On The Horizon
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On The Horizon
ExoZymes (EXOZ): Unlocking Hard-to-Scale Molecules with AI-Driven, Cell-Free Biomanufacturing
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ExoZymes (NASDAQ: EXOZ) CEO Michael Heltzen joins Tim Gerdeman and Robert Sassoon in this episode of the On The Horizon podcast to discuss the company’s AI-driven, cell-free biomanufacturing platform and how it aims to overcome longstanding scalability challenges in synthetic biology. The conversation covers the scientific differentiation of its “exozyme” enzyme engineering approach, the commercial strategy behind its lead programs in metabolic health (NCT) and non-intoxicating cannabinoids, and the broader opportunity to produce high-value molecules that have historically been inaccessible at scale. The podcast also explores regulatory dynamics, near-term commercialization milestones, and ExoZymes’ dual strategy of advancing internal assets while positioning the platform for future licensing, alongside considerations around capital efficiency and funding.
Welcome to the WTR on the horizon podcast. I'm your host, Tim Gerdamin, Vice Chair and Co-Founder, and Chief Marketing Officer of Watertower Research. In today's podcast episode, I am joined by Michael Helsin, CEO of XDime's NASDAQ ticker symbol EXOZ. Also joining us is my WTR healthcare analyst, Robert Sassoon, CEO of XDime's pioneering AI-enhanced enzymes that convert sustainable feedstocks into highly valuable nutraceuticals and novel medicines. The company has developed a next generation biomanufacturing platform designed to efficiently produce valuable natural products. So, Michael and Robert, welcome to today's podcast.
SPEAKER_02Thank you very much.
SPEAKER_01I look forward to it. Good morning, Tim, and uh good morning to you, uh Michael.
SPEAKER_00Michael, before I hand it over to Robert to ask a few industry-specific questions, let me start by asking you to tell our listeners about your professional background, what brought you to become CEO of Exozymes, and then please provide our listeners with a 30,000-foot overview of the company and its primary business model.
SPEAKER_02Cool. I was born in Race Bank in Denmark. It became clear relatively early in my life that I had been an entrepreneurial personality. I see opportunities where people see problems. I start making plans when I see some of them and I like executing on it. So this is my uh fifth company that I'm a part of building. Uh I'm in my mid-40s, so I've been a little busy with that. Um early 20s, we were some uh guys back in in Denmark that wanted to take over the bioinformatics uh market, basically using computational power to understand how DNA, RNA, and proteins worked. And to keep the story short, we we ended up building um the largest bioinformatics platform for next reaction sequencing, sequence analysis, and um basically got into genomics before it was even termed such. And um that's kind of what I had become specialized in. Computational power on the one side, molecular biology on the other side. How do we turn those new opportunities into businesses? And um I have uh built uh a number of companies where I then, when I sold the last one, was recruited to uh what is today uh exosympes. Great. So excellent.
SPEAKER_00That's a good overview. I have to I have to say as a uh joke here that um given that you're on your fifth startup by now, you should either have gray or white hair or no hair. So somehow you beat the uh you're an outlier in terms of how you manage the stress, but with an alternative.
SPEAKER_02I there's plenty of gray hairs to show and plenty of metal scars if you want to see some to check.
SPEAKER_01Robert? Yeah, thanks, Tim, and uh Michael, good to have you on this podcast. So, Michael, you've described uh exodes as a platform as a using AI-enhanced enzymes that operate in a cell-free bioreactor, bioreactor, removing the need for living cells while offering a cleaner alternative to both petrochemical and conventional biochemical processes. Now, synthetic biology players have made similar claims for years, but often struggled to scale or sustain efficiency. So, what makes your approach fundamentally different from those failures and how replicable is it by competitors?
