Is Ginkgo Bioworks’ Synthetic Biology Story Worth $ 15 Billion?

“Times must be good when a young biotech company can afford to hire people to write unrelated magazine-style articles.” scolded Dirk Haussecker, a savvy biotech stock picker who is active on Twitter.

Kelly says the magazine was inspired by Think, a periodical printed by IBM from the 1930s. “Why did they do that? Well, no one knew what a computer was,” says Kelly, who sees Ginkgo playing a similar role as an evangelist of the possibilities of genetic engineering.

While a podcast, Stat News reporters compared Ginkgo to a “stock meme” or “stonk,” positioned to appeal to an investing audience looking for trends without considering company fundamentals. When the SPAC deal is finalized, sometime in September, the company will trade under the ticker symbol “DNA”, which was once owned by Genentech, one of the early heroes of the biotech scene. “Ginkgo Bioworks does not deserve to use the DNA ticker,” said Adam Feuerstein, reporter for Stat.

PSPCs are a Wall Street Trend which offers an IPO route with little less than the usual scrutiny of a company’s financial outlook. Will Gornall, a business school professor at the University of British Columbia, believes they democratize investor access to hot sectors, but can also overstate the value of companies. Some offers, like the one who publicized Richard Branson’s space company, Virgin Galactic Holdings, did well, but five electric car companies that went public through PSPCs were subsequently pummeled with what Bloomberg called “brutal“Corrections.

Gornall can see the logic of a bettor in the Ginkgo bet. In recent years, stock market profits have been driven by a handful of tech companies, including Amazon, Apple, Facebook, Google, and Microsoft, each now worth more than $ 1 trillion. “The assessment might make sense if there’s even a 1% chance that biology is the computer of the future and it’s the business that makes it happen,” says Gornall.

Others’ products

Since its inception, Ginkgo has spent nearly half a billion dollars, much of which to build laboratories equipped with robots, gene sequencers and sophisticated laboratory instruments such as mass spectrometers. These “foundries” allow him to test genes added to microorganisms (often yeasts) or to other cells. It claims to be able to create 50,000 different genetically modified cells in a single day. A typical goal of a foundry project is to assess which of the hundreds of versions of a given gene is particularly effective at, for example, turning sugar into a specific chemical. Kelly says clients can use Ginkgo’s services instead of building their own lab.

What is lacking in the history of Ginkgo are the successful products resulting from its research service. “If you call yourself ‘synbio’, that sets the bar high for success – you say you’re going to the moon,” says Koeris. “You have raised so much money for a fantastic vision that soon you will need a transformative product, whether it is a drug or a crazy industrial product.”

To date, the engineering of Ginkgo yeast cells has led to the commercial production of three fragrance molecules, Kelly says. Robert Weinstein, president and CEO of the American branch of flavor and additive maker Robertet, confirmed that his company now ferments two of these molecules using yeast designed by the Kelly company. One, gamma-decalactone, has a strong peachy odor. The other, massoia lactone, is a clear liquid normally isolated from the bark of a tropical tree; used as a flavoring, it can be sold online for $ 1,200 per kilo. Running a fermenter all year round could generate a few million dollars from such a specialized chemical.

Engineers of organizations: The five founders of Ginkgo Bioworks met at MIT. From left to right: Reshma Shetty, Barry Canton, Jason Kelly, Austin Che, Tom Knight.


For George Church, a professor at Harvard Medical School, these products do not yet deliver on the promise that synthetic biology will vastly transform manufacturing. “I think the flavors and scents are a long way from the view that biology can create anything,” Church says. Kelly also sometimes has trouble reconciling the “disruptive” potential he sees for synthetic biology with what Ginkgo has achieved. Church drew my attention to a May report in the Boston Globe on the merger of Ginkgo with Soaring Eagle. In it, Kelly said his company was an attractive investment because the world was learning about the extraordinary potential of synthetic biology, citing covid-19 vaccines made from messenger RNA and animal-free proteins in new ones. vegetable burgers, like those from Impossible. Food.

“The article was a list of accomplishments, but the most interesting accomplishments came from others,” says Church. “It doesn’t seem like $ 15 billion to me.” Still, Church says he hopes Ginkgo succeeds. Not only is the company her ‘favorite unicorn’, but she acquired the remains of some of his own bio-synthetic startups after their bankruptcy (he also recently sold a company to Zymergen). Ginkgo’s future performance “could help our whole estate or hurt our whole estate,” he says.

While Ginkgo’s work hasn’t led to any blockbusters, and Kelly admits it’s “frustrating” that biotech takes so long, he says other customers’ products are coming soon. The Cronos cannabis company, based in Canada, announces that it will sell by the end of the year intoxicating pineapple-flavored candies containing CBG, a molecular component of the marijuana flower; Ginkgo helped show her how to make the compound in yeast. A spin-out of Ginkgo, called Motif FoodWorks, said he also expects a synthetically produced meat flavor to be available this year.

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