Synthetic Biology - fact or fiction?

Who else wants to come in? I like Jim's explanation. I was going to say something to the effect that it's about applying engineering principles to biology as well, and the inclusion of having biology do something above and beyond what it ordinarily does, at least in that system, I think is also a nice add-on.

I think we've probably come on to talk more about the economics, but did you want to say anything already now about that? Yeah, I mean there's a lot of people cutting trail for us where they'll never recover the investments. Like Genencor again, for isoprene and indigo, they had teams of 20, 30, 40 people working on those projects 15, 20 years ago, and that money is gone. But those are examples. I think recovering your investment is an understandable metric that we might hold ourselves to, but it seems like an awfully low bar. And if all we can hope to do is recover our investment, we're not going to fulfill the promise of the bioeconomy. And I think the audience at BIO will appreciate that there's a huge potential around biology becoming a huge economic factor in the 21st century. And I think everyone on this panel would agree that synthetic biology is part of the key to unlock that potential, to have bio-based technologies relevant to more of the economy above and beyond where it has historically played, which is chiefly in therapeutics and in agriculture, with some also in consumer care with enzymes, for example for cold water Tide. But the potential is far vaster. And with the examples you raised, Jim, of projects that never recovered, one of the commonalities with them is that they were drop-in replacements. They were seeking to make molecules via biology that otherwise are made industrially. And I think that is both a source of trouble and a huge opportunity for the sector. We ought to be focusing our efforts on fulfilling unmet market needs. And the measure of success is the ability to solve real-world problems with biology that have foiled the attempts of other technologies to solve them previously, or where the solution is in many ways massively suboptimal. This can include sustainability, but ought to also include other dimensions of success: performance features above and beyond sustainability that make the public and the consumer flock to that solution because of the virtues it provides above and beyond sustainability. There will always be a cadre of the economy, the consumer, that will buy based on sustainability concerns, and I fervently hope that that segment of the economy is growing. I think it is. But a much more robust source of long-term economic traction is offering solutions that are virtuous above and beyond sustainability. And that often means venturing into product solution areas that aren't precedented already in other industries, so it requires a bit of boldness on product development. I've always thought that the holy trinity for the bioeconomy is performance, price, and then sustainability. Sustainability has to be taken for granted, it has to be a part of the offering. It's not the main selling point. And I think that might be where we went wrong in the early days of biomaterials, because we actually thought that sustainability would do it. Companies would be biting companies' hands off to get products that just happened to be made with biotech and were more sustainable, without taking into account that you need to have at least as good performance, but very likely better performance.

You have to be incredibly thoughtful about choosing the problem you're going to seek to solve. If you choose poorly, you may have technical success, manufacturing success, but lack commercial success. Or your timelines may be too long to fulfill the needs of your investors. So at my company, Zymergen, we have one area we've focused on: consumer electronics, which is a peculiar place for bio perhaps to be participating historically. But it is an area where materials innovation means the difference between winning in the market and losing. If you have the right materials embedded in your device that confer advantageous properties, you can take market share. And the cycle of innovation is incredibly rapid, so it puts some tremendous pressure on the biology side to keep up with that pace of innovation, to anticipate what the needs are going to be, and to offer solutions from biology that can't be arrived at by some other means. And if you can do all that, then the payback period is actually quite rapid. The regulatory hurdles are rather low as compared to other sectors where biology, like ag and therapeutics, where we traditionally play. And the speed of uptake can be astonishingly fast, so it can have attractive payback periods if chosen wisely.

Absolutely. And while sustainability is a component, as you mentioned before, it's third on the list. The chief virtue we offer is one of performance. So there are famous polyamide films which were first developed by companies like DuPont back in the 60s, which are incredibly temperature resistant, thin, they can have a lot of wonderful thermal and mechanical properties. But they tend to be, well, they're always orange in color. They don't have favorable optical properties. And we were able, by employing monomers available from biology and very hard to arrive at through other means, a set of monomers that retain the attractive thermal mechanical properties of the polyamide films but were optically transparent. And they set the stage for flexible electronics, a new generation of materials that will be embedded in not just bendable but also truly deformable electronics that can assume any shape. And with that flexibility, you open up new product classes. And yes, of course, something like the Galaxy Fold is the first dipping one's toes in the water of truly flexible electronics. But as you may know, the development of that phone was delayed many years with many false starts, almost entirely due to challenges they faced on the material sciences side. With the incorporation of bio monomers, you are basically embarking on materials science with a whole new palette of starting chemicals, starting ingredients, which are quite distinct and differentiated from the classical petroleum building blocks that people have used before. And with that expanded palette of chemicals, you can create a variety of new exciting materials. We have chosen polyamide films as our first venture, as our first commercial product, because it's such an urgent unmet market need with such potential for rapid growth, and it was a place where biology could offer a solution that couldn't be had by any other means.

