How will biology help us achieve our climate goals?

This week I spoke to Edward Shenderovich, Co-founder and CEO of Synonym, a financing and development platform for the bioeconomy.

How will biology help us achieve climate goals?

Decarbonization is only partly a story of energy transition. Much of the stuff that we use in our daily lives – from lots of materials, to additives, to certain chemicals, to some food ingredients – needs to be created from new methods of production. Biomanufacturing, the production using biology, represents the most obvious route to better products in a more sustainable way.

Only in the last decade, as several breakthroughs have made gene-editing more precise, cheaper, and easier to deploy, has a new generation of companies – the synthetic biology ecosystem – been empowered to engineer cells to make useful stuff that those cells wouldn’t otherwise make. Cells, after all, employ the original programming language: instead of 1’s and 0’s, they code instructions via A’s, C’s, G’s, and T’s. Understanding and improving that software enables cellular products that mimic and improve on existing ones.

Image Source: National Human Genome Research Institute

Over hundreds of millions of years, biology created the living things that now represent our fossil fuels. These fuels have powered our civilization for the last two centuries and in the last century have also delivered much of the physical stuff we interact with, like plastics. But it remains profoundly inelegant to turn a decayed wooly mammoth into a drinking straw. Biomanufacturing is a vastly more direct route to the products we need.

Directness, of course, has its benefits. Biomanufactured products (bioproducts) will replace currently available staples at a significantly lower carbon footprint. We’re just beginning to see these life cycle analyses conducted, but they’re looking extremely promising. And it makes sense when you think about it. Take that straw example, a simple plastic straw – cheap, disposable, and banned in an increasing number of jurisdictions as a tepid acknowledgement of the silliness of single use. That straw’s cost obviously didn’t take into account the polluting effects of the fossil fuel extraction that was required to synthesize it. Nor the transportation of that fuel, processing, and production. Nor does it take into account the hundreds of years that straw will persist in the environment, polluting it.

Image Source: MDPI "Environmental Life Cycle Assessment of a Novel Cultivated Meat Burger Patty in the United States"

How do we create the stuff we need with fewer externalities? Hundreds of companies are working on this problem. To take one: a company based near Atlanta, Georgia named Danimer Scientific produces the same PHA that’s traditionally used to make straws via microbial fermentation instead of petrochemicals. This means that it’s trained bacteria to consume inexpensive feedstock , like canola oil, and churn out PHA. So, not only does it remove the need for fossil fuel from the final product, but Danimer’s straws are completely biodegradable. In short, bioproducts not only produce fewer emissions but naturally degrade in the environment.

Image Source: Strengthening Biomanufacturing to Advance the Bioeconomy

If these products represent this kind of paradigmatic breakthrough, why are so few parts of our supply chains already?

The array of new bioproducts on the horizon is mesmerizing. To highlight a few examples:

• Spiber is making an alternative form of spider silk that’s lighter weight and seven times tougher than the aramid fibers used in bullet proof vests.

• The EVERY Company is making egg protein without any actual chickens.

• Synthetic Genomics uses saltwater algae to make sustainable fuel for cars.

• LanzaTech is recycling carbon from industrial emissions and making it into aviation fuel.

Here’s the problem: the world doesn’t have the biomanufacturing capacity to meet current and future demand. And it’s not a small shortfall. For fermentation, one type of biomanufacturing, the conservative projections are that we need 1000x more capacity in the coming decades.

Image Source: Synonym

To address this, Synonym launched the first comprehensive directory of available fermentation capacity called Capacitor.bio. Our conclusion: there simply isn’t yet the commercial capacity to meet even existing demand let alone future demand.

Adoption of bioproducts will happen when they reach cost parity with existing, fossil fuel based alternatives. Cost, in turn, is a function of scale. And scale is expensive. These facilities each cost a couple of hundred million dollars to build and are complex to operate.

Synonym is building the blueprint for scaling biomanufacturing. Because the industry hasn’t yet proven it can reliably produce products at scale, it has been extremely difficult for companies to secure competitive financing to build scaled facilities. Without the proof points that scaled production can bring, these products aren’t reaching the market. We’re fixing this vicious cycle by focusing on facility productization – creating a blueprint for facility design and construction to make these facilities accessible to the companies that need them.