SPEAKER_02Yep, great uh big question. So let me just start dividing it up into a couple of small pieces. ExoSymes, it's we're basically a company that makes very valuable natural product-inspired molecules. So uh typically a nutraceutical or a pharmaceutical small molecule. And uh we basically specialize in taking uh natural product-inspired small molecules that have been known for a long time to be insanely valuable. People just haven't been able to make enough of it. If they try to find it in nature, they would have to basically deplete the natural resource from it to get enough for one generation of the product. Or if they tried to do it with petrochemistry, they either couldn't or it was super polluting or super expensive. People then tried, as you pointed out, with synthetic biology, that is basically genetically engineering a cell to make these things. A number of people have tried a lot of things, but they often got stuck in that they couldn't scale that. We can get into that a little bit later why cell-based biomanufacturing had such a hard time scaling a lot of these things, and why the solution is cell-free. So, stepping back, it sounds like a complex thing, uh, but it's actually relatively simple from an overview perspective. We have just taken the biochemistry that works inside of cells, that is, breakdown enzymes, a feedstock that is broken down into building blocks and build-up enzymes that puts those building blocks back together up to the end molecule. We've taken that out of the cell and runs it cell-free. And it's fair enough if there's a scientist or two out there that goes like, hey, you can't do that because in somatic pathways, they only work inside of cells because the cell is supplying a lot of um of the building block, the energy, the balances that is needed. That is what we have replicated in our setup. So we can run that artificial environment that is like being inside of a cell, but you're just inside of a big steel tank instead of, if you're the enzyme. And then we uh are working on the enzymes to make them what we call the the Superman versions of the enzymes that we call exosymes. So enzymes that can work outside of the cell, they are um strong enough and and um steady enough because we genetically engineer them to be so. So that's the second layer of it. How do we genetically engineer those enzymes to become exozymes? Well, like everybody else, we could sit down and kind of theorize one mutation, what would that potentially be like, and then we could go in the lab, put it into a cell, express the enzyme, see if the enzyme performs better and take it back. But that's super low throughput. So what we do is we sit down and uh bioinformatically with um uh alpha fold inspired kind of algorithms. We're now on like third or fourth generation of those algorithms. We sit down and project per enzyme in our uh manufacturing solution per enzyme, probably a thousand mutations. We computationally think that that is a thousand mutations that each makes a benefit from uh a um a performance perspective. And then when we have uh projected that, we can go to the laboratory and as uh very few people in the world, if not the only, we can take all thousands and express them uh without cells because we're still free experts. So we go from DNA to enzymes without putting into living cells, and by basically building that system that the DNA with the mutation goes into the new version of that enzyme, we can very fast, in parallel, express all of these enzymes, performance test them, take that data back to the algorithm and say you are right about this one, let's put that over in the group of things we were built with, and you're wrong about this one, learn from that so you become a better algorithm. So we basically brute force evolution, reinforcement training on DNA to enzymes, enzymes to performance back to the projection. So we can run that circle, and in this is kind of popular speech, so it's it's not precise science, but we basically run a couple of billions of years of evolution in a week.
SPEAKER_01Right. And I guess uh you you think that you're fairly unique in that sense, and that uh it's not something that um there's a huge amount of competition out there for you. And we feel a little alone sometimes.
SPEAKER_02That's good sometimes feeling so no there are there are a few other companies that are are are working in uh this push to to make things self-free. And we're actually a company that are uh very, very friendly to anyone that wants into the self-free space. So we have a number of things that we will either license out or or literally give away, and and we are actively helping universities to get access enough to this kind of technology that they can teach it, because we see it as the next generation of biomanufacturing.
SPEAKER_01Right. So in 2025, uh Exodesign has shifted from a partnership-led strategy to advancing select programs internally, citing partner skepticism of synthetic biology and unfavorable deal terms. So, is this a long-term strategic shift in how the company plans to capture value or a temporary move to build proof points to improve negotiating leverage?
