All right. Good afternoon. I'm Stephen Ma in TD Cowen's Life Science Tools and Diagnostics team. Our next panel today will be focused on sustainable API manufacturing using synthetic biology. So similar to other transformational technologies like the internet and mobile computing, we believe synthetic biology may become one of the most important technologies of our time. With technology advancements such as precise gene editing, new R&D tools capable of generating huge amounts of data, continuing lowering of R&D and computing costs, and emergence of long-term secular trends such as sustainability, we believe we're at the precipice of a new revolution. Synthetic biology can address many of the global needs, including food supply security, human health, and our panel topic, more sustainable and environmentally friendly manufacturing of active pharmaceutical ingredients.
So today, I'm pleased to welcome Christina Smolke, a Ph.D., Co-Founder and CEO of Antheia, and from Codexis, Stephen Dilly, CEO, and Bob Sato, Senior Vice President of Technical Operations. And then finally, from Ginkgo Bioworks, Ryan Morhard, Senior Director for Policy and Partnerships. So, I appreciate everyone joining us today. Let's keep it an interactive discussion as much as possible. Audience members that want to participate can email me questions at steven.ma@tdsecurities.com. And before I let the companies do a quick introduction of themselves and their companies, you know, maybe let's level set the audience on, you know, the current API manufacturing landscape. You know, what are some of the critical APIs being made?
You know, where are they being made, are there any areas of high concentration? And, you know, what are some of the downsides to, you know, current API manufacturing processes? And, you know, and again, let's keep it interactive, you know, people can jump in as they see fit.
Great! So Stephen, maybe I'll start off the panel. But APIs are basically active pharmaceutical ingredients. They're the key active ingredients that comprise our medicines. When we think about classes or categories of active pharmaceutical ingredients, we can have small molecule ingredients, like the active ingredient in aspirin, acetaminophen. We can have large molecule APIs, many of our biologics, antibodies. Beyond that, when we think about categories, we can also think about sort of the criticality, the role in public health across APIs. We can also think about how cost will play into this. APIs can also be categorized in terms of innovator APIs. These would be molecules that would still be under patent.
And then you can have generic APIs, basically, molecules that have been in the healthcare system for a long time, are off patent, and can be made and offered by many different players in the pharma space. I think the key challenge then that we're seeing is that the manufacturing methods that we rely on for API production are not agile, they're not resilient, and they're increasingly susceptible to disruption. All APIs are basically produced in one of two ways, either leveraging chemical processing, chemical synthesis, or biological synthesis, but oftentimes reliant on harvesting them from natural biological sources, whether this be a medicinal plant or even an animal, or it can actually be a combination of both of those.
But ultimately, the problems that we're beginning to see is that these supply chains have evolved globally to optimize on volume, cost, and capacity. And so what that means is that the production of these compounds are geographically concentrated to particular regions of the world. In particular, most of our APIs are being produced in China or India. And what that means is that when we look at these supply chains, they lack transparency, they lack end-to-end control. And so when we have disruptions in the supply of a critical pharmaceutical ingredient, we do not have the capacity in our global supply chains with our manufacturing methods to quickly turn on production in another area or to have that resiliency.
And then, these disruptions in these supply chains can actually result in yearslong shortages of a drug that have impact to the patients that need that medicine. So I'll just pause there and, also let my colleagues on the panel jump in if, they'd like to supplement what I said.
That was a fabulous overview. I don't think I could improve on that, so, thank you, Christina. So thanks, Professor Smolke. No, that's great. And, you know, I guess the problem was even exacerbated during the pandemic, right? Because, you know, the supply channels were closed. So yeah, there's... And we'll discuss this later as we get into the kind of, you know, geopolitics and, you know, you know, bioeconomy, executive order from President Biden on, I mean, kind of, you know, kind of onshoring or reshoring, you know, biomanufacturing to secure supply chains. But yeah, no, that was a great introduction.
So, so let's go on to, you know, maybe, you know, can you two provide a kind of a, a brief background on, on each of your respective companies and, you know, how you are kind of fitting within that framework that Christina outlined? So should I go for Codexis first then? Yeah. So Codexis, we've been around for just over 20 years. We're an enzyme engineering company by background. What we do is we use machine learning, artificial intelligence, and a lot of human intelligence based around a platform called CodeEvolver, to optimize enzymes to drive specific-
... chemical reactions. And, you know, I think we are sort of the OGs in terms of biocatalysis and small molecule manufacturing. We've been doing it for about 15 years. We, you know, we've lost all our hair in the process. And, you know, we've had some reasonably significant impacts on the field, but, you know, in that, we've learned some fairly hard lessons around, you know, we are competing, like, on cost against chemical manufacturing in parts of the world where these things are done cheaply. And so the opportunity right now for biocatalysis is somewhat restricted. It's not the whole field. If you look at the global small molecule API manufacturing market, you come up with a number like $200 billion worth of manufacturing spend. About 50% of that is API.
