Biden boosts biotech
Yesterday Biden inked an executive order to focus more U.S. attention on driving innovation in biotechnology and biomanufacturing. As with other critical future-focused industries, there’s concern that U.S. R&D, not to mention manufacturing, is falling behind competitive countries like China. COVID was also a clear call to arms; the next generation of illnesses isn’t waiting for us to develop remedies for them.
While the initial press release didn’t mention specific investment amounts, those will be forthcoming later this week. The order described a “whole-of-government approach” and identified climate energy, food security, agriculture, supply chain resilience, and other industries as motivating factors.
So… what exactly are biotechnology and biomanufacturing? To be sure, those are broad terms, as illustrated by the range of industries (described above) to which they can potentially contribute. ‘Life’ on planet Earth is good at making stuff or performing valuable actions and reactions. Plants turn CO2 and other nutrients into the food we eat, pharmaceuticals that help us stay healthy, and many other products we use every day.
Biomanufacturing refers to using biological platforms to synthesize and or create materials or products.
Specific to climate, biotech can play a role across countless verticals.
- For agriculture, biotechnology might concentrate on improving crops in some way, whether by fostering pest or drought resistance and increasing crop yields. It can also aid in ‘designing’ entirely new foods, like this recently FDA-approved tomato.
- Bioremediation in waste management and environmental services refers to using microorganisms and enzymes to process different types of waste.
- In energy, all kinds of different natural organisms are used to produce biogas and biofuels
- In carbon removal, companies like Living Carbon harness biotech to suck up more CO2 from the atmosphere. In Living Carbon’s case, they bioengineer plants that are enhanced for greater carbon capture and storage
This order isn’t the Biden Admin’s first move to promote biotechnology and biomanufacturing. The CHIPS Act also included robust support for research in biotechnology disciplines. And the focus is warranted. While the U.S. has an incredibly strong biotechnology footprint, considering China’s commanding lead in other critical industries and supply chains, including many related to climate, maintaining a lead, or even level footing, is an important priority.
The U.S. is already tethered to China for battery materials and solar panel components. China has ~80% market share in solar panel parts, which isn’t ideal. And the U.S. certainly doesn’t want the same to be true for, say, vaccine components.
Still, there are plenty of heavy-weight biotech companies in the U.S., as well as climate biotech startups. San Diego and Boston are probably two of the biggest biotech hubs in the world. Within climate, here are a few names to know:
- Pivot Bio, which raised a $430M Series D last year, innovates fertilizer production techniques. From the hundred-year-old process of creating synthetic nitrogen fertilizer to their use on farms, fertilizers can be quite deleterious for the environment.
- Ginkgo Bioworks, based out of Boston, uses biological engineering to make a whole host of products, from food to ingredients for soil remediation and more. Side note –
- Ecovative uses mycelium as a platform to grow everything from bacon to ‘bio’-bricks for buildings.
- As noted earlier, Living Carbon engineers trees that grow faster to accelerate carbon removal.
- As an earlier stage example, Bluestem Biosciences is a renewable chemicals company that leverages synthetic biology. It raised its pre-seed round earlier this year.
Given the existing footprint, part of the executive orders focus is that what’s innovated in America can also be made in America.
If you winnow down your scope to focus on a category like fuel, ‘bio’ can mean a lot of different things. And ‘bio’-fuels are in the spotlight right now for checkered environmental impact. While things like sustainable aviation fuel may well help drive decarbonization, other biofuels aren’t necessarily driving emissions reductions. For instance, studies on ethanol production in the U.S. show many refineries produce more emissions than other oil refineries. Ethanol burns cleaner in cars itself, but that doesn’t account for its full supply chain. And while much of the negative environmental impact from ethanol in question here stems more from sidestepped regulation than characteristics of the fuel itself, it hammers home the point that a lot more is required to drive impact than simply affixing a ‘bio’ prefix to any technology. In general, it’s been very difficult to understand whether biofuels have a positive impact.
Elsewhere, it’s essential that cutting-edge biotech projects not distract from other solutions. Ambitious synthetic biology projects often get all the love, whether to produce alt-meat or clean drinking water. Sometimes there are already great, competitive solutions ready for commercialization that don’t require more research. Often, they’re organisms that are already abundant in nature. For example, insects are increasingly seen as an attractive animal feed ingredient to displace other crops that may be more intensive to produce.
Moonshots are exciting, but mealworms are too.
The Biden admin is on a roll. About time! Beyond massive amounts of climate and energy spending, announcements in recent weeks have drilled down on specific, essential opportunity areas. Last week it was a DOE initiative to slash costs in geothermal energy, ideally making it a viable source of reliable power across the country (at present, geothermal has about a ~4GW footprint in the U.S.). While a bit more expansive, this week’s biotech announcement follows the trend of identifying key priorities and sending a strong demand signal to scientists, entrepreneurs, and investors who are innovating (or considering working on) solutions.
As to what exactly the U.S. government has on offer for climate biotech companies, we’ll see what specifics from the executive order trickle out over the week. It’s also fun to think what else might be up Biden’s sleeve. With midterms approaching, it’s in his interest to pass as much climate-friendly legislation as possible, especially when it also helps other crucial American industries. The Inflation Reduction Act was popular with voters. And we’re certainly here for it!