Cannabinoid, meet biochem – Lygos acquires Librede to scale up and commercialize cannabinoid production

January 18, 2020 |

While Cheech and Chong now say that marijuana’s coolness is gone, cannabinoids on the other hand are taking off like crazy and Lygos is pushing the gas pedal to the max to scale up and commercialize cannabinoids.

In California comes the hot news that Lygos, who you may know for their sugar converting advanced biotech platform, has acquired Librede, Inc., an emerging synthetic biology company focused on cannabinoid products for the consumer market.

Say what? A specialty chemicals company acquiring a cannabinoid bio company?

When pondering cannabinoids, perhaps you think of Levadura Biotechnology and their synthetic biology and cannabinoid fermentation process, or maybe Amyris considering they recently shipped their first fermentation derived cannabinoid to LAVVAN and their super dope $255 million cannabinoids project as reported in The Digest in February 2019.

But nope, Lygos, the first company to ramp up malonic acid production from sugar to pilot-scale back in 2015 is the one acquiring Librede.

According to Lygos, “the combined proprietary technology platforms enable Lygos to accelerate the development of high-quality, sustainable and rare cannabinoids and rapidly commercialize new innovative cannabinoid-based consumer, nutraceutical and pharmaceutical products.”

Financial terms of the transaction were not disclosed.

So is Lygos following Amyris’s lead on their cannabinoid project? As they say, follow the money and cannabinoids is where the money is at right now.

Librede’s Backstory

First, a bit more about Librede since it’s not a name seen in The Digest before but it has an interesting story.

Founded in 2009 by leading scientists in the Department of Bioengineering at the University of California, Los Angeles, Librede uses synthetic biology tools to develop new technologies that can solve problems in both the pharmaceutical and consumer space. Since 2014, Librede has focused on the research and development of cannabinoids. With the support of numerous grants from the National Institutes of Health, Librede developed a proprietary yeast-based production process that can produce specific cannabinoids of commercial or research interest. Now we see why they caught the eye of Lygos.

Lygos’s Backstory

Founded in 2011 by scientists in the Department of Bioengineering at the University of California, Berkeley, Lygos developed proprietary technology for producing diverse compounds through fermentation. Lygos created a full-stack biological engineering platform focused on organic acid specialty chemicals and bio-monomers.

You may remember Lygos from back in 2015 when The Digest reported that they were the first company to ramp up malonic acid production from sugar to pilot-scale.

A versatile compound, malonic acid was identified by the U.S. Department of Energy as one of the “Top 30 Value Added Chemicals” to be produced from biomass-derived sugar, instead of petroleum. Lygos’ novel manufacturing technology decreases CO2emissions, eliminates toxic inputs and could replace the existing petroleum production process for malonic acid at lower cost and less energy.

Lygos identified over $1 billion in derivative specialty and commodity chemicals that can be accessed from malonic acid, and developing its fermentation technology is key to enabling these opportunities. The scale-up was performed at Berkeley Lab’s Advanced Biofuels Process Demonstration Unit (ABPDU), which is located in Emeryville, CA.

Pushing malonic acid forward, as reported in The Digest in March 2019, Lygos partnered up to expand bio-malonic acid applications with the Center for University of Massachusetts-Industry Research on Polymers (CUMIRP), the nation’s oldest National Science Foundation Industry / University Cooperative Research Center dedicated to polymer research.

The partnership aims to develop novel high-value applications for the company’s Bio-Malonic Acid product family, which includes the derivatives diethyl and dimethyl malonates. By elucidating how the underlying microstructures of cross-linked polymer systems are enabled by malonates, the collaboration endeavors to identify new formulations that will result in high-value, stable and sustainable materials, such as impact-absorbing foams, composites and durable coatings. These polymers are currently produced using petrochemical-based processes that are not only toxic to the environment but also represent a health risk to workers and end-users.

In March 2019, The Digest reported Lygos received three innovation research grants totaling $750,000 of non-equity funding to support advanced research and development. These funds have been awarded through separate grants from the United States Department of Energy (DOE), United States Department of Agriculture (USDA) and the National Science Foundation (NSF).