If you look at the cost of intermediates, they're about 50% of the API cost, and you then take it down to about a third of those, we believe are amenable to a biocatalytic effect, impact. So you're looking at something like a $20 billion total addressable market, which is great, until you then think about, you know, penetrating that market, how much of it actually gets adopted? So what I can say is, 15 years into this effort, we're doing about $40 million of revenue in biocatalysis of small molecule APIs, and it's not because we're bad, it's because it's really hard sledding in the, in this market. So, you know, I admire others joining us in this endeavor. Or maybe Ryan?
Yeah, I'll go ahead and go, Stephen. Yeah, yeah, and thanks, Stephen. It's good to be on the panel. So again, I'm Ryan Morhard, and I'm with Ginkgo Bioworks, and so I lead Ginkgo's public policy and government affairs work. I came to Ginkgo about four years ago from a background in biosecurity and in health diplomacy. So about Ginkgo Bioworks, Ginkgo's an R&D solutions company, so we deploy flexible automation at scale to help our partners accelerate their discovery and development and production. So we do that across all industries, in biopharma, in agriculture, and also in industrial biotech. So we're a 15-year-old company, as well, and we have 1,200 or so employees.
We're headquartered in Boston, where I am today, and in Boston is where we operate our 300,000 sq ft sort of highly automated labs in support of our partners. And partners. You know, companies partner with Ginkgo when they want to bend their R&D cost curve down and improve their speed and probability of success. And so in pharma manufacturing, specifically, we've partnered with Moderna, for example, on the COVID vaccine manufacturing, and also with Novo Nordisk and with Merck on biocatalysis of APIs.
To answer your question, you know, in terms of how we're contributing to some of the issues that Christina wonderfully laid out, you know, partners are coming to us to leverage these large automated labs and massive biological data sets and AI tools for better strains, better enzymes, and better bioprocesses, which altogether stand to contribute to either better bio-based production or replacing those methods that Christina outlined, where replacing those traditional or extractive methods with bio-based approaches that would meet their goals about Ginkgo Bioworks.
Great, and then maybe I'll close out introductions. I'm Christina Smolke. I'm co-founder and also CEO of Antheia. I have a technical background, trained in chemical engineering and biochemistry, and before my role at Antheia, I was a professor at Caltech and also Stanford universities. And I spent about two decades of my career in that role, really pushing on the frontiers of what was capable with synthetic biology in terms of synthesis of complex small molecules. So at Antheia, we've sort of been built upon the foundation of that R&D work, and we're taking it to be able to really transform how we produce pharmaceutical ingredients.
Our focus, coming back to the API categories I laid out, is on small molecule, active pharmaceutical ingredients, and in particular, looking at, the drug ingredients that play a critical role in our public healthcare system, so ones that are on essential medicine lists, and really critical for public health. And then also targeting the ones that have these challenges in their supply chain, where they are reliant on, you know, very long processes, inefficient processes, of extraction from medicinal plants and animals, and it is actually a very significant fraction of medicines, that we rely on. So it's not, you know, a, a very, small fraction. Upwards of 40% of our medicines, do actually rely on these, especially ones that are on these essential medicine list.
What we do, is we take a microorganism like brewer's yeast, and we transform it into a miniature drug factory. We basically, engineer enzymatic processes into that brewer's yeast that allow it to go through a very standard fermentation process of growing on sugar. But then internal within the yeast cell, it will transform the sugar to that drug ingredient. And really, our focus then is being able to bring all of the enzymes for this process into that single cell, so that from a production standpoint, we are able to produce the drug ingredient in a single-step fermentation process that might take place over four days. And this is in contrast to the conventional processes that we currently rely on that take two or more years.
So this increase in efficiency, this increase in yield, ultimately allows us to then offer to the industry, to the market, to the patients, a much more agile, much more efficient process that also has advantages of sustainability, which we can talk about, but also has advantages of addressing the long-standing pain points in the industry of time, cost, and also surety of supply. And I think those things will be really important as we continue on in the panel discussion.
