Bet on that strain! 10 Billion Fund Gambles on Synthetic Biology "Cell Dream Factory"

Text | Hai Ruo Mirror

"After the financing heated up last year, more than 100 synthetic biology companies have emerged in China, and there must be many companies that already exist, like those that used to do industrial enzymes, APIs, or hyaluronic acid, and now add the label of synthetic biology." It may be in the stage of inflating expectations," one VC investor said. The valuation of synthetic biology companies he invested in in 2019 has risen more than 20 times, when the category of fire was still cannabinoid CBD.

Coding genes, modifying organisms, and synthesizing biology through engineered methods is considered to be the "third biotechnology revolution" and "a disruptive technology leading industrial change". Some securities companies and investment institutions believe that the current "development singularity" of synthetic biology has emerged, "the inflection point of technology has arrived", and the fields that can be applied - new drugs, new materials, new energy, new consumption, etc., are all exciting big markets.

Hillhouse, Sequoia, Dinghui, Yuansheng and other first-line funds frequently invest in a number of synthetic biology companies; under the background of the carbon neutral era, the "national" mixed reform fund (China State-owned Enterprise Mixed Reform Fund) is in the biodegradable material PHA track, spending hundreds of millions of yuan, while leading two competitors: blue crystal microorganisms and microstructure workshops.

From 2021 to March 2022, some synthetic biology companies will be funded

Since the beginning of 2022, according to the incomplete statistics of 36Kr, 13 synthetic biology companies in China have announced the completion of financing. Synthetic biology media SynbioBeta data shows that in 2021, synthetic biology startups received a total investment of nearly $18 billion, the best year since 2009.

In this field, the American star companies Amyris and Zymergen, which are in the front, bet on biofuels and flexible screens, respectively, but they are in the "large-scale mass production" step, and the stock price plummets. With the lessons of the past, domestic investors pay special attention to two points when selecting projects: whether the category selected by the enterprise has a broad market and the just need for application; the ability to scale up the process can support the strain from the orifice plate of the test bench to the 1 liter, 10 liter, 1000 liter, or even 10,000 liters of mass production fermentation tank.

Creation Basic Disk: Find and transform that strain

At an industry forum, Zhang Haoqian, co-founder of Sapphire Microbiome, said that the term synthetic biology is more difficult to understand, and "engineering biology" better summarizes this concept.

What is engineering? Ouyang Yi, a professor at Peking University and an academician of the Chinese Academy of Sciences, said: "That is, your design and production should be able to be separated, and its sign is that your theory can quantitatively predict the behavior of what you design. The higher your predictive power and the stronger your design ability, the more you can safely put the design blueprint on the production floor, and there must be no problem in producing according to this plan. ”

In complex biological systems, the realization of "quantitative prediction of the behavior of designers, controllable input-output" is the direction that synthetic biology is pursuing. At present, DNA sequencing, DNA synthesis, and gene editing tools (represented by CRISPR/Cas9) have been continuously innovated, allowing rapid improvement in synthesis capabilities; however, the pathways and regulatory mechanisms of biochemical reactions in living organisms are very complex, and there are many undefined mechanisms of action. This makes the ability of bioengineering design still limited, through rational design + artificial experiments, only a part of the biological response can be regulated, therefore, large-scale screening and trial and error, is an important method of current synthetic biology research.

Similar to programming, the path of synthetic biology is "design-synthesis (code)-test-learn" (DBTL), testing the modified strains, and then constantly correcting the design in the microscopic "cell factory", synthesizing, re-testing, and learning data until the required strains are screened.

This strain is often referred to as "chassis cells", and the selection and optimization of chassis cells is a core step in the synthetic biological chain and an inseparable link with scientists and basic research. Based on chassis cells, platform molecules are synthesized; platform molecules are used as the basic components to synthesize more and more complex target molecules and materials by adjusting metabolic pathways in vivo or catalysis in vitro.

So, how do you understand a strain and understand the process of transforming it? The above investor metaphor, just like the Internet startup project, through the corresponding algorithm ideas, you can judge whether the product function can be realized, investors usually do not need to look at the underlying code. In synthetic biology, the design ideas of strains have a general paradigm, can be published, and understood; after the results of the small test and the pilot test are out, the yield and performance of the target are also evaluated by macro indicators.

Similar to Internet investment, the logic of "investing in people" still applies, and at the end of last year, Hillhouse Zhang Lei talked about investing in more than a dozen synthetic biology companies, especially mentioning "letting scientists stand in the C position". Overseas MIT, Berkeley, Cambridge, etc. have fertile soil for the development of synthetic biology, and the start time of domestic related scientific research is similar to that of the world, and Peking University, Tsinghua University, Fudan, Chinese Academy of Sciences, Shenzhen Advanced Institute, etc. have leading scholars and laboratories in synthetic biology.

In addition to the training of colleges and universities, the synthetic biology academic competition iGEM (International Genetic Engineering Machine Competition) founded by the Massachusetts Institute of Technology has also selected a large number of industrial and academic talents for the industry. At present, in China, the founders of synthetic biology companies such as Blue Crystal Microbiology, Red Panda Biology (Bamboo Seeking Biology), Unnamed Light Picking, and State Creation Biology have all participated in iGEM competitions, which have also become a "training ground" for synthetic biology talents.