SPEAKER_02Uh you gave me an A and a B, it's B. Um, let me unpack that for you. Basically, it is not a long-term shift, it is uh short-term a way of overcoming the reality that we met some skepticism in the market because this sounds too good to be true. And people literally said, like, well, we have already burnt our fingers on synthetic biology and handed over tens of millions of dollars to people that promised us the sky, and they came back and basically they had a petri dish with a little bit of what they had promised, but it it couldn't scale. So they were very disappointed with synthetic biology. We we we we realized that um not that the will was poisoned, but it was probably not as clean as we wanted it to be. So we we took a step back and said, like, instead of us arguing with potential partners about if this will work, why don't we just build a couple of things ourselves? And to be very frank, we also found a couple of things where where the business case was just so great, where we were starting to think internally, why would we give this away? That's NCT and cannabinoids, we can talk a little bit about later, that our flagship uh product uh programs.
SPEAKER_01So you mentioned uh those two flagship uh efforts, uh the NCT program in metabolic health, and you're cannabinoid by a manufacturing platform. So could you actually give us a high-level overview of each and what you're ultimately trying to achieve with those programs?
SPEAKER_02Yeah, absolutely. So when I talked about that, we are looking for things that have known to be um very valuable, but nobody has been able to commercialize and and uh basically make the uh the business case. Um that's basically a product of us having our idea management uh program where we run all ideas again, screen them, which which one will most likely be the best from a product market fit perspective, from a technology product uh perspective, from a size of market and all of that. And and we ran into to these two areas where NCT is just very, very timely. This is a small molecule that boosts metabolism, that means turns fat into energy. That is a big conversation the world is having with itself right now, but it's from a different perspective. It's the DLP1 conversation of like if you take this this uh GLP1, then you turn off your your hunger signal, but you also turn off your your bowel movement signal and your uh muscle growth signal and other things that are actually not an advantage. So just like dosing up on DLP1s is not like the the one and all solution. So there's a lot of our pharma partners that were talking about could you start combining a DLP1 with something? And as you know, this is where the market has gone. So some people get around and call them the DLP3s because it's DLP1 and a couple of other things. Those um uh combination drugs, we sat down and and we looked in our portfolio and we said, like, well, NCT is exactly that, and it's better than what a lot of other people are doing because it's actually hitting a drug receptor that boosts metabolism. It's a much better value proposition of burning more of your fat and getting more energy than just trying to kind of limit your fuel.
SPEAKER_01Yeah. What about your cannabinoid program?
SPEAKER_02So um same kind of story with a twist. Cannabinoids have been known for a thousand years that they have some medicinal um uh impact and opportunity to them. But um, imagine you got a drug that you got drunk from. That that would be fun the first day, but like the rest of your life would be ruined, right? So that's the problem with cannabinoids. You you get the medicinal uh effort, but you also get high from it. And therefore, you have this whole kind of like we can't make that a drug, we can't make that uh something the FDA is going to approve, also because the cannabinoids that we are typically having access to is from plants, and like the the vast from an amount of cannabinoid point of view, the vast uh the most cannabinoid you get out of a plant is THC, that's the one you get high from. And that there's only a couple of other ones that is kind of enough that you can harvest, and then you have like a hundred or two hundred other cannabinoids in tiny, tiny, tiny amounts. It happens to be the ones that have the medicinal effects often. So from that perspective, it's like, ah, I can't really get it because again, I have a situation where I can imagine the value proposition, the market, and the opportunity, but I can't get to it. We have to be in a very unique position where because we literally engineer our pathways, there's nothing alive in our cell uh sorry, in our cell-free uh systems. Step by step is chemistry. It's biochemistry, it's very inspired by nature, but it is step-by-step not an alive thing, it's just a chemical reaction. We can literally guarantee THC-free cannabinoids as probably one of the only uh groups in the world. And as you have maybe followed, uh there have been a rescheduling of uh cannabinoids because there have been a recollection and and realization of that there's this um uh intoxicating and non-intoxicating cannabinoids, and then non-intoxicating ones keeping them away from the market when the the endocannabinoid system, as it's the receptor system in in the human body, is so vast, it's literally in all of ourselves, and it has so many potential benefits we're keeping mankind away from because of this uh uh messy reality of THT always being mixed in. Coming with a solution to that is something that has been a uh strong market demand for, and we look forward to launching.
