Genomatica: Biofuels Digest’s 2014 5-Minute Guide

Company description: 

Genomatica is a widely-recognized technology leader for the chemical industry. It develops comprehensive manufacturing processes that enable its licensee partners to produce the world’s most widely-used chemicals a ‘better way,’ from alternative feedstocks, with better economics and greater sustainability than petroleum-based processes.

Genomatica has the distinction of driving the first genuine commercialization of a biobased process for a major, high-volume chemical. It is the only company in the industry to demonstrate genuine commercialization of a major chemical (BDO) and receive support for its process technology through multiple licenses and partnerships with the chemical industry’s largest firms.  Genomatica achieved commercial reality in only five years for its process, GENO BDO, which has been licensed by BASF (#1 BDO producer in the world) and Novamont.

Further, multiple companies including Lanxess, DSM, Toray and Far Eastern New Century proved successful production of their downstream products using Genomatica’s BDO in the past 12 months.

Genomatica is developing processes for additional major chemicals.  Genomatica established agreements with Braskem (#3 producer of butadiene in the world) and Versalis for the development of a process to produce Genomatica’s second target chemical, butadiene ($20 billion market). Genomatica’s butadiene program now includes investments of over $100 million, as anticipated under current agreements.

Genomatica’s recognition includes the Kirkpatrick Award, recognizing the most noteworthy chemical engineering technology commercialized in the world in the prior two years; the EPA Presidential Green Chemistry Challenge Award; the Wall Street Journal Technology Innovation award; and being voted #1 Hottest three years in a row by Biofuels Digest.

Rankings

30 Hottest Companies in Renewable Chemicals: #1, 2013-14

Awards

2013 Renewable Chemical of the Year — BDO (Genomatica, Lanxess, BASF, Toray)

In November, we knew we had a winner in BDO when BASF announced that it had produced its first commercial volumes of 1,4-butanediol (BDO) from renewable raw material, and is offering this product to customers for testing and commercial use. The production process relies on a patented fermentation technology from Genomatica, based in California.

As we observed in 4C-able future: “Where’s Genomatica in the mix? Possibly counting all the money they are going to make.”

Case in point. In June, Lanxess said has run a production campaign of bio-based PBT in Lanxess’ world-scale production plant using 20 metric tons of bio-based BDO made with Genomatica’s commercially-proven process. The world-scale PBT plant, with a capacity of 80,000 tons per year, is located in Hamm-Uentrop, Germany and operated as a joint venture in which Lanxess has a share of 50 percent.

This — for Genomatica, after announcing that Toray had produced some PBT from Genomatic BDO, and that Versalis and Genomatica announced this past spring the establishment of a technology joint venture for bio-based butadiene from non-food biomass. The resulting process will be licensed across Europe, Asia and Africa by the newly-created joint venture. Versalis — the chemical subsidiary of Eni — aims at being the first to license the process and build commercial plants. It will also provide over $20 million in funding to Genomatica to support development of the integrated end-to-end process.

Situation

If you ever followed the sport of big-wave surfing, you’ll recognize Mavericks — California’s perilous winter capital of The Big Ride, where dudes with less than ordinary regard for survival run the life-and-death risks — for the rush of mastering the monster 20-foot right-handers.

Not every one can surf, and not every surfer takes on the big waves, and fewer still take on Mavericks.

In synthetic biology these days, there are the Big Wave surfers too — companies like Amyris, Solazyme, Gevo, Genomatica, Verdezyne, Rivertop Renewables, Myriant, Segetis, BioAmber, Cobalt, Green Biologics, Butamax, LanzaTech, INEOS Bio, LS9, Elevance, and Sapphire Energy, among others.

Not for them the safe markets in high-value biopharma, where you can drain and scrub out the fermenters any time there is a misstep, because you are making handfuls of product for zillions of dollars.

These are the Big Waves. The transformative cost advantages in big markets via renewables.

You might have thought that the big waves were named Waimea and Pipeline or the tow-in sets at Peahi. But their real names are adipic acid, succinic acid, BDO, paraxylene, dielectric acids, isobutanol, ethanol, and drop-in fuels.

Watching this class of technologies come along — well, it has something in common with watching a group take on the 70-footers at Ghost Tree for the first time. The wave looks impossibly big, the surfer impossibly small. While the rewards are immense, one fall can be fatal.

You know they have the bravado, but do they really have the voodoo?

Top of the leaderboard

Though some have fallen, and some are yet to roll out their full-size rhino chasers for the really Big Ride, at scale — we have a new leader on the board, in Genomatica.

This week, the company confirmed what had been rumored for some time amongst the fermeterati — their massive project, producing biobased BDO (1.4, butanediol) in the big 600,000 liter fermenters at a DuPont Tate & Lyle plant in Tennessee, had come off without a hitch.

Think of it. 5 million pounds in a five-week run of continuous fermentations, probably 50 in all. Street value, not far shy of $5 million — all of it quickly sold to customers. Arguably more product than all the others in this class of technologies coming through produced all year, combined.

In the world of BDO, and of renewable chemicals as a whole — where output is measured in pounds and tonnes instead of gallons and barrels — 1 million pounds a week is world-class scale. More than 2,000 metric tonnes, made from conventional dextrose sugars — instead of from conventional fossil petroleum as BDO usually is.

The five year run from lab to scale

This marks the first time that BDO– with an existing worldwide market of billions of pounds per year – has been produced biologically on this scale and at this rate. This campaign was completed less than five years from when Genomatica first demonstrated the ability for a microorganism to produce BDO in 2008. In their case, it’s modified e.coli fermentation.

