatically produced Linea DNA IVT templates. The Linea IVT platform enables its customers to make better mRNA, faster.

According to the company's internal modeling, the ability to sell both Linea DNA IVT templates and Linea RNAP under the Linea IVT platform potentially increases the company's mRNA-related TAM by approximately 3x as compared to selling Linea DNA IVT templates alone, while also providing a more competitive offering to the mRNA manufacturing market. Linea RNAP is produced for the company by a third-party CDMO located in the United States.

Manufacturing Scale-up

The company plans to offer several quality grades of Linea DNA, each of which will have different permitted uses.

The company manufactures Linea DNA pursuant to Good Laboratory Practices (GLP) and, subject to the availability of future financing, is creating a fit for purpose manufacturing facility within its current Stony Brook, NY laboratory space capable of producing Linea DNA IVT templates under Good Manufacturing Practices (GMP) suitable for use as a starting material for clinical and commercial mRNA therapeutics, with a planned completion date in the first half of calendar year 2024. The company also plans to offer Linea DNA materials manufactured under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product, with availability expected during the first half of calendar year 2025, dependent upon future funding. GMP is a quality standard used globally and by the U.S. Food and Drug Administration (FDA) to ensure pharmaceutical quality.

Segment Business Strategy

The company's business strategy for its Therapeutic DNA Production Services is to capitalize upon the rapid growth of mRNA therapies in the near term via its planned near term future availability of Linea DNA IVT templates manufactured under GMP, while at the same time laying the basis for additional clinical and commercial applications of Linea DNA with its future planned availability of Linea DNA manufactured under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product. The company's plan is through its Linea IVT platform and planned near term future GMP manufacturing capabilities for IVT templates to secure commercial-scale supply contracts with clinical and commercial mRNA and/or self-amplifying mRNA (sa-RNA) manufacturers for Linea DNA IVT templates and/or Linea RNAP as critical starting materials; to utilize its current GLP production capacity for non-IVT template applications to secure supply and/or development contracts with pre-clinical therapy developers that use DNA in their therapy manufacturing, and upon its development of its planned future Linea DNA production under GMP suitable for use as, or incorporation into, a biologic, drug substance and/or drug product, to convert existing and new Linea DNA customers into large-scale supply contracts to supply Linea DNA for clinical and commercial use as, or incorporation into, a biologic, drug substance and/or drug product in a wide range of nucleic acid therapies.

In addition, the company plans to leverage its Therapeutic DNA Production Services and deep knowledge of PCR to develop and monetize, itself or with strategic partners, one or more Linea DNA-based therapeutic or prophylactic vaccines for high-value veterinary health indications (collectively Linea DNA Vaccines). The company seeks to commercialize its Linea DNA Vaccines in conjunction with lipid nanoparticle (LNP) encapsulation to facilitate intramuscular (IM) administration. The company has recently demonstrated in vitro and in vivo (mice studies) expression of generic reporter proteins via Linea DNA encapsulated by LNPs. For the in vivo study, successful expression of the LNP-encapsulated Linea DNA was administered and achieved via IM injection.

MDx Testing Services

Through Applied DNA Clinical Labs, LLC (ADCL), the company's clinical laboratory subsidiary, it leverages its expertise in DNA detection via PCR to provide and develop clinical molecular diagnostics and genetic (collectively MDx) testing services. ADCL is a New York State Department of Health (NYSDOH) Clinical Laboratory Evaluation Program (CLEP) permitted, Clinical Laboratory Improvement Amendments (CLIA)-certified laboratory which is permitted for virology. Permitting for genetics (molecular) is pending with the NYSDOH. In providing MDx testing services, ADCL employs its own or third-party molecular diagnostic tests.

The company has successfully validated internally its pharmacogenomics testing services (the PGx Testing Services). The company's PGx Testing Services will utilize a 120-target PGx panel test to evaluate the unique genotype of a specific patient to help guide individual drug therapy decisions. The company's PGx Testing Services are designed to interrogate DNA targets on over 33 genes and provide genotyping information relevant to certain cardiac, mental health, oncology, and pain management drug therapies. The company's PGx Testing Services cannot commence until it receives approval from NYSDOH.

On March 22, 2023, the company submitted its validation package to the NYSDOH for its PGx Testing Services. On September 21, 2023, the company received a first set of comments from NYSDOH requesting additional data and clarifications. A response was submitted to NYSDOH on November 17, 2023. Timing of any approval by NYSDOH for its PGx Testing Services is unclear.

DNA Tagging and Security Products and Services

By leveraging its expertise in both the manufacture and detection of DNA via PCR, its DNA Tagging and Security Products and Services allow its customers to use non-biologic DNA tags manufactured on the company's Linea DNA platform to mark objects in a unique manner and then identify these objects by detecting the absence or presence of the DNA tag. The company's core DNA Tagging and Security Products and Services, which are marketed collectively as a platform under the trademark CertainT, include:

SigNature Molecular Tags, which are short non-biologic DNA taggants produced by the company's Linea DNA platform, provide a methodology to authenticate goods within large and complex supply chains with a focus on cotton, nutraceuticals and other products.