SPEAKER_01Well, certainly a lot of research momentum in cannabinoids into you know mental health uh disorders, cells Alzheimer's, it's it's it's a really a very interesting area now.
SPEAKER_02Exactly.
SPEAKER_01So going back to NTT, um it is described as the only known potent agonist of H and F4 alpha, a master regulator of liver metabolism that has been an accessible at scale. And your platform can amazingly produce it at a greater than 99% farmer grade purity. As you transition from demonstrating scientific and production capability to building a real commercial business, what data support the idea that activation of this regulator can drive meaningful, monetizable outcomes? And where would you place yourselves today along the evidence curve?
SPEAKER_02Yep. Um so uh you're right. The receptor is a receptor that sits inside of mitochondria, inside of uh the the powerhouse of the cell where uh energy production uh goes on. So it's it's a receptor that is known to basically, if you can activate it, it basically goes up in activity. And actually, over time you can even have mitochondria uh grow almost like a muscle if you use it more. So that is that is a a long-standing uh proven many many different ways. Then the next step is obviously the the animal models. People have been running um uh an a number of different uh layers of uh proof points over the years. I I would say the the the one um uh the the one that is is uh the the cleanest and and the the kind of easiest to to look at is um uh the one from Sanford Burnham. The group basically sat down and gave high-fat diet to uh I believe rats, and the the the the rat that got the high-fat diet got big and bloated and uh had a basically destroyed liver, exactly uh fatty liver disease style. Then the the the same clone of that rat, but and and and same amount of food, but with NCT in it, ended up with 30 to 40 percent less body mass and a much, much healthier liver. So so that's that's kind of where where the first layers of indication. And and everybody woke up to the world and said, like, wow, this if we could only get uh access to this compound. The challenge is that you find this in uh I think it's like 14 parts per million in, for example, uh black uh pepper uh kernels. So you need a household worth of black pepper to have enough for one dose of this thing, and and there's just no practical reality where you can isolate it from nature. And then people have tried um all kinds of different things, but haven't ended up with the kind of purity and the the kind of production matrices needed until we applied our platform on it. And um, as you pointed out, we uh together with KM Chemicals basically ran a pilot where we uh where we showed that um basically uh uh uh the vast majority, 90% 99% of the feedstock ended up as the end product. So imagine if this was a cell-based system. If you gave a cell, let's just say some sugar or some feedstock, how much of that sugar will turn into an end product in the other end, no matter how much genetic optimization you have done, the cell will start using the feedstock for other things or try to turn off the production of what you want it to do because it's basically um it's it's basically not in need of it. So to to answer your your last part of the question, uh NCT has been uh used in in humans and are considered uh very safe uh from the perspective of um uh it's it's been used for for basically gut health. Uh the um the the the the gut lining uh ripens up when you give NCT, and that that is uh one area people are pursuing, and there's an area uh where basically people worked from a diabetes and uh metabolomics perspective, where uh we see things uh slightly different is that nobody has had this in pure form before. So we are sitting down, and you ask, well, we are specifically in the evidence curve. We we are now getting to the the in-human use uh studies and uh teaming up with uh uh people in the uh metabolomics uh uh space to to really investigate now when we have so pure form and and so we we we can we can basically uh deliver the next generation of uh preclinical insight. And then of course, when we talk to people, there is uh two routes commercially. There's the nutraceutical route. This can uh very, very, very likely be grass approved uh because the the lesser pure form have already been grass approved, so we're we're pretty sure about it. Uh generally recognized as safe can be sold over the counter as a nutraceutical supplement, and that means there's a uh path to revenue uh relatively fast. And then at the same time, and this is actually probably the most exciting part about all of our platforms, so hang on to this one. When we go to the pharmaceutical side, it's not NCT, the natural product version, because with an engineering level control, we now have design control over the small molecule in a way, medicinal chemistry way, that we'll have never had access to before. So we can make more potent versions, more bioavailable versions, we can literally tinker with the small molecule all the way back to the computer and we can design what small molecules should be used for specific indications. So I'm personally very excited about uh fatty liver disease, I'm very excited about um uh the the overall um uh metabolomics uh diseases that that this can probably be uh customized for. But but that's where we are taking the the pharmaceutical direction, and that's where we are having conversations with uh biotech and pharma companies. And it came down to your first question of like when we negotiate those things, or obviously we know we can we can take this further along the value uh inflection point curve. So from a negotiation point of view, it's like you know what, we can for a relatively small amount of money, we we can get to the next value inflection point. Why would I do a licensing deal before that?