... Yeah. So yeah, maybe let's go, maybe let's just move that, move into that area. Maybe discuss some of the case studies, and maybe look the—since we're talking about Christina, that, you know, time, cost, and surety. You know, some of the issues, you know, we've heard with synthetic biology techniques is, you know, it's obviously gonna be more expensive than using, you know, chemical-based or, to your point, you know, plant-based extract or, you know, maybe extracted with, you know, low cost or illegal labor-type practices. You know, maybe talk about case studies at Antheia about, you know, how lowering costs.
Yeah, absolutely. So, one of the case studies, I can just offer up as an example is, in our first product, thebaine. So this is a key starting material. It is used to produce about half a dozen different drug ingredients right now that are on essential medicine list. One of the more notable examples, that we recently highlighted, was its use to produce the active ingredient in Narcan, which is, of course, used to as an opioid, opioid overdose rescue medication. So when you look at the way, the current supply chains are organized, again, this compound relies on basically a two-year manufacturing cycle. Starts with growing, medicinal plants in a field, then you have to harvest that plant material.
You have to take the plant material to a separate extractor, which is going to basically go through a very low-yielding plant process of being able to extract in very low yields that drug ingredient from the plant material. Then that material, the extracted compound, has to get further processed, ultimately shipped to a different location, where it will go further purification and further processing, and then used to produce the active pharmaceutical ingredient. Antheia's process that we've developed can produce metric ton quantities of this material in basically a two-week process. So again, changing a cycle that takes two years to something that can produce the same amount of material, same quality in a two-week cycle.
We've actually demonstrated the process now operating at commercial scale in tank sizes that are over 100,000 L, producing material of quality that is required for it to be actually used in humans. And so we've demonstrated the quality meets all of the existing specifications, and it can be done consistently, and actually, you know, have DMFs approved on the process, right? So this is a very real process, you know, a transformation ultimately, and it is, again, from a perspective of time, giving us about, you know, basically a 50x or more, sort of reduction in the time required from a manufacturing cycle. From the perspective of cost, right, as the process scales, it will actually lead to a very substantial cost savings, right, in the overall process. And then surety of supply.
Again, you can imagine there's tremendous advantages, because right now you can have variations in yield. As the plant is growing, if you have a climate event, that can really disrupt, right, the quality and yield in any particular growing season, and this is happening more and more. You don't have the same issues of worrying about climate events, worrying about pests, or just worrying about other things that are gonna disrupt that. And so you have a much more consistent process that gives you all of these advantages, as well as addressing issues of sustainability. It greatly reduces the amount of land that's required, right? If you look at the sugar that you're feeding the cells as opposed to the land for farming, it can be reduced by about 1,000-10,000-fold in terms of the arable land that's required.
And again, no harsh chemicals, no harsh solvents, right? You're, this is being done in an aqueous environment. So I think it, you know, it's a really good example in terms of checking all the boxes, but also offering then something that is really important to public health, right, in terms of addressing the criticality of these medicines and bringing that resilience in.
Yeah. No, that's a great example. Yeah, maybe let's pivot over to Codexis. You know, Christina, you were mentioning doing metric tons, you know, let's talk about an example. Codexis was, you know, engineering an enzyme used in API production for Pfizer's Paxlovid. I think you guys were making, like, hundreds of tons of that, if I'm remembering right. You know, maybe just give us a snapshot and/or, you know, kind of highlights from that case study.
So, so we got super lucky as a global population during the pandemic in a lot of ways. When it happened was really important because we were advanced enough in sort of understanding mRNA that we could actually build vaccines. Another sort of story that people don't know is that the reason that we had Paxlovid was completely fortuitous, that, you know, Codexis happened to have in its back pocket an enzyme we'd been working on a decade before for a completely different drug, that happened to work on a critical step in the synthesis of Paxlovid.
Our colleagues at Pfizer were aware of that, and, you know, soon after lockdown had started, said: "You know, how much of this enzyme can you make us?" And, you know, one of the things that I want to call on Bob for, and the reason, you know, I wanted him here was, you know, the lived experience of responding to the crisis and scaling the enzyme and getting it out of the door. And I think you said 30 metric tons?
Yeah, 30 metric tons, and over 220 batches were manufactured. And this, this required knowledge of our supply chain that we've built over almost two decades of business. But it's not just the, the manufacturing side of things. We've built infrastructure for quality control, quality assurance, and our bioprocess development team was responsible for transferring that manufacturing process to another CMO in order to meet Pfizer's demand.
