The first blessing of synthetic biology unicorns has emerged from the woods. Ginkgo Bioworks appeared first, with a post-money valuation of over $4B, followed closely by Impossible Foods with a $2B valuation.
And more are coming. TechCrunch’s Emerging Unicorn Leaderboard includes LanzaTech at $950M, Precision BioSciences at $784M, and Recursion Pharmaceuticals at $650M. Let’s not forget about Zymergen ($1B-$10B?), Bolt Threads ($500M-$1B?), and Pivot Bio ($100M-$500M?) — valuations according to PrivCo.
The meteoric rise of these companies comes as no surprise to industry insiders. To them, it was just a matter of time. The success of these companies can be largely attributed to decisions made early in their growth in three key areas: facing down scale-up challenges, finding the true competitive advantage, and making strategic partnerships to maximize the value of their products.
These are the three tell-tale signs of a synthetic biology unicorn.
Scaling for success
Synthetic biology is populated with start-ups entrenched in the R&D phase seeking early-stage investment to help prove their technology. Scaling up is not an easy task, simply because the supply chains and contract manufacturing organizations (CMOs) don’t yet exist to support the new technologies developed by synthetic biology companies. This forces them down the expensive route of scaling in-house or finding collaborators willing to try to develop their technology for scaling.
Leaders in the field like Ginkgo and Twist have taken advantage of these needs and enable scaling in synthetic biology. Ginkgo opened their first foundry — an automated platform for the design and production of novel DNA parts and organisms — in 2015. Since then, Ginkgo has opened three more to suit an expanded pipeline of organisms and is reaching out for collaborators. They recently announced partnerships with accelerators YCombinator and Petri to provide biotech startups with easy access to their cell programming platform. They have effectively positioned themselves as the first commercial CMO foundry in synthetic biology.
DNA is the coal fueling this new industrial biotech revolution. Twist built its platform around scaling up DNA synthesis using miniaturization and advanced silicone chip technology. In addition to commercial and academic customers, they also made key strategic partnerships with Microsoft and Ginkgo, meeting their rising demand for high quality DNA for data storage and biotechnology respectively.
Automation and miniaturization are driving scalability in synthetic biology. Robotic platforms from Opentrons, Analytik Jena, and Hamilton are pervasive in foundries and synthetic biology research centers. Similarly, experimental design software and machine learning are being incorporated into the mix, with Synthace and Riffyn developing leading platforms capable of integrating different robots across multi-functional workflows.
Ginkgo were the first commercial group to recognize the competitive advantage automation of design brings. Foundries are becoming the backbone of synthetic biology, an industry where biological factories are designed, built, tested and improved upon. Foundries allow faster and more reliable cycles of design than can be done by even the most skilled scientists by hand.
In the food tech sector, Impossible Foods have developed yeast engineered for producing plant-derived heme. Heme is the iron-binding compound in blood that gives meat its distinctive “meat” taste. By scaling up their engineered strain, Impossible Foods has landed strategic partnerships with Burger King in addition to their own food range.
Synthetic biology is also adding significant value to healthcare, particularly in the development of novel drugs. This has its own unique hurdles regarding regulatory requirements and taking novel therapeutics into the clinic. Precision BioSciences have a unique gene-editing technology using a proprietary engineered enzyme to make precise edits in a genome (think CRISPR but better).
Intrexon has also acquired a large portfolio of therapeutics. ActoBio Therapeutics, Precigen, and Exemplar Genetics are among Intrexon’s subsidiaries who use their precisionng genome engineering and DNA delivery platforms to develop novel targets and drug delivery systems, with many candidates currently in the clinic.
Never prance alone
Strategic partnerships are the unsung hero of synthetic biology. The field is dominated by companies that share ideas as standardization of the software and hardware empowering this revolution are improved upon and adding value across multiple sectors using synthetic biology. Powerful platforms cry out for collaboration.
At the crossroads of healthcare and synthetic biology, companies must navigate the perilous waters of regulatory approval and funding clinical trials. Precision partnered with Baxalta (since acquired by Shire and now Takeda) early on to help develop and scale its CAR T-Cell therapies. Takeda also took an interest in Recursion Pharmaceuticals drug discovery platform, announcing they were exercising their options on the AI-based platform earlier this year.
Ginkgo is also getting in on healthcare with its recent announcement of collaboration and investment in Boston-based Synlogic Therapeutics. Synlogic develops next generation live biotherapeutics – microbes engineered to deliver therapeutic compounds to the gut.
The pattern repeats itself even in the wholly different field of carbon-capture, synthetic biology companies are making strategic partnerships and rising to new challenges in the field. NovoNutrients has input from experienced partners at Intrexon, Novozymes, and Codexis to help guide their approach. More advanced companies like LanzaTech and Calysta have already begun securing a supply chain through identifying early customers, like Virgin Atlantic.
Now let’s go unicorn spotting
Spotting the next biotech unicorn before it leaps into the sky like a rainbow may be as simple as spotting these signs early on. Who has a well-planned scaling strategy? Who is making collaborations to support their value chain? Who is doing the groundwork on building a solid customer base and supply chain? Maybe they’re on the Forbes 30 under 30. Maybe they’re in an accelerator program. Or maybe it’s you.
Acknowledgment: Thank you to David Kirk for additional research and reporting in this post. David is a synthetic biologist and science writer interested in the bioeconomy, bio-based industry, and biopharma.
Please note: I am the founder of SynBioBeta, the innovation network for the synthetic biology industry. Some of the companies that I write about are sponsors of the SynBioBeta conference (click here for a full list of sponsors).
Originally published on Forbes https://www.forbes.com/sites/johncumbers/2019/09/27/how-to-spot-a-synthetic-biology-unicorn/0