synthesizing all things and reshaping the future - yicai global released the "future industry series white paper | synthetic biology"
2024-08-31
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table of contents
1. synthetic biology: reshaping the science and industry of the future
1.1 definition of synthetic biology
1.2 development of synthetic biology
1.3 synthetic biology industry chain overview
1.4 applications of synthetic biology
2. pharmaceuticals: innovation is an important tool for rapid entry of api companies
2.1 application of synthetic biology in medicine
2.2 api companies and synthetic biology hit it off
2.3 major players in the synthetic biology api market
3. beauty and care: helping to break through the bottleneck of raw materials, domestic enterprises vigorously expand commercial use
3.1 synthetic biology helps break through the bottleneck of beauty and skin care raw materials
3.2 the commercialization process still faces challenges
3.3 domestic policy support has increased
3.4 domestic enterprises start to deploy
4. food: supervision is improving and the application prospects are broad
4.1 the application prospects in the food field have room for imagination
4.2 cautious approval delays application implementation
4.3 commercialization needs to break the "scale-cost paradox"
5. chemical industry: outstanding cost advantage, huge room for improvement in industry scale
5.1 cost advantage is an important competitive advantage
5.2 barriers to large-scale commercial use remain
5.3 china welcomes policy opportunities
5.4 rapid development of domestic enterprises
vi. agriculture: the development window has arrived, with leading progress in breeding and feed
6.1 agricultural synthetic biology market continues to expand
6.2 leading application progress in breeding, feed and other fields
6.3 domestic enterprises explore innovative applications
vii. energy: a strategic battleground for future energy, but still a long way to go for industrialization
7.1 the scale of the global bioenergy market is growing year by year
7.2 synthetic bioenergy has gone through three generations of innovation
7.3 industrialization is still a long way off, but the trend is clear
7.4 continuous exploration and application at home and abroad
8. ai + synthetic biology: innovation-driven, two-way movement
8.1 accelerating integration of ai and synthetic biology
8.2 innovation is the driving force for the rapid development of ai+synthetic biology
8.3 models and barriers of ai+synthetic biology
9. synthetic biology investment panorama
9.1 major companies in the field of synthetic biology
9.2 evaluation of major domestic synthetic biology companies
text
1. synthetic biology: reshaping the science and industry of the future
as an emerging interdisciplinary subject, synthetic biology is developing at an unprecedented speed. it not only involves fields such as biology, engineering, and computer science, but also provides us with unlimited possibilities to reconstruct biological systems and create new life forms.
as synthetic biology gradually penetrates into all walks of life, synthetic biology has shown great application potential and market value in the fields of medicine, agriculture, energy, etc. however, the development of synthetic biology is far from reaching its peak. yang shengli, an academician of the chinese academy of engineering, pointed out in the preface of the book "synthetic biology roadmap 2030: the engine driving the next generation of biomanufacturing" that with the iterative development of synthetic biology technology and the continuous expansion of enabling applications, synthetic biology will play a core role in the revitalization of the future bioeconomy and provide new solutions for global sustainable development.
1.1 definition of synthetic biology
according to the definition given in the "china synthetic biology 2035 development strategy" produced by the china discipline and frontier field development strategy research (2021-2035) project team, synthetic biology is guided by the "bottom-up" concept of engineering science, and is oriented towards creating engineered life with specific structural functions or realizing the engineering of life processes. it integrates system, synthesis, quantitative, computational and theoretical sciences, and uses the iterative research principle of "design-build-test-learn" to understand the theoretical framework and methodological system of life.
as an emerging interdisciplinary subject, synthetic biology creates new biological systems or redesigns existing ones by integrating principles and methods from life sciences, engineering, mathematics, computer science, physics, and chemistry.
1.2 development of synthetic biology
the development of synthetic biology can be traced back to the 1970s, when scientists began to explore gene recombination technology. in 1973, stanley cohen and herbert boyer first achieved gene cloning, marking the birth of genetic engineering. in the following decades, with the continuous advancement of genome sequencing technology, scientists gradually mastered the ability to transform the basic units of life.
in the 21st century, synthetic biology has experienced rapid development and has gone through four important stages of development. 2000-2003 was the founding period of synthetic biology, when researchers developed a variety of research methods and theories with field characteristics; 2004-2007 was the expansion and development period of synthetic biology, when the concept of synthetic biology was rapidly promoted; 2008-2013, synthetic biology ushered in a period of innovation and application transformation, and the substantial improvement of the efficiency of the underlying technology promoted the continuous expansion of synthetic biology technology development and application; since 2014, with the combination of open source applications of biological big data and bioengineering platforms, synthetic biology has entered a new stage of development; the "design-build-test" cycle of synthetic biology has gradually expanded to the "design-build-test-learn" cycle. at the same time, the introduction of new concepts or disciplines such as "semiconductor synthetic biology" and "engineering biology" has injected new vitality into the development of synthetic biology.
the global synthetic biology industry has experienced rapid growth over the past five years. according to cbinsights statistics and forecasts, the market size has grown from us$5.3 billion in 2018 to more than us$17 billion in 2023, with an average annual growth rate of 27%. it is expected that the global synthetic biology market will continue to maintain a rapid development momentum in the foreseeable future and will grow into a global market with a volume of nearly us$50 billion in 2028.
1.3 synthetic biology industry chain overview
the synthetic biology industry ecosystem covers a huge area, with diverse technologies and industries landing in various directions, and all have considerable market scales. based on this, the entire synthetic biology industry chain can be roughly divided into upstream, midstream and downstream.
the upstream focuses on the development of enabling technologies, including reading-writing-editing-learning, automation/high-throughput quantification and biomanufacturing, and pays attention to the disruption of underlying technologies and improving efficiency and reducing costs.
the midstream is a technology platform for designing and transforming biological systems and organisms. the core technology is pathway development, focusing on the selection of synthetic routes and technical implementation (such as chassis cell selection and transformation, optimization of culture conditions, purification method development, etc.). compared with downstream companies, it places more emphasis on the versatility of the technology platform and potentially has cro attributes.
the downstream involves application development and product implementation in all aspects of human life, and the core technology lies in the control of large-scale production costs, batch differences, and yield rates. compared with midstream companies, they emphasize more on the focus on application areas, fine-tuning of products, and commercialization. in terms of large-scale production, they have the potential to possess cdmo attributes.
strictly speaking, there is no clear boundary between midstream and downstream companies in synthetic biology, but compared with midstream companies, downstream companies place more emphasis on focusing on application areas, fine-tuning products, and commercializing them. at this stage, the industry as a whole is still in the early stages of industrial development, and many biotechnology companies are essentially integrated in the midstream and downstream.
1.4 applications of synthetic biology
the development of synthetic biology has brought about a large number of industry application scenarios, and its application areas cover many aspects such as medicine, agriculture, energy, and environment.
according to a report released by boston consulting group in 2022, it is expected that in the next 10 years, various industries such as healthcare, medical beauty, chemicals, agriculture, and food will be affected one after another, followed by industries such as mining, energy, and construction.
in terms of downstream terminal products, medical health is the largest application field. in 2021, the market size of synthetic biology terminal products in the medical health field is us$2.33 billion, accounting for 50% of the downstream terminal product market; it is expected that by 2026, the market size will reach us$5.35 billion, accounting for 31%. with the development of synthetic biology technology, the application in food, beverage, agriculture and other fields continues to expand, but medicine is still expected to be the largest terminal product market.
in the following chapters, this report will discuss the latest developments and industry prospects of each sub-application field of synthetic biology.
2. pharmaceuticals: innovation is an important tool, and api companies quickly enter the market
many of the active synthetic biology stocks in the market are api manufacturers. these companies have quickly entered the synthetic biology market by leveraging their technology and production capacity advantages in api and intermediate production.
in fact, biomedicine itself is also one of the important application areas of synthetic biology and is considered to be one of the more promising application areas of synthetic biology.
"the biggest driving force for pharmaceutical companies to transform to synthetic biology is that under the dual pressure of policy guidance and changes in the external environment, traditional profit margins have been squeezed to a very low level. only by taking the lead in innovation can companies gain more market space and market premium." yang yang, marketing director of the central nervous system business unit of hansoh pharmaceutical, previously told china business news that under such an industry background, "pharmaceutical products that do not use new technologies are destined to lag behind, which makes some rapidly developing new technologies such as synthetic biology a must for pharmaceutical companies to innovate and transform."
