The Right Time for a New Commercial Strategy in Synthetic Biology

It is an exciting time to be in our industry! I have personally seen this field grow and change since the late 1980s when I did my Ph.D. on the use of enzymes to make chiral compounds. Back then this was more a scientific curiosity than a technology for commercial use. It took more than 20 years for these and related technologies to mature and enable broader applications such as creation of intermediates and active ingredients for the pharmaceutical industry. Many of the companies in the field emerged from the biotech world where startups which and lived off of research funding and milestone payments. Companies that survived, like Codexis, realized a different market dynamic was necessary and adapted their models to focus first on developing lower risk products they could rapidly bring to the market before they began building out product portfolios with higher risk, higher value products. Development of these early enzymes and processes took significant time and investment, but today there are many successful products on the market and a lot of companies in this space.

So why hasn’t this success translated broadly to other sectors of the synthetic biology market? We believe there are a few key factors. First, the supply and distribution chains necessary to produce a final product from cell lines is challenging, expensive and complex. Genetic engineering and optimization of a new strain is only the first of many steps to creating a successful product, each getting more complex and expensive than the one before. The strain must be scaled from mL to kL, a process that involves both extensive fermentation development, as well as development of new downstream processing methods. Market specific regulatory and quality requirements can also create substantial challenges. Many consumer products, for example, must navigate a complex regulatory path with biomanufactured compounds often facing additional challenges. Finally, the commercial landscape is unique to each product class, and a single go to market strategy will not suffice. Building a brand around more sustainable pet foods, for example, is much different than a brand for flavors and fragrances and requires a completely different distribution chain.

At Sestina we have adopted a different commercial strategy. Our aspiration is to establish the world’s most efficient and advanced industrial synthetic biology R&D platform without being distracted by scaleup, production and commercialization. To fully leverage its platform (Figure 1) Sestina will create spinout companies to develop and commercialize new products. This approach allows the Newcos to focus on their specific businesses, engage the right investors, hire the required expertise and execute on the specific development and commercialization plans. Sestina spinout companies will include, when necessary to secure the full supply chain, bioindustrial production companies focused on producing and selling ingredients, intermediates and chemicals to other companies. A second class of Sestina spinouts will be retail or consumer facing companies, leveraging key ingredients sourced from other Sestina companies. To support these companies and accelerate their product development and commercialization efforts, Sestina is establishing an ecosystem of partnerships with CDMOs, CMOs and feedstock companies.

Sestina will remain focused on applying and continually improving its best-in-class synthetic biology R&D platform to support the spinouts and realize new product concepts to continuously fuel a pipeline of new companies. Unlike other “Biofoundry” models, Sestina will carefully align each new spin-off to the core platform and sister companies and therefore significantly improve their chances of success.

Sestina’s commercial model

Figure 1: Sestina’s new commercial model feeds continuous investment into a capital efficient platform and creates focused, sector-specific spin-out companies

We will be selectively opportunistic, not just opportunistic. This approach means every new project is built on the shoulders of the previous ones, significantly increasing the efficiency of these activities and providing them with a much greater chance of success. We intend to start simple in known markets with the products and customers in mind early and build out our first wins, then work tirelessly to reduce everything to a repeatable, high quality engineering process that we can improve and expand to tackle more complex products. There is a significant global shift towards products made using more sustainable technologies over the past few years, and we are excited to participate in it.

- Peter Seufer-Wasserthal, PhD, Chief Commercial Officer, SestinaBio