Mascoma catches its Wascaly Wabbit, as Lallemand acquires the Mascoma yeast business

Mascoma’s “slow rabbit, the first commercial app from its CBP technology, gets snapped up by Lallemand.

In Massachusetts, Mascoma Corporation announced that it has completed the sale of its yeast business to Lallemand Inc., a privately owned company that researches, develops, produces and markets yeasts, bacteria, and related products. As part of the transaction, Lallemand has acquired the Mascoma company name and trademarks pertaining to the yeast business, all of its proprietary and patented yeast strains and associated technologies, as well as the yeast business’ entire research and development team located at its facility in Lebanon, NH.

Terms were not disclosed.

Lallemand and Mascoma have been partners in the successful commercialization of the TransFerm line of products, including TransFerm and TransFerm Yield+, to the corn ethanol industry. The TransFerm products, which to date have been used to produce over 2 billion gallons of renewable fuel, will continue to be developed, marketed and sold by Lallemand’s Biofuels & Distilled Spirits (LBDS) business unit.

The Mascoma strategy

As Mascoma CEO Bill Brady tells the tale, the TransFerm success story exemplifies two things that young renewable companies should be doing. First, our understanding at The Digest is that the original idea for what started as Mascoma Grain Technology came from one of those suggestion boxes that companies set up for employees to contribute ideas to.

Secondly, it demonstrates what Brady called the strategy of “catching a slow rabbit and killing it” when a company is first trying to get into business — which is to say, have a good solid win based on identifying a readily-available niche.

The backstory

What was originally known as Mascoma Grain Technology, or MGT, yeast product, was the first commercial application of Mascoma’s proprietary consolidated bioprocessing (CBP) technology platform, and launched in 2011 and began getting traction immediately.

The MGT product is a genetically-modified yeast designed as a drop-in substitute for conventional fermenting yeast that lowers costs for corn ethanol producers by alleviating the need to purchase most of the expensive enzymes currently used in corn ethanol production.

A signature agreement was signed in March 2012 when Mascoma and Lallemand Ethanol Technology entered into a commercial agreement with Pacific Ethanol.  The agreement covers and pricing for any purchases of the Mascoma Grain Technology, yeast product for use at Pacific Ethanol 40 MGy facility in Boardmen, plus for the extension of these terms and pricing to three additional plants operated by Pacific Ethanol. The four Pacific Ethanol plants have a combined production of about 200MGy.

By June 2012, Lallemand and Mascoma announced that the MGT yeast product will be marketed under the commercial name TransFerm for use by the fuel ethanol industry. The technology picked up a Biofuels Digest Award in 2012 for Yield Improvement.

In 2013, the business went to the new level when Lallemand and Mascoma announced the introduction of TransFerm Yield+, a bioengineered drop-in substitute for conventional fermenting yeast.

In pilot-scale tests at ICM, the leading provider of engineering services to the ethanol industry, and commercial-scale trials at corn ethanol producers, TransFerm Yield+ consistently demonstrated ethanol yield improvements of up to 4%. Commercial-scale trials are currently underway at several corn ethanol producers. Both TransFerm and TransFerm Yield+, which are currently commercially available, are manufactured and distributed by Lallemand and jointly marketed and sold by Mascoma and Lallemand through their exclusive partnership.

TransFerm Yield+ alleviates the need to purchase a significant amount of the expensive glucoamylase (GA) enzymes, comparable to the performance of TransFerm, which is Lallemand and Mascoma’s first bioengineered yeast product. TransFerm Yield+ works by expressing GA enzymes, similar to TransFerm, and by significantly reducing the amount of glycerol production during fermentation via an alternative ethanol pathway that has been inserted in the yeast. This pathway creates more ethanol with no increase in the amount of corn needed.

By December 2013, more than 1 billion gallons of ethanol had been produced with TransFerm.