2.1 the application of synthetic biology in the medical field mainly includes two categories
in its exchanges with pharmaceutical industry practitioners, china business news found that the current definition of synthetic biology by some innovative drug companies is inconsistent with the common definition.
according to the "china synthetic biology industry white paper 2024" jointly released by bcg and b capital, the application of synthetic biology in the medical field mainly includes two categories: innovative drugs and innovative therapies, and api and intermediate manufacturing. among them, the application in the field of innovative drugs can be specifically subdivided into bacterial engineering, artificial viruses/phages, and cell gene therapy.
however, a person in the biopharmaceutical industry told caixin that the application of synthetic biology in the domestic pharmaceutical field is more of an upgrade of production processes by traditional chemical pharmaceutical companies. by changing the original production method based on chemical synthesis to biological synthesis, costs can be greatly reduced and environmental pollution and other problems can be reduced, thereby improving the competitiveness and profitability of enterprises.
the person said that as a biopharmaceutical company, it originally produced drugs through advanced biotechnologies such as genetic modification. although there is some overlap in technology with synthetic biology, the use of synthetic biology by biopharmaceutical companies is not intended to solve problems such as high costs and high pollution.
a relevant person in charge of another car-t therapy company also said that he does not think the company's current cell therapy business has a close connection with synthetic biology, which is somewhat different from the current third-party definition of the concept of synthetic biology.
zhang yanfeng, r&d director of sino-science xinyang, expressed another view, "synthetic biology still has great potential in the application of new drugs and new therapies." he said that with the development and application of gene editing technology, the application of synthetic biology in the field of innovative drugs has gradually matured worldwide. some therapies that use synthetic biology technology to transform intestinal flora and then inject them into the body to participate in the treatment of some diseases have entered the clinical trial stage. however, he also pointed out that due to the strict supervision of the application of synthetic biology in food, medicine and other fields in china, the research progress in this area in china is relatively slow.
2.2 api companies and synthetic biology hit it off
from the perspective of actual application, domestic pharmaceutical companies engaged in the production of chemical raw materials/pharmaceutical intermediates and other products with strong demands for cost reduction and efficiency improvement have indeed made arrangements in the field of synthetic biology earlier. for example, representative companies in the industry such as chuan ning biotechnology (301301.sz) have formed a considerable scale of synthetic biology product production capacity. in the field of front-end drug research and development, since the research on technologies such as bacterial engineering transformation and artificial viruses/bacteriophages is still in the concept verification stage, it still needs continuous technological breakthroughs and further policy support.
china is the world's largest supplier of apis and intermediates, and occupies an important position in the industry chain. according to the analysis of the generic drug association, the number of chinese api companies accounts for 48% of the world's total, and the production capacity accounts for 30%. in addition, china's intermediate production accounts for 80% of the world's total production.
however, as most companies are still in the upstream low value-added links, the overall profitability of domestic raw material pharmaceutical companies is not strong. in addition, my country began to levy environmental protection taxes in 2018, and the profit margins of chemical raw materials that cause serious environmental pollution have been continuously compressed.
the overall global demand is sluggish, and the prices of most apis are at historical lows, which has accelerated the decline in the gross profit margins of companies that were originally not high. controlling costs has become an important means for domestic api companies to stabilize their profitability. huachuang securities said that although geopolitics has brought some disturbances to the division of labor in the global api industry chain, cost is still the primary factor in competition in the api industry.
driven by synthetic biology, the original manufacturing process of apis and intermediates will gradually transition from animal and plant extraction, chemical synthesis or microbial fermentation to enzymatic processes and cell engineering. some apis that are more expensive and difficult to prepare under the original synthesis method, but have a large market demand, are expected to achieve a significant improvement in production efficiency, energy conservation and emission reduction through synthetic biology, thereby helping companies to form a stronger cost advantage. this has become an important reason why api companies are more keen on deploying synthetic biology.
2.3 major players in the synthetic biology api market
at present, the main bulk apis in china are antibiotics, vitamins, amino acids, hormone drugs, etc. due to the low technical threshold, fierce competition, and relatively low gross profit margins, companies have a stronger demand for further cost control. therefore, a number of api listed companies have conducted research on synthetic biology in a self-built manner earlier, and have taken the lead in forming a scale effect, helping companies establish a competitive advantage in the segmented track.
at the same time, with the rapid rise of the concept of synthetic biology in recent years, more companies have chosen to cooperate externally, such as introducing professional platform companies or cooperating with scientific research institutions, so as to enter the track in a shorter period of time and also gain certain competitive advantages.
among a-share companies, chuan ning bio is a raw material and pharmaceutical intermediate manufacturer under kelun pharmaceutical (002422.sz). its main business is antibiotic intermediates, among which the production capacity of penicillin intermediates, cephalosporin intermediates and erythromycin thiocyanate is in the leading position in the industry.
in recent years, the company has made great efforts to develop synthetic biology. in the short term, several products such as bisabolol, 5-hydroxytryptophan, ergothioneine, and ectoine have entered the production and sales stage. it is one of the first synthetic biology companies in china to achieve product delivery.
the company said that the next mid-term products have been targeted at amino acids, vitamins and other products with high demand and output value. at the same time, it will use synthetic biology and ai technologies to further transform the existing antibiotic intermediate production strains, thereby achieving cost savings, quality improvement and efficiency enhancement.
saito biotechnology (300583.sz) is the leading supplier of steroidal drug raw materials in china and the first domestic manufacturer to use synthetic biology to produce steroidal drug raw materials on a large scale. as early as 2011, it used genetic engineering and synthetic biology to achieve coverage of the five major parent nucleus series of steroidal raw materials such as androstenedione, which are used to develop steroidal drugs such as glucocorticoids, sex hormones, progestins and anabolic hormones.
with the continuous development of synthetic biology, strain modification and other processes, the company has also relied on its technological advantages to increase the sales proportion of high-gross-profit, high-value-added high-end intermediates, and continuously optimize its product structure and profitability. china post securities believes that with the gradual increase in the concentration of the steroid drug industry, saito bio's steroid intermediates business is expected to achieve steady growth, and its leading position in the sub-sector is expected to continue to consolidate.
3. beauty and care: helping to break through the bottleneck of raw materials, domestic enterprises vigorously expand commercial use
raw materials are the soul of beauty and personal care products. for a beauty and personal care product to achieve efficacy and gain market recognition, the formula must contain effective raw materials, such as niacinamide, bifida yeast, and phosphatidylcholine, which are favored by consumers and major brands because they can achieve relatively balanced effects in beauty and care.
in recent years, domestic beauty care brands have gradually risen, but restrictions on product raw materials still exist. for a long time, 80% of the raw materials for beauty care products in my country have been imported, and local brands have always been in a passive situation in product research and development and innovation. "it has only been in the past 10 years or so that domestic companies have started to develop their own raw materials, and most of them are plant extracts. overall, the beauty care product raw material market in recent years is still dominated by foreign brands." zhang yanfeng, r&d director of sino-science xinyang, told caixin.
restrictions on raw materials have led to serious homogeneity of domestic beauty and skin care products. competition in the industry continues to be fierce. the application of synthetic biology has brought more possibilities for industry innovation and is expected to drive an opportunity for a reshuffle in the domestic beauty and skin care market.
3.1 synthetic biology helps break through the bottleneck of beauty and skin care raw materials
as an emerging technology that has developed rapidly in recent years, the support of synthetic biology can not only greatly improve the safety and production efficiency of beauty products, but the new synthesis process can also enable raw materials to achieve effects that traditional technologies cannot achieve.
a relevant person in charge of bloomage biotechnology (688363.sh) told china business news that the cosmetic raw materials produced by synthetic biology methods are derived from renewable and natural biomass resources, and mainly use gene editing technology to obtain and create various substances needed for human life and health, so they are safer and more biocompatible. especially for consumers with sensitive skin and post-medical wounds, the raw materials produced by synthetic biology methods are safer and gentler, and can exert stronger effects while reducing the potential safety hazards and poor biocompatibility problems that traditional methods may cause.
the person in charge also said that the traditional production of raw materials for beauty products mostly relies on animal and plant extraction or chemical synthesis. these methods are not only inefficient and costly, but may also have a negative impact on the environment. synthetic biology can produce high-quality cosmetic raw materials in a safe and environmentally friendly way by transforming microbial chassis cells, making the production process environmentally friendly and sustainable, while further improving production efficiency and reducing costs.
"ergothioneine is the most classic example of synthetic biology replacing chemical synthesis," said zhang yanfeng. "in the past, the unit price of ergothioneine manufactured by chemical synthesis was about 20 million yuan per kilogram. now, using synthetic biology technology, the price has dropped to 10,000 yuan per kilogram or even lower." he believes that, based on the case of ergothioneine, reducing costs and increasing efficiency is still one of the core goals of the application of synthetic biology in the cosmetics field.
more and more beauty and skin care brands, especially domestic brands, have begun to deploy synthetic biology technology. replacing traditional methods such as animal and plant extraction with biosynthesis has gradually become an industry development trend. at the same time, the beauty and skin care industry is also becoming one of the important application areas of synthetic biology.
according to estimates by cb insights and b capital, the market size of synthetic biology in the consumer brand field is expected to reach us$3.6 billion by 2028, with an average annual growth rate of 37% from 2023 to 2028, accounting for approximately 7.2%.
3.2 the commercialization process still faces challenges
synthetic biology has shown great application prospects in the field of beauty products, but many links still face limitations and challenges, from material synthesis to efficacy confirmation and then to commercial production.
the above-mentioned person in charge of huaxi biology said that synthetic biology mainly realizes the directional production of cosmetic raw materials by transforming microbial chassis cells. although this technology has made progress in dna synthesis, gene editing, metabolic engineering, etc., it still faces technical challenges in improving the accuracy and efficiency of synthesis, such as how to ensure the accuracy of gene editing, how to improve the efficiency and stability of metabolic pathways, etc. the person in charge said that the life system is extremely complex, involving numerous genes, proteins, metabolic pathways, etc. to fully simulate or synthesize a life system, it is necessary to deeply understand its complexity and interactions, which is a level that science has not yet fully achieved.
in this regard, zhang yanfeng also said that compared with material synthesis, the commercialization process of new cosmetic raw materials may encounter more difficulties.
