You have to begin with a clear business goal this is how you build a sustainable business. This hasnt always been the case…”
In our fast moving-industry, built on innovations and ideas, a solid business model can sometimes be lost amidst the possibilities of an exciting new breakthrough. We can all think of examples of a widely-heralded product or company that has arrived amidst much fanfare and either quickly exploded or just quietly fizzled out. I recently travelled to Brussels to attend the European Forum for Industrial Biotechnology and the Bioeconomy (more commonly known as EFIB) and amidst the wide variety of PowerPoints from bio-businesses both giant and small, as well as regulators, regional developmental agencies, and many more a presentation stood out for its clarity of message and aims the one delivered by Tom Beardslee, Vice President of Research and Development at Californian industrial biotechnology company Verdezyne. Keen to learn more, I spoke to Tom and the team at Verdezyne (@Verdezyne) to find out more about who they are and where they are going.
Founded in 2008, Verdezyne engineers yeast for the production of renewable chemicals, using their own highly-proprietary platform. This enables them to use multiple non-food-based renewables as feedstocks for a fermentation process to produce widely-used, high-value, bio-based chemicals at a lower cost and substituted or dropped-in for their petroleum-based counterparts without compromising quality. Operating out of Carlsbad, California, Verdezynes investors include BP Ventures, DSM Venturing B.V., OVP Venture Partners, Monitor Ventures, and Sime Darby.
Intrigued by the EFIB presentation, I followed up with Tom (pictured below), a 16+ year veteran in the fields of biochemistry and genetic engineering to ask him why the company is built on yeast. Its a great organism for commercial large-scale production, it is robust and is capable of fermentation in challenging conditions. And, yeast is not vulnerable to infection by naturally-occurring viruses that can infect and destroy some bacterial fermentations. Plus, the yeast we use has two chromosome copies that give us a greater stability when compared to bacteria. Bacteria are used by some larger companies as their production organism, and it does grow faster and can be easier to engineer than yeast. But the payback when using yeast is that robustness at commercial scale.
From the outset Tom zoomed in on the opportunity for commercial-scale production and I asked him to expand this focus a little further: You have to begin with a clear business goal this is how you build a sustainable business. This hasnt always been the case. Even five years ago there was a lot of what Id call gee-whizz science being presented at trade conferences, but the companies that have survived have a clear commercial goal and a focus on both performance and cost. Without being able to take technologies from the lab to commercial scale, there is no real business.
Having a clear focus in any successful business is important, and there was a time when Verdezyne was also developing technology to produce ethanol, but as their business strategy evolved it became clear that it wasnt a strong fit: We never really saw ourselves as an ethanol producer, so we sold off that technology to DuPont and that allowed us to focus on the renewable chemical side of the research. Those projects have come through quickly. The result of this focus is the successful scale-up of our process and the planned construction of the first plant to produce dodecanedioic acid (DDDA).
DDDA is used in the production of high performance nylon 6,12 resins, probably the source of the bristles on your toothbrush, as well being found in cosmetics, paints and lubricants, plus many other uses. Traditionally produced from petroleum-based sources, by utilizing a multi-step chemical process Verdezyne has leveraged its yeast platform for production of its proprietary BIOLON DDDA made from a low cost plant-oil sourced feedstock.
Its been a busy year for Verdezyne on the commercialization of BIOLON DDDA front, with the granting of its United States Department of Agriculture (USDA) Certified Biobased Product Label in June. All bio-based claims are verified by independent labs and monitored by the USDA, a major plus for both business clients and consumers in helping them make purchasing decisions.
The USDA approval followed closely on the heels of the news that Verdezyne signed an agreement with Netherlands-based Will & Co, a long-established sales and marketing firm for raw materials, semi-finished products, additives, and pigments, for distribution of BIOLON DDDA in Europe.
Running alongside these pieces of news has been the continued development of the worlds first bio-based plant for the production of DDDA that Verdezyne will open in Nusajaya, Iskandar, in southern Malaysia.
Tom is clearly excited about the opening of the plant, which is scheduled to see commissioning begin in 2017; The plant in Asia is a huge step forward for Verdezyne, it will make us a different company. Its certainly a big test but will further develop or reputation and show on a large scale the potential for these products.
Tom added, Malaysia is the perfect location for it, with the abundant supplies of the fatty acid feedstock used for DDDA. Southeast Asia has the largest concentration of fatty acids in the world with the palm oil industry. We are working with feedstock suppliers that adhere to the principles and criteria set forth by the Roundtable on Sustainable Palm Oil (RSPO) to ensure the feedstock is sustainable. The potential from the production of DDDA in Malaysia along with other commercial diacids is significant and will be a huge focus for us in the coming years. We cant wait for it to be built!
Taken as a whole, the companys various developments in Malaysia are clearly a major story, and the guests at the signing ceremony for the initiative in Kuala Lumpur in 2014 could not have been any bigger – United States President Barack Obama and Malaysian Prime Minister Dato Sri Najib Razak.
Verdezyne President and CEO E. William Radany, Ph.D. had this to say about the significance of these high-profile guests: It was an honour and a true privilege that both President Barack Obama and Prime Minister Najib Razak attended our signing ceremony. It speaks to the significance of this agreement for the renewable chemicals space and of strengthening ties between the U.S. and Malaysia. Moreover, it highlights the important environmental and geo-political benefits of replacing petroleum-derived materials with renewable sources. We hope that this agreement, and the technology development it will enable, can serve as a model for how the U.S. can lead the world in the development of environmentally-friendly products.
If theres one word that comes to the fore from this brief discussion with Tom, it is focus. In the sale of the ethanol business to DuPont and homing in on key strategic areas, Verdezyne looks set to have some big years ahead and Im looking forward to keeping track of all the latest news.
As our time came to an end, I asked Tom to try and sum up how the industry has changed during his time as a biotech professional; With the science we can do so much more now. Let me give you an example: DNA sequencing. This used to be hugely expensive so really limiting on when it could be done and who could do it. Now you can sequence a genome for under $10,000. This is a revolution. But hand in hand with this has been the development of bio-business, it has matured significantly. Its not just about the chemical or product, it is about making it work on an economic and quality level. The DDDA development and commercialisation is an example of this with a clear focus on the end-goal. Im looking forward to seeing where we head next.
By Luke Upton, Editor, Bio-Based World News (@Bio_BasedWorld)
Lead Photo(AP Photo/Carolyn Kaster) – United States President Barack Obama, Malaysian Prime Minister Dato Sri Najib Razak, Verdezyne President and CEO E. William Radany, Ph.D., and Sime Darby Berhad President and Group Chief Executive, Tan Sri Dato Seri Mohd Bakke Salleh.
Thanks to Bill Douglass of Spark PR for the assistance with this article.
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