“BIO hosted a round-table discussion with leading-edge companies on technical and commercial advances in applications of synthetic biology. Speakers in the session represent leading firms in the field, Amyris, BioBricks Foundation, Verdezyne and Codexis.”

The Progress in Commercial Development of Synthetic Biology Applications podcast can be listened to at this link.

BIO is a biotechnology advocacy, business development and communications service organization for research and development companies in the health care, agricultural, industrial and environmental industries, including state and regional biotech associations.

Below are my notes and summary from the conference call.  (Disclaimer: all quotes should be taken as terse paraphrases and see the official transcript, if any, for direct quotes.)

BIO:

“BIO sees synthetic biology as natural progression of what we’ve been doing all along [previous biology and biotech commercial research]. […] Industrial biotechnology gives us tools to selectively add genes to microbes, to allow us to engineer those microbes for the purposes of [biofuels] or production of other useful products.  Synthetic biology is another tool which allows us to do this, and is an evolutionary technology, not a revolutionary technology.  It grows out of what our companies have always been doing with metabolic shuffling or gene shuffling, etc.  [Synthetic biology] has become so efficient that new ways of thinking about this field are necessary.  We are beginning to build custom genomes from the ground up, a logical extension of the technologies [biotech companies] have developed. […] “

Industrial biotechnology’s phases:

1. Agriculture (previous phase)
2. Heathcare (previous phase)
3. and today’s phase: biofuel production, food [enrichment], environmental cleanup

Challenges in today’s world are: energy and environment (greenhouse gases, manufacturing processes, … how to also develop these in the developing world);  Synthetic biology can help to address these problems.

“Every year the development times [of modifying organisms for specific tasks] are shortened [due to availability of more genomic information].”

“There is unpredictability in synthetic biology [however] this is still very manageable.”

This comment was a response to a ‘fluffy’ question about the ‘risks/dangers’ of the technology.

“[This technology is accessible because as we have heard in the news] there are now home hobbyists experimenting with this in their garage laboratories.”

Hmm; I wonder who they are talking about..

Amyris:

“We have been moving genes around for quite a while.  [The difference today which yields Synthetic Biology is that] we can do things easily, rapidly and at small [measurement] scale.” Synthetic biology allows scientists to integrate all the useful [genomic, bioinformatics] data into a usable product [much more rapidly than before].  Previously it would take months to modify a microorganism, now we are down to 2-3 weeks [which is] limited only by the time required for yeast to grow [and we aren’t looking to speed that part up]; this is a rapid increase in the ability to test ideas and [measure] outputs.  We view synthetic biology as very predictable [in the sense that un-intended consequences are inherently reduced].  We engineer microorganisms to grow in a [synthetic environment for fermination in a ] steel tank which reduces it’s ability to grow in a natural environment [thus] the organism loses out against environmental yeast [so modified organisms won’t cause problems in the environment since they will die].   We need more people who can understand complete pathways, complete metabolisms.”

Verdezyne:

“Synthetic Biology is a toolset to create renewable fuels and chemicals.  […] The benefits of Synthetic biology are, 1. profitability, as sugar is a lower cost of carbon; 2.  efficiency, from use of [standard high efficiency] fermentation processes; 3. from efficiency improvements, this improves margin, 4.  decreased capital costs; 5. Use of bio-economy, using local crops [for biomass] or local photosynthetic energy to yield [chemicals for local use].    Now we can explore entire pathways in microorganisms [compared to previously when we could only look at single genes].  Traditionally, chemical engineering is the addition of chemicals to create a functionality [whereas in microbial engineering the microorganism directly creates the outputs desired].  We retooled for synthetic biology very easily [from originally building chemical engineering systems].”

Codexis:

“Biocatalysts [are] enzymes or microbes with novel properties [for commercial use].  Green alternatives to classic manufacturing routes.  Biocatalysts require fewer steps and fewer harmful chemicals.  Synthetic biology is one tool towards this [to] quickly create genes and pathways [using the massive amounts of genomic information now available].  [Use of] Public [genome] databases [allow us to] chop months off the [R&D] timeline.  [One desire] of scientists in synthetic biology is making the microorganisms [predictable, as in in engineering] however in commercial environments we can make variants very quickly [so we can deal with variants].  There are many companies which focus on commodification of biological synthesis and we use a variety of suppliers.  The analysis [the R&D] required for designing new pathways is [what is lacking in skillsets of today’s biologists].”

