Power Breakfast Recap: Biotech + Sustainability: 2018 and Beyond
On Wednesday, March 7, we held our latest Power Breakfast event in San Francisco with the support from our longtime sponsors, Silicon Valley Bank and Wilson Sonsini Goodrich & Rosati.
Our topic for this event was industrial biotech. More specifically, we sought to explore how a changing set of tools available to biotech innovators is impacting technology development, and how industries and investors might react to optimize that. We had a diverse panel of conversation starters who each brought a unique perspective. Our panel consisted of:
- Charles Dimmler, Founder and CEO, Checkerspot
- Arvind Gupta, Managing Director & Founder, IndieBio and General Partner, SOSV
- Riccardo LoCascio, Business Development Manager, DuPont Industrial Biosciences
- Jenny Rooke, Managing Director, Genoa Ventures
- Sarah Reisinger, Head of Product, Ginkgo Bioworks
While we maintain a policy of non-attribution to encourage open discussion at these breakfasts, we thought it useful to recap key learnings from the day:
Lessons learned from the past decade
The discussion started with a review of the past decade and an acknowledgement of the high capital requirements inherent to targeting commodity products like ethanol and other fuels with very low margins. We heard about companies targeting high performance materials to bring non-commoditized molecules to the market. The bigger profit margin associated with such a choice of initial market application is key.
High production costs were also a bugaboo of the last decade and remain high, compounding scale-up challenges that have caused many biotech companies to fail. The group seemed to agree that reaching high-volume production remains a bottleneck where many of the issues that can arise in large-scale production are still unknown during lab-scale trials. Innovators who invest in smoothing this pathway will have a higher success rate.
New tools are now available, is this a turning point?
New technical advances have provided entrepreneurs with more advanced tools (e.g. CRISPR) and computational techniques (e.g. Ginkgo Bioworks) have significantly increased development speed. Furthermore, potential market applications for companies that structure technology offerings as multi-disciplinary platforms are now broader. This serves to blur the lines between investment in, say, strictly industrial or strictly health-focused biotechnology solutions and can grow addressable markets as well as potential investor pools for innovators.
We also heard contrarian views, however, suggesting that although new tools are helpful in the R&D phase, the real value-add is in developing new products and applications.
Other challenges remain
The panel was in unanimous agreement that industrial biotechnology innovation is still difficult. Despite the technical achievements made by many, adoption risks remain an important barrier to commercialization.
One technical challenge highlighted is that even for direct replacements of petroleum-based molecules with bio-based ones, extensive performance needs to be conducted despite the fact that these molecules are chemically identical.
Identifying the right business model is also critically important, particularly when pursuing commercial partnerships. Without sufficient thought for the eventual business model, for instance, one might end up unwittingly choosing between a faster path to collaboration with a corporate partner and owning all of the upside if a new product succeeds. One panelist also suggested that it’s key for platform technology developers to work with as many partners as possible, not only to offset technological risks, but also to tap into multiple markets.
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