COMPANY PROFILE

Genomatica

Fermentation-based process technologies to produce specialty and commodity chemicals and intermediates . Founded in 1998 and based in San Diego, California, United States of America. Currently in Concept Lab Development Introduction Scale stage.

Lux logo LUX TAKE: Strong Positive

  • Strong Caution
  • Caution
  • Wait And See
  • Positive
  • Strong Positive

STATUS:

Active


This is a company profile. It is written by the Lux Research analyst team, based on an in-depth interview with the company itself. Click here to learn about how this differs from other types of Lux Research company coverage.We focus on profiling the most important companies in each space.

What You Need to Know

  • Aims to provide more sustainable chemicals by licensing processes it develops or producing chemicals itself 
  • Emphasizes its focus on designing processes for scale-up and steadily working on optimized production to bring down costs
  • First commercial product has been 1,4-butanediol (BDO), where it has claimed its process can enable 25% cost reduction; licensed to Novamont and BASF, with Novamont producing at 30,000 tpa scale
  • Launched its own 1,3-butylene glycol (BG) production in 2019 and sells through distributors for more sustainable/natural personal care and home care products 
  • Recently announced first-ton production of nylon precursor caprolactam with partner Aquafil 
  • Has added oleochemicals though its recent acquisition of REG's life science business; the deal also brought in a research partnership with ExxonMobil on biodiesel
  • Also recently announced a research partnership with Covestro, though details remain undisclosed
  • Clients should monitor Genomatica as a leader in large-scale production of bio-based chemicals and potential partner for synbio production in areas where its capabilities are well-aligned

Overview

Headquarters:
San Diego, California, United States of America
Business Model:
Licenses Technology; Sells Product
Founded:
1998
Employees:
145
Phone:
-
Cash:
$15 million (est.)
i
Not disclosed; Lux estimate based on recent investments and revenue/profitability estimates
Revenue:
$30 million (est.)
i
Not disclosed but reported to be "well over" $20 million annually
Profitable:
No (est.)
i
Not disclosed but believed to be close to profitability

Italics indicate Lux Research estimated value

Scorecard

Last Update: July 01, 2020

Technology/solution value

4
Can offer capex and total cost reductions for some molecules and has strong expertise in scaling synbio processes, along with supporting sustainability claims

Addressable market size

4
Combined markets for its target products are in the double-digital billions, though a licensing model will only earn it a share of total sales

Competitive landscape

4
Many other players developing bio-based and synbio solutions but less direct competition for the key molecules it is targeting; still faces large incumbent players with traditional processes, particularly in nylon precursors

Barriers to growth

4
Has demonstrated cost-effective production of BDO; has attracted strong interest for nylon precursors but will need to scale and show reasonable costs; further market development needed for BG

IP position

5
Large war chest of more than 1,500 patents and strong process knowledge and know-how

Regulatory factors

5
Regulatory drivers for emissions reduction and potentially sustainable materials generally in some applications

Management team

5
Well-rounded team with entrepreneurial experience as well as past senior roles at industry players like BASF, UOP, Tate & Lyle, Verenium, and Basell

Partnerships

5
Licensees and tech partners include Novamont, BASF, Covestro, ExxonMobil, and Braskem

Momentum

5
Over the past 18 months, launched BG and secured several distributors and customers, raised $90 million in funding, acquired REG LS business, started caprolactam production, and added Covestro partnership

Other

4
Ability to enable smaller-scale distributed production aligns with longer-term industry trends, though in near term it is most attractive for players looking to backward integrate rather than incumbent large-scale producers

Scorecard comparison


Timeline

Last Update: July 01, 2020

Company Timeline:Genomatica

News Commentary

Last Update: March 31, 2020

Low importance

Nohbo raises $3 million in seed funding for its dissolvable shampoo drops

The funding round will allow Nohbo to scale manufacturing to 15 million drops per month (priced at around $0.6/drop), reflecting current demand. Yet there are still questions surrounding future growth, especially given the company's main value proposition of reducing plastic waste. Similar to single-use detergent pods, its drops still require secondary housing. This may be problematic if the packaging is more difficult to recycle than traditional plastic bottles, leading to more (not less) waste. While it makes sense for the company to target small single-use toiletries, many hotels are switching to bulk sizes to combat plastic waste, and eco-conscious (or picky) travelers prefer to use reusable containment to house their favorite products.

For the original news article, click here .
Average importance

Genomatica produces 1 ton of synbio-derived caprolactam in Slovenia

Two years after announcing that Aquafil would license its caprolactam technology, Genomatica has now produced a meaningful quantity of intermediate, to be polymerized into nylon 6 by Aquafil in Slovenia. However, the operation time of the fermentation process and Genomatica's production capacity for caprolactam are unknown. Nevertheless, as Genomatica and Aquafil look to scale up production of this chemical intermediate, the partners are smart to emphasize the environmental benefits as the key value proposition for the synbio route.