SigNify portable DNA readers and SigNify consumable reagent test kits provide definitive real-time authentication of the company's DNA tags in the field.

fiberTyping and other product genotyping services use PCR-based DNA detection to determine a cotton species or cultivar, via a product's naturally occurring DNA sequence for the purposes of product provenance authentication.

Isotopic analysis testing services, provided in partnership with third-party labs, use cotton's carbon, hydrogen and oxygen elements to indicate origin of its fiber through finished goods.

The company's largest commercial application for its DNA Tagging and Security Products and Services is in the tracking and provenance authentication of cotton.

The company's business plan is to leverage growing consumer and governmental awareness for product traceability catalyzed by the UFLPA to expand its existing partnerships and seek new partnerships for its DNA Tagging and Security Products and Services with a focus on cotton.

Research and Development

During the fiscal year ended September 30, 2023, the company incurred research and development expenses of 3,735,078.

Strategy

The company's current growth strategy is to primarily focus its resources on the further development, commercialization, and customer adoption of its Therapeutic DNA Production Services, including the expansion of its contract development and manufacturing operation (CDMO) for the manufacture of synthetic DNA for use in the production of nucleic acid-based therapies, and to further expand and commercialize its MDx Testing Services through genetic testing.

The company will continue to update its business strategy and monitor the use of its resources regarding its various business markets. In addition, the company expects that based on available opportunities and its beliefs regarding future opportunities, it will continue to modify and refine its business strategy, which could include restructuring its business.

Research and Development

The company incurred approximately $3.7 million on research and development activities for the fiscal year ended September 30, 2023.

Intellectual Property

As of December 4, 2023, the company's patent portfolio included the following issued and pending patent applications applicable to each of its three primary business markets:

Therapeutic DNA Production Services: 6 issued patents and 13 pending patent applications in the United States; and 11 issued foreign patents and 9 pending foreign patent applications.

MDx Testing Services: 5 issued patents and no pending patent applications in the United States; and 4 issued foreign patents and no pending foreign patent applications.

DNA Tagging and Security Products and Services: 28 issued patents and 4 pending patent applications in the United States; and 47 issued foreign patents and 14 pending foreign patent applications.

Regulation

ADCL is offering its safeCircle surveillance testing in compliance with current Centers for Disease Control and Prevention (CDC), FDA, Centers for Medicare & Medicaid Services (CMS) and New York State Department of Health recommendations.

Competition

Some of the company's competitors that operate in the nucleic-acid based therapeutic, biologics and DNA manufacturing markets include MilliporeSigma; Precigen, Inc.; Aldevron, LLC; Charles River Laboratories; Integrated DNA Technologies, Inc.; 4basebio PLC; MaxCyte, Inc.; Touchlight Genetics Ltd.; Quantoom Bioscience; Syngoi Technologies, S.L.U.; Generation Bio, Co.; Novartis AG; Kite Pharma, Inc.; Juno Therapeutics, Inc.; Promega Corporation; OriGene Technologies, Inc.; Blue Heron Biotech, LLC; Gene Art; GenScript Biotech Corporation; Merck & Co., Inc.; and others.

Some of the company's competitors that operate in the veterinary therapeutic and biologics space include Zoetis, Inc.; Merck Animal Health; Boehringer Ingelheim Animal Health USA, Inc.; Elanco Animal Health Incorporated; Dechra Pharmaceuticals plc; Invetx, Inc.; and Ceva Animal Health LLC.

Some of the company's competitors that operation in the molecular and genetic diagnostic space include 23andMe, Inc.; Laboratory Corporation of America (LabCorp); Quest Diagnostics Inc.; Myriad Genetics, Inc.; ARUP Laboratories; Sonic Healthcare USA; Fulgent Genetics;, Everly Well, Inc; and, Fulgent Genetics, Inc.

Some of the company's competitors that operate in the supply chain security and product authentication markets include AlpVision Sa; Authentix, Inc.; Brandwatch Technologies, Inc.; Chromologic LLC; Collectors Universe, Inc.; DataDot Technology Limited; De La Rue Plc.; Digimarc Corporation; DNA Technologies, Inc.; Haelixa Ltd.; ICA Bremen GmbH; IEH Corporation; Informium AG; opSec Security Group plc.; MicroTag Temed Ltd.; Nanotech Security Corp.; Nokomis, Inc.; Oritain Global Limited; SafeTraces, Inc.; Selectamark Security Systems plc; SmartWater Technology, Inc.; Sun Chemical Corporation; TraceTag International Ltd.; TruTag Technologies, Inc.; Tailorlux gmbH; and YottaMark, Inc.

History

Applied DNA Sciences, Inc. was founded in 1983 under the laws of the state of Florida.