This is actually the first time that the Green Blog was able to interview and know more about Verdezyne, an industrial biotechnology company (or a synthetic biology company, whatever fits!) based in Carlsbad, California.
The company, founded in 2005, was formerly known as CODA Genomics, a spin-out from the University of Irvine, California, which originally focused on offering gene assembly tools, gene design and gene optimization. Verdezyne's business model has been converted last year from a tools business to a product focus business and is now offering its biological expertise and proprietary technologies to design and engineer enzymes, metabolic pathways and microorganisms to produce biobased fuels and chemicals.
Damien Perriman, vice president of business development, talked about the company's strategies going forward, milestones the company hopes to achieve, and his views about the current state of the industrial biotechnology sector.
Q: Can you begin with a short summary and an overview of Verdezyne?
Perriman: Our technology platform includes proprietary metabolic pathway models, algorithms for protein design, a patented method for self-assembling synthetic genes and translational engineering tools that optimize the expression of these genes in recombinant microbes. In 2008, we made the decision to transition to an industrial biotechnology company going beyond a single gene and focusing on a whole series of genes that were responsible for metabolic pathways that can convert sugar to chemical products.
For example in ethanol fermentation, we've been able to achieve high yield rates, increase margin, been able to run the process faster, and reduce the costs. We are also working on a suite of petrochemicals replacements where we are engineering new pathways for a pipeline of chemical targets. We are targeting organic acids although we cannot say more about them until we finished our proof of concept work. One of our goals is to find a way via fermentation of sugar to produce the petrochemical feedstock that the chemical industry uses today. Another is the development of novel chemicals where biology can already produce very well but don't exist within the chemical toolbox.
Overall, our goal is to improve the productivity of existing fermentation, enable cost-advantaged petrochemical replacements, and develop novel chemicals that are previously unattainable.
Q: How is the company's current financial standing?
Perriman: Honestly, I think the global financial crisis has given us some breathing space and is not really a big challenge to what we're doing. Our growth has been good for the last couple of years and we expect a period of great growth for us for the next 2-3 years. As long as you can get the funding, focus on the science and bring things through proof of concept, then we are going to be in a much stronger position to earn more on what we developed at the end of the day.
Q: What's on the company agenda when you look out on the industrial biotechnology sector? What specific accomplishments the company made in this field so far?
Perriman: We've already achieved our proof-of-concept with our fermentation process and plan to have the validation study of that completed by the end of the year. We expect to have our ethanol process in the pilot plant as well as start partnering at the beginning of 2010. When it comes to our lead chemical opportunity, I think our run of proof of concept is about 12 months away, and after that we aim to get the validation which I think will take another 12 months. I see the company about 2 years away from having a renewable-based chemical product being manufactured in a 5-10 liter fermentor and producing yields that are meaningful to the industrial chemical industry.
Q: How do you see the current state of the industrial biotechnology sector? What are the challenges that biotech companies have been facing recently in your view?
Perriman: What we saw in the first generation of industrial biotechnology companies is the pursuit of low-hanging fruit. Fuels opportunity in ethanol was exploited readily while investments and energy is now thrown into biopolymers. What the market want is what the market has today - a product that is used in the same way with the same costs except that it is biobased. The challenge for the new generation of industrial biotechnology companjes is to find their focus on what type of chemical products they can pursue that actually have a chance of reaching the consumers at the end. There's no performance trade-off whatsoever.
The nice thing about our industry is that we're not so much competitive because we focus on different targets while using similar toolbox. One of the challenges for us to overcoming the early hurdles of proof-of-concept risks. Credibility is important for us to maintain. We have to step forward with confidence that we obtain something that is backed up by science and results from our laboratory. We have to be careful about really getting too carried away with what we think we can achieve before we achieve proof-of-concept because reputation is very sensitive in this industry.
Also, I think having investors that have seen examples of successful exits give them greater confidence in that space. I don't think that investment money is scarce in this field, I think investors are just confused on how they are going to get their returns.
Q: What are Verdezyne's strategies to being successful in this field?
Perriman: Our business model is quite flexible but what we really look for is to have core expertise around developing a process and validating out that process in a 10 liter laboratory scale fermentor. After validation, it requires scale-up and that's where partnership with chemical companies has to come in.
What we care about is not so much as being green but it is all about reducing the costs of producing chemicals in a sustainable way and using resources that are renewable. We are not trying to save the world, we are just trying to make a difference in those two small areas.
Our approach is to do the petrochemical replacement first, their molecular equivalent, and then once we validate and be successful in that area, we can start exploring the world of functional equivalent, where market risk is great but the return is greater.
Stay tune for the Green Blog's next Industrial Biotech Interview: NatureWorks