For the original news article, click here .
Low importance

Ginkgo Bioworks joins the Ellen MacArthur Foundation's Circular Economy 100, emphasizing replacing unsustainable manufacturing processes

Although much of the hype around the Ellen MacArthur Foundation (EMF) has revolved around brands moving towards sustainable packaging, the organization's overall goals do include moving away from fossil resources and hazardous chemicals and processes. While Ginkgo could play a role in developing advanced recycling processes, its focus with the EMF is likely to develop bio-based routes to existing products, as in its partnership with Genomatica.

For the original news article, click here .
Most recent news shown. For more Genomatica news, click here to expand.

History

Last Update: July 01, 2020

CEO Christophe Schilling founded Genomatica in 1998, originally to design a software platform for modeling metabolic pathways for strain engineering. In 2007, it shifted focus to develop bio-based processes for producing intermediate chemicals. Genomatica has raised more than $230 million from venture capital, private equity (Viking Global Investors is its largest shareholder), and strategic investors. Most recently, it raised $90 million in a round that included its strain development partner Ginkgo Bioworks.

Technology

Genomatica combines predictive computational modeling tools, microorganism design and development, and process engineering to develop fermentation-based production routes to produce bio-based intermediates and chemicals. Steve emphasized that its strongest point of differentiation is in its focus on designing processes for scale-up from the start and steadily working on optimizing production to bring down costs. The company applies modeling techniques (including digital twinning of the fermentation process) to decrease the amount of necessary test runs for scale-up, reducing the time and cost to bring new molecules to market. For more details, see our previous profile. Genomatica recently expanded its tech portfolio by acquiring REG's Life Sciences division (formerly the independent startup LS9), which has developed processes for bio-based oleochemicals, including a biodiesel research program with ExxonMobil.

In terms of value proposition, in some cases, Genomatica offers cost savings over incumbent processes – it has previously reported that its 1,4-butanediol (BDO) costs 25% less than conventional BDO, and Steve indicated that further cost reductions should come in future implementations. In some cases, the fact that its ingredients are bio-based and can merit a "natural" or "sustainable" claim allows for some price premium, and its use of fermentation means it can enable smaller-scale distributed production. While the company generally uses sugar as feedstock, it is exploring waste feedstock, either from conversion of agricultural waste to sugars or from gasification of municipal solid waste to produce molecules (likely methanol) that its organisms can digest.

Strategy and Markets

Genomatica's primary business model is to develop and license its various process technologies. Four molecules headline Genomatica's current commercialization efforts: BDO, 1,3-butylene glycol (BG), and the nylon precursor caprolactam. It also has efforts in butadiene, oleochemicals, and likely other C6 molecules.

In BDO, Novamont continues to be a licensee, operating a 30,000 MT BDO plant to supply material for its bio-based polyesters. Genomatica still has a licensing agreement with BASF, and Steve said it continues development work on this platform, though it has not publicly made any announcements about new plants or expansion.

The company has made significant progress on BG in the past two years, launching commercial-scale production of its Brontide brand in early 2019, selling through distribution partners Daicel (Asia-Pacific) as well as Azelis (Europe) and its Glenn subsidiary (U.S.) for personal care and home care applications. Products from Nohbo (single-use shampoo pods) and Bio-Botanica (botanical extracts) have been announced using Brontide, and Genomatica has reported that other product and ingredient suppliers, including Farmacy, Peter Thomas Roth, Lady of Beasts, and Custom Essence are using it as well, though it hasn't disclosed any sales volumes.

Finally, the company recently announced the world's first-ton production of caprolactam in partnership with Aqaufil, which will use it to produce bio-based nylon. Steve said it has seen strong interest from major consumer-facing brands in the technology, hinting that it might announce further licensing deals and expansion later in the year. He said that initially the product would have a higher cost than conventional nylon, though he expects costs to come down with scale and further development.

Genomatica does still provide project development services for the pharmaceutical, nutraceutical, personal care, and food and beverage companies through its Bioengineering Solutions (BES) group (see the previous profile for more details). However, Steve said it is placing less emphasis on this service and focusing more on its own process development and licensing.

 

Analyst Note

  • For butadiene, the company has licensed the technology to Braskem and collaborated on making bio-based synthetic rubber with Versalis; Steve said that technical work continues but implied that it has seen less progress toward price parity with petroleum-based materials at current market conditions.
  • Genomatica recently received a third award from the U.S. Environmental Protection Agency (EPA) for its Brontide BG, which Steve noted only three other companies have done. It's also been awarded the Kirkpatrick Chemical Engineering Achievement Award for its BDO process. 