... so it was, it was quite an experience. Everybody stepped up. It was all hands on deck to produce 30 metric tons of enzyme in, I think, just over a year and a half.
Right. And so 30 metric tons of enzyme, that's, that's a lot of enzyme, right? Now, everyone can read the public disclosures, and just to tell you how hard this is, Pfizer probably made $20 billion or $30 billion of clear profit on Paxlovid. We probably made $20 million or $30 million, right? We got one-thousandth, one-thousandth of the value of that drug by that heroic effort that you heard. And the problem is, with, you know, a lot of biocatalysis, and I'm not talking about what Christina's talking about, traditional biocatalysis with single enzymes in multi-step cascades, you get a tiny bit of the value. So the way forward in this industry of using synthetic biology and making medicines is when you do the whole thing, right? When you do the whole thing enzymatically, biologically.
And that's why Codexis is now ruthlessly focused on a new class of medicines, which is RNA medicines. So we can make, as we showed at the TIDES meeting in Boston last week, we can now make full-length short interfering RNA, real molecules, using enzymatic synthesis. And the numbers we are looking at in terms of impact on the environment, impact on cost, impact on infrastructure, are very similar to the kind of numbers that Christina is getting very excited about. So, you know, this is not. This has moved from being a small molecule story to a much broader application of, you know, the real technology. 'Cause, like, you know, these drugs have been growing in plants for hundreds of millions of years. Well, enzymes have been making oligonucleotides for billions of years, since the start of evolution.
We've just got a little better at engineering them to make the ones we want to now. So, you know, this you were dead right, Stephen, saying we are at the precipice of a major change driven by synthetic biology.
Okay, great. Thanks for that, and that's a great case study there. And, maybe just finishing up with Ryan at Ginkgo. You know, I know you signed, you know, a couple recent partnerships in API manufacturing. You mentioned Merck. I think you also have a partnership with Centrient and also Prozomix. You know, maybe just give us an overview of, you know, what you guys are trying to accomplish with these partnerships.
Yeah, very happy to, and I just think it's really astute, Stephen, your comment about how, you know, the COVID response was happening kind of just the right time, just as capabilities were sort of coming online to do so, you know, for such a breakthrough and save so many lives. And the same is true with the kind of challenge that Christina outlined. This has been an enduring challenge, but we're seeing technologies coming online now that actually give us a shot for the first time in, I would argue, a long time, to actually make progress against them. And so I think, just to your point, Stephen, about when will the bio become competitive with traditional approaches?
I just think we need to be pretty careful about sort of extrapolating from the drawing conclusions from the way things have always been for the way things are always going to be. Because I think there's a lot in the new approaches to biotech R&D that to make us really pretty excited. I'll give two examples to your question, Stephen. I'll give two examples around what we're doing at Ginkgo and where our enzyme improvement capabilities, which are built on sort of large-scale data generation and AI models, are allowing us to train and deploy machine learning tools for enzyme engineering. So these are ML-guided enzyme improvement capabilities, and they're showing impressive results. I'll give two examples.
One, we have one large pharma partner where we deployed this AI, ML, metagenomic search, protein engineering, followed by this, the closed loop, you know, lab in the loop reinforcement learning method, and it improved enzyme activity for our partner by 110-fold. So that's a, that's a breakthrough for our partner, and it's, it's hard to imagine seeing, you know, traditional approaches delivering a 110-fold improvement to enzymes. And so there's new, there's new approaches that we're deploying here. Another example, we had a partner that's using an enzyme, producing APIs, using biocatalysis, and the enzyme was working. But it, you know, a more specific enzyme would be better. It would produce less byproducts and engage in less side reactions and would be less, less costly.
So again, we have our protein engineering team go forward, and we designed, using AI-guided design, we designed something like 1,100 variants of the enzyme. That's designed, but then we built them, and we tested them all in our automated foundry, and the top performers from that run had about twice the rate of product formation and half the byproduct. So that's five- or six-fold improvement in overall performance, and again, to our conversation now, that was for API production. So those are the types of projects that I think should give us all a lot of reason for optimism, particularly when there are so many good reasons to change the way we produce APIs, and then now we have technologies driven by AI, you know, coming online to actually give us a shot to do that.
Okay, great. Yeah, so, so perfect. Those, those are great examples. Well, let's pivot over to, you know, supply chain and, and, biosecurity. You know, that's... It's been getting, getting a lot of press lately, even though it really started with President Biden's executive order on the bioeconomy, which he signed in, I believe, late 2022. You know, maybe just your comments on, you know, how you, you know, how you think that's going to play out. I know there's a playbook out there already with the CHIPS Act, and they're just now beginning to deploy, I believe, about $55 billion to... essentially, onshore, chips manufacturing, which is, you know, mostly done in Taiwan today.