"some high-value substances, such as paclitaxel, may attract the attention of many researchers, and many synthetic pathways will be derived. in this way, the use of synthetic biology to promote the commercial production of this raw material will require a short period of time." he said that in the field of cosmetics, the attention paid to new substances is not so high. although some new substances such as glabridin have outstanding effects in whitening, their synthetic pathways still require scientific researchers to analyze and determine the commercial production process from scratch, which will take at least five years. "in a highly involutionary track like cosmetics, no one can guarantee whether this substance will still be favored by consumers and brands in five years, and research will stagnate at this time."
in addition, synthetic biology companies may also face a series of entry barriers such as product efficacy confirmation and industry qualification certification. among them, how to judge the value of the synthesized substance is a systematic process, which needs to be adjusted through two aspects: efficacy evaluation and market acceptance of the substance, and through a series of complex means such as systematic experimental verification, market research and competitive product analysis.
however, bloomage has achieved good results in this regard. zhang yanfeng said that by directly operating its own brands, bloomage has greatly shortened the feedback chain and can respond to customer needs in a timely manner, thus gaining good returns in the c-end market. "at present, few companies can really do this."
3.3 domestic policy support has increased
at the policy level, since 2021, my country has continued to increase its support for innovation in cosmetic raw materials.
in may 2021, the "regulations on the management of registration and filing information for new cosmetic ingredients" issued by the national medical products administration came into effect, changing from the previous "approval system" to a "filing system", and only implementing registration management for high-risk new raw materials.
previously, from 2004 to april 2021, only 14 new raw materials were approved, and 6 of them were registered in the second half of 2021. with the relaxation of new raw material registration, brand companies continue to be enthusiastic about raw material innovation. from 2022 to 2023, a total of 111 new raw materials have been registered, of which 69 were submitted for registration in 2023. according to the latest data, as of the first half of 2024, the number of new raw materials submitted for registration has reached 46, an increase of nearly 90% over the same period last year, and the proportion of domestic companies remains above 78%.
local governments are also increasing their support for the application of synthetic biology in the field of raw materials for beauty products. in september 2023, the beijing municipal bureau of commerce and nine other departments issued the "several measures to support the high-quality development of the beauty and health industry", which proposed to support the innovative research and development and application of new cosmetic raw materials, encourage enterprises to develop high-quality biotechnology and new chemical raw materials based on scientific and technological achievements such as bioengineering and dermatology, and reward enterprises that register and file new cosmetic raw materials and obtain new functional cosmetics registration certificates.
at the same time, the hangzhou municipal government issued the "several measures to support the high-quality development of the synthetic biology industry", proposing to focus on supporting the research and development of cosmetic raw materials, and to provide certain financial rewards for new synthetic biology cosmetic raw materials that are successfully registered or filed.
driven by a series of policies and markets, the trend of local companies accelerating the research and development and innovation of cosmetic raw materials through synthetic biology is expected to continue, thereby continuously promoting the rapid development of the industry.
3.4 domestic enterprises start to deploy
the optimistic application prospects of synthetic biology in the field of beauty and skin care have made it increasingly popular with investors, and related companies have also been sought after by many investment institutions.
according to synbiocon statistics, as of december 10, 2023, a total of 52 synthetic biology-related companies in china have completed a total of 57 financing/fundraising events, involving nearly 20 beauty care projects. among them, blue crystal microorganisms obtained a financing scale of over 400 million yuan in the b4 round. it is understood that the company mainly uses synthetic biology to help b-end customers in industries such as consumer goods, food, medical care, agriculture and industry to carry out differentiated competition in the industry. the projects mainly involve biodegradable materials pha, regenerative medicine materials, new functional ingredients for beauty and cosmetics, new food additives, and engineered probiotics.
among listed companies, more and more companies are planning to use synthetic biology in the beauty and skin care field.
huaxi bio is in the first camp in the field of synthetic biology in china. since 2018, the company has used synthetic biology as the underlying technology and is committed to the development of cosmetic raw materials. based on the advantages of the technology platform, after the company achieved success in the field of hyaluronic acid, it has also launched a number of new raw materials such as ergothioneine and recombinant type iii collagen. at the same time, the company has also built the world's largest pilot transformation platform to provide guarantees for the commercialization capabilities of new products. the company stated that in the future it will continue to focus on six major categories of substances, namely functional sugars, amino acids, proteins, peptides, nucleotides and natural active compounds, comprehensively layout the bioactive substance industry system, and deeply cultivate consumer fields such as functional skin care products and functional foods.
juzi biotechnology (02367.hk) was the first in the world to achieve mass production of recombinant collagen skin care products in 2009. at present, the annual production capacity of recombinant collagen and rare ginsenosides has reached 10,880 kg and 630 kg respectively, both of which are the highest in the world. the company owns brands such as kefumei, kelijin, and xindan, covering three major industrial directions: functional skin care products, medical devices, functional foods and special medical formula foods.
jinbo bio (832982.bj) is one of the leading companies in recombinant humanized collagen in china. the company has successfully developed recombinant type iii humanized collagen and developed a class iii medical device product "recombinant type iii humanized collagen freeze-dried fiber". the product was approved for marketing by the national medical products administration in june 2021 for facial wrinkle correction. in 2023, thanks to the substantial increase in sales of implant products with recombinant humanized collagen as the core ingredient, jinbo bio's full-year revenue and net profit attributable to shareholders increased by 99.96% and 174.60% year-on-year, respectively.
4. food: supervision is improving and the application prospects are broad
there are high hopes for the application of synthetic biology in the food industry, but from the perspective of commercialization, the development of synthetic biology in the food industry is relatively slow. this is due to policy factors such as strict legal and regulatory control, as well as market factors such as relatively low public acceptance.
market research institutions remain optimistic about the industry's development prospects. cb insights data predicts that by 2028, food will become the second largest application in the field of synthetic biology after medical health, with a market size expected to exceed us$12 billion.
what are the potential applications of synthetic biology in the food industry? what are the main challenges facing the industry at this stage? how can related companies find a way to survive and develop?
4.1 the application prospects have room for imagination
with the continuous growth of population and the increasing demand for sustainable development, the application potential of synthetic biology in the food industry has attracted much attention.
chen jiaqi, general manager of beijing green kangcheng biotechnology co., ltd., said that the biggest advantage of the application of synthetic biology in the food field is that it can be produced continuously and efficiently, and is less affected by factors such as environmental changes and land conditions; secondly, foods produced by synthetic biology technology consume less resources and pollute the environment than traditional agriculture and animal husbandry. by reducing the use of pesticides, antibiotics and other biochemical agents, the food production process is safer and more controllable; finally, the ability to quickly expand production is also a major advantage of synthetic biological foods, especially in the face of supply shortages or even sudden disasters, industrially produced synthetic biological foods can quickly fill the demand gap.
there are two main types of applications of synthetic biology in the food field. one is the production of alternative proteins, that is, obtaining proteins from non-animal sources through synthetic biology. the main application directions include artificial meat, etc.; the other is for the production of food additives, food raw materials, etc.
according to different technical paths and implementation difficulties, alternative proteins are divided into plant proteins, fermented proteins and cell culture proteins. among them, animal proteins obtained through cell culture have more market prospects, but the current technology is not yet mature. due to issues such as cost and taste, market acceptance is also low and it is still in the early stages of commercialization. the industry predicts that alternative proteins directly cultured from animal cells will not reach cost parity with relatively expensive beef until 2032, and only then can industrial production be started.
in contrast, plant-based proteins developed based on soy protein and pea protein will have achieved parity with meat production costs in 2023, and commercial applications are developing rapidly at this stage. for example, the vegetarian burger meat-related products of the global artificial meat brand impossible meat have been approved by the fda to enter the retail market. according to the analysis of boston consulting group (bcg), the annual compound growth rate of the plant protein market is expected to reach about 16% from 2025 to 2030, and by 2030, the consumption of the plant protein market will be about 50 million tons.
according to the forecast of the us department of agriculture, global meat consumption will reach 358 million tons by 2030. as the cost of synthetic biological alternative proteins represented by plant meat decreases, it is expected to play an increasingly important role in human protein supply.
compared with alternative proteins, the current application of synthetic biology in the fields of food raw materials and food additives is implemented faster, and it is the mainstream application of synthetic biology in the food field at this stage.
food additives and food raw materials include a variety of substances such as nutritional enhancers, antioxidants, sweeteners, colorants, new food raw materials, functional ingredients, etc. in the modern food industry, as the global food and beverage market continues to expand, the demand for food additives continues to grow.
zhang zhenzhuo, a researcher at taixin fund, said that compared with traditional chemical and fermentation methods, biological food additives are more secure in terms of food safety and have more advantages in production efficiency and innovative product development.