Fact. It's unquestionably fact, though of course people can be forgiven for suspecting it might be fiction because of all the hype. And I've been part of the sector beginning in the biofuels and lived through that bubble and that bursting, and then tried to raise money for Zymergen in the wreckage left by the implosion of a lot of biofuels companies, in which investors wanted to have nothing to do with synthetic biology. They thought it was just a money-losing proposition. And here we are again, many years later, with a bunch of prominent companies making big promises. And I think the lessons learned from that first debacle are helping us, well helping some of us, not all of us, make more reasonable projections as to what is possible. My company has kept a pretty low profile for a number of years because we wanted to talk about things after we had done them, not on the promise of doing them in the future. And so when we launched our first product this April, this flexible polyamide film for consumer electronics, no one much saw that coming. But we made the first announcement about it when it's actually on the market, when you can buy it. And I hope that there will be other companies that take that stance, that have to acknowledge that there is a lot of skepticism. And the surest way to turn around that skepticism is to show up with a product developed with your technology, with syn bio.

No, I disagree. I mean, oh sure, there may be a little bit of a temptation, but it's quickly overwhelmed by one's view of the long game. I mean, it's a short-term win, medium-term to long-term loss to create a hype cycle. And you're going to have to live with the consequences if you over-promise and under-deliver. And as a founder of a company, you want to ensure the longevity of your company. You want to make it last. And you have to be patient and stick to your principles around generating true value and demonstrating that value. I think the sort of muted tones you're hearing from this panel should not underestimate the true potential of the technology. I mean, the technology has the power to revolutionize and change manufacturing across virtually every segment of society and of the economy. That's grand, that's very grand. What we need to do to bring that about, chiefly in my mind, is introduce a strong profit motive behind it. Because if all we do is break even, no one's going to flock to this industry. We need to be successful enough, economically successful enough, so as to attract new entrants who are motivated by the prospect of becoming the next Grit, or founding or launching the next great company that's going to have a huge impact on the world, economically, socially. And to do that, we need some proof points. So Zymergen's goal is to become a sustainable company, but also to be not just economically sustainable but economically very well off, because we have found the right combination of technology and markets and can provide a key proof point that is going to inspire others to take up the mantle of using biology to overturn or displace existing solutions. So the goal is very grand, but you're not going to get there by talking about it overly much. You need to do it by showing.

Okay, there's that Bill Gates quote that people overestimate what they accomplish in a year but underestimate what they accomplish in a decade. I think that I agree it's not going to be next year. But if we can start to amass enough proof points, we'll start to also attract more capital and more talent to the sector, and hopefully it becomes a virtuous feedback loop whereby, like other phenomena of the economy, it just becomes almost a self-fulfilling prophecy because it's so clearly the right thing to go do. And by the right thing to go do, I mean from even just a purely economic sense. If you look at the biggest companies on the stock exchange by market cap today, they're completely different, with the exception of Microsoft, than they were 15 years ago. Exxon Mobil is no longer there. So change does happen on the 10 to 15 year time scale. And I have high hopes that 10 or 15 years hence, synthetic biology companies will be amongst the top 10.

From a regulatory point of view, I think I've been inclined to agree, at least relative to other geographies. From a government support through fundamental grants and influx of cash into both training programs and universities, as well as research programs that can be the starting points for the next generation of companies, it's not what I wish it would be. But I also expect that things will change once we have more evident demonstrations of utility, of success.

A combination. Yeah, I mean we do a lot of contract manufacturing and we look overseas for a lot of it, for lack of available or flexible enough facilities in the United States, fermentation facilities in particular. So yes, there does need to be more infrastructure, more investment in some of the steps that happen downstream of the micro-engineering as well.

One should not mistake volume for progress. And so, yes, there are companies that are actively participating in a hype cycle, in my opinion, and self-promoting to the point of probably eventual letdown. And you happen to have on your panel today people who aren't taking that approach. And I have to admit, in the early days of Zymergen, we actually shunned the term synthetic biology because back in 2013 when we were founded, in the years following, it was so much associated with money-losing that you didn't want to leave that taste in the mind of your investors. We focused on our business model and engineering biology and developing products. These days, syn bio is now back in vogue, and so we embrace the term again. But we do so judiciously, knowing that our fate is going to be determined not by how the public views synthetic biology, but rather by the traction our products have in the market. So there could be a second synthetic biology bubble that bursts, and I honestly think Zymergen will withstand that because we'll be held to measure by our revenue growth and our market traction with the products we're launching. So it's safe now for us to re-embrace the term.

Oh, we came up with all sorts of clunky names. It's not even worth recounting them. But fundamentally, we just talked about engineering biology or working with biology. It's more accessible to a general audience anyway. I don't think the general public would understand what synthetic biology is.

I think synthetic biology has something to offer the next generation in terms of appeal, in that it allows you to, it is an engineering discipline. I mean, we all agreed that the definition of synthetic biology is applying engineering principles to biology. So whereas a classic biologist basically dissects nature and tries to understand mechanism, how what's working under the hood of biology, what you do in synthetic biology is you employ what is understood, or even through advanced techniques of machine learning pushing those boundaries, and make use of them for some societal good, for the development of some product to fulfill an unmet market need, for some sustainable solution. And I think the application of science, which is basically engineering in biology, has the potential to attract a whole separate set of creative individuals that might have been overlooked or passed over, or they might have passed over becoming a full-fledged biologist.

Thank you.