Lesaffre acquires Butalco: will the race for sustainable butanol ever be the same?

We look at why yeast giant Lesaffre acquired this development-stage Swiss company and its yeast enhancement technology.

And how that may affect the competitive landscape in the search for cellulosic options.

Plus, a 7-Slide, 3 Minute Tour of the technology and its promise.

From Switzerland and France, news arrived that Butalco has been acquired by Lesaffre — an old and established yeast company in France that not too long ago launched a new business unit Leaf Technologies (LESAFFRE ADVANCED FERMENTATION TECHNOLOGIES) dedicated to the development and sales of value added fermentation solutions to the bioethanol and bio based chemicals industries.

The French company has been a multi-national for some time, highly visible in baking, nutrition and health, flavors and fermentation.

Readers with sharp memories might recall that back in July 2012, the early-stage Butalco sold its xylose isomerase technology (xylose isomerase from Clostridium phytofermentans) to Lesaffre — so you could see this acquisition as in some ways a deepening and broadening of an already interesting relationship.

That acquisition kicked off a mini-scramble in industrial biotech — and Verdezyne also sold its xylose isomerase technology, enabling the metabolism of 5-carbon sugars — in that case to DuPont Industrial Biosciences. (Under the terms of that sale, DuPont has purchased rights to Verdezyne’s patented xylose isomerase technology, covered by U.S. Patent Nos. 8,114,974 and 8,093,037, for use in the rapidly-commercializing biofuels and biochemical fields.

Back to school on yeast

The yeasts that most know are sacromyses cerevisae. It’s the wine-making yeast — among about a zillion uses, and it is the backbone of the modern industrial biotech industry.

But here’s the problem. S. cerevisiae efficiently ferments C6 hexoses (such as glucose and sucrose) but is not able to ferment C5 pentoses (such as arabinose and xylose).

So, there you have it. Lignocellulose, that’s generally the world of C5s. In the case of Butalco, its xylose isomerase technology enables an improved production of lignocellulosic biofuels, as the enzyme is highly active in
yeast cells and, in contrast to other xylose technologies, is not inhibited by fermentation side
products like xylitol.

Back to school on Butalco

Who are theseSwiss techies, again? Butalco is a research company focused on yeast technology with its headquarters in Fuerigen/Switzerland and research resources in Frankfurt/Germany. It’s research has been in developing yeast strains for second generation biofuels and biochemicals based on lignocellulose.

Core technologies included molecular biological tools to optimise Saccharomyces cerevisiae for increased yields in bioethanol production by using C5 sugars as well as the production of advanced biofuels, like biobutanol and other biochemicals.

Ah, butanol. Hence the company’s name.

Recently, Butalco had recently achieved increased isobutanol production with recombinant yeast strains. By combining its proprietary isobutanol technology with the Clostridium phytofermentans xylose isomerase, Butalco could demonstrate the first production of isobutanol from lignocellulosic material.

Besides biobutanol, Butalco’s other main focus had shifted to the development of specific xylose transporters which are no longer inhibited by glucose. The improved xylose transporters, it hypothesized, would enable yeast strains to ferment xylose simultaneously with glucose. This will significantly reduce the time for the complete fermentation of lignocellulosic hydrolysates and will therefore reduce production costs for lignocellulosic ethanol and butanol.

And there was more in the Butalco portfolio of magic. They have been looking into construction of yeast strains producing adipic acid or malic acid from sugars.

Now, they’ve been in start-up mode for some time — and we hadn’t heard of any major technology licenses since the big sale to Lesaffre. So, this acquisition almost certainly represents the happiest of landings for the IP. They had been raising money since — well, since the company foudned, but the feet had been pounding the pavement hard since 2012, as the R&D opportunities began to become a) really interesting and b) really expensive.

So, let’s take a 8-slide, 5-minute Tour of Butalco to see exactly what Lesaffre got a hold of. And we’ll show the money.

The advantages of yeasts

Butalco’s expertise in the development of advanced yeasts

The competitive landscape

The problem of lignocellulose – unlocking it as a key to solving the feedstock challenge

Butalco’s transporters enable reduced fermentation time

This is the money slide.  Faster fermentation means smaller equipment for a given capacity, or more capacity for a given footprint. Either way, it’s a huge boost on capex.

Seen as a yield booster – up to 60% more

Lots more molecules there to chase

The Bottom Line

It’s all about developing technology that drives efficiency in fermentation. For sure, Lesaffre saw hot technology in reducing capex and opex. May well have become concerned that, a la Verdezyne’s sale of its xylose isomerase technology to DuPont, that the technology might not end up as a stand-alone supplier, but in the proprietary hands of a competitior. So, they took it out.

Why? Not just the opportunities in getting sugars out of lignocellulose to make butanol. It’s isobuanol. No one else has been doing that. The only two companies that have been making butanol from lignocellulose are Green Biologics and Cobalt — and, in their case, they’ve been producing n-butanol.

Now, you can isomerize n-butanol into isobutanol — but its an extra step.

And isobutanol works much better as a fuel — one of the reasons Gevo and Butamax have been chasing it. But they’ve made no big announcements around lignocellulose and butanol; both have been focused on corn sugars.

But, with Butalco, there’s more than isobutanol. There’s bioadipic acid, and biosuccinic. And when we say “bioadipic” you go ahead and think “nylon”. Nice high prices there, new markets, good margin potential. All in all, a coupe of great reasons to wrap up a hot technology before someone else does.