according to reports, the food additives currently produced by synthetic biology include l-alanine, vitamin e, lycopene, etc., which are obtained through animal and plant extraction or chemical synthesis and have been applied in the food field, as well as new products that were previously impossible to synthesize, such as hmo (mammalian oligosaccharides) and erythritol. among them, hmo, as an innovative nutritional fortification ingredient, is one of the relatively promising exploration results of synthetic biology in the food field.
chen jiaqi also said that in the field of consumer goods, especially in the niche track of functional nutrition products, consumers are more receptive to innovative raw materials and less sensitive to prices. with the endorsement of powerful technology, food raw materials developed by synthetic biology are more likely to be recognized.
currently, dsm is the most successful leading company in the global transformation from traditional chemical synthesis to biosynthesis. since 2021, nutritional additives produced from bio-based or extracted from nature have accounted for more than 50% of the company's revenue.
as the patents of multiple food additives of leading companies such as dsm have expired one after another, domestic synthetic biology companies have gradually achieved breakthroughs in the fields of ara (arachidonic acid), malic acid, 1.3-propanediol, etc. in recent years. listed companies led by huaheng bio (688639.sh) and jiabiyu (688089.sh), as well as start-ups such as green kangcheng, have ushered in major development opportunities.
regarding the demand prospects of this track, chen jiaqi said that the national nutrition plan (2017-2030) released in 2017 clearly expressed the recognition and support for new nutritional and healthy foods such as health foods and nutritionally fortified foods. at present, the market size of functional foods in china has exceeded 600 billion yuan, and the future demand space for functional foods and nutritionally fortified foods based on synthetic biology is still very broad.
4.2 cautious approval delays application implementation
my country attaches great importance to food safety and has strict approval procedures for products such as food additives. zhang zhenzhuo believes that this has objectively slowed down the application of synthetic biology in the food field.
"in the field of food applications, synthetic biology products involving the production process of genetically modified microorganisms need to undergo safety certification and approval from different ministries such as the ministry of agriculture and the national health commission before they can enter the market." chen jiaqi told caixin that this process requires a lot of safety testing and review, and the time period is about 1-2 years.
in addition, synthetic biological foods lack matching quality standards and production process certification in china. chen jiaqi said, "if you want to obtain a production license for food and food additives, companies must follow the quality standards issued by the state and comply with the prescribed production processes. however, for synthetic biological foods, there are no corresponding standards for their new production processes, which creates a huge obstacle to the application for production licenses."
usually, the formulation of relevant national standards requires extensive consultation with the industry. for the synthetic biology food industry, it may take some time to break through the development bottleneck. however, chen jiaqi also revealed that in view of the current status of the industry, relevant institutions have actively promoted the update of industry standards and have formed a clear work plan. "at present, the approval path for synthetic biology in the field of new food additives has been opened, and related work in other sub-sectors is also being accelerated, which is expected to lay the foundation for the introduction of synthetic biology foods to the market."
it is reported that on october 7, 2023, the national health commission approved 2'-fucosyllactose and lactose-n-neotetraose as new food additives for infant formula, modified milk powder (for children) and special medical infant food. at the same time, two other hmos are being solicited for comments.
zhang zhenzhuo is optimistic about this and said: "the approval of hmos indicates that my country's regulatory policy for synthetic biology food ingredients is advancing. in the future, synthetic biology will be more widely recognized and applied in the food field."
4.3 commercialization needs to break the "scale-cost paradox"
due to stricter safety regulations, domestic synthetic biological food raw materials and additives still face challenges in commercial production.
according to relevant national laws and regulations, raw materials used in the food industry must have separate production lines with higher safety standards and cannot be produced on the same line as other industrial products. this means that while synthetic biology companies need to respond quickly to the diverse needs of the market, they also need to establish production lines with different standards for the same type of raw materials. chen jiaqi said that this is a considerable expense for synthetic biology companies, especially start-ups, and has become a certain obstacle to companies expanding product applications.
in addition to capacity building, companies also need to invest a lot of resources in brand building, sales team building, etc. according to reports, at present, synthetic biology companies generally invest about 20%-25% of their overall operating funds in market sales, and some to c companies may have a higher proportion.
when it comes to the commercialization process of different synthetic biological foods, some new products face special problems. "commercialization is the core of opening up downstream application scenarios. for most product-oriented synthetic biology companies, the main problem is the 'scale-cost paradox.'" zhang zhenzhuo said that for new products, lower prices and stable supply are the basis for downstream customers to try, but scale-up requires sufficient commercialization as support, that is, there must be enough demand to support large-scale industrial production.
however, he also said that since the market space in areas such as food additives and nutritional products is large enough and consumers are relatively insensitive to prices, it is conducive for synthetic biology companies to break the "scale-cost paradox." "if there are suitable synthetic biology technologies or new products, and there is a stable and relatively low-cost supply, synthetic biology may have great room for development in the food field."
5. chemical industry: outstanding cost advantage, huge room for improvement in industry scale
as the production process is more environmentally friendly and less dependent on natural resources such as oil, using biological methods to replace chemical methods to manufacture bulk chemical raw materials has always been one of the key areas of synthetic biology applications. cb insights predicts that in 2023, the chemical industry market will reach us$3.4 billion in the global synthetic biology market, accounting for nearly 20%.
compared with traditional chemical methods, biological methods based on synthetic biology use renewable raw materials, and the reaction conditions of biological manufacturing processes such as enzyme methods or fermentation methods are milder. therefore, the emission of pollutants such as carbon dioxide and wastewater in the research and development and later manufacturing processes is greatly reduced, and the dependence and consumption of petrochemical resources such as oil are also reduced. choosing bio-manufactured chemicals is becoming one of the important strategies for companies to deal with regional environmental protection access barriers.
it is worth noting that the number of bulk chemicals that can be synthesized by synthetic biology is still relatively limited, and the industry size still has huge room for improvement compared to the overall chemical industry. zang huiqing, secretary of the board of directors of cathay biotechnology (688065.sh), said that the application of synthetic biology is still in a relatively early stage, especially in the overall scale of application in the production of bulk chemical raw materials. therefore, the positive impacts such as energy conservation and emission reduction have not yet been clearly reflected in social and economic development. in the future, with the continuous expansion of synthetic biology applications in various aspects and the gradual implementation of large-scale production capacity, its value in environmental protection will gradually become apparent. "when the output value of a synthetic biology factory can reach the same level as that of a refinery of similar size, it truly means that the value of synthetic biology in the field of biomanufacturing can compete with chemical methods."
5.1 cost advantage is an important competitive advantage
controlling the cost of chemical raw materials has always been an important means for enterprises in the chemical industry chain to improve the competitiveness of their products, and reducing costs and increasing efficiency is precisely another important advantage of synthetic biology. compared with some chemical methods that require dozens of synthetic processes, synthetic biology methods only require a few simple steps to achieve the synthesis and production of target raw materials as long as the appropriate bacterial flora is cultivated, so it has a more significant advantage in process difficulty and cost.
the change of ownership of the long-chain dibasic acid market is an excellent example of biological methods replacing chemical methods. as an important raw material in the fields of long-chain nylon, coatings, lubricants, plasticizers and pesticides, the global market share of this substance has always been in the hands of companies such as dupont and invista. zheng qian, strategic development director of cathay biotechnology, introduced that relying on process advantages such as synthetic biology, cathay biotechnology has achieved market substitution for similar chemical products at a lower cost and has become an important successful case of biological methods replacing chemical methods in the global chemical field.
however, she also pointed out that in the field of chemicals, the replacement of chemical methods by synthetic biology is still limited by many factors. some chemicals that can be obtained by simple cracking of petroleum, such as ethylene and propylene, have extremely low process difficulty and cost. at present, synthetic biology technology has no way to reduce costs, so it cannot replace traditional processes. on the other hand, even if some small varieties can achieve lower costs through biological methods, the limited market space means that few synthetic biology companies are willing to get involved in this field.
"we are still exploring and looking for varieties with great potential, but this is a long process that requires continuous technological iteration and research and development," said zheng qian.
