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Turning Algae’s Golden Corner: Triton, Sapphire Energy, Heliae, Rincon, and Monsanto

| October 2, 2013

th-logoHow and why a foundational technology led to Sapphire, then spun out again and led to Triton, and attracted investment from Heliae.

It seems a long time ago now that, out of Dr. Steve Mayfield’s lab at Scripps and later at the University of California at San Diego, a series of discoveries made it possible, for the first time, that algae could be used a platform for synthetic biology and genetic innovation — just as yeast and e.coli had been used for years.

But, in developmental terms, it really isn’t such a long-time — after all, the discoveries that led to the transistor and the computational revolution were a century in development, and Mayfield’s work in algae has taken him 20 years, and enabled company formations by the mid-2000s.

There are subtle and microscopic reasons why algae could be a platform to rival e.coli — some related to superior folding (proteins that don’t fold properly are generally inactive, or can become toxic or change their function).

folded proteinBut it comes down to this: Compared to bacterial and mammalian systems, algae has the potential to produce proteins cheaply and at very large scale. With algae in 2010 at about $3 per kilogram at commercial scale, the researchers estimated then that making recombinant protein would cost about 60 cents per gram prior to purification.

Enter Rincon

Mayfield’s technology ultimately led to the formation of Rincon Pharmaceuticals in 2004 to pursue commercialization. The original goal, the development of therapeutics. The company raised some $5 million by 2005, and established collaborations with then-hot companies such as Biogen Idec.

Exit Rincon, enter Sapphire

Almost immediately, algae’s ability to produce oils began to attract substantial attention — after all, it was not long after George W. Bush made his “addicted to oil” speech and hatched a biofuels-centric plan to end US energy dependence.

The stakes were high, the opportunities in fuels both disruptive and massive. Here was a Black Swan, and Bill Gates and the Rockefeller family office, alongside a team of veteran Silicon Valley VCs, arranged for the formation of Sapphire Energy to chase the giant prize of drop-in algal biofuels at scale. Rincon’s IP was acquired as it was running out of cash, and that, most thought, was that.

Along the way, the Sapphire mission crystallized into inventing and scaling a Green Crude Farm to make green crude oils, that could be upgraded using existing refinery technology into diesel, gasoline or jet fuel. And along came Cynthia “C.J” Warner to lead that titanic effort, originally as Sapphire’s president — and then ultimately as Chairman and finally CEO of the company.

And so Jason Pyle exited from the company nearly two years ago, and Mayfield’s work moved more to the background as the emphasis at Sapphire changed from solely the science of making the right algae strains, as much as the design and engineering of what is arguably the world first 22nd century Farm.

Which is to say, a Green Crude Farm where — to use an analogy borrowed from the Monsanto model — green crude farmers use exotic algae seeds in what could be the most highly-engineered attempt of total systemic passivity — force feed them CO2 in a broth of salt water and nutrients to make a biomass that can be thermo-chemically converted to a green crude oil. Passive because that is the best way to take out costs; 22nd century because, after all, we are working here with the smallest one-celled crops that Nature ever invented and sustained.

The Second Neolithic revolution

Ultimately, Sapphire is a revisiting of the Neolithic Agricultural Revolution, using the genetic knowledge that has been uncovered since Crick and Watson unlocked the secrets of DNA’s double helix in 1953.

Only, back in the days of the Neolithic Revolution, the ancestral famers were attacking the problem of food supply — by moving from a hunting-and-gathering methodology to an agricultural model. They learned to grow grains, systematically and affordably, that could be used for human consumption and for livestock. And ultimately, for a lot more.

But, ever since the Neolithic days, we have continued to be hunters and gatherers of energy. Though as hunters we have moved from wood, to coal to oil and ultimately to uranium — and we have become better and better at it — the second footfall of the Neolithic Revolution had yet to be heard.

Ironically, it was the end of the Ice Age that ushered in the Agricultural Revolution — as Ice Age megafauna became scarce and the climate became warm enough to support the spread of agriculture.

It would be the Second Great Warming, the temperature lift of the Industrial Revolution that has climate scientists deeply worried about rising temperatures and rising seas associated with fossil fuel emissions — that would lead to Sapphire and the Second Neolithic Revolution. In which the agricultural model would be applied to the production of fuel — with a switch from food crops to algae as a platform, where it was hoped that the economics and the productivity of algae will allow agrifuels to compete head to head with Brent Crude and West Texas Intermediate.

The seeds of destiny

But as Sapphire reinvented the farm, who would reinvent the seeds?

For sure, Sapphire has done much of the heavy lifting there, too. But Pyle and Mayfield knew that, as Sapphire continued to focus on fuels, an entire universe of medical applications remained outside the Sapphire focus, yet inside the promise of the Mayfield technology.