Partnerships

  Partner Type Importance Comment
Technology partner
Major
Partnered to develop a commercial process for caprolactam
Distributor
Major
European distributor for Brontide BG, and well as U.S. distributor through its Glenn Corp. subsidiary
Licensee
Major
Licensee of 1,4-BDO technology
Licensee
Major
Licensee of butadiene technology
Investor
Major
Investor
Major
Led $90 million funding round in 2019
Technology partner
Major
Partnered for R&D on bio-based performance materials
Distributor
Major
Asia-Pacific distributor for Brontide BG
Licensee
Minor
Expected licensee of butadiene technology
Technology partner
Major
Working on biodiesel research via the REG/LS9 acquisition
Development partner
Major
Subsidiary
Major
Former startup LS9's technology was acquired by Genomatica in 2019 from REG, which acquired the startup in 2014
Investor
Major
Licensee
Major
Licensee of 1,4-BDO technology
Investor
Major
Genomatica's largest shareholder

Key Issues

Last Update: July 01, 2020

Price premium for bio-based products

What They Said

While Genomatica is "maniacally focused" on bringing down costs through process optimization, products like bio-based nylon could continue to command a price premium for eco-conscious consumers in markets like apparel and carpeting. Steve noted Aquafil's "Econyl" nylon made from recycled waste as a proof point for a more sustainable nylon product that commands a price premium.  

What We Think

The bio-based chemicals industry is generally leery of relying on a "green premium" – and rightly so, in most cases, given its history. However, the existence of a significant market for natural, "free from," organic, and clean-label products in food, personal care, and home care applications, very often priced higher than conventional versions, shows that a premium can be earned in some cases. Whether this proves to be true in the apparel market at scale remains to be seen, but the strong interest from fashion brands in materials innovation in general and sustainable fiber innovations in particular suggests that the potential is there. Watch the progress of Genomatica's bio-based nylon closely as a leading indicator here, both of its price point in the market and for the company's progress on lowering cost.

Production flexibility

What They Said

While ability of a fermentation facility to produce multiple different products is a key benefit of synbio, flexible production is not as simple as switching out strains to produce any desired molecule. The change over time and cleaning needs between strains hurt utilization rates, and the need to optimize the whole process, including fermentation conditions and subsequent purification steps, means that contract manufacturing models aren’t likely to be competitive, particularly for more price-sensitive molecules. A more realistic model could be a facility that is capable of producing a class of related molecules, such as medium-chain diols, that can swing between different products as market conditions demand, similar to how petroleum refineries operate today. Moreover, fermentation can enable smaller-scale distributed production and potentially use a variety of feedstocks.

What We Think

Flexible production is indeed a key value proposition for synbio, and flexibility as well as distributed production are among the reasons clients should look more to synbio in the aftermath of the COVID-19 pandemic. The truly flexible "fabless" type of model is more applicable to molecules like flavors and fragrances, which command higher prices and which often need more limited production volumes. The use of synbio for larger-volume commodity of specialty chemicals will be done on a case-by-case basis, where the economics for bio-based processes turn out to be more favorable, but will require dedicated facilities. Smaller-scale production, allowing producers like Novamont to effectively backward integrate into key intermediates, can also help the industry to move away from vulnerable large centralized facilities in the long term.

Lux Innovation Grid

Lux logo LUX TAKE:

Companies within the synthetic biology space historically focused on creating microbes to make a desired end-product. As such, these developers were responsible for strain engineering, scale-up, and selling the final product. However, because of overly aggressive timelines, the majority of these companies have failed to commercialize strains, which has led to the emergence of synthetic biology companies focused on providing services for individual parts of organism development, such as strain engineering. These service providers, such as Ginkgo Bioworks, and Zymergen, dominate the synthetic biology landscape. More importantly, these synbio-as-a-service players are starting to translate their experience with microbe development for clients into their own products - ranging from Zymergen's partnership with Sumitomo Chemical to Ginkgo's spin-out in alternative proteinsJV for nitrogen fixation, and $350 million fund for synbio spinouts.

For more details, please see our synthetic biology Tech Page.

Methodology details: The Lux Innovation Grid (LIG) below evaluates companies based on primary research done by Lux Research analysts. Our interviews allow us to conduct in-depth evaluations, resulting in the LIG chart's x-axis scores for business execution (focusing on factors like partnerships, momentum, management team, and more). Meanwhile, the LIG chart's y-axis scores each company's technology (focusing on the technology solution itself as well as IP position, key metrics, and more).

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Lux logo LUX TAKE:

Bio-based polymers were initially developed by large players like DuPont, Dow, and Cargill looking to make plastics from more renewable materials. However, challenges competing on price and performance led to early struggles within the space. Because of their high cost, bio-based polymers like PLA were initially used for medical-grade and other niche applications. Advances in manufacturing have since lowered the cost of production, extending the range of viable applications for these materials. Newer polymers are positioned for improving both mechanical and end-of-life (recyclability, compostability, biodegradability) performance, with leaders such as Danimer Scientific and Itaconix emphasizing product development. Leaders in bio-based drop-in polymers include Avantium and Origin Materials prioritize production costs and have partnerships throughout the value chain to support scale-up efforts.