You know, maybe just talk about how each of your companies are kind of fitting in with, you know, well, helping to secure this, you know, global, you know, supply chain. And, you know, how do you guys enable, you know, decentralize manufacturing? You know, your thoughts on how it plays out, your thoughts on how, you know, what, what's needed from the government in terms of, you know, is it building out precision fermentation plants, or is it, you know, putting more money into R&D? You know, just your thoughts more on kind of this, this higher level, you know, political landscape we're in right now.
I-
Oh, go ahead, Ryan.
Yeah, yeah. You know, and I think you're right to highlight President Biden's executive... is that, frankly, the last three presidents have been leaning in on and had executive orders and pretty interesting policies on bioeconomy and growing the bioeconomy. And I think what it represents is we are seeing, in part because of some of the technologies in each of our three companies, but we are seeing biotechnology emerge as one of these strategic technologies of geopolitical competition. And you're right, Stephen, to highlight semiconductors, because we have these lists, and on those lists, we have semiconductors and quantum and 5G, and we see biotechnology. And so countries are competing. You know, we President Biden announced his executive order, and not long after, we saw similar policies around the world. We see similar policies in the European Commission.
We see them in Japan. We certainly see them in China. And so countries are racing to compete in biotechnology. And the reason they're doing that is, you know, take this API conversation we're having now. Well, that basically is a conversation around changing how things are made, right? And how things are made is what really underpins the interdependencies that drive our geopolitics and our economic and national security. And just the way synthetic biology stands to revolutionize the way we make APIs, well, it stands to revolutionize the way we make a whole bunch of things, right? And so that's why the race is on, and the way Ginkgo is contributing there is, you know, we believe the big challenge in terms of manufacturing in biotechnology has been one around basically approach.
You know, a traditional approach has been one where every company is out there building their own labs and hiring their own scientists and doing their own expensive research that might not work, and that's frankly an approach that doesn't work in large swaths of the economy. And so what we're bringing to bear with is this kind of large biological data factory, and in terms of our foundry and automated labs and AI tools, that we're you know aiming to make available the same way that cloud computing infrastructure really accelerated the digital economy too. So company and start-up and cloud-native companies could just go on and build fast and bring products to market. And we believe that's what it takes to, again, bend our R&D cost curves down.
But that's where we're gonna see competition, we believe, around that pre sort of early R&D, R&D approach, and also then to your point around precision fermentation, manufacturing, and where the manufacturing is actually being done, and what are the feedstocks, and what's the go-to-market. And this is, you know, BIOSECURE is a great example of kind of congressional action in that regard, but I think it's the beginning of many steps that we're gonna see, where governments are just trying to compete and fortify their position in a new bioeconomy.
Ryan, you made a really important point there that I want to emphasize, which is about kind of seeding the economy with multiple players. One of the things that Codexis has done over the years is actually collaborate, license our technology to other companies. So, you know, biocatalysis became more of a thing, and it's actually helpful to us that, you know, you guys and Merck and others are also talking about biocatalysis. Because when we started out on this journey, we were kind of out in the wilderness as a lone voice, saying it could be done this way.
And that's super helpful because one of the things we find in the real conversations with, you know, the associate director of procurement in a name your big pharmaceutical company, is they want to know that the process they're signing up for is secure, robust, is gonna meet the regulatory requirements, is gonna, yeah, is gonna be reliable, that we can guarantee that they can get their 5 tons of enzyme when they need. And that's where guys like Bob come right into it. So, you know, it's not just gonna be about money either. We need the right regulatory landscape in terms of adoption of the biotechnology and syn bio approach.
But, you know, we also have to be competitive on cost, because it often comes down to that consideration when people are making the decision whether to commit to this new route.
Maybe I can just add a couple points from Antheia's perspective and what we've seen. You know, coming back to one of the themes of this panel around API production, I mean, the U.S. government and many national governments have recognized that our pharmaceutical supply chains are one of the four critical supply chains that we rely on. So it impacts not just public health security, it impacts national security, and it impacts economic security. You know, Stephen, you had sort of brought up how COVID brought to, you know, sort of the forefront, you know, drug shortages, you know, and the limitations within our supply chains. But what we are seeing, and I think this is a really important point to make, is that it is not only related to COVID.