SPEAKER_01Right, yeah, very interesting anyway. Um, but going back to the uh cannabinoid inspired molecules uh platform that you um are also developing, uh you've had some partial regulator uh rescheduling as you uh as you uh uh mentioned uh uh previously. But the broader canab can cannabis uh adjacent space has struggled with distribution, regulatory complexity, and consumer trust. Those are things that uh uh may take a while to um uh to uh you know to uh to to um to prevail over. What specifically are you doing differently to avoid those same pitfalls?
SPEAKER_02Uh uh So um uh First of all, just being very blunt about we will never touch anything people uh can be uh high from. So no intoxicating cannabinoids found at at our facility. And and we are actually DEA uh registered. So so we have a license from the DEA to make cannabinoids. So uh we're very, very compliant from that perspective. And then as as you pointed out, there has been a lot of regulatory hurdles, but that was because it was a Schedule One drug. That's literally the definition. A Schedule One drug is a drug that the US government um sees no medicinal use case for. And and therefore, how how can you convince anyone in the FDA or anyone anywhere that that there is a medicinal use case? So that's that's the second big change that that is here. First of all, we can stay away from the intoxicated ones. Number two, we have uh a rescheduling event going on. And then frankly, there's just a couple of hundred years worth of pre-clinical and clinical and outside of the clinical uh setting uh data sets on what works for what. So now we come back to this core uh thing of our platform where we can engineer the small molecules. So we will actually not just be taking the ultra-rare cannabinoids that people are dying to get hold of. We will also take them and say, why don't we engineer your rare cannabinoid and make a new two-nature cannabinoid? So you can get a uh patent, a composition of a matter patent on it, but also so you can optimize it to the specific use case or maybe cut it away from doing anything else than your specific use case. So that optimization is the third argument for why we can make very unique cannabinoids. And then from a marketing perspective, you might not even call it a cannabinoid because if you have the specific disease, do you really care where we were inspired from when we built this new molecule that that helps with whatever we're talking about?
SPEAKER_01Good answer. So uh what are the key near-term uh milestones for NCT and uh cabinet and the cannabinoid programs? And when do you expect to start generating meaningful revenues from either of them?
SPEAKER_02So uh in NCT first, we are probably uh a year away from launching uh the nutraceutical um um according to our plans, and it will probably in the beginning be more about introducing the product to market. So it will be uh introduced to a most likely to a relatively high price because there's a segment of longevity and um uh health-focused individuals that will pay basically anything for this, and we will probably establish in that market and then when the production goes up, get the price point down so that it is uh for everybody. Um and and it's not just to kind of like skim the market, that's actually not what it's about. It's about establishing the conversation about how valuable this new molecule is and and and what it can do. Um so uh depending on how how you define meaningful uh uh revenue, it will be meaningful from the perspective of it will be the first revenue and it will start the chain. Um will it be um uh significant in in the form of um uh uh numbers um not right away, but it it is the takeoff point. And and we we do believe that if this is launched correctly, that it can become a very big deal because it's a natural product-inspired uh either alternative to GLP once that you can buy over the counter, or it is a uh if you've been on DLP ones, but you actually want to step off it, but you don't want to gain all your weight again, as people do. This is this is maybe your your your tool to uh to mitigate that. So we we are talking with a number of different partners that would like to to basically market this into different segments. So that's where we're at right now, and and what you should look forward to the next uh year or so on the NCT side is basically us partnering up with the manufacturing partners uh that is gonna make this and the the marketing partners that are gonna bring this to different segments.