Image Source: Capacitor Bio

Because Synonym’s facilities represent the world’s first advanced bioproduction facilities and are built to accommodate multiple kinds of fermentation companies as tenants, the typical risks associated with facilities built for a single tenant are greatly reduced. This allows Synonym to access lower cost capital which we can pass along as savings to our customers. So companies are able to access the capacity they need to cost-effectively deliver their products to market without having to roll the dice on the company’s future by building a facility themselves. At the same time, we see increasing investor appetite to own sustainable assets with attractive yields. Twenty years ago, data centers existed but were hardly considered the standardized asset class they are today. We expect a similar evolution for “fermentation farms.”

What’s happened in recent times that makes you excited and bullish for biomanufacturing?

First, I think the world is waking up to the potential of biomanufacturing. The race to build a sustainable bioeconomy is on. I started my career in the late 1990s when the internet was just beginning its promise to alter our daily lives and today synthetic biology feels the same way: we can’t even conceive of all the revolutionary things this paradigm will create.

I am a product person at heart and I have to say, the innovations coming from the synthetic biology community are simply unbelievable. Everyday, we read about new advancements and it gives me confidence that yes, we can use biology to produce the things we consume — from the food we eat to the materials we use to the energy powering our world. This bodes well for our future.

Second, governments around the world are stepping up to invest in biomanufacturing. Last year, the Biden Administration signed an Executive Order establishing the National Biotechnology and Biomanufacturing Initiative and committing $2 billion in investment into the sector. A follow-on report from the President's Council of Advisors on Science and Technology underscored the huge potential of the bioeconomy and urged U.S. policymakers to create the conditions for it to grow and thrive.

Around the same time last year, the U.S. Food and Drug Administration announced it approved lab grown poultry from Upside Foods as safe for human consumption. This is a crucial first step in making food grown from cultured animal cells available to consumers and will open the door for the development of additional food proteins in the future.

Finally, investments into synthetic biology are growing. In the last decade, nearly $40bn was invested into the space. All of these companies will need to scale production.

I believe biomanufacturing is one of the most promising investments we can make to achieve a sustainable future. The activity we’ve seen in this sector in recent years makes me bullish and hopeful that we as a society have a clear path to mitigating some of the largest challenges facing us today.

How should companies think of outsourcing biomanufacturing at different stages?

Companies creating bioproducts typically handle bench-scale product development in-house. This is work on the core intellectual property they will ultimately bring to market. To date, the whole ecosystem has followed a stepwise growth path – discover and optimize at the bench scale, improve and tweak at the pilot scale, and begin to generate commercial interest at the demonstration scale (this roughly means growth from a tabletop bioreactor to one that’s several thousands liters). But unlike, say pharmaceutical products, which need only be produced in relatively small qualities (for often a lot of value), non-pharmaceutical indications inevitably require very large scale production to satisfy both demand and cost expectations.

Anything beyond bench-scale production becomes expensive to build and operate. Companies have typically relied on contract manufacturing organizations (CMOs) to produce their products at anything larger than bench scale. Finding available production capacity is difficult, time consuming, and inefficient (which is why we launched Capacitor.bio last year), but even when companies do locate an outsourced solution for their production needs, it’s usually only a temporary one. Since cost is ultimately the deciding factor for market adoption, producing with a CMO at commercial scale is often not tenable. And there really isn’t enough commercial scale capacity (roughly defined as greater than 100,000 liters) anyway.

Faced with a shortfall of large scale capacity, companies are deciding whether to just build their own. Building these facilities is a head-spinning undertaking, from design, permitting and construction, to workforce training and operations. To do any of it, companies need to tap hundreds of millions of dollars of outside capital for facility design and construction. Raising that money in the current macroeconomic environment is daunting. Having seen some high-profile facility failures, investors are understandably concerned about financing such ambitious facilities for a single company. What if the company can’t figure out how to build the facility on time and on-budget? What if they can’t scale their operations to meet their cost requirements? And what if the market for their product changes or disappears altogether?

We believe that companies should have the chance to get their products to market without having to build their own facilities. These facilities should be a part of the biomanufacturing infrastructure asset class — modular, reusable, and upgradable assets financed by patient infrastructure capital.

Edward Shenderovich is the Co-founder and CEO of Synonym, a financing and development platform for the bioeconomy. The company raised $6.3 million in pre-seed funding from Andreessen Horowitz, Giant Ventures, Blue Horizon, Thia Ventures.

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