For more details, please see our bio-based polymers Tech Page.

Methodology details: The Lux Innovation Grid (LIG) below evaluates companies based on primary research done by Lux Research analysts. Our interviews allow us to conduct in-depth evaluations, resulting in the LIG chart's x-axis scores for business execution (focusing on factors like partnerships, momentum, management team, and more). Meanwhile, the LIG chart's y-axis scores each company's technology (focusing on the technology solution itself as well as IP position, key metrics, and more).

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Lux logo LUX TAKE:

Innovations in the bio-based intermediate space include routes for producing drop-in equivalents to petroleum-based intermediates (e.g., ethylene glycol, para-xylene) as well as routes for producing more novel intermediates (e.g., 2,5-furandicarboxylic acid [FDCA], succinic acid). Such routes generally involve the catalytic or microbial conversion of bio-based feedstock sources to yield a desired intermediate. While there appears to be a downstream pull for bio-based intermediates to produce more "sustainable" materials and end products, one of the main roadblocks for their adoption has been high costs relative to petroleum-based incumbents. As a result, and because of the large upfront investment and historically long commercialization timelines in the materials space, smaller players are finding it difficult to attract investment and/or technology partners to assist in scaling their platforms. Other barriers for growth include the need to develop new supply chains. Thus, we view startups like Genomatica that are actively working with partners along the supply chain (from Südzucker for feedstock to Vaude and H&M for product development), as being more likely to succeed. Still, it is important to note that funding and partnerships do not guarantee success in the space, especially as there is shifting sentiment in the bio-based space surrounding the definition of sustainability and other technologies being explored for their ability to reduce CO2 emissions. 

For more details, please see our bio-based intermediate chemicals Tech Page.

Methodology details: The Lux Innovation Grid (LIG) below evaluates companies based on primary research done by Lux Research analysts. Our interviews allow us to conduct in-depth evaluations, resulting in the LIG chart's x-axis scores for business execution (focusing on factors like partnerships, momentum, management team, and more). Meanwhile, the LIG chart's y-axis scores each company's technology (focusing on the technology solution itself as well as IP position, key metrics, and more).

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Further Reading

Computing Further Reading...

Case Studies

Last Update: February 28, 2019

Aquafil

What Genomatica is doing to make 100% bio-based nylon a reality

Introduction

Genomatica is a synthetic biology company that develops and licenses fermentation-based routes for the production of bio-based intermediate and specialty chemicals from sugars. It employs modeling techniques (digital twinning of the fermentation process) to decrease the number of necessary test runs for scale-up, reducing the time and cost to develop new molecules. While the company has successfully demonstrated its 1,4-butanediol and 1,3-butylene glycol platforms over the past few years, it is currently focused on advancing its process for nylon intermediates like caprolactam (CPL).

Use case and business impact

2018 witnessed a number of setbacks in the bio-based nylon space. Rennovia closed its doors in March, despite having a cost-effective route to adipic acid. Two months later, Verdezyne filed for bankruptcy after losing funding from lead investor Sime Darby and being only a few months away from the completion of its highly anticipated commercial facility for dodecanedioic acid.

Now, Genomatica is taking the lead in the race for bio-based nylon. In January, the company licensed its CPL technology to Aquafil. Later in the year, the companies announced the start of the EFFECTIVE consortium funded by Horizon 2020 for commercializing 100% bio-based nylon. The project is notable for its long list of partners across the nylon 6 value chain.

Lux logo LUX TAKE:

Bio-based intermediates like CPL are appealing, as downstream markets already exist for these molecules. Nevertheless, such production routes are generally more expensive than incumbent routes and require significant resources and supply chain development to scale. While rising oil prices could shift the favorability of these platforms, investors and large players are growing less tolerant of the long timelines and upfront capital required for commercialization. Unlike other startups in the nylon space, Genomatica's licensing model has allowed the company to hedge its exposure to scaling risk. Without the need to build its own capacity, it can allocate more resources to developing a value chain to support the success of its technologies.

Coverage History

Last Update: July 02, 2020

Date Title Interviewee(s)
July 02, 2020 Genomatica Steve Weiss (Strategy and Marketing Advisor)
April 12, 2018 Genomatica Steve Weiss (Marketing)
March 02, 2017 Genomatica Steve Weiss (Marketing)
July 23, 2015 Genomatica Steve Weiss (Marketing)
March 06, 2014 Genomatica Christophe Schilling (CEO)
October 04, 2012 Genomatica
March 24, 2011 Genomatica
April 13, 2010 Genomatica
February 24, 2009 Genomatica