Top Industrial Biotechnology Trends in the U.S. – The view from Europe

By Mark Warner, PE, Founder, Warner Advisors LLC

Special to The Digest

It is not just the U.S. heartland that is working to bring communities of once great manufacturing dominance back to life, the same is true in Eastern Germany.  Housed in a region with significant historic chemical operations, including the home of where buna rubber was first commercialized, Eastern Germany is similar to parts of the industrial midwestern United States.  The area benefits from a strong infrastructure of research and scale-up facilities, including the Fraunhofer institute, which is similar to the U.S. National Labs, and includes support from a range of governmental officials and entities, and was highlighted during my recent visit and meeting with the Prime Minister of Saxony-Anhalt, one of the 16 German states.  While there, I had the opportunity to participate in a set of business meetings hosted by a Bioeconomy Cluster, that is an association of local businesses and governmental agencies working to leverage assets in this former part of the German Democratic Republic (GDR), all in an effort to expand into the modern bioeconomy.

In a world-wide environment of limited credible scale-up options, the biocluster partners provide a unique set of attributes, which is the ability to perform both fermentation and complex chemical conversion within the same complex.  The synergy of biotechnology and traditional chemistry is receiving more focus, but is still not mainstream within advanced biotechnology.  While there are benefits of merging both technological approaches, there are limited industrial biotechnology scale-up resources that have experience in both.  The biocluster provides a unique combination of fermentation scale-up and chemical conversion technologies, all within a close proximity, that make scale-up of a hybrid technology possible in one location.

The primary purpose of my engagement was to provide perspectives on the U.S. biotechnology industry and insights to where Europe could use the lessons learned from the U.S. to focus their development efforts as they grow the local bioeconomy.  The United States has put significant venture-funded investment into industrial biotechnologies in the last few decades with both notable successes and highly-publicized failures.  The focus of my presentation was to summarize the lessons learned to provide guidance for strategic planning.  The highlights are below and the complete presentation follows on the next webpage.

Follow the money – from 2005 to 2015, most investment in U.S. industrial biotechnology were in biofuels and biochemicals, while recent investment have focused almost entirely on novel food proteins and compounds for agricultural use.  While Europe has a stronger commitment to advanced biofuels than the U.S., the novel proteins and agricultural products are key focus areas that Europe can exploit.  U.S. based venture funding sources have not invested in industrial biotechnology startups outside of the U.S. in a material way and the emergence of new companies may provide a unique opportunity.

Agricultural bioproducts – the next wave of US biotechnology investment, from microbial pesticide replacements to organic fertilizers, has agricultural applications as an increased focus of US investment.  This has been a trend with increased emphasis and is expected to continue with multiple companies on the verge of commercial-scale operation.

What the U.S. does well – a strong supply of industrial biotechnology funding, talented technical staff, deep understanding of synthetic biology and the ability to manipulate organisms has allowed the U.S. to take a leadership role in industrial biotechnology commercialization. 

Where the U.S. could improve – an over-reliance on synthetic biology to solve all problems and proliferation of “bug development” companies without assets to commercialize their technology has the path to commercial success far from clear for many technologies.  Lack of commercial-scale contract fermentation sites in the U.S. continues to be a major obstacle to product commercialization.