Synthesized, can it be mass-produced and sold?

Young talents from famous universities at home and abroad are undoubtedly the new force of synthetic biology "creation"; but as the product line enters the pilot and mass production stages, factory directors with decades of fermentation management experience have become the objects of introduction of synthetic biology enterprises. The whole process of biomanufacturing involves genetic engineering, biological engineering (fermentation process), biochemical industry (separation and purification, etc.), polymerization and modification of biological polymer materials, and the innovation chain and cycle are very long, which is a double-intensive industry of capital and technology.

In the process of strain modification and cell culture process, the common "scale-down" problem. From petri dishes in the laboratory to factories with 10,000 tons of production volumes, the volume change of the fermentation tank is not only a change in the reaction vessel, but also means a change in the accumulation of local metabolites and the flow field environment. So in a small tank of 1L, the strain that grows "as expected" may get out of control in the 10L jar and need to restart the "design-synthesis-test-learn" (DBTL) cycle.

In the process of synthetic biology research and development, the faster and more efficient the trial and error, the greater the advantage. Therefore, high-throughput screening has become a key capability of enterprises. Amyris and Ginkgo Bioworks, which are among the three giants of overseas synthetic biology, and Cathay Biologics, a company listed on the domestic science and technology innovation board, have built a high-throughput, automated and data-based screening system to shorten the research and development cycle from strain transformation to mass production.

With a total revenue of $314 million in 2021, Ginkgo Bioworks is highlighted by the highly automated working model and code base (biodata assets) of its "Foundry for Life", its first-generation automated foundry can perform up to 15,000 automation implementations per month, and Biowork2 has increased its efficiency by 6 times after improving device integration and miniaturization.

Cathay Biologics, a domestic synthetic biology company, has a revenue of about 2.2 billion yuan and a net profit of 600 million yuan in 2021, which is one of the few enterprises that has realized the transformation from strains to large-scale production and sales of industrial products. It also uses online sensor technology to collect various physiological parameters of biological metabolic processes, conduct big data analysis, implement intelligent control processes, gradually amplify the fermentation reaction of long-chain dibasic acids, and achieve product cost and quality stability. But a high-throughput, automated screening platform is only part of the success, and choosing the right synthetic item class is also crucial for the company.

Amyris in the United States is the originator of the high-throughput engineering system of synthetic biology, and the raw material they constructed, farneene (a class of intermediate compounds with many uses), was once considered a new hope for mass-produced material fuels and oil replacement. But after the construction of the 10,000-ton plant in Brazil was erected, the scale-down problem was exposed: the previous fermentation process was "unsatisfied", did not meet the expected output and low cost, the price could not be reduced, and the global oil price fell, which quickly dragged down the company's cash flow.

Fortunately, Amyris adjusted the development direction of farnesene: high value-added fine chemicals, typical such as beauty raw material squalene, sugar substitutes, cannabinoids, etc. In China, there are also a number of companies that choose the development path of main consumer goods, such as the unnamed pick-up of light to choose synthetic collagen, state Tron Biology, Bai Kui Rui Biological and other peptide raw materials developed, listed companies Bloomage Biology, Huadong Pharmaceutical, etc. also try to develop hyaluronic acid through synthetic biotechnology.

Fine chemicals tend to have higher unit prices, market sales are often in "grams" as a unit, and kilogram-level production may bring sales and cash flow to the company. Compared with synthetic biotech companies that produce commodity materials (biofuels, biodegradable plastics, etc.), there are relatively few downstream engineering expansion problems facing fine chemicals.

However, through biological fermentation, to ensure the quality of each batch of products is stable and consistent, testing the team's ability to control the process, after all, with the downstream manufacturers to continue to supply cooperation, only rely on samples is not enough. Teams with downstream channels and sales resources are more likely to sell bio-manufactured products; however, in the case of short-selling agencies suing Ginkgo (one of the three giants of synthetic biology in the United States) related party transactions, it is crucial to evaluate the sales revenue of synthetic biologics companies and consider their dependence on related parties.

At present, the underlying technology of synthetic biology has accumulated to a certain extent, and it is speculated which strain in the industry produces the target molecule more efficiently, so many companies are no longer in the laboratory thinking, choosing to expand the category from the market demand and find a technical path.

The needs of the "carbon neutral" era provide an external opportunity for synthetic biology companies to achieve carbon neutrality through synthetic biology at separate nodes such as raw material processing, production operations and product use. As carbon emissions become tradable, downstream manufacturers are also more motivated to choose synthetic biomaterials and pay for them.

On the synthetic biology track that integrates BT (biotechnology) and IT, although Compared with overseas first-class companies, Chinese companies are still in a catch-up position, but the gap with them is rapidly narrowing. Driven by new technologies such as artificial intelligence and big data, synthetic biology will give humans a stronger ability to "transform nature and use nature", in the face of the attraction of superpowers, front-line investment institutions are still looking for high-quality targets, and entrepreneurs of synthetic biology are also continuing to emerge and move forward.

(If there is a synthetic biology company, clues seeking reports, welcome to contact the author, WeChat: hairuojing001)