Drug shortages are continuing now beyond COVID, and they are increasing both in frequency and duration. I mean, one of the things that was sort of eye-opening for me is that when you look at the 1,200 sort of most prescribed drugs in the U.S., over 300 of them are active on drug shortage lists right now. So you have about 25%-30% of the drugs that we rely on are actively on drug shortage lists, and many have been on there for 5, 10 years, right? And now coming back to Synthetic Biology, biomanufacturing, you know, why the U.S. government is interested in this, why other governments are interested in this, is that one of the core things that have come out a lot of these studies is we need to rely on support advanced manufacturing technologies.
Fermentation, biomanufacturing is an advanced manufacturing technology. It has agility, it has, you know, on-demand response, and it is one that can be distributed, right? One of the challenges we have with our conventional technologies is when you have a chemical manufacturing, you know, plant, it's very tailored to produce, you know, 1, 2, maybe 3 different drug ingredients. It is not easily repurposed, right? And so what that means, again, in order to sort of fit within optimizing for cost, is you might have 1 or maybe 2 plants globally that are making that drug ingredient, because that's how how it can be supported.
So if you have something happen to one of those plants, if there's a regulatory issue citation, if something, you know, a climate disaster happens that takes it offline, you basically have a half or even more of the supply of that ingredient go offline. Fermentation is entirely different because the infrastructure can actually be used to make many different drug ingredients, right? What you change in the example of Antheia's technology is that cell that goes into the tank. But whether you're making the active ingredient for aspirin, a chemotherapeutic, right, or the active ingredient for a sedative drug, it's all the same infrastructure. So you can have now facilities distributed across different nations, where you're not just making one to three drug ingredients.
You can have hundreds of drug ingredients approved and ready to be made in that infrastructure and do it on that very rapid timeframe, right? Again, we talked about this 2-week manufacturing cycle. You can actually shift the drug that you're making in a matter of 1-2 days, right? So these are the types of solutions that biotechnology, biomanufacturing is bringing to the industry, and this is why I think the U.S. government and other governments are so excited about really trying to support this and build a new kind of economy and supply chain around this technology.
Great. Absolutely super helpful.
That's-
Oh, no, sorry. Go ahead.
Yes. So we are also trying to skate where the puck is going as well, in that there are existing shortages, and there are shortages that are crushingly obviously gonna happen. And, you know, you talked about the single-use harsh chemical plant. One of the best examples of that in the world is phosphoramidite chemistry to make oligonucleotides. And because, you know, some of the best medicines being developed and approved right now rely on phosphoramidite chemistry synthesis, and they're gonna scale, we see that as the next big wave. And exactly as you were saying, Christina, what you need is a method that has multipotential, where you can deploy it on existing infrastructure, preferably aqueous-based, you know, that can be distributed, and that's exactly what we're working on in the enzymatic synthesis of oligonucleotides.
You know, it's kind of like learning from the current world about where we're going in 3-5 years' time.
Yep. Yeah, maybe that's a good segue to one of my other questions. You know, let's talk about precision fermentation, you know, the ability to kind of scale. You know, our, you know, our understanding right now is, you know, you know, precision fermentation, you know, capacity is somewhat challenging, and, you know, it continues to be a bottleneck. You know, are you guys seeing any more shifts in terms of, you know, more capacity coming online? And, you know, there's also... You know, I mean, you've talked about batch fed, Christina, but, you know, there's also new emerging technologies of continuous biomanufacturing, where it's a smaller bioreactor. You just kinda just perfuse fresh media in, and then kinda just take out what you need, and that, that's a continuous process. It requires less CapEx, smaller footprint.
You know, just, just curious, you know, what your thoughts are on precision fermentation challenges and any sort of shifts you see on the horizon. This could be for anyone.
I can certainly jump in. Oh, Brian, I saw you gotta come off. I don't know if you wanna jump in first. Why don't you jump in first, and then I can follow you?
Well, I was gonna be kind of brief then, Christina, but really, I was—I think there's a bit of a... I mean, I think we're seeing—I think we are seeing movements in precision fermentation. I think we're seeing shifts, but I think you're gonna see, you know, as these applications come online and as there's interesting applications commercially, I think that the capacity for manufacturing is gonna come with it. I think we can expect that. And I, you know, I just wanted to put a fine point on this. We really did focus a little bit on being cost competitive, and I think obviously this can be very important.
