Venter Builds a Bacterium – and a Bio+Technology Company

By Steve Dickman, CEO, CBT Advisors

For a glimpse at the future of biotechnology, we recommend this week’s Economist cover story on Craig Venter and his Science paper describing the creation of a bacterium with a synthetic genome. The accomplishment, which made front pages around the world on Thursday*, reflects a high-profile step along the winding path to a new industry. The new bio+technology will practice true genetic engineering on genomes and organisms, yielding predictable and practical results including – one hopes – cheap and environmentally friendly biofuels.

The Economist story along with an accompanying editorial is available without charge here. The Science paper is similarly free here.

The Economist has done its usual thorough job in this piece. The science and technology editor of many years, Geoff Carr, demanded and got the cover for the story, not to mention three full pages inside. That’s unusual treatment for a science piece. The piece, unattributed, lays out the case for why Venter’s creation is so remarkable: “the first creature since the beginning of creatures that has no ancestor.” As you see from this example, the treatment is somewhat breathless (cue the Frankenstein metaphor) but also persuasive:

• We learn the limitations of Venter’s organism, cobbled together as it was from the carcass of an enucleated bacterium in which the new genome hijacked the cadaver’s protein synthesis machinery.
• We learn the status of Boston-based academic projects like the RNA-based self-replicating life forms that Harvard’s (Nobel laureate) Jack Szostak hopes to create that can mimic what early life may have looked like in a primordial “RNA world.”
• And we learn of next-stage projects like that of another Harvard professor, George Church, who is attempting to engineer a protein-synthesizing ribosome from scratch.
• Finally, we learn the magazine’s view that although technology, which until now been mostly of academic interest, is perhaps still nothing more than a parlor trick (the magazine calls it a “stunt”), there is one big reason to believe that re-engineering of microorganisms is the next big step toward true bio+technology.

That reason derives largely from two diverging exponential curves: the rising productivity of efforts to synthesize DNA; and the cost of said synthesis, which is plummeting. This application of “Moore’s law” leads directly to the conclusion that ever-fancier tricks will lead to ever-more practical and powerful end products, which might include carbon-dioxide-eating, gasoline-producing bacteria. At least this is what Venter wants investors in his company Synthetic Genomics to believe. The case is strengthened by this publication, although in July, 2009, presumably even before the paper was even submitted to Science, Exxon Mobil had promised to invest as much as $600 million in Synthetic Genomics.

Moore's Law of Biology: declining cost, increasing productivity of DNA synthesis

Figure 1: Exponential improvement in the availability of (some of) the stuff of life (Courtesy The Economist)

And therein lies an interesting twist not covered in the article: how the race for a new organism is playing out on the commercial side. It is just thirteen months since the Boston Globe (in April, 2009) announced the demise of the Boston area’s entry to the gene synthesis race, a now-defunct, then five-year-old biotech company called Codon Devices. Codon Devices, a CBT Advisors client, went to market with a strategy of selling synthetic DNA. The company had high-profile advisors, including Church and then-MIT professor Drew Endy, also quoted here. Codon did not lack for high-profile investors, who included Kleiner Perkins, Alloy Ventures and the Boston area’s own Flagship Ventures and Highland Capital. Its corporate slides, presented at BIO 2006 in Chicago, even mentioned “Moore’s law in biology” as a selling point. But the assumption that “if you build it they will come” did not work for a DNA factory. There was a lack of demand for DNA, even long stretches of it, at premium prices.

Codon’s problems included the main one mentioned by the Globe: lack of ability to raise additional venture money during a financial crisis and an IPO drought. But in retrospect it also seems like the company did not forward integrate quickly enough into lucrative end markets, preferring instead to try to supply them all and try thereby to capitalize on its technology advantages. Other gene synthesis companies have recently moved beyond selling genes (e.g. California-based DNA 2.0, which just signed a strategic alliance with a protein expression company) or been sold off (GeneArt in Germany, bought by Life Technologies last month).

Venter’s firm was never content to stop at DNA synthesis alone. It forward-integrated all the way to a new and interesting form of life. Synthetic Genomics has also been quicker and more efficient – not to mention having Venter himself as its marquee spokesman – at finding a deep-pocketed and thus far sustainable base of investors.

We agree that synthetic biology has the potential to be the future of biotech. That’s why we are calling the field it is spawning bio+technology. It will take not just cheap DNA but brilliant bio-architects doing more than parlor tricks to make the new industry a reality.

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*The Belfast Telegraph jumped the gun and broke the Science embargo on publication early on Thursday. That landed the story at the top of the web sites of newspapers and scientific journals around the world a day or so ahead of the original plan.


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