Nanalyze

Most Funded Synthetic Biology Companies in 2018

It’s that time of the year again, when you start returning or re-gifting all of the plastic crap that got shoved under a slowly dying tree in that annual orgy of consumerism known as Christmas. It’s also the time of year when the media start to hit you with all those year-end lists of the greatest things that happened. We’re not immune to this sort of self-reflection, though we think our lists are a more useful barometer for not only understanding the year just passed but for thinking about an investing strategy in the year to come. Toward the end of 2017, for instance, we looked back at how poorly most of the seven publicly traded synthetic biology stocks we had highlighted back in 2015 were faring.

This year we’ll do a little bit of everything – startups, IPOs, established public companies – as we look back at the most funded synthetic biology companies in 2018. Our list comes from SynBioBeta, a consulting firm that tracks the industry. We chose SynBioBeta for a couple of reasons. First, it definitely has the expertise in the synbio ecosystem. Second, we can blame someone else should we miss anything, because crowdsourced websites like Crunchbase just aren’t that well designed to produce such lists.

What is Synthetic Biology?

What is synthetic biology, or synbio, as the hip scientists call it? You can look back at our previous synthetic biology coverage to refresh your memory, but briefly: Synthetic biology applies engineering, design, and computer science principles to biology, usually at the cellular level. Often there is a high level of automation – and sometimes artificial intelligence – to replace the manual labor of yesterday’s laboratories. In one sense, synbio is about turning microorganisms like bacteria or yeast into biological machines, which is why we usually cover this topic under nanotechnology. Some also include genetic editing, such as CRISPR-based therapies, along with other forms of genetic-level manipulations under the definition of synthetic biology, which falls more in the life sciences category.

When we talk about emerging tech, this is the really cutting-edge stuff – and it’s drawing a lot of interest. SynBioBeta reported that 98 synthetic biology companies raised a record $3.8 billion in 2018. That’s not just venture capital, but new IPOs, post-equity investments, and secondary market offerings.

Top funded synthetic biology startups.

Credit: SynBioBeta

We decided to focus on the top 30 funded companies (above) because we had to go that far down the list before we could find a few that we actually haven’t covered before. Let’s start with the startups that made the leap into the public markets this year.

Top Synthetic Biology IPOs in 2018

Five of the first seven synthetic biology companies on the list represent startups that went public in 2018.

 Company  2018 Funding  Total Funding  IPO Date  IPO Raise
 Moderna Therapeutics  $625M  $1.6B  12/6/2018  $604M
 Synthorx  $62M  $79M  12/6/2018  $131M
 Sutro Biopharma  $85.4M  $201.7M  9/26/2018  $85M
 Autolus  n/a  $181.7M  6/22/2018  $150M
 Twist Bioscience  $50M  $253.1M  10/30/2018  $70M

We’ve previously introduced you to Moderna Therapeutics, Synthorx, and Twist Bioscience. Interestingly, Moderna (MRNA) and Synthorx (THOR) both debuted on the NASDAQ on the same day – and have since gone in radically different directions. Touted as the biggest biotech IPO in history, Moderna has dropped nearly -40% in its short life on the market, while Synthorx is up nearly +40%, as of Dec. 28.

A tale of two stocks.

A tale of two stocks. – Source: BloombergMarkets

Moderna falls into a group of companies developing therapies around messenger RNA (mRNA), which transfers the instructions in DNA to make the proteins required for cells to work properly. Moderna is developing mRNA drugs that program a patient’s cells to produce proteins to prevent, treat or cure disease. Synthorx is also dabbling in the genetic code for drug discovery by adding two synthetic letters that can make proteins with up to 172 different amino acids versus the normal 20 amino acids. That offers more flexibility in developing drugs, such as turning spider venom into a painkiller. Meanwhile, Twist Biosciences (TWST) is in the business of creating synthetic DNA for various applications, such as the fake spider silk produced by Bolt Threads, the No. 6 most-funded synthetic biology company (a $123 million Series D) in 2018. That leaves us with two newly minted public companies that we have yet to cover.

The Sutro Biopharma drug pipeline.