5.2 barriers to large-scale commercial use remain
promoting product sales is still the most important issue that synthetic biology companies need to face.
there is no doubt that synthetic biology has advantages in production costs, production efficiency, and environmental protection. however, in the field of bulk chemicals, there are many links involved from raw materials to final products, and synthetic biology companies generally only play the role of upstream raw material suppliers. it is not a one-time thing to replace the original chemical products and put them into large-scale commercial production.
it is reported that the materials produced by biological methods do not simply copy the performance of materials produced by chemical methods. there are certain differences between the two and each has its own advantages. therefore, in the later processing of large-scale commercial production, it is necessary to match various links such as production equipment, production process, and technical parameters, which will significantly increase the replacement cost of enterprises. zang huiqing said that in order to complete the replacement of bio-based materials, every link in the industrial chain needs to form a unified understanding of the products, but at present, the application and innovation capabilities of downstream customers for bulk raw materials are still insufficient, which leads to the promotion of bio-manufacturing raw materials. the need for a lot of market education, "just for the application and promotion of nylon 56 in the field of textiles and clothing, we have invested a lot of energy in application development and market education, but the widespread acceptance of various links in the industrial chain requires a process, and so far, downstream applications have not been fully implemented."
in addition to communication in the industrial chain, the application of synthetic biochemicals in some fields also involves stricter qualification certification. for example, in the fields of passenger cars, public transportation equipment, photovoltaic wind power and other new energy equipment, synthetic biomaterials need to pass many qualification certifications to enter the relevant market. "in the field of passenger cars, if you want to enter the relevant supply chain system, the average cycle may be two years. of course, the advantage is that once you enter this system, you will form a relatively strong customer stickiness and a high entry barrier, and bring a very strong endorsement effect to the entire material." zheng qian introduced.
therefore, at present, at least in the field of chemical products, if synthetic biology technology is to be promoted and applied on a large scale, it is not only necessary to find products with broad demand and significant cost advantages when selecting products, but also to obtain unanimous recognition from upstream and downstream of the industrial chain. it can be foreseen that it will still take a considerable period of time and huge investment. this is undoubtedly a huge challenge for private enterprises in the field of synthetic biology in china.
5.3 china welcomes policy opportunities
as national policies gradually tilt toward the biomanufacturing industry, my country's synthetic biology industry is ushering in new development momentum.
my country started late in supporting the development of the synthetic biology industry. it was not until the 13th five-year plan that it was clearly proposed to accelerate the development of synthetic biology technology, promote innovation and industry applications. later, in the 14th five-year plan for the development of the bioeconomy, synthetic biology was mentioned more frequently, requiring that the technology be identified as a key technological innovation field to promote its application and transformation in the fields of medicine, agriculture, chemical industry, energy, etc.
judging from the implementation situation, central enterprises are expected to become an important driving force for the development of my country's synthetic biology industry as the executor of relevant support policies. in fact, under the current economic environment, many state-owned enterprises are actively seeking transformation, trying to get rid of the original business model with finance and real estate as the main income. at present, when my country is vigorously promoting the development of new quality productivity, synthetic biology has naturally become an important starting point for the transformation of these enterprises. at present, many central enterprises are increasingly participating in the development of the synthetic biology industry by setting up investment funds and providing financing support.
in 2023, cathay biotech disclosed a plan for a private placement of rmb 6.6 billion to introduce china merchants group as an indirect shareholder, and jointly deploy a bio-based composite material construction base through the capital and resource advantages provided by the latter. the company said that after the cooperation is reached, the company's synthetic biological products can be applied to multiple industrial sectors under china merchants group. it can be seen that this cooperation model will help synthetic biological companies quickly open up the market and have a positive impact on promoting product sales.
5.4 rapid development of domestic enterprises
the overseas synthetic biology industry developed earlier and a series of leading companies were born. among them, amyris is regarded as the originator of the global synthetic biology industry. in 2007, it successfully synthesized farnesene using synthetic biology with sugarcane as raw material. farnesene is believed to have broad application prospects in the fields of beauty, food, energy and materials.
genomatica is a synthetic biology company that focuses on using biotechnology and metabolic engineering to transform renewable raw materials into a variety of chemical products. in 2008, the company pioneered the use of synthetic biology to produce 1,4-butanediol, setting a precedent for biotechnology to replace traditional chemical technology in the field of petrochemical products.
in addition, some chemical giants have also tried synthetic biology earlier and have made breakthroughs in industrial production. since 2013, dupont has successfully used bio-based processes to achieve industrial production of chemical raw materials such as 1,4-butanediol and 1,3-propylene glycol; basf, as one of the major manufacturers of chemical intermediates, has successfully used synthetic biology to achieve industrial production of succinic acid, 1,4-butanediol, and γ-butyrolactone in 2014 and 2017 by developing patented strains that can adapt to different raw materials.
in contrast, domestic synthetic biology companies started late in the production of bulk chemicals, but have developed rapidly. huaheng biotechnology (688639.sh) is the world's first company to mass-produce l-alanine products using microbial anaerobic fermentation. according to the company's prospectus, by 2023, the company's global l-alanine market share will have jumped to the top.
cathay biopharma is another representative enterprise in the field of synthetic biology in china. it achieved technological breakthroughs in the industrialization of bio-based long-chain dibasic acids, bio-based pentamethylenediamine and bio-based polyamide in 2003 and 2014 respectively. it has now become the leading supplier in the global long-chain dibasic acid market.
vi. agriculture: the development window has arrived, with leading progress in breeding and feed
previously, people have vigorously improved plant structure and increased plant photosynthesis utilization rate through large-scale development of synthetic and natural fertilizers, optimized breeding and other strategies to obtain higher yields. however, traditional agricultural strategies focus more on the regulation of individual components, which makes it difficult to achieve the goal of improving nutrition, and lead to a high proportion of methane and nitrogen oxides in agricultural emissions, which is not conducive to environmental protection.
with the gradual promotion of synthetic biology in the agricultural field, its advantages in reducing fertilizer use, reducing carbon emissions, strengthening disease prevention and control, and improving growth efficiency are becoming increasingly prominent.
6.1 agricultural synthetic biology market continues to expand
according to the "china synthetic biology industry white paper 2024" jointly launched by bcg (boston consulting group) and b capital (boston investment), the international community has proposed three key development technologies for agricultural synthetic biology, namely promoting the development and application of technologies in artificial photosynthetic systems, nitrogen fixation systems, and biological stress resistance systems. these three major technological development directions are also china's primary goals in the technological leapfrogging stage (2020-2025).
china also plans to enter the industrial leapfrog stage between 2026 and 2030, realize the industrialization of artificial nitrogen fixation and some stress-resistant varieties, new generation enzyme preparations and pesticides, and rank among the world's advanced levels in agricultural synthetic biotechnology research and development. in the overall leapfrog stage between 2031 and 2035, china's agricultural synthetic biotechnology research and development and industrialization will reach the world's advanced level.
the "2023 synthetic biology agricultural food application white paper" released by 35dou, a future agricultural service platform, predicts that the market size of each segment of synthetic biology agricultural food will exceed 10 billion yuan between 2025 and 2030. among them, the market size of innovative food and additives is the largest, and it is expected to exceed 300 billion yuan in 2025; the market size of seed gene editing in the field of animal and plant breeding has also reached 40 billion yuan; the market size of animal and plant nutrition, animal and plant health, innovative materials, and agricultural waste resource utilization will all reach 10 billion yuan in 2025; and the fields of food safety testing and green preservation are not yet fully developed, but with technological breakthroughs and the support of policies and capital, they are expected to grow rapidly.
according to cb insights' forecast data, as synthetic biology is applied more widely in various fields and its technology improves, the market size of the synthetic biology industry is expected to expand rapidly, and is expected to reach us$38.7 billion by 2027. due to the wide range of applications brought about by selective breeding of animals and plants, dtc genetic testing, and microbial-based beauty products, food and beverage and agriculture will be the fastest growing sectors, with an estimated annual compound growth rate of 45.4% and 56.4% from 2022 to 2027.
6.2 leading application progress in breeding, feed and other fields
from a technical perspective, the application of synthetic biology in agriculture currently focuses on microbial modification and plant modification, and has been commercialized in sub-sectors such as breeding, fertilizers, feed additives, and pesticides.
taking breeding as an example, the application of synthetic biology can be divided into three categories: the first is to improve yield and quality through the domestication of wild plants; the second is to improve fruit quality, nitrogen fixation, insect resistance and other performance transformation; the third is to promote carboxylation reactions through synthetic biology, improve light energy utilization and reduce photorespiration losses.
compared with traditional breeding technology, the use of synthetic biology to transform seeds through high-precision gene editing has obvious advantages in terms of clear goals, lower costs, and shorter time in the development of new crops and traits. compared with genetic modification technology, gene editing technology has a lower threshold, faster breeding speed, lower investment costs, and more products can be developed on the breeding side.
globally, gene editing has been widely used in crops such as rice, corn, soybeans, wheat and tomatoes. gene-edited products such as glutinous corn, high-oleic soybeans, browning-resistant potatoes, high-gaba tomatoes and browning-resistant mushrooms have been launched and promoted in the united states, japan, the united kingdom and other countries.
yicai.com sorted out public information and found that many breeding companies such as da bei nong (002385.sz) and longping high-tech (000998.sz) have already laid out gene editing breeding. a person related to a breeding company said that my country's gene editing breeding companies are ready to go and are already at the leading level in technology. although relevant domestic policies have not yet been officially liberalized, in january 2022, my country issued the "guidelines for safety evaluation of gene edited plants for agricultural use (trial)", which standardized the safety evaluation management of gene edited plants. the ministry of agriculture and rural affairs also intensively solicited opinions on gene editing technology, laying a policy foundation for the next step to fully open up the gene editing market.
in terms of fertilizers, agricultural production output depends largely on the large-scale use of chemical fertilizers. while increasing crop yields, it also seriously threatens the sustainable development of agriculture. in recent years, researchers at home and abroad have turned their attention to biological nitrogen fixation pathways, providing nitrogen sources for crops by constructing artificial high-efficiency nitrogen-fixing plant systems, partially replacing or significantly reducing the use of chemical nitrogen fertilizers, and creating a new field of nitrogen fixation synthetic biology.