But I'm just reflecting on the comments there from Christina and from Stephen around all the just massive advantages of the bio-based approach. And in terms of skating where the puck is going, it's not that hard to argue that this is where the puck is going, right? There's not really a better way to be addressing these major challenges around supply constraints. And so I think you can see a world where the precision fermentation does come online. And from the Ginkgo perspective, where our commitment is, in terms of just sort of driving that demand, is to...
You know, we have been just exploring ways to dramatically simplify our deal terms and ways to allow our customers to access our platform more, more easily, access data generation more, more effectively, train their own AI models so they can bring products to market more, more reliably as well. And all of those things, you know, using our, using our infrastructure, but all of those things are going to be things that drive demand for precision fermentation. And Christina just outlined really well-
... you know, what can be done in just one facility in a way that's totally different than if you're building one bespoke chemical manufacturing facility. So plenty of reason to, I think, to be optimistic about precision fermentation capacity coming online. But really, it's about, driving application adoption on, on the front end, I think, to drive that.
Yeah, and maybe I'll just jump in from our, you know, some of our own learnings and perspective. You know, I think there is capacity coming online. I think part of the question is: Where is that capacity gonna come online? You know, there have been certain countries, certain regions that have been already very proactive, basically, about building additional capacity. Because there is an acknowledgment that capacity has been limited, particularly in certain regions of the world, and I would say from our own experience, the US. And so, you know, we have tried to make the point very clearly that we do think the US government needs to do more to work and develop public-private partnerships, develop the right incentives, develop the right-- You know, and again, it doesn't...
Money is certainly part of this, you know, subsidies for infrastructure, et cetera, but it's also, as was mentioned, regulatory frameworks, things like that. All of that is gonna be really key to creating the right environment to ensure that these really exciting, innovative assets and technology that's being developed actually gets deployed in this country and in other countries, again, of course, because it is distributed. But really allowing for those benefits to be made available to the American public and to the global good in a way that aligns with our values. I mean, I think this is the other thing that we've really tried to highlight in the conversations that we have with the U.S. government. I mean, you know, as Ryan said, it's inevitable. There's so many advantages here. This is going to be the way of the future.
The U.S. needs to be a leader, right? It needs. It doesn't have to be the only leader, but it needs to have a seat at the leadership table because that will allow the U.S. to really help guide the discussions about how this technology is used, how it's deployed, and make sure that it's really used for the greater good of everyone, right, including the American public, and it allows us to solve these challenges.
Okay
... I'll just stop there.
Yeah.
Actually, I'm gonna ask you another question, Christina, because I know Secretary of State Blinken recently visited Antheia. You know, were there any takeaways that you can share, you know, on that discussion?
Yeah, no, absolutely.
It was pretty timely.
I mean, it feeds into-
Pretty soon, right?
Yeah, no, it, it definitely feeds into some of, you know, what I was just highlighting. But we did have the honor of hosting Secretary Blinken. You know, we were able to take him sort of through the end-to-end process of Antheia's biomanufacturing process. You know, highlighting the example I gave around the thebaine of Narcan and what this can really enable in terms of efficiencies in the supply chain scaling. Because, of course, in the U.S., right, there have been recent policy changes to make Narcan over the counter, make it more available, right, to all of the American public. So really addressing those issues and bringing that resiliency in.
What we also were doing was leading really a leadership discussion, right, with other biotech and policy leaders, to really have a broader discussion around the criticality of biotechnology, biomanufacturing to the U.S. government, right, to the values of the U.S. And discussing really, you know, what is going to be needed, you know, from these public-private partnerships to be able to ensure that, you know, the U.S. is leading not just in the R&D, not just in the technology development, but really the scaling and deployment of this technology that's bringing solutions to the global people. And so, you know, I think it was definitely reinforced that synthetic biology, biotechnology is a key technology for the U.S. government. It's critical, again, for national security, but also for economic security.
And there's ongoing activities, basically, you know, that we'll continue to see them, some alluded to, right, in this conversation, that are going to be really driving policy, you know, and actions and partnerships that allow the U.S. both to be a leader, but also to be coordinating leadership across, you know, different nations as well.
Christina, I think you mentioned two things that parallel our experiences. One was global capacity, and we view that there's actually a lot of global capacity for fermentation that's available. It's really a matter of finding it. But the second point I think you mentioned was about scalability, and I think that's really important. Codexis has a very robust expression platform, and we routinely scale from 10 L from our pilot plant here in Redwood City to 10,000 and 15,000 L at our CMOs. So we routinely manufacture metric tons of enzyme and are able to ship that globally to our customers.
