Saturday, May 21, 2011

A transformative, nano-enabled life sciences franchise – a 21st century oil company?

A private company pre-IPO report appearing on seekingalpha has some interesting text:

The ongoing advances in biotechnology and nanotechnology are ushering in a new age of synthetic nanobiology that promises to profoundly alter the global economic landscape in coming years. Scientists have come to recognize that much of biology is executed at the nanoscale level. (...) We are reaching a stage in the evolution of synthetic nanobiology where we are likely to see an acceleration of product innovation and commercialization in the years ahead. Solazyme is an emerging pioneer of synthetic nanobiology in the life sciences. We think of the company as the poster child for Juan Enriquez’s visionary and provocative book, “As the Future Catches You” (Crown Business, 2000, 2001). Led by CEO Jonathan Wolfson and President and CTO Harrison Dillon, both experienced entrepreneurs who have built a top-notch team over the past several years, Solazyme is in the early stages of building out a transformative, nano-enabled life sciences franchise – a 21st century oil company – that is creating fundamentally new ways of producing high value fuels, chemicals, skin and personal care products, and nutritional products that have the potential to change the way people live, work and play.

The text the potential to change the way people live, work and play. relates to what business people call innovation.

Yes, the topic of patents appears in the report:

Solazyme’s technology platform enables a new paradigm that allows for the production of tailored oils containing fatty acid profiles that are not found in natural plant oils or animal fats and cannot be achieved through blending alone. The company has a large patent portfolio with 125 patents issued or pending.

One also finds the following:

It is important to emphasize that Solyazme’s process for producing oil from microalgae is unconventional. More conventional approaches have not proven to yield a path to profitability and there are good reasons to be skeptical about the economic feasibility of conventional oil from algae technology.

Professor James Richardson, an agricultural economics professor at Texas A&M, has evaluated many different types of conventional algae technology using advanced statistical techniques. Dr. Richardson’s research shows that most conventional biofuel technologies have negative investment return profiles and are unlikely to achieve profitability. It is instructive to note that Solazyme reportedly nearly went bust several years ago following a more conventional approach to producing oil from algae.

One thing one does NOT find in the report is a reference to US Patent 7,905,930 (to Genifuel), the first claim of which includes an element b) producing oil by heterotrophic growth of algae wherein the heterotrophic algae growth is achieved by introducing a sugar feed to the oil-producing algae. See IPBiz post US 7,905,930 to Genifuel : sugar to heterotrophs to oil

Of Professor Richardson, one finds the following from a meeting in Toronto in May 2011:

Abstract: James Richardson

Cost of Producing Algae Oil in the Desert Southwest

The technology for producing algae oil is progressing on many fronts. Test ponds exist or are being constructed in California, Arizona, New Mexico and Texas. In time these test ponds will improve our ability to estimate the costs of building and operating commercial size algae farms. But until that time investors, DOE, and researchers need estimates of the costs to build and operate commercial size algae farms.

We use a Monte Carlo simulation model for simulating alternative types of micro algae farms/raceways to estimate probability distributions of production costs for algae oil. Stochastic variables, such as: production, oil content, nutrient use, prices for nutrients, temperature, and by-product prices will be used in the model. Variables for location are included in the model to account for longitude and latitude for solar radiation and weather effects. The resulting costs are probability weighted cost of production, that are used to estimate confidence intervals for cost estimates.

The complete model estimates the probability that a commercial algae farm will be economically viable over 10 years. Probabilistic forecasts of the Income Statement, Cash Flow Statement and Balance Sheet are developed for a proposed algae farm. Viability of an algae farm is good for a farm that maintains a positive cash flow more than 75% of the time and increases real net worth more than 90% of the time.

To date, there are three issued US patents to Solazyme, the most recent of which is US 7,935,515 (titled: Recombinant microalgae cells producing novel oils , issued 3 May 2011) , with first claim

A cell of the genus Prototheca comprising one or more exogenous gene, wherein the exogenous gene is a sucrose invertase gene, a fatty acyl-ACP (acyl carrier protein) thioesterase gene, a fatty acyl-CoA/aldehyde reductase gene, a fatty acyl-CoA reductase gene or a fatty aldehyde decarbonylase gene and is integrated into a nuclear chromosome of the cell, and wherein the sucrose invertase gene encodes a sucrose invertase having a catalytic activity of hydrolyzing sucrose to glucose and fructose, the fatty acyl-ACP thioesterase gene encodes a fatty acyl-ACP thioesterase having a catalytic activity of hydrolyzing a fatty acyl-ACP substrate, the fatty acyl-CoA/aldehyde reductase gene encodes a fatty acyl-CoA/aldehyde reductase having a catalytic activity of reducing a fatty acyl-CoA molecule to a primary alcohol, the fatty acyl-CoA reductase gene encodes a fatty acyl-CoA reductase having a catalytic activity of reducing a fatty acyl-CoA molecule to an aldehyde, and the fatty aldehyde decarbonylase gene encodes a fatty aldehyde decarbonylase having a catalytic activity of converting a fatty aldehyde to an alkane or alkene.

Claim 18 explicitly requires SUCROSE as carbon source:

A method of making a triglyceride composition comprising cultivating the cell of claim 11 under heterotrophic conditions suitable for lipid production, thereby producing the triglyceride composition, wherein the cell further comprises an exogenous gene encoding a sucrose invertase and sucrose is provided as a carbon source.

**In passing, biological cells are roughly in the micron size range, not in the nano size range.


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