The Sutro Biopharma drug pipeline. Credit: Sutro Biopharma

Click for company websiteFounded 15 years ago, Sutro Biopharma out of San Francisco had raised $201.7 million over eight rounds, with major pharmaceutical and biotechnology investors like Merck (MRK) and Celgene (CELG), before going public in September. Sutro Biopharma is focused on cancer and autoimmune therapies using a unique platform for developing therapeutic proteins. Instead of engineering cells to produce proteins, Sutro’s technology separates the cellular components required to produce proteins and turns them into an extract. Just add water (or, in this case, a specific DNA sequence) to produce the desired protein.

Click for company websiteFounded in 2014, London-based Autolus had raised $181.7 million before its June IPO. The company is in the growing field of cancer immunotherapy research, which helps the patient’s own immune system stand up for itself against the disease. The Autolus technology platform engineers specially programmed T cells, a type of white blood cell that is part of the immune system, that are better equipped to recognize, fight, and kill cancer cells. It’s kind of like when we send in Special Forces to train a third-world army on how to fight better. That always works out in the end, right?

Most Funded Synthetic Biology Startups

Below we highlight the five startups in the top 30 funded list that we haven’t covered before.

No. 11: Founded in 2011, Berkeley Lights in Emeryville, California, took in $135 million over two rounds this year, bringing total funding to about $225 million. Nikon was the lead investor on the most recent $95 million Series D in October. Berkeley Lights is actually one of those rare companies that sell hardware rather than a service. Specifically, the startup develops lab instruments for creating personalized cell therapy treatments, such as engineering the sort of T cells Autolus is doing for cancer immunotherapy, but designed for a specific patient. The machines are based on a technology called optofluidics, which uses light to manipulate singles cells on chips. And you thought personalized recommendations from Netflix were cool.

Inari Agriculture steals the whole "foundry" idea from Ginkgo Bioworks.

Inari Agriculture steals the whole “foundry” idea from Ginkgo Bioworks.

No. 26: Founded in 2016, Inari Agriculture in Cambridge, Massachusetts, raised $40 million in August, bringing total funding to $55 million, according to Xconomy. It was founded by a science-focused venture capital firm called Flagship Pioneering. Inari falls in the category of companies using various gene-editing technologies – CRISPR, in this case – to develop seeds customized for the local growing conditions such as soil and climate. (Read our recent article on Cibus, a San Diego startup that recently filed for an IPO, to learn more about gene-editing for plant breeding.)

No. 27: Founded in 2015, San Diego-based Poseida Therapeutics took in $30.5 million in April, bringing total funding to $84.5 million. (This is the rank by SynBioBeta, even though the 2018 funding would suggest that it should be further down the list; we assume Crunchbase missed something.) Poseida is another cancer immunotherapy startup using gene-editing to develop T cell therapies. The company is betting on a particular type of T cell known as stem memory T cells, which are long-lived and potentially less toxic than other immunotherapy approaches that rely on genetically modified T cells.

Cows without horns. What's next? Pigs that fly?

Cows without horns. What’s next? Pigs that fly? – Source: Business Insider

No. 28: Founded in 2008, Recombinetics out of St. Paul, Minnesota, took in $34.5 million in August, by far its biggest raise over nine rounds. It has now raised $60.9 million for its gene-editing technology focused on livestock health and productivity. The startup is best known as the company that created hornless cows. (Insert your own joke about horny cows here.) Maybe it’s these sorts of agtech companies that make people think that chocolate milk comes from brown cows. Recombinetics has 22 patents with another 300-plus patent filings.

No. 30: Founded in 2013, Fluidic Analytics is a spin-out from University of Cambridge that pocketed a $31 million Series C last month, bringing total funding up to $40.7 million. Fluidic Analytics is another hardware-for-the-lab company. If you haven’t figured it out yet, proteins are pretty important for most cellular functions. Understanding their behavior will help scientists learn about disease development, drug interactions and why the Beatles broke up at the pinnacle of their popularity. Its line of lab tools are designed to provide insights into proteins by characterizing them in solution, just as they exist in the body.

Conclusions

It was a big year for synthetic biology. Moderna Therapeutics scored a record-breaking IPO for a biotech company. Zymergen emerged with one of the biggest funding rounds to date for a biotech startup with a $400 million Series C, led by free-spending SoftBank, for its genetically altered microbes. And the number of synbio companies working on various cancer therapies, with an emphasis on a personalized approach, makes us hopeful that a cure for some types of the disease may be within reach. The question remains whether the synbio category can sustain its rapid growth in the face of a possible recession.

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