That means that the transferability of the process, the simplicity of the process is super important because you have to be able to access that capacity that exists out there. You know, if no one else can do what you do, it's not very helpful if we're, you know, relatively small companies.
Yep, that's right. So we only have a few minutes remaining, but, you know, I did wanna touch upon the BIOSECURE Act that's gotten a lot of attention lately. Looks like it's going at lightning speed. You know, a couple companies were named, you know, companies of concern, including WuXi and a number of WuXi subsidiaries, including WuXi Biologics. You know, yeah, you know, how do you guys see, you know, that impacting, you know, your, your businesses? Is it gonna unlock opportunities? And then maybe talking about, you know, fermentation capacity, you know, you know, I'm not really sure how much, you know, WuXi has in terms of precision fermentation. I'm assuming they had some. Is that going to be an impact going forward?
... I guess I'll start this one, Stephen. I mean, I think it, you know, at a high level, I think if we do see the U.S. government cut ties with biotech companies in China, I think absolutely Ginkgo does stand to benefit and have an opportunity to fill that gap and continue to support the ecosystem. So I think that to make that point, but I think I would make a different point, too, that I think we have every reason to believe that BIOSECURE Act is just one step among many potentially to come, and in particular, as we see that AI is really emerging as a fundamental tool in biotech, and biotech is a major application of the latest AI.
We've seen how interesting it has been for governments to want to lead in sort of large language models that we've seen for English language models, and it's been really interesting for the U.S. government to be leading in digital texts like ChatGPT. So I think they're gonna wanna be leading in AI, and so far, public biological data sets have been lacking. We're committed to helping to fill those data sets and make our foundry available to do that. But just to make the point that I think BIOSECURE is probably one step among many to compete in biotech.
Yep, yeah, sorry. I would, I would agree with that. Yeah, there's, there's definitely, there's definitely a trend, trend here, and, and-
Yeah
... importantly, come up here, but it, it's bipartisan as well, which is, maybe one of the few things which both parties agree on.
The very nature of what we do makes it relatively easy to bring onshore because the infrastructure is much less onerous than is required for a lot of the conventional synthesis techniques. So, you know, it, as Ryan was saying, there are a number of tailwinds. This is the way of the future. This is just another step on that.
Yeah, that's great. And, you know, if WuXi does, you know... These people do have to cut ties, you know, what behavior do you think big pharma is gonna take, you know, for API manufacturing? 'Cause I know WuXi does have an API business as part of that. Is that gonna be up for grabs, and is it gonna go to, you know, current players, or, you know, do you think, you know, big pharma is going to be more receptive on kind of newer tech, newer synthetic biology-based technologies?
Maybe I can just jump in from my, our perspective. I mean, I do think Big Pharma is open to newer technologies like Synthetic Biology. I mean, in general, if you look at the just history of pharmaceutical evolution, you have seen manufacturing innovation drive transformation in the industry, right? But usually, what I will say and what is important for pharma in general, these are sticky supply chains, right? Because there are barriers to change a supply chain, starting with regulatory, you know, qualification, et cetera. So when you see supply chain shift, there has to be clear value, clear differentiation for the customers, right? They're not gonna do it for something that's just parity and comparable.
But if you are addressing, and this is why, you know, coming back to some of the earlier points I made around addressing pain points for the industry, if you are addressing long-standing pain points in the industry around cost, around time, sure do you supply others, and you have strategies that allow for the regulatory to be relatively streamlined, right? They will absolutely be very accepting and open to that, right? But the benefit has to be there for them, right, to make that transition, and we've seen that happen in the past, right? With recombinant DNA technology, you know, switching from extracted insulin to synthetic insulin, right? And even prior to that, introduction of synthetic chemistry, right, just sort of two centuries ago, where, again, you saw a lot of transitions from extracted drugs to synthetic drugs.
So pharma welcomes innovation, right? But it has to be innovation that is offering not just, like, a little kind of marginal change. It has to really be differentiated, and you will see the entire industry move.
I can give you a real-life example of that, which is Merck changing their supply chain for Januvia, their, their blockbuster diabetes drug, to include a biocatalytic step. Because it was more reliable, it was more scalable, it saved them money, and it was worth taking the regulatory steps, even after approval, to do that. So, you know, there is precedent that says that we can do this.
Yeah, that's a great example, Stephen. Yeah, you know, unfortunately, we are out of time. It was a really great discussion. I still had a few more questions, but we'll have to do it for next time. But I wanna thank all the panelists today. Really great discussion. Really appreciate it. Thank you so much.
Thank you.