Ginkgo Bioworks Scales Biology for Industrial Synbio
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At the beginning of the month, we talked trash. Specifically, the piles of plastic that threaten to overwhelm many countries in the world. One long-term solution is to use biodegradable bioplastics made from natural renewable resources like algae. But that still leaves a legacy of water bottles, packaging, and Kardashian body parts that will be around for centuries. Our article on biomanufacturing to solve the world’s problems highlighted technology from San Francisco-based Zymergen, which designs and engineers biological machines out of microbes to produce unique products like bio-based films for sensors and printed electronics. Now we want to profile its arch-rival in biomanufacturing on the other side of the country – Boston-based Ginkgo Bioworks.
Both Ginkgo Bioworks and Zymergen work in a sector of biotechnology called synthetic biology (synbio), which is the intersection of biology and technology. The ultimate goal of a company like Ginkgo Bioworks is to replace factories with biological foundries that can produce everything we need directly (with a little genetic tweaking) from nature. Thanks to massive advances in automation and DNA sequencing, the Ginkgo Bioworks foundries can design and test thousands of biological machines to make just the right one to produce new flavors, foods, and fertilizer.
The First Synthetic Biology Unicorn
Founded in 2008 by a group of MIT grad students and their advisor, Ginkgo Bioworks has raised somewhere in the neighborhood of $789 million. The first synbio unicorn in 2017, Ginkgo Bioworks now sports a value of more than $4.2 billion following a $70 million in May of this year. That money is reportedly earmarked specifically for automating COVID-19 tests using Illumina’s next-generation sequencing (NGS) technology (more on that in a bit). Not surprisingly, Illumina (ILMN) was a key investor on this most recent round, along with a couple of East Coast investment firms that had also kicked in cash for last year’s $290 million Series F (who needs Silicon Valley, right?). Other noteworthy names on the investment roster include investment management firm T. Rowe Price (TROW) and king of the lizard people, Bill Gates.
New Biological Factories
The company has obviously spent money on the usual R&D, a steady supply of synthetic DNA from Twist Biosciences (TWST), and building new foundries. These robotic laboratories, referred to as Bioworks, develop biological machines out of bacteria and yeast using robots and sophisticated software – based on a massive codebase of cells, enzymes, and genetic programs. It’s like a software engineer cutting and pasting pre-built software code, and then tweaking the program to fit the application. In this case, the program is for an organism that can even make cannabinoids without the plant. The genetically reconfigured microscopic critters ingest sugars and metabolize new chemical products, similar to the fermentation process for making beer. Suddenly you have billions of tiny factories slaving away like a child sweatshop in Bangladesh.
The company claimed in 2018 that a biological engineer working with its foundry could accomplish nearly 25 times more than was possible using traditional by-hand methods. Between 2015 and 2018, foundry output doubled every six months. That was the same year Ginkgo opened its Bioworks4 foundry, switching from its core business of retooling single-celled microorganisms like yeast and bacteria to engineering mammalian cell genomes using the company’s high-throughput process. The client base here is obviously pharmaceutical companies that want the ability to research, develop, and test medicines at scale. No doubt Bioworks4 laid the foundation for the startup’s jump into COVID-19 testing.
Automated COVID Testing
Ginkgo Bioworks has caught the COVID-19 fever, but in a good way. The company jumped into the pandemic fray as early as April with $25 million in free work at its foundries for institutions responding to the disease. In addition, Ginkgo started collaborating with Moderna Therapeutics (MRNA) on the latter’s vaccine development. Then, in May, there was the $70 million round to build large-scale testing infrastructure. Leveraging Illumina’s NGS equipment, which can read, process, and analyze many DNA and RNA samples in parallel, Ginkgo has developed a system to detect the presence of the SARS-CoV-2 virus on thousands of tests at once using equipment the size of a washing machine.
Ginkgo hasn’t slowed down since. In June, it launched Concentric by Ginkgo, a pandemic response program for its large-scale testing capacity, especially for businesses and educational organizations. The federal government handed over another $40 million to the company in July to support the program.
Last month, Ginkgo partnered with another Boston area startup called Totient, which uses artificial intelligence in drug discovery, specifically for antibody therapies. Founded in 2017, Totient emerged from stealth mode in September with a $10 million Seed round. The company’s antibody platform is based on identifying antigens – protein segments with distinct surface features that stimulate an immune response – using structures in infected or inflamed tissue called tertiary lymphoid structures (TLS). Early research suggests TLS could be a source of new antibodies that could be tapped to fight diseases like COVID-19.