Sapphire itself had been involved in these efforts at least as late as 2010, when Mayfield published a study in Plant Biotechnology Journal. which sought to determine whether seven diverse human therapeutic proteins could be produced in Chlamydomonas reinhardtii, a green alga used widely in biology laboratories as a genetic model organism, much like the fruit fly Drosophila and the bacterium E. coli.

The 60 cents-per-gram protein production costs, even then, were “about the same cost estimates for the least expensive protein expression systems presently available, and considerably cheaper than mammalian cell culture,” Mayfield and his team reported at the time. With expected improvements in the ability to express proteins in algae, “and the continued reduction in algal biomass cost associated with the large scale efforts to use algae for biofuel production, we anticipate at least a ten-fold reduction in the costs over the next few years, which should make algal protein production the least expensive platform available.”

Enter Triton

Ultimately, some of the old Rincon IP was spun out of Sapphire and back to Mayfield and Pyle, who then founded Triton last fall, and began bringing on staff at the end of last winter, funding the company themselves and via friends & family.

As Triton exec Dan Sachs observed, after joining the company in March, “it’s hard enough for companies like Sapphire to invent and do the production capacity build. It’s a great development effort, and developing the evolved seeds is another another shelf of capex that makes projects more difficult. Sapphire has a deep bench in upstream, midstream, and downstream — but we saw an opportunity to move upstream to create high value products. Now that Sapphire, Heliae and Aurora etc are developing the capacity, people are looking for new products.”

Triton’s platform is known as PhycoLogix, and uses algae to produce compounds that other organisms cannot, that can be safely consumed without modification, and can be cultivated at large scale inexpensively.

But it is important to make a distinction between the old Rincon ideas and today’s Triton. It’s been focused in terms of projects and products — and takes advantage of the development of what will be the big production systems under development not only by Sapphire, but at Heliae and also Aurora Algae, to name a few.

“We’re like the iPhone,” said Heliae CEO Dan Simon, “and companies like Triton are bringing forward the apps”. We may well see companies like Heliae selling licenses for its production technology to customers who in turn license and introduce Triton’s apps, to generate complex proteins, enzymes, and other biologics that are cost-effective and have immediate applications in agricultural, pharmaceutical, and other retail markets.

Enter Monsanto

Or, if you will, Triton is the Monsanto, the developer of transformative seeds, and companies like Heliae, Sapphire Energy and Aurora Algae are the farming systems — tilling, seeding, cultivating, harvesting. Perhaps it is fitting that Monsanto chose in 2011 to back Sapphire — seeking access to its genetic technologies which, the agri-giant’s leaders believed, could be used to isolate traits in algae that could be imported into terrestrial crops, with Monsanto CTO Robb Fraley commenting at the time that algae was an “excellent discovery tool.”

This month, the first product line from Triton was announced, and the company began to come out of stealth. Triton’s first product line, the founders decided, would be PhycoShield,a line of proteins that they said could save millions of human and animal lives. Triton’s first PhycoShield product is Mammary Associated Amyloid (MAA), a protein found in colostrum that stimulates production of a mucus coatingin the digestive tract. This coating is known to prevent colonization of pathogenic bacteria that would result in the onset of diarrheal diseases. Triton’s MAA has the potential to address diarrheal diseases worldwide, which account for over two million human deaths each year, are the leading cause of infant mortality, and kill approximately 20% of the world’s livestock.

As this evaluation via the National Institute of Health found in 2009: “In vitro experiments confirmed that a 10-mer peptide derived from human mammary-associated serum amyloid A3 (M-SAA3) protected intestinal epithelial cells from enteropathogenic Escherichia coli (EPEC) adherence.”

Enter Heliae

Having identified the first target products, it was time to begin raising sufficient money to support Triton’s ongoing research and development programs, expansion of Triton’s PhycoLogix platform, and commercialization of Triton’s first product, PhycoShield.

Like a farmer investing in seed technologists, the $5 million Series A investment in triton came from Heliae Technology Holdings. Triton’s proprietary MAA algae will be produced using Heliae’s Volaris advanced algae technology platform. Heliae’s Volaris platform is uniquely equipped to support Triton’s proprietary strains.

As the partnership progresses, Heliae and Triton aim to deploy an extensive pipeline of Triton’s advanced algae strains using Volaris.  Triton is capable of producing complex proteins, enzymes, and other biologics in algae suitable for diverse applications across multiple industries. Triton’s pipeline includes antibacterials, anti-diarrheals, vaccines, antioxidants, catalytic enzymes, and growth factors for use in human and animal health, nutrition, and cosmetics.

In short, the huge ambitions that are not uncommon for algae. Will they be realized?

Triton thinks that the time is nigh. As Heliae prepares to roll out its platform at scale, and as Sapphire moves into the million gallons plus range for production capacity in 2014-15 and prepares for the leap to full commercial scale before the decade is out — well, it could be that the Second Neolithic footfall is nearly within ear range.

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