taking nitrogen-fixing bacteria as an example, according to the relevant person in charge of beijing green nitrogen biology, the original indigenous nitrogen-fixing strains have natural defects, low nitrogen fixation efficiency, poor adaptability to the environment, sensitivity to soil nitrogen, and the nitrogen fixation function cannot be effectively exerted, resulting in unstable field test results. through synthetic biology (gene editing) transformation, the nitrogen fixation limitations of nitrogen-fixing bacteria can be broken through, their environmental adaptability can be increased, and the stability of their functional performance can be ensured.
in terms of feed additives, according to zhou sha, chief analyst of the agriculture, forestry, animal husbandry and fishery industry at huaxi securities, from the perspective of the breeding industry, protein is an important feed raw material, and soybean meal is the mainstream protein raw material in the current feed industry. since my country has long relied on imports of soybeans, the addition of soybean meal in feed has been greatly affected. the country has introduced a number of policies in the early stage to promote the increase of soybean production in my country, and issued the "three-year action plan for reducing and substituting soybean meal for feed" to reduce the addition of soybean meal in feed. in the future, low-cost synthetic protein substitution will be an important way to solve the problem of protein addition in feed, and it is expected to further reduce breeding costs.
in terms of pesticides, synthetic biology can enable the manufacturing of green biopesticides. while breaking through core technologies such as new targets and molecular design of green pesticides, creation of plant immune inducers, and synthetic biology of biopesticides, it has become a trend to use synthetic biology intelligent manufacturing platforms to establish key technologies for the industrialization of green pesticides and efficient application technologies, and to develop new bio-source pesticides. in addition, synthetic biology can also be used to build a photoautotrophic platform that can cover many industries, with huge room for imagination.
6.3 domestic enterprises explore innovative applications
for the industry, synthetic biology brings about a "creation revolution" that will overturn traditional production methods while reducing energy consumption and carbon emissions. for enterprises, this "creation" method is expected to further magnify their cost advantages. in the domestic market, a number of leading companies are focusing on animal and plant health and nutrition, using synthetic biology to build technology platforms, and constantly exploring the application of technological innovation in the commercial field.
in april 2023, shandong shunfeng biotechnology co., ltd. obtained my country's first agricultural gene editing biosafety certificate (high oleic acid soybean safety certificate), taking an important step in the development of domestic plant gene editing from laboratory to industrialization. in january 2024, the long-juvenile soybean developed by shunfeng biotechnology was awarded the plant gene editing safety certificate again.
beijing green nitrogen biotechnology co., ltd. is committed to promoting the industrialization of synthetic biological nitrogen fixation technology based on the national agricultural production needs. according to the relevant person in charge of green nitrogen biology, based on high-throughput screening, synthetic biology, machine learning and computational modeling technology, the company pioneered the directed micro-ecology theory (directed micro-ecology/dme) and its application system, and launched a portable nitrogen-fixing bacteria culture box (dme-05) and a nitrogen-fixing bacteria special culture machine to achieve on-site one-step fermentation and cultivation, and can achieve expansion cultivation of >500 million and 1-2 billion cfu/ml respectively within 20 hours. at present, the culture product is being piloted with universities, institutes, and seed companies to conduct field effect tests. in the future, it will actively participate in the government procurement project of nitrogen-fixing bacteria, and plans to complete the market layout within two years, and it is expected to achieve operating income of more than 10 million yuan.
in the a-share market, there are also many companies exploring the application of synthetic biology in the agricultural field.
ruipu biotech (300119.sz) invested 20 million yuan in 2023 to establish tianjin national synthetic biotechnology innovation center co., ltd. in a joint venture with enterprises and institutions such as the tianjin institute of industrial biotechnology of the chinese academy of sciences. the aim is to develop veterinary vaccines such as nucleic acid vaccines and recombinant protein vaccines, enzyme preparations, prebiotics and other biological preparations, as well as veterinary antibiotics and feed additives through the application of biosynthesis technology. according to the company's interactive platform, the new animal feed vitamin product jointly developed with the tianjin institute of the chinese academy of sciences has entered the verification stage.
according to a research report by west china securities, the total output of industrial feed in china will exceed 300 million tons in 2023, and there is a huge space for feed protein. in addition, proteins synthesized by synthetic organisms can also be used in food processing, with a wide range of application scenarios. in the future, after the implementation of the "microbial protein scale manufacturing" project of ruipu biotechnology and the mass production of proteins, it is expected to contribute new revenue and profits to the company.
bowen group (001366.sz) previously stated on the interactive platform that in 2023, the company was awarded the key laboratory of feed synthetic biotechnology by the ministry of agriculture and rural affairs. feed amino acid vitamin synthetic biotechnology is one of its key research and development directions. through these research and development work, the company has unique technologies such as oen performance nutrition, bowen double acid clean breeding model, sff (partial biological fermentation technology), bowen calcium supplement technology, and has deeply cultivated young animal nutrition, and developed sff happy meal (bowen ttt + sff nursery feed), bowen laying hen feed and other products. data shows that in 2023, the company's product revenue using biological fermentation technology accounted for about 60% of the company's operating income.
fubon shares (300387.sz) has laid out in the fields of biofertilizers and nitrogen fixation in grasses, biopesticides and root-knot nematode control, yield improvement, green planting, etc. in the future, the company will actively use crispr gene editing technology, homologous recombination and other technologies, and use molecular biology, synthetic biology and other methods to continuously carry out research and development and technological innovation in the field of bio-agriculture, and strive to achieve the goals of green environmental protection, low carbon and carbon reduction, cost reduction and efficiency improvement, and quality and production increase.
in the production and manufacturing of l-glufosinate, limin co., ltd. (002734.sz) takes synthetic biology technology as the core, uses cells and their components to mediate material processing, and integrates theories and methods such as engineering, chemistry, and physics to achieve a nearly 100% conversion rate, and no intermediate residues, truly achieving the increase in efficiency and reduction in pesticides and carbon reduction in the production process. the company said that synthetic biology provides unlimited possibilities for the research and development of new biological pesticides. the company's technical team can create new biologically active substances or improve existing insecticidal genes through gene editing technology. the expression of invisible gene clusters can discover new candidate compounds, thereby developing more effective and safer biological pesticides.
weilan biotechnology (603739.sh) has also established a synthetic biotechnology innovation laboratory, which is mainly used to develop functional proteins for feed, sweeteners for food, etc. according to an insider of the company, the laboratory has few r&d projects in reserve and is still in the early stage of strain laboratory r&d. there is still a big gap from large-scale expansion and it does not yet have the conditions for industrialization.
vii. energy: a strategic battleground for future energy, but still a long way to go for industrialization
synthetic bioenergy is an energy product obtained by using artificially designed synthetic organisms, using agricultural and forestry waste resources, urban organic waste resources, and even synthesis gas and co2 as raw materials. it meets the development requirements of low-carbon and environmental protection.
synthetic bioenergy includes different product types such as bioethanol, biodiesel, higher alcohols, biogas (methane), biohydrogen and bioelectricity.
compared with fossil energy, synthetic bioenergy mainly uses renewable biomass resources as its raw materials, and the co2 produced by combustion will not only not increase emissions, but can even reduce net greenhouse gas emissions. the development of synthetic bioenergy is of great significance for ensuring energy security, improving the ecological environment, and helping to achieve the "dual carbon" goals. it has become a strategic area of "future energy" in the world.
7.1 the scale of the global bioenergy market is growing year by year
in the mid-to-late 19th century, biogas and bioethanol were industrialized. the oil crisis that broke out in the 1970s led to widespread attention to the development of bioenergy, which objectively accelerated the research and development and industrial application of various types of bioenergy.
since 2000, with the global attention to sustainable development and the gradual rise and development of synthetic biology, a new generation of synthetic bioenergy technologies including cellulosic ethanol, higher alcohols, aliphatic hydrocarbons, biogas, biohydrogen and bioelectricity have gradually developed, injecting new impetus into the expansion of the bioenergy market space.
according to data released by the international renewable energy agency (irena), the global biomass energy market grew at an average annual rate of about 4.6% from 2014 to 2019, and is expected to reach us$500 billion in 2025. biomass electricity will dominate, and the biofuel market is expected to grow at the highest rate. according to statista data cited by guojin securities, the global biofuel market is expected to exceed us$120 billion by 2024, and the industry's average annual growth rate from 2021 to 2030 can reach 5.4%.