Drew Endy:

Patents costs are drastically more than the cost of the technology itself.  The technology of the iGEM competition costs $3-4 million per year for all international teams, whereas the costs of patenting all submitted Biobricks every year would be 25k per part for 1,500 parts for a total of over $37 million dollars; thus, the patent costs are much more expensive than the technology, so this is an area which is being worked on.  The next generation of biotech is hoped to “run” on an open “operating system” made from an open foundation [where new researchers can use existing genetic parts as open technology rather than having to build everything from scratch].

There was an additional analogy on the call which related synthetic biology to the emergence of vacuum tubes for electrical engineering, which ushered in incredible tools for the advancement of technology and creation of new products.  I’m on the fence about these analogies, because vacuum tubes were well defined and characterized, and the shapes of their mechanical parts was well known (glass, wire, heater filaments, gas fillers, contact length, arc potentials, etc); whereas, the shapes (thus, the function) and characteristics of biological “parts” is still mostly unknown (microbiology is more than the “software strings” of nucleic acid’s A-C-G-T; it is mechanical micro-machines which interact in various ways depending on chemical context and the mechanical shapes or fittings of many of the parts are not well understood yet).

There you have it. Synthetic biology is the leaner, meaner biotech for the future.

One set of perspectives on systems biology startup business for 2008.

Institute of Biological Engineering’s

Bio-Business Nexus 2008

From OpenWetWare

Links

• Institute of Biological Engineering on OpenWetWare

The presentations below were given at the  Institute of Biological Engineering annual meeting March 30, 2007 in St. Louis, Missouri, under the topic of BioBusiness.

The Mellitz presentation is very good reading.

BioBusiness Nexus Presentations 2007

Mellitz presentation: Commercialization of University IP: Translational Research in BME Leading to Company Formation

Nidus Center presentation

BioGenerator presentation: Bridging the Gap Between Technologies and Viable Companies

Akermin presentation: Biofuel Cells for Portable Electronic Applications

Chlorogen presentation: Production of a Human TGF-beta Family Protein with Potential as an anti-Cancer Therapeutic Protein From Plant Chloroplast

Kereos presentation: Targeted Imaging / Targeted Therapy

Apath presentation: Automated Antiviral Drug Screening Using Engineered Replication Systems

Orion Genomics presentation: DNA Methylation & Cancer

Sequoia Sciences presentation: Bringing Back Nature to Drug Discovery Natural Molecules in an Antibacterial Program

Somark Innovations presentation: BIOCOMPATIBLE RFID INK TATTOO

If you ask most incumbents in the field of biology, they’ll likely say: “What exactly is synthetic biology?”

Maybe they should watch Drew Endy’s video on YouTube.

However, really, synthetic biology is the simple extension of modern biology.  Not too long ago, it wasn’t possible to “make” biology.  Now, it is possible (also known as: synthesis).  And the cost of synthesis keeps getting lower every year.  Some say the drop in the cost of synthesis looks curiously like the curves to Moore’s Law: doubling in technological capability every X months (where X is sometimes debated, usually quoted at 18 months, often misquoted as “every year”).

Synthetic biology is often compared to the computer industry, to leverage the historical perspective.

In the computer industry, there are three big pieces of the pie (usually seen as two; I want to purposely highlight as three).

• Hardware companies
• Software companies that sell source code (“source software companies” for the purposes of this article)
• Software companies that sell binaries (“binary software companies” for the purposes of this article)

In the early days of the personal computer revolution, some bright guys saw that the hardware companies had a great product.. but software could be a much, much more profitable product:  with software, the cost of manufacturing is ZERO.  With hardware, the cost of manufacturing weighs down profits, so the maximum margin might be 20% to 30% for very glamorous products, and maybe 5% to 10% for less glamorous products.  These bright guys immediately bluffed their ways into IBM’s business center and negotiated what turned out to be one of the most profitable deals (if not the most profitable deal!) in the history of the world (Microsoft’s model).  In parallel to this, some other bright guys decided that they could instantly boost their overall profits by both building hardware and including all the fundamental software: hence, the first “personal computer systems company” (hardware plus all necessary software) was created (Apple’s model).

It’s worth keeping in mind at all times that the computer revolution existed before the “personal” computer revolution.  At that time, there were only mainframes (IBM: “big blue”).  During that time, though I’m not totally sure, I believe the market likely segmented like this:

• Mainframe system companies (hardware + software)
• Mainframe service companies (people required to run & maintain the machines)

Mainframe system companies charged heafty prices because they could: the only purchasers were governments and incredibly large (deep pocket) companies.  Yet the mainframe hardware business was killed by the personal computer market, which offered enough technology to the mass market to undercut most of the need for mainframes.  Of course, a mainframe company would never want to make a personal computer — it would erode their own profit potential (eventually, IBM caved in and created the IBM PC, but it was originally unsuccessful and only the reverse-engineered clones from other companies were accepted by the market).

