Synthetic Biology 2.0: High-Growth Vertical Disrupting Many End Markets

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THE COWEN INSIGHT

Synthetic Biology (“SynBio”) is a high-growth vertical with the potential to unlock value across multiple industries. There are 4 platform types — tools 2.0, R&D engines with product development (lab-to-market), R&D engines that produce products (sharing economy), and products. SynBio products are entering many other verticals; a horizontal effect. We expect an acceleration of commercial successes and market penetration, especially as tools 3.0 plug in.

What is Synthetic Biology?

SynBio uses molecular biology techniques to custom engineer functional products or intermediaries that have traits of interest and manufacturing those intermediaries using host cells to be reproducible and scalable at low-cost for use in sustainable end products. A good analogy is software coding where 1’s and 0’s are replaced by the 4 DNA base pairs which can be edited using molecular biology techniques.  Like computer programming, once you have a good starting point, it’s easier to create new software.

This process includes:

  1. importing biological components found in nature into cells
  2. writing unnatural biological components & import
  3. editing natural & unnatural biological components & import
  4. assembling biological components & integrating with nonliving particles

Biological components include DNA, RNA, protein & biologically produced small molecules.

What Is the Market Potential?

We believe that broadly defined SynBio is a HSD trillion market and will grow to MDD trillions by 2025. We are ahead of McKinsey’s $4T estimate — a conservative estimate given product visibility.

Next-gen R&D productivity (higher technical success at lower costs & on faster timelines) & market-savvy C-Suites (better at identifying and executing on commercial potential) should accelerate commercial product successes. Less than expected product success and unmitigated biosecurity concerns could attenuate growth of tools, R&D & products.

Catalysts to Watch

SynBio tools 3.0 — DNA writing & editing, single-cell assays, AI, non-standard amino acid incorporation, automation, & printing non-living particles incorporating biological components.

Compelling “sharing economy” R&D platforms — with biological modularity (parts & characterization), validated platforms, & flywheel effects.

SynBio products with high commercial potential — next-generation biologic therapeutics, consumer (mainly food, cosmetics, cannabis), agriculture, and materials.

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