7.2 synthetic bioenergy has gone through three generations of innovation
from the perspective of technological iteration, synthetic bioenergy has gone through three generations of innovation. the first generation mainly used vegetable oils, waste cooking oils, etc. as raw materials to synthesize biofuels; the second generation of raw materials developed into non-food biomass, including grain straw, sugarcane bagasse, etc.; the third generation used co2 in the atmosphere as raw materials for microbial utilization to produce fuels and chemicals. at present, the third generation of biosynthesis has made initial progress.
take bioethanol as an example. the first generation of bioethanol uses sugar/starch crops as raw materials and has achieved large-scale commercial production worldwide. the united states (mainly corn production) and brazil (mainly sugarcane production) are the two major producers, with a combined output of about 80% of the world. the second generation of bioethanol uses agricultural waste and lignocellulosic materials as raw materials. driven by advanced biotechnologies such as synthetic biology, it is becoming more mature. countries around the world have successively built cellulosic fuel ethanol production demonstration projects. the third generation of bioethanol uses microalgae as raw materials and is still in the cultivation stage. many energy companies are accelerating their research and development layout. for example, energy giant total energy and veolia group are working together to promote the technical research of carbon dioxide cultivation of microalgae.
biodiesel is a type of long-chain fatty acid methyl esters (fames)/ethyl esters (faees) produced by transesterification of plant, animal or microbial oils with short-chain alcohols (methanol and ethanol). as early as the 1930s, people tried to use vegetable oils to prepare biodiesel. compared with chemical catalysis, enzymatic transesterification has mild reaction conditions, is environmentally friendly, and is easy to separate by-products such as glycerol, which is a development trend of green chemical industry. in recent years, metabolic engineering based on escherichia coli and yeast for biodiesel production has also made some progress, and the efficiency of synthesizing biodiesel using exogenously added or endogenously synthesized fatty acids and ethanol as raw materials has been continuously improved.
from the perspective of cost-effectiveness, biodiesel production mediated by whole microbial cells is also more attractive. it is reported that researchers at the indian national institute of science (inrs) have developed a new method for biodiesel production using microorganisms, sewage sludge and biofuel byproducts, which can reduce the production cost to $0.72/l (the price of traditional production process is about $6.78/l). in addition, the de novo synthesis of biodiesel by microbial cells can utilize a variety of raw materials, including glucose carbon source, glycerol, xylose, straw hydrolysate, waste oil, and even lignocellulosic biomass.
in terms of hydrogen energy, in the context of green energy transformation and the "dual carbon" goal, traditional hydrogen production methods such as fossil fuel hydrogen production and industrial byproduct hydrogen production can only be used as transitional technical means for hydrogen production due to their unsustainability. "green hydrogen" technology represented by biohydrogen production is regarded as one of the best ways to develop green hydrogen energy in the future. through the transformation of engineered bacteria through synthetic biotechnology and the optimization of process regulation, the efficiency of biohydrogen production has been greatly improved.
in addition, driven by synthetic biology, the development of bpv (biophotovoltaics) has made significant breakthroughs. researchers have constructed synthetic microbial groups (double bacteria, four bacteria, etc.) through design, transformation and optimization at the genetic, environmental and device levels, effectively improving the power output of the bpv system.
for example, the dual-bacteria bpv system built by zhu huawei and li yin's team from the institute of microbiology, chinese academy of sciences has a maximum power density that is more than 10 times higher than that of a single-bacteria bpv system, and can generate electricity stably for more than 40 days; the maximum power density of the four-bacteria bpv system can reach up to 1700mw/m2, breaking the long-standing technical bottleneck of low efficiency and short life of bpv, and laying an important foundation for further promoting the development and utilization of bpv.
zhu huawei and others stated in their research paper that the expansion of synthetic biology in the fields of microbiome and materials science is expected to help develop more diverse and efficient bpv systems. in particular, synthetic microbiome biophotovoltaics have shown great development potential in terms of power density and system stability. in theory, as long as the primary energy carrier can be continuously regenerated, the synthetic microbiome can continue to produce electricity. the greater the energy carrier flux, the higher the output power. at present, synthetic microbiome still has problems such as low energy carrier flux and insufficient continuous synthesis capacity. in the future, the synthesis rate of energy carriers should be strengthened, the problem of metabolic stagnation caused by cell physiological regulation should be solved, and the key technology of continuous synthesis of energy carriers should be broken through.
in general, synthetic biology has achieved transformative breakthroughs in the conversion and utilization of biomass, the development and optimization of cell factories and biocatalysts, and the design and construction of new energy conversion routes, providing an effective means for the efficient preparation and production of bioenergy.
7.3 industrialization is still a long way off, but the trend is clear
from raw materials to technology to products, no link can exist in isolation. therefore, the key to judging the maturity of an industry is to see whether it has opened up the upstream and downstream of the supply chain and formed a complete industrial chain. in the current bioenergy supply chain, both the supply of raw materials at the upper end and the industrial demand at the lower end are not yet mature.
the "china synthetic biology 2035 development strategy" points out that synthetic bioenergy faces the contradiction between high production costs and low product value, and the contradiction between huge market demand and low technological maturity. these two contradictions are the key bottlenecks in the current development of synthetic bioenergy technology and industrial application. therefore, it is necessary to study the optimization of biofermentation processes, intelligent fermentation control, and separation and purification of fermentation products to achieve efficient and low-cost production of synthetic bioenergy, thereby gaining an advantage in the competition with petrochemical energy.
wang qinhong, deputy director of the tianjin institute of industrial biotechnology, chinese academy of sciences, suggested that the following five directions should be given priority in the future: design and construction of integrated biorefining systems for cellulosic biofuels, preparation of biofuels using artificial biological conversion systems for carbon-containing gases, design and construction of multi-cellular systems for efficient conversion of biomethane, design and assembly of efficient biological hydrogen production systems, and creation of portable and implantable biofuel cell systems.
wang qinhong believes that in order to realize the industrial development of biological resources in the future, on the one hand, it is necessary to strengthen the research on raw material technology of bioenergy, improve conversion efficiency and form large-scale industrial advantages; on the other hand, it is also necessary to establish a full-range business model for biomass resources from collection, storage, transportation to trading.
7.4 continuous exploration and application at home and abroad
energy-related synthetic biology companies are the category with the greatest ups and downs in the entire industry. they have had early glory, but have also experienced the bursting of the industry bubble and the "death" of a large number of companies.
here, we have to mention the lesson of amyris, the originator of synthetic biology. amyris was founded in 2003 and is headquartered in california, usa. after successfully using microorganisms to synthesize artemisinic acid, the company turned its attention to the practice of using genetically engineered bacteria to convert sugar into oil.
amyris' goal is to design a bacterium that converts sugarcane juice into farnesene (c15h24). after a simple chemical step (hydrogenation), farnesene can be turned into a highly combustible fuel with almost the same properties as diesel. unlike fossil fuels, it does not emit polluting exhaust gas when burned, making it a real green energy source. this technology has received support from the gates foundation and attracted the attention of silicon valley venture capital. in 2010, amyris successfully landed on the nasdaq.
however, the transition from laboratory to large-scale production is full of challenges. amyris built a factory in brazil, but encountered problems with yeast cell death and insufficient conversion rate during mass production. although amyris' biofuel is technically feasible, after 2011, the shale oil revolution in the united states caused oil prices to fall. in contrast, the high cost of biofuels made its commercialization path difficult, and ultimately, it failed to achieve its production targets. subsequently, although amyris continued to seek transformation in product direction, it still failed to reverse the decline and filed for bankruptcy in august 2023.
in terms of using algae to produce bioenergy, the representative company is lanzatech in the united states. the company mainly uses microorganisms to convert waste gases (such as carbon dioxide or methane) into fuels and chemicals. in china, lanzatech and shougang group jointly established shougang lanza, which organically combines the independently developed synthetic biology with ccus technology to directly convert carbon-containing industrial tail gas into high-value products such as bioethanol and microbial protein. shougang lanza is the first company in the world to realize the production of feed protein and fuel ethanol from steel industry tail gas. currently, 4 projects have been put into operation, forming an ethanol production capacity of 210,000 tons/year and a feed protein production capacity of 25,000 tons/year.
compared with direct combustion of industrial tail gas, shougang langze's first-generation technology can reduce carbon dioxide emissions by more than 33% and nitrogen oxide emissions by more than 90%; the second-generation technology can achieve zero carbon dioxide emissions, and each ton of ethanol directly consumes 0.5 tons of carbon dioxide. compared with combustion power generation, the economic value generated by the same raw gas is more than twice that of power generation.
according to the 2023 annual report of cofco technology (000930.sz), the company has built a fuel ethanol production line that mainly uses corn fuel ethanol, and flexibly uses cassava and inedible raw materials such as rice and wheat. it has built and continuously optimizes the cellulosic fuel ethanol pilot line, and has the technical reserves for non-grain biomass ethanol production.
compared to ethanol, higher alcohols can be mixed in higher volumes, but industrial production of most bio-alcohols remains to be developed. butamax (a joint venture between bp and dupont) and gevo have already begun to commercialize the bioproduction of isobutanol.
of course, universities and research institutes are still the primary force in synthetic bioenergy research and application exploration.
for example, the team led by academician ren nanqi of the chinese academy of engineering pioneered the "fermentation-based biohydrogen production technology", which accelerated the cost reduction and efficiency improvement of biohydrogen production by cultivating new bacteria with high efficiency in hydrogen production and conducting production-scale tests, and gradually promoted dark fermentation biohydrogen production technology into the pilot-scale expansion stage. relying on the latest scientific research results of his team, the first integrated biohydrogen production and power generation project in china started trial operation in harbin in february 2023. the project uses straw, kitchen waste, organic wastewater, etc. as fermentation substrates and high-efficiency anaerobic hydrogen-producing bacteria as producers, realizing the recovery of a large amount of clean energy hydrogen while treating waste, which has effectively promoted the demonstration, promotion and industrial application of biohydrogen production technology.
