Building a chemical plant inside a microbe: Evonik, OPX BIO ink agreement for bio-based chemicals

May 15, 2013 |

OPXBio-smSpeciality chems giant opts for the OPX Biotechnologies’ EDGE technology to slash development timelines and costs, and boost ROI.

Making biobased work on price and performance.

In Germany and Colorado, Evonik and OPX Biotechnologies have entered into an agreement to jointly develop a list of (undisclosed) bio-based specialty chemicals. Evonik is one of the world leaders in specialty chemicals, active in over 100 countries around the world, with 33,000 employees and 2012 sales of €13.6 billion.

Terms of the multi-year, milestone-based R&D agreement were not released — although it was disclosed that OPXBIO will also be able to market bio-based products resulting from the Evonik collaboration, and that agreement calls for OPXBIO to use its proprietary EDGE (Efficiency Directed Genome Engineering) technology to develop the bio-processes.

The stage-gate agreement will operate with a joint, dedicated project team overseeing all sub-projects, with the active oversight of a steering committee — very much a traditional technology development style, but jointly overseen by two companies. The project teams will also be able to leverage additional development and knowledge resources across both Evonik and OPX Bio.

Why the EDGE platform, and what is EDGE again exactly?

The OPX Bio Process - click for a full-size view

The OPX Bio Process – click for a full-size view

Why? Speed, to put it in one word. OPXBIO’s Efficiency Directed Genome Engineering (EDGE) technology platform is up to 5,000 times faster than conventional bioengineering methods for redesigning the genetic code of microbes.

What? As OPX Bio CEO Chas Eggert explains with OPX Bio’s first target product, bioacrylic acid, “The physical and mechanical process of turning a raw material into acrylic acid has been around a long time. But petroleum costs are volatile and consistently rising. Factories are facing more regulation regarding emissions and the impact their facilities themselves on the environment.

“We can take a lot of what happens within the physical chemical production process and put it inside a microscopic biological system. We are using the microbe’s biological system to make the designated chemical from a raw material. Rather than having engineers inside a factory do that work, we can adjust the microbe as needed to produce whatever chemical it is we need it to produce. We’re proving it’s economical, sustainable and scalable.”

How? With EDGE — as with other technologies doing strain optimization — there are changes made to the genetic code of millions of microbes., and lab experiments are run to test the ability of the resulting “new” microbes to make a targeted product.

What makes EGGE different is that it is deterministic and direct. Instead of randomly mutating a strain and hoping to find, through brute force, a series of optimized capabilities — EDGE determine and then purposefully programs the specific genetic code, and tracks every genetic change — to relate specific genetic changes to microbe performance in our lab experiments.

Another thing – with EDGE, you don’t necessarily “freeze” a strain after developing in the lab — and then build a process, independently, around it. Even in the later stages of process development and scale-up we can still use EDGE to rapidly adjust the genetic code of the microbe to further improve process performance and cost.

EDGE is designed to create a strong connection between microbe design and overall production process design — to rapidly optimize performance and cost.

EDGE in practice

As an example, OPX has used EDGE to develop its bioacrylic microbe within two years, shaving as much as five years off strain development.

That changes outcomes both from a competitive point of view — and in terms of rate of return for investors. Think of a 20 percent hurdle ROI for corporate investing, for example. Take seven year to make a strain, add in 3-5 more years for scale-up. Imagine a front end commitment of $10 million in R&D – you need $89M back from that investment to meet the hurdle rate, if you take seven years to make a strain and five years to scale it up commercially, commission it, and begin recouping the investment.

Reduce that to two years for strain development and four years to scale (because you can continue to optimize the microbe – as well as the process – during scale up). In that case you need to return $30 million to meet that hurdle rate.

It was a 5-10 percent rate of return, apparently, that killed off an otherwise promising solvent liquefaction technology at Chevron, according to a recent investigative piece by Bloomberg — so these concerns are real world ones.

Reaction from the companies

“There’s a growing market demand for more sustainable products and processes, and OPXBIO is an excellent partner to help us meet that demand because their technology can create high-value, bio-based chemicals quickly and cost-effectively,” said Dr. Thomas Haas, Vice President Science-to-Business Center Biotechnology of Creavis, the strategic research and development unit of Evonik.

“Evonik is a leading global specialty chemicals company, and we’re looking forward to helping them expand their portfolio of bio-based chemicals,” said Charles R. (Chas) Eggert, OPXBIO president and CEO.

“Evonik has strong capabilities in this area already. We’ve been working to help them see the the power and potential, the efficiency of the EDGE platform in accelerating strain development, and over time they’ve come to understand and appreciate the opportunities that can come from working together, rather than doing all the work on their own.

“At the same time, Eggert added, “This gives us an opportunity to work with one of biggest names in specialty chemicals, and with this agreement we are completely focused on developing the strain, while retaining complete flexibility with respect to commercialization.”

Back-end commercial flexibility

The Digest asked Eggert if the clause giving OPX Bio some rights to do its own commercialization was in response to problems that had occurred in research programs such as Codexis conducted with Shell, where ripples in the larger company’s strategic direction can cause tsunamis in the smaller companies plans. “No, not directly in response to Codexis, but it is important to structure agreements that have flexibility on the back end, especially when they are multi-year arrangements where the R&D will take some years to complete.”

The Bottom Line

It is the second announcement this week of a German chemical giant partnering with a biobased technology developer to bring biobased renewable chemicals to market — following news that BASF has licensed the Genomatica process and will build a first commercial plant in the 50,000 tonne range.

As we noted in the Genomatica story, both BASF and Evonik have biobased R&D capabilities — it makes it more notable, for that reason, that these deals have come off.

Both are solid wins for the industry — though with Evonik making more than 4,000 speciality chemical products, we’ll have to wait some time before we know more about the specific chemical targets that Evonik has in mind.

REDA MORE: OPX BIO was selected as an Innovation Pioneer at CERA Week, this spring, More on that here.


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