And just a few days ago, Ginkgo announced it would secure up to 50 million rapid antigen tests from a diagnostics company called SD Biosensor to complement the company’s own molecular testing efforts.
Ginkgo Spinout Companies
Kicking off a new business during a pandemic doesn’t seem like the greatest idea unless maybe you’re starting a contactless drone delivery company or a pizza business where you pay most of your profits to a drone delivery company. But that didn’t stop Ginkgo from spinning off its third company in just four years.
Founded in October 2020, Boston-based Allonnia (apparently named after some sort of extinct shell-covered critter) is entering the waste remediation business with $40 million from Ginkgo and a host of other investors including its friends at those same East Coast VC firms (Viking Global and General Atlantic). The basic idea is that Allonnia will leverage its parent company’s platform, as well as recent advances in protein engineering and cell design, to develop biological ways to destroy environmental contaminants – much like Zymergen is trying to do with plastics. The new company will tackle a range of waste pollution challenges, according to a press release, including industrial wastewater treatment, soil remediation, and solid waste management and upcycling.
Regarding the last application: Allonnia will attempt to design organisms capable of metabolizing electronic and manufacturing waste into new components for those same industries, which often rely on costly mining operations.
Allonnia is the first company to emerge out of Ginkgo Bioworks’ $350 million Ferment Consortium (backed by the company’s major investors), a “private investment vehicle for funding Ginkgo spinout companies with transformative potential in established industries.” Allonnia joins two other Ginkgo spinouts – Joyn Bio and Motif FoodWorks. The former is a joint venture with pharmaceutical giant Bayer (BAYN:GR) to engineer microbes that can improve soil health. The latter designs and develops microbes that can ferment new food ingredients, like alternative dairy proteins. TechCrunch reported just this month that Motif has nine ingredients in development, with plans to release its first one for commercial production. The ingredient will reportedly improve meat alternatives that don’t taste all that great because they’re meat alternatives.
Acquisitions and Investments
While Ginkgo seems more interested in standing up new ventures, it has made a couple acquisitions over the years. We wrote about the first one back in 2017 when Ginkgo bought Gen9, a Silicon Valley startup that produces synthetic DNA like Twist Bioscience. The move was obviously made to increase control of the company’s supply chain, though it was still sourcing product from Twist Bioscience as recently as 2018.
In May 2019, Ginkgo acquired another Boston startup in Warp Drive Bio, which had raised $125 million before being acquired in October 2018 by REVOLUTION Medicines (RVMD), a precision oncology company developing novel therapies. The new car smell had barely faded before REVOLUTION Medicines unloaded Warp Drive for an undisclosed amount. As Ginkgo described in a press release at the time: “Warp Drive Bio’s genome mining platform enables access to valuable natural products that have previously gone undiscovered due to historical technology limitations.” Specifically, the company’s platform uses genomic sequencing to identify, analyze, and evaluate over 100 classes of potential antibiotics to develop novel medicines.
The acquisition is yet another indication of Ginkgo Bioworks larger ambitions in healthcare, particularly drug development and pharmaceuticals. That may explain its partnership and investments in Synlogic (SYBX), a synbio medicine company that appears to be on the skids, with a market value of just $65 million. Ginkgo made a post-IPO equity investment of $80 million in 2019 that is looking like a high-risk, high-reward deal tipping in the wrong direction.
The other major investment Ginkgo has made outside of Synlogic and its own spinouts is in San Diego-based Genomatica. The 20-year-old synbio startup, which we covered years and years ago, has raised about $231 million, including a $90 million venture round in 2018 that involved both Ginkgo Bioworks and one of its key investors, Viking Global, among others. Genomatica is a bioengineering firm working on technology to swap petroleum-based and other non-sustainably sourced chemicals used to make plastics and cosmetics with renewable, plant-based ones using genetically enhanced microbes.
The company is currently working on a bio-based replacement for nylon.
In each of its many spinouts, investments, and partnerships, Ginkgo offers access to its foundries to accelerate development of these various biological machines and mechanisms. As Ginkgo Bioworks CEO Jason Kelly noted in a recent interview, his company wants to be the Amazon Web Services of the biotech field. In other words, Ginkgo wants to be the biomanufacturing version of cloud services, so that customers don’t need to invest in the R&D and infrastructure required to design and engineer their own biological nanofactories.
Ginkgo Bioworks seems well funded and well managed, growing and diversifying its portfolio of businesses rapidly. The idea that it could be the Amazon of synbio seems more fact than marketing fiction. Hopefully, the company will join other successful biotech IPOs like Berkeley Lights (BLI) soon so that retail investors can get a look at the financials and the real potential.
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