8. synthetic biology + ai: innovation-driven, two-way movement
the synthetic biology industry has developed rapidly in recent years, and the pace of technological innovation and business model exploration has continued to accelerate. among them, the integration of synthetic biology and ai technology has gradually become a new trend. from the world's leading company ginkgo to the domestic leading company cathay bio, the introduction of ai technology is becoming a new topic for more and more synthetic biology companies.
ai+synthetic biology, what kind of sparks will the two cutting-edge disciplines collide with each other? how will ai technology empower synthetic biology companies and even create a new business model?
8.1 the integration of ai and synthetic biology is accelerating
as a rapidly developing frontier field, the trend of integration of ai technology and synthetic biology is becoming increasingly obvious.
in february 2024, ginkgo, one of the leading companies in the field of synthetic biology, announced the acquisition of two ai-driven drug discovery startups, reverie labs and patch biosciences. at this time, ginkgo's market value had shrunk significantly due to doubts about its "lack of core technology", falling by nearly 90% from its peak. after a series of attempts, it regarded the acquisition of ai companies as one of the important means to make up for the lack of core technology and insufficient products.
ginkgo is not the first synthetic biology company to acquire an ai company. prior to this, leading synthetic biology companies such as amyris and twist bioscience had similar arrangements.
among domestic companies, cathay biopharma invested in ai protein design platform company molecular heart in early 2023 and has since launched a series of collaborations. liu xiucai, founder of cathay biopharma, has repeatedly stated that ai technology will play a positive role in the field of synthetic biology.
in addition to investment and mergers and acquisitions, the cooperation between synthetic biology companies and ai companies is also increasing. globally, specialty minerals and materials company icl and agricultural technology company lavie bio announced in july that the cooperation between the two parties on biostimulants has achieved an important milestone and will further use ai technology to promote the development of synthetic biology products. in the domestic market, this year, twinings bio signed a strategic cooperation agreement with jinyu technology. the two parties intend to use ai to assist in the research and development of synthetic biology and jointly develop new products; in july, langkun environment announced that it had signed a tripartite cooperation agreement with huawei cloud and isoftstone to jointly promote cooperation in the fields of bio-intelligence, artificial intelligence, and digital twins.
"from the perspective of the synthetic biology industry itself, the demand for ai technology is an inevitable result." wang meijie, chairman of yuanxing intelligent pharmaceutical, said in an interview with caixin that the combination of ai technology and synthetic biology is the general trend. "as long as data is generated, any industry will eventually need the support of ai technology. the underlying logic of synthetic biology is to find new raw materials and new production processes through technologies such as gene editing. in the process of continuous experimentation, a large amount of experimental data will be generated, and the processing of massive data will inevitably give rise to the demand for ai technology." yuanxing intelligent pharmaceutical is a metabolic drug developer focused on combining ai with life sciences.
using ai technology to predict the function of designed protein structures can greatly improve protein design efficiency and reduce r&d costs, which is just one of the many roles played by ai technology in the field of synthetic biology. wang meijie introduced that ai technology currently has a lot of room to play in helping synthetic biology companies design new molecular structures or new r&d programs, helping to understand the mechanism of target action, designing enzymes and other catalysts, and helping to complete gene editing or bacterial screening. "alphafold, which is used for protein structure prediction, has been updated to the third generation. the development of this technology platform has directly driven the progress of protein design, especially the optimization of enzyme design, which has further improved the process of synthetic biology production and fermentation. this is the most intuitive example of ai technology driving the development of the synthetic biology industry."
on the other hand, the experimental data obtained from a large number of synthetic biology experiments can further promote the upgrade and iteration of ai models in vertical fields, thereby further deepening the understanding of synthetic biology technology. "in the long run, ai technology will definitely be widely and deeply used in the entire field of synthetic biology." wang meijie said.
8.2 innovation is the driving force for the rapid development of ai+synthetic biology
at this stage, the application of ai technology in the field of synthetic biology is more about improving r&d efficiency and reducing costs, so as to continuously lower the prices of synthetic biology products and enhance market competitiveness, but the results in material structure innovation are still quite limited.
wang meijie believes that the main reason for this phenomenon is that in the past, the product development ideas of synthetic biology companies were linearly advanced from the upstream technology end to the downstream application end. after the product development was completed, they looked for the market. this runs counter to the original development goals of synthetic biology companies. "starting from solving the needs of the downstream application end and leading the upstream technology innovation direction is the r&d idea that synthetic biology companies should have."
she said that the reason why it is impossible to solve the downstream application needs is that it is impossible to design a material structure that meets the needs by relying on human thinking logic and innovation ability, and this is exactly the pain point that ai technology can cut into. "through massive data and stronger computing power, ai technology can create more possibilities for solving problems. this is the most important application scenario of ai technology in the field of synthetic biology."
cathay biotech, which introduced ai technology earlier, has high hopes for the role of ai in the field of synthetic biology innovation. "although gene editing technology is constantly developing, there has been no major breakthrough in the overall research and development paradigm of synthetic biology. we hope to use the prediction results of ai technology to transform protein structure, thereby greatly breaking through the original research and development model and achieving better product effects and higher conversion rates." zheng qian, the company's strategic development director, said that cathay biotech will increase its efforts in the field of ai technology in the future. "the ideal situation is to use ai technology to predict protein structure and reversely customize the required protein structure according to actual needs."
from the perspective of specific applications, among the many current application fields of synthetic biology, the cosmetics industry has a stronger demand for innovation in raw materials, providing a better development environment for the development of ai+synthetic biology technology.
as customers' spending power and consumption concepts continue to upgrade, the demand for personalized performance of beauty products continues to grow. "but in the process of working with customers, we found that both brands and synthetic biology companies still lack awareness of user needs. at the same time, there is a lack of in-depth biological research on some synthetic biology raw materials themselves. for example, there are no good products to solve many practical problems such as acne, hair loss, and dandruff."
the continuous feedback demand is forcing upstream synthetic biology companies to increase their research and development and innovation efforts in cosmetic raw materials, which also creates huge opportunities for the intervention of ai technology.
"at this stage, the research and development focus of synthetic biology companies is more on process innovation, but the understanding of the functions, efficacy, and mechanism of action of raw materials is not clear." wang meijie said that by cooperating with ai technology companies, it can help synthetic biology companies better discover new raw materials, understand the mechanism of action, and screen products, so as to respond more promptly to consumer needs.
8.3 models and barriers of ai+synthetic biology
at present, there are two modes of combining ai and synthetic biology. one is led by synthetic biology companies, such as ginkgo or china's cathay biotech. leading synthetic biology companies introduce ai technology through cooperation or mergers and acquisitions during the research and development process. such companies are more concerned with using ai technology to solve a series of practical problems encountered in the process of synthetic biology research and development and innovation.
the other type is ai technology companies, such as molecular heart, yuanxing intelligent medicine and other ai-driven technology companies. these companies are committed to improving r&d efficiency and product performance in the field of synthetic biology by relying on their own ai technology, and provide external service cooperation. at the same time, they use their professional experience, technology, data accumulation and other advantages to achieve major innovations in synthetic biological materials.
wang meijie said that compared with traditional synthetic biology companies, ai-driven companies have more advantages in the research and understanding of biological mechanisms. "the accumulation of interdisciplinary expertise, the r&d experience and data accumulated in the continuous r&d process, especially the technical patents accumulated in the field of protein design, are an important moat for ai companies in the field of synthetic biology applications. the series of products developed based on this constitute the most important competitiveness of ai companies.
however, like its application in the biopharmaceutical field, the application of ai technology in the field of synthetic biology also faces a problem, that is, the effectiveness of its results lacks large-scale verification. so far, no company has disclosed that new materials designed by ai technology have been put into commercial production and sales.
"in the process of cooperation with ai companies, some results are still very eye-catching, but how much role ai technology has played in this process and whether there are some accidental factors still need to be finally determined through continuous trial and verification." zheng qian said that in the process of introducing ai technology, cathay biopharmaceuticals itself is also crossing the river by feeling the stones. "we know that ai technology is useful, but how useful it is still needs continuous observation."
ix. panorama of synthetic biology industry investment
9.1 major domestic companies in the field of synthetic biology
9.2 evaluation of major domestic synthetic biology companies
references to this report
[1] china’s discipline and frontier field development strategy research (2021-2035) project team, “china’s synthetic biology development strategy 2035”
[2] synthetic biology development strategy research group, synthetic biology branch, chinese society for bioengineering, “synthetic biology roadmap 2030: the engine driving the next generation of biomanufacturing”
[3] bcg, b capital, “china’s synthetic biology industry white paper 2024”
[4] 35 dou, “white paper on the application of synthetic biology in agriculture and food in 2023”
[5] “development status and trends of synthetic bioenergy” (zhang yuanyuan, wang qinhong)
[6] biophotovoltaics: a new environmentally friendly solar energy utilization technology (zhu huawei and li yin)
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