National Science Foundation Phase IIB SBIR Grant ($500K) aims to develop new technologies to fix CO2 during microbial biochemical production, providing new ways to capture and valorize this abundant greenhouse gas.

DOE Phase I SBIR Grant ($150K) concentrates on solving purity and cost issues related to the incumbent processes used in glycolic acid manufacturing.

USDA Phase I SBIR Grant ($100K) focuses on biological technologies to produce glyceric acid, an enabling chemical for manufacturing new polycarbonates.

To get more details on how Lygos takes a low pH yeast platform and add in some BioFab and software to convert sugar into multiple organic acids resulting in a variety of bioproducts, check out Eric Steen’s ABLC NEXT presentation Microbes to Materials: The Digest’s 2020 Multi-Slide Guide to Lygos’ Sugar Conversion here.

Lygos also received Series B financing and in September 2019 reported that they were able to expand their tech platform capabilities. They commissioned automated equipment to assist its scientists and engineers in optimizing microbe performance, accelerating fermentation development, and scaling operations. The expanded capabilities enable parallel processes that leverage advances in miniaturization, high-throughput automation, and machine learning technologies.

With our Series B financing, we upgraded our robotics and automation capabilities to create improved microbial cell factories at faster rates. Our work focuses on the cell’s ‘malonic acid superhighway’, which is capable of producing many valuable products. This technology enables us to make new products faster, using inexpensive, sustainable starting materials like plant sugar,” said Eric Steen, PhD, CEO of Lygos. “We are now well-positioned to achieve our goal of delivering a new microbe capable of producing our flagship Bio-Malonic™ Acid products in processes competitive with fossil fuel-derived competition. We hope to produce up to 20,000 tons of one of these products, Diethyl Malonate (Bio-DEM™), by 2025, but all of our current products and pipeline products will benefit from these technology upgrades.”

“These investments automate and improve the tools our R&D teams use for high-throughput strain development,” said Jeffrey Dietrich, CTO of Lygos. “Strain generation and analysis efficiencies have significantly improved, and we expect to more than double the number fermentation runs this year and to develop more unique strains to significantly improve our ability to create new products. We are excited about these new advancements, as every member of our team shares a sense of urgency about replacing our reliance on fossil fuel technology with cleaner, more efficient biotechnology.”

Reaction from the Stakeholders

The Carbon Sequestration Superhighway technology we’ve developed initially for our flagship Bio-Malonic products is the key route to many valuable organic acids, including cannabinoids,” said Eric Steen, PhD, CEO of Lygos. “Librede’s leading cannabinoid technology and team of highly qualified bioengineers and scientists are highly complementary to our operations. We believe we can integrate quickly, produce rare cannabinoids in commercial quantities and launch sustainable consumer cosmetic products later this year. We can also now provide lead compounds for nutraceutical and pharmaceutical programs. The new product programs will generate revenues prior to breaking ground on our first large-scale Bio-Malonic Acid manufacturing facility, which is planned for the 2022-2023 time frame.”

“Librede has led the way in creating the next generation of technologies that will drive the future of the cannabinoid industry. Our leading non-plant-based platform enables low-cost production of a wide range of valuable compounds that are not easily accessible through agricultural means,” said Jason Poulos, PhD, CEO of Librede. “Joining forces with Lygos enables us to now automate the strain screening and development processes, scale production and bring these valuable cannabinoid ingredients and consumer products to the market much faster than before.”

Bottom Line

It’s not surprising to see the increased interest from companies in cannabinoids given the current smokin’ hot demand (and expected rising future demand), and it makes sense that it’s coming from biochem companies – after all they have sugar, they have fermentation tech, they have microbes, they have biotech platforms already built.

We wouldn’t be surprised if there are more of these types of acquisitions, partnerships, joint ventures or other deals between biochem and cannabinoids in the future so stay tuned for future smokin’ hot deals to be announced.

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