Before Mavericks was made famous in the 1990s by Surfer Magazine, turns out that one lonely surfer (Jeff Clark) had been conquering it for years. In the case of Genomatica, they smartly partnered with DuPont Tate & Lyle, which has has been running its leading-edge biochemical plant in Tennessee since 2006, producing 1,3-propanediol (PDO) at commercial volumes. No rookie crew here.

PDO (1,3 propanediol), is one of the only examples of an industrial intermediate, or basic chemical, that has been successful in making the cost advantaged transition from the petro based PDO, to the direct chemical equivalent, bio-based PDO. DuPont, Tate & Lyle and Genencor collaborated to develop and commercially scale this process with sales over $200 million. This accomplishment took 7 years to commercialization and another 3 years to achieve market penetration.

Genomatica produced commercial Bio-BDO less than two years after Genomatica and Tate & Lyle signed a joint development agreement for the demonstration-scale production of Genomatica’s Bio-BDO (1,4-butanediol) — at 13,000 liter scale at the Tate & Lyle plant in Decatur, Illinois.

The BDO market

BDO, by the way, is not only a high-value product — selling in the $2000-$2300 range per tonne last year on the spot market — it’s also a big one, with $4 billion in global sales last year.

Commercially viable at this scale. Yes, says Genomatica – at this scale it has a commercially competitive cost structure. And, for Genomatica, this is the year.

“It’s given a lot of comfort to licensees,” Genomatica CEO Christophe Schilling told the Digest, “to have validation done at commercial scale.”

More announcements to come regarding customer deals? Schilling pauses. “Suffice it to say at this stage, more will follow — and this is the year of commercialization, for the BDO part of our story. All the scale-up stuff, the pilot, the lab, the demonstration — all that is behind us now and we are focused on the commercial scale facility.”

Bottom line — Genomatica was at 13,000 liter scale — then went for the Big Wave, and came down the face with amazing speed and not a little grace. Go to the front of the class of the mavericks, at Mavericks.

3 Top Milestones for 2010‐13

1. Genomatica and BASF announced a license agreement allowing BASF to build a world-scale production facility that uses Genomatica’s GENO BDO process. BASF later announced that it produced its first commercial volumes of BDO from renewable raw material using Genomatica’s process, and is offering this product to customers for testing and commercial use.

2. Validated use of GENO BDO™ in the production of downstream products from multiple companies including Lanxess, DSM, Toray, and Far Eastern New Century.

3. Signed partnerships and secured additional investment for development of Genomatica’s second process for butadiene with Braskem and ENI Versalis. Genomatica’s butadiene program now includes investments of over $100 million, as anticipated under current agreements.

3 Major Milestone Goals for 2014-16

Broader, deeper commercial rollout of GENO BDO process.

Additional partners for butadiene program and for other target chemicals.

Business Model: (e.g. owner-operator, technology licensor, fee-based industry supplier, investor)

Genomatica licenses its process technologies to major chemical firms, so they can produce major chemicals using alternative feedstocks.  The partners build, own and operate these plants, providing Genomatica with milestone fees and royalties.

In addition, major partners sponsor research and development programs that lead to processes for new target chemicals, such as for butadiene.  Genomatica then licenses these processes to the industry, with sponsors receiving advantageous terms.

The combination of licensing and sponsored R&D allows a capital-efficient business model for Genomatica.

Genomatica’s partners include BASF, Novamont, Braskem, Versalis, Mitsubishi Chemical,  DuPont Tate & Lyle, Tate & Lyle,  M&G/Chemtex and Waste Management.

Competitive Edge: 

For Licensees:

It Works:  The BDO produced using Genomatica’s process has repeatedly proven that it meets the demanding quality and economic requirements of the global chemical industry. This is evidenced by the multiple industry leaders that are taking steps toward producing real-world products from BDO made with Genomatica’s process:

• FENC produced high-performance fibers and clothing using BDO made with Genomatica’s process.

• Toray confirmed production of molded component prototypes from successful polybutylene terephthalate (PBT) polymerization of BDO made with Genomatica’s process technology.

• After Lanxess converted 20 tons of BDO at their world-scale PBT plant, Lanxess customers used the PBT to make sample parts. These include:

o Mennekes, a leading maker of electrical products, which made electrical junction boxes

o Trevira, a leading maker of high-tech polyester fibers and filaments, which made a non-woven technical textile, often used in protective clothing.

It works at commercial scale:  Genomatica’s production of millions of pounds of product, in just weeks, starting in Q4 2012, established new benchmarks for the industry and showed that the process is ready for prime time.

Better Economics and Smaller Environmental Footprint: Our processes deliver better economics (e.g. 50% lower capex for plant construction) and a smaller environmental footprint.  Additionally, because our technology is based on fermentation and separation processes, our approach is simpler, uses less energy, operates at ‘gentler’ temperatures and pressures, costs less to build and operate, and lets producers more reliably match supply and demand.

For Genomatica:

Genomatica’s biotechnology platform – and extensive intellectual property on over 20 major industrial chemicals – provides a significant advantage in approaching and mastering the development of cost-effective processes for multiple intermediate and basic chemicals. Its distinctiveness and significance has been recognized by earning both the top science award (EPA Presidential Green Chemistry) and the top chemical engineering award (Kirkpatrick).

Our platform is designed to identify the most efficient biochemical pathways and select the most effective microorganisms to convert feedstocks into target chemicals, leading to optimal process technologies developed in a capital-efficient manner. As of October 31, 2013, we owned or had licensed rights to 71 issued patents and 450 pending patent applications, in addition to trade secrets and other intellectual property rights.

Website.