The innovation in computer technology occurred so rapidly that unhealthy monopolies were created as a result. (Microsoft, AT&T, IBM)  In the case of AT&T, they were forced to split into different operations and allow more market competition (both the short and long term benefits of this forced split are still debated).  Microsoft avoided being split through government ignorance, entrenchment, lawyers, and luck.

Biology is a different from the story above. Biology does have “soft” ware, of a sort — it’s DNA.  The software is sometimes distributed as “source” code, of a sort — it’s as genes, protocols, primers and vectors.  The software is sometimes distributed as “binary” code, of a sort, too — it’s the modified microbes that “just run” when placed in the right environment.  But after this, the analogy kind of breaks down; the cost of manufacturing is never near zero.  Additionally, the fundamental “source” code can’t be protected under copyright, because it’s DNA.  And, the goverment has a heavy hand in determining what “software binaries” you can get ahold of in order to run.

Of course, I’m still a rank amateur at biology, though, currently, this is what others seem to see in biology.  And of course, I’m predicting the future, so maybe no one can definitely claim I’m incorrect.

• Hardware companies, supplying machines and tools.
• “Software” companies: supplying digital DNA sequences, cellular models (like BioBricks), and bioinformatics programs which simulate & verify the cellular models for fabrication.  Additionally, much of the intellectual property here will be public domain or Share-Alike licensed.
• Fabrication companies: supplying physical biological material based on the digital sequences.  Most people will outsource fabrication to these companies and only the “large pharmas” will perform fabrication in-house.

Does this fit reality?  I say, no.  The fabrication companies will quickly starve, since the prices continue to fall — just like the DRAM computer companies closed with the falling prices of the transistor and transistor memory (Intel bailed out of manufacturing DRAM as Moore’s Law eroded their profits beyond repair).  The idealized “Software” companies can’t actually operate in the prescribed manner, because biology consists of chemicals, and such a company is not set up as a physical laboratory; the Share-Alike licensing will remove profit potential; and the company that sells the chemicals isn’t even on the map.

Here’s what seems to mirror the current market more closely.

• Hardware companies: supply machines and lots of glass hardware.  Presumably lower profit margin except for large equipment sold to big pharma.
• Wet Lab companies (biological engineers): supplying primers, enzymes, reagents, chemicals.  High profit margins, due to patent protection and high barrier to entry (requires highly specialized education and some number of years of experience).
• Dry Lab companies (bioinformatics engineers): Design and supply digital DNA and cellular models, via computational models, and design bioinformatics progams and wet lab protocols for use.  Funky profit margin, because, if design is made Share-Alike, then profits don’t exist; if design is kept secret, then standards may not evolve well; and, the DNA intellectual property is already mandated as public domain.
• Fabrication service companies: encompass limited rage of Wet Lab + Dry Lab, but don’t create their own protocols.  Margins vary, depending on level of the service.

The big winner right now seems to be the Wet Lab guys and the Hardware guys.  By leveraging patent protection, the Wet Lab competition is locked out of competing.  Although no one in the industry has anything nice to say about patents, everyone files them, and all investors demand them.  The Hardware guys currently have big profits, high prices, and little competition, as no one is forcing the prices down — sound familiar?  This should; it’s the same phenomenon that occurred in the mainframe days.

The shakeout seems to be that the Dry Lab guys, the Hardware guys, and the Fabrication guys will need to get together in some way.

Yet, there’s another interesting aspect of biology: organisms are different.  Each organism has it’s own unique pathways and in-compatibilities.  It is not possible, in general, to run “software” from one genetically engineered machine on another genetically engineered machine.  In fact, that’s why biologists usually argue against synthetic biology, claiming it will never work.

So rather than the universal “PC platform” that exists in the computer world (a derivative of both unhealthy monopolistic practices and the market requiring a common environment), the biological environments will number in the thousands.  Yeast grows differently than e. Coli, and both Hardware and Dry Lab are customized to individual species.  That could be the market segmentation: biological compatibility itself, creating multiple competitive hardware and “software” markets, with some market segments Share-Alike, and some not.

If someone has a crystal ball, let me borrow it for a second.