SPEAKER_01Right. Well, as you know, the the uh lifeblood of any uh company at your development uh stage is um financing. So you uh ended 2025 with three million dollars in cash approximately and a runaway into the middle of this quarter, the second quarter. Um how should investors think about the alignment between your current capital position and upcoming milestones, the ones that you just um um explained to us? And what is your strategy to bridge that funding gap?
SPEAKER_02Yep. Uh so we are uh right now in conversations with investors about investing into the company. And uh we are a little bit unique from the perspective of being an Azdaq listed company, but still relatively early states. This is something that have been termed uh public ventures, so instead of uh VC venture capital that typically is used to boot up companies like ours. We we are funded by a venture capital model that has basically been developed by uh MDB Capital, that is one of the co-founders of the company. So they are an investment bank, but really think of them as a merchant bank that uh uh takes their time to find really big tech breakthroughs and then turns them into commercial successes. They have a 30-year track record of doing exactly that, and uh they've been very successful at it. So uh MDB were our financier up until the IPO, they were the investment bank that took us um uh uh public in uh uh 2024 of November 2024, right in the middle of the time where everybody's saying, like, there's nowhere of IBO' right now. And we could anyway, because MDB capital is not just a bank of their own, it is also a community of hundreds of often entrepreneurial uh individuals that have had their own assets that don't really care about where the market is, if there is a big idea, if there's a big opportunity. So that's where we have had our capital coming from for the IPO. Those are the people we're also talking to uh now. Um, and uh we are uh with with a high degree of certainty uh uh we we know we can take the capital in that we want. But we're in a uh very nice position where we can um uh build very capital efficient. We spent less, we spent around$10 million a year building uh these very, very uh valuable asset packages. And and right now there's just no good reasons for taking more than 10, maybe 15 million dollars uh max in because that easily gets us on the other side of the value in inflation points that that we've been talking about, that that will generate much more value than that. So to not dilute our shareholders to be um uh good stewards of the capital, we we basically are set up in this very efficient system.
SPEAKER_01Interesting. Now, final question from me. You said you aim to build the company into both a pharmaceutical platform and a specific asset plate, doubling down on NCT and the cabinoids, uh cabinoid cannabinoids, while also engaging biotech and pharma companies interested in your core technology. Those are two very different business models, product company versus platform licensor. At what point do you have to choose one or the other? And what does that decision hinge on?
SPEAKER_02Yeah, so before I get billloid here sitting and saying that I'm focusing on two different things, that's that's um uh obviously not what we're gonna do. We are a platform of platforms. That that is who we are. We just happen to take our first born products uh through the pipeline ourselves to show people that this is uh real, that it really has the production matrices that we say it does, and um that that we can build these very valuable uh uh compounds that that have been considered impossible. So so consider that kind of like the Kindle we use to kind of kick start the fire. But we are a platform company that will be uh in in in three five years from now, when we talk again and and we are we're talking hindsight, we will be talking much more about licensing deals and us building biomanufacturing solutions for other people. So to begin with, it's it's more of a how do we get this in time started?
SPEAKER_01Great answer to that. Well, thank you, Michael, for walking us through exozymes and unpacking you know what people from the outside might think was is pretty complex, but you've done pretty well in uh in simplifying it for us and uh and help us better understand the company's uh company and its business strategy. So I'll gonna pass it back to Tim.
SPEAKER_00Yeah, thanks, Robert. And uh Michael, thanks so much for joining us today to uh discuss exozymes. And I would uh uh replicate what Robert just said. I was appreciating as you were speaking the granularity with which you went into detail, which I know investors will appreciate. So uh have a great afternoon, gentlemen.
SPEAKER_02Thanks so much for the time.
SPEAKER_00Thank you for listening, and do not forget to subscribe as well as visiting www watertowerresearch.com to stay up to speed on the WTR on the horizon written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules. We will see you next time for another edition of WTR on the horizon podcast. Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.