If one could magically convert a substance selling for $0.20 per pound into a substance selling for $2,000.00 per pound, he might consider doing so. Of course, the conversion process is not magical, it is scientific and technological, using modified biological organisms to produce higher value products from cheap sugar. Given potential profits, you can perceive why so many synthetic biology startups and venture capitalists are moving in that direction.
The “carbon value chain” is a concept that categorizes carbon-containing products based on their price per mass. Although other variables, such as market size and maximum theoretical yield, are important, the carbon value chain offers quick insight into the largest margins that SynBio companies can realize on processes that generally all use sugar ($0.25-$0.50/kg) as an input. The image [above] depicts approximate current bulk prices for rough categories of potential SynBio products.
The field is apt to grow crowded, with multiple shakeouts due to occur. The successful companies will find profitable niches early, build market share, and branch into new product lines as they are able to realistically finance.
Some SynBio start-ups originally focused on producing chemicals with higher value than fuels. For example, Myriant Technologies and Lygosproduce succinic acid (historically $3–5/kg) or malonic acid (historically $20–30/kg), respectively. Genomatica uses engineered strains to produce 1,4-butanediol, butadiene, and nylon intermediates. However, most SynBio start-ups, including fuel start-ups mentioned earlier, recently pivoted towards higher value chemicals to stay in business.
The keys to bringing down production costs for synthetic biology, include better methods for genome editing, better culture media, and more economical automation for rapid production and separation of valuable chemicals.
Machines don’t get tired, human arms do. And machines can repeat processes to such a high degree of precision that they can reduce the discrepancies and disparities between labs and across time. Combine this with a world where the researcher’s own lab is becoming more intelligent. The internet-of-things is knocking on the lab door. Machines are becoming cheaper, smarter and more mobile. Liquid handling robots, like BioBots and Modular Science, once hundreds of thousands or dollars, can now be bought for the price of a consumer 3D printer. Companies like Zymergen and Gingko Bioworks are taking advantage of this, increasing scale of operations and drastically improving time taken to achieve never-before-seen yields. 3D printers, led by the maker movement, are entering the biology realm and printing tissue structures equivalent to the human body and in forms never seen nor contemplated before. New tools have such speed, efficiency and sensitivity that creating a defined, characterized single cell atlas of every cell in the human body is being contemplated. With technology so refined and so pioneering, you have to sit up and ask “What is actually possible in the next 10 years?!?”
Another way that synthetic biology will become more economical, is in the outsourcing of the rote, lower value, low-information production. High value research, design, and development will take place in the central labs. This is similar to how new telecommunications and computer equipment is designed and produced.
Taking Zymergen as an example, we can see how advanced cycles of design-build-test-analyse combined with next level automation techniques help to speed the production of advanced microbes and advanced products.
The Design-Build-Test-Analyze cycle guides our work as we improve the performance of the microbes we engineer. By bringing together the most advanced techniques in biology with the latest in automation and computation we work in high-throughput to engineer and evaluate thousands of strains in parallel. Our results guide our next set of experiments.
… Key to Zymergen approach is the fact that we automate every step of the process, removing guesswork and human error that exists when scientists are left to do these experiments by hand. Zymergen’s robots – and the protocols we created to control them – have enabled us to build and test thousands of strains with resources typically required to build and test tens of strains, fueling breakthroughs far more quickly and predictably
Improvements at each step in the cycle can add more to profit margins.
Another company example, Intrexon:
The Opportunity for Synthetic Biology
Intrexon is leading the way in the new paradigm of synthetic biology. The company believes this is the foundation upon which the bioindustrial revolution will be built. Through a deep understanding of DNA, the company is able to design and construct its own genetic programs, effectively re-engineering biology to deliver specified results. The company harnesses the power of software and data mining with its UltraVector platform to analyze and efficiently engineer complex assemblies of DNA for multiple solutions on multiple scales.
From the company’s website:
UltraVector has captured a wealth of data over iterative experiments in the design, build, and testing of DNA components, driving more proficient manufacturing of biological systems providing our collaborators with multiple options for optimizing DNA-based solution.
Intrexon applies a broad suite of technologies to approach different biological challenges. For example, its RheoSwitch technology is the first clinically-evaluated gene switch, enabling regulation of gene expression and therapeutic effect through the timing and dose of an oral activator ligand. This technology has shown great promise in early trials of cell therapies with its oncology-focused exclusive channel collaboration partner Ziopharm (ZIOP). Here is a list of the company’s various technology solutions from its corporate presentation:
Multiple Approaches to Growth
Intrexon is growing rapidly, even at this very early stage, through a four-pronged approach: licensing, joint venture, internal development and acquisition. Even at this very early stage, next year’s revenues are pegged at more than $200 million, 30% higher than 2015 when growth was more than 100%. __ http://realmoney.thestreet.com/articles/09/03/2015/build-core-position-biotech-intrexon-these-lower-prices
Pathways Ahead for SynBio Start-ups
Thus far in 2015, several SynBio start-ups have made headlines after earning investments from venture capital firms. For example:
· Bolt Threads: $32 million, Series B
· Caribou Biosciences: $11 million, Series A
· Editas Medicine: $120 million, Series B
· Ginkgo Bioworks: $45 million, Series B
· Twist Biosciences: $37 million, Series C
· Zymergen: $42 million, Series A
Flush with capital and lessons from fuels, SynBio start-ups are uniquely poised at this moment to execute on their grand ideas. It will be fascinating to see what other SynBio start-ups emerge and how all of them begin to change the world, and I look forward to assisting them in some capacity when the time is right. __ https://blogs.plos.org/synbio/2015/09/08/an-introduction-to-start-ups-in-synthetic-biology/
The Two Sides of the Coin
As we have been saying over at Al Fin Energy for many years, syn-bio production has the capability of putting a ceiling on oil and natural gas prices. Sugar is cheap, and much cheaper methods of sugar production are in the pipeline. Peak oil has never looked less likely than by looking through the lens of future syn-bio and future nuclear process heat technologies. Fuels and chemicals from synthetic biology are likely to be a $10 trillion business in a few decades. Synthetic materials using nuclear process heat are likely to be similarly valued by 2050.
On the other side, we have synthetic biology on the cheap, taking place in garages and backyard labs across the landscape. New computer and telecom startups began in such places, so it is not surprising that new syn-bio, new robotics, and new nano-tech startups and undercover operations will have modest beginnings.
Just like tele-computing, the Pandora’s box of synthetic biology has been long opened. And just as computer security against hacking is growing as rapidly as any other industry, so will security against errant syn-bio products become a booming business, in time.
With the addition of backyard nanotechnology, human societies will need to pay a lot more attention to the security of the commons. Life is becoming more complex, thanks to criminal, terrorist, and foreign-state hackers of all varieties.
Advanced technology in advanced computing, advanced communications, advanced biology, advanced nanotechnology, and advanced robotics will overturn the established order of the world. In some ways this can be very good. In other ways, it could be very, very bad.
Hope for the best. Prepare for the worst. It is never too late to have a Dangerous Childhood.