The United States monopolizes 40% of the global market, and Biden can't put down synthetic biology

Not long ago, Biden signed a paper called the National Biotechnology and Biomanufacturing Program to put synthetic biology in the
spotlight.

At the beginning of the outbreak of the new crown, the shadow of the economic recession hung over the global capital market, and the synthetic biology track was indeed one of the few "Guangsha" in the ups and downs, which became the flow and placement of the wealth of many investment institutions
.

2020 and 2021 are considered to be the "best year"
of synthetic biology.

The prosperity of synthetic biology belongs to the world, but it is hard to deny that this prosperity originated mainly in the United States
.

According to Reportlinker, the global synthetic biology market size will exceed $10 billion for the first time in 2021, and the synthetic biology market size is expected to exceed $13 billion in 2022 and reach $33.

In 2021, the United States became the world's largest regional market for synthetic biology with a share of nearly 42%, which is inseparable from the relatively loose regulatory policies
in the early days of the United States.

McKinsey commented two years ago that in the next 10-20 years, the economic value of $4 trillion will be dominated by synthetic biology, and in principle, 60% of the products on the market can be produced
using biological methods.

Amyris has been on the market since 2010, and Zymergen and Ginkgo Bioworks have also landed in the secondary market last year, further transferring
the heat of synthetic biology to non-institutional investors.

Although Zymergen's 95% market value shrank in half a year based on the market performance of the past two years is a big surprise, Ginkgo Bioworks has also experienced a stock price diving circuit breaker
.

01 Radical regulatory policies create opportunities

In the United States, synthetic biology has been around for decades
.

Strictly speaking, synthetic biology is a technology born in the 21st century, marked by Gardner's construction of the first gene switch in E.

Opponents were concerned that genetically engineered organisms were not reliable enough in terms of safety, pointing out that the level of regulation at the time could not ensure that such commercial applications would not harm human health or damage the environment
.

In the end, the debate was crowned with the victory of the
pro-commercialization side in 1986 when the White House Office of Science and Technology Policy (OSTP) published the U.

This is clearly a relatively radical decision, and some low-risk genetically engineered organisms could even be exempt from regulation
under the guidance of the "framework".

In contrast to the United States, regulators in Europe have adopted the "precautionary principle" on the same issue, which can be simply interpreted as taking precautions against all activities that may cause harm to human health or the environment, even if some causal relationships are not yet fully established
in science.

"Maintaining a first-mover advantage" has always been an important decision-making basis behind the relatively aggressive regulatory policies adopted by the
United States.

According to a Wilson Center study, between 2008 and 2014, the U.
S.
government invested more than $800 million in synthetic biology research, funded by the U.
S.
Department of Energy, the Department of Defense, the Department of Agriculture, as well as the National Science Foundation (NSF) and the National Institutes of Health (NIH), Ginkgo Bioworks was founded
in 2008 on this wave of policy.

From the perspective of technological development trajectory, 2008 is also a key node
in the transition of synthetic biology from technology research and development to application transformation.
This year, research at the University of Exeter in the United Kingdom has realized the use of the metabolism of amino acids in E.
coli to produce biofuels
.
Around 2014, synthetic biology was moving to a new level
.
The youngest of the "Royal Three Families", Zymergen, was born just the year before, and the ten-year-old big brother Amyris began to commercialize
artemisinin using yeast strains at about the same time.

Technological breakthroughs and expectations of its future value have led China, India, Japan, the United Kingdom, and countries on the European continent to start throwing attention and real money into synthetic biology from the height of national strategy, and it has also increased the anxiety
of the United States as the number one.
Governments are aware that synthetic biology and its associated technologies may help them reduce their dependence on oil, address key environmental challenges, change manufacturing processes, and boost agricultural production, while adding new industries and more jobs
.

In 2012, the Obama administration released the U.
S.
National Bioeconomy Blueprint, and the bioeconomy of synthetic biology was formally proposed
as a national strategy.
Since then, whether it is Trump's White House summit on the U.
S.
bioeconomy or Biden's National Biotechnology and Biomanufacturing Plan, the development of synthetic biology has been included in the task list
of each U.
S.
president.

Policy is often the bellwether of the stock market, and the popularity of synthetic biology in the primary market in the first two years is visible to the naked eye, and investors in the secondary market have long been eager to try, and their eyes are brushed into the star companies that have been pinned high hopes
.

02 Whether to do the platform or the product, this is a problem

Do platform or product? Ginkgo Bioworks, Amyris, and Zymergen each have their own agenda
.

In theory, the product can be directly oriented to the C-end and has a higher market ceiling
.
However, there is actually a huge gap between laboratories and industrial applications, and there are too many risks
in the process of industrial scale-up.

Ginkgo Bioworks is determined to make the platform to the end, and Amyris has achieved great success
in the beauty field by establishing a brand to make products.
Zymergen's appearance provides a typical negative case for latecomers, showing that "product-type" companies will fall into a huge passivity
once the selection fails.

The rapid fall of Zymergen took most investors by surprise
.
Its synthetic biomanufacturing business integrates machine learning and automation technology, using its own molecular biology, data science, automation and genomics technology to build a platform that can search and locate the required molecules from the natural catalog, and design candidate microorganisms that can produce such molecules, and finally genetically engineer microorganisms to achieve large-scale biological manufacturing
of target molecules.

The synthetic biology company, which was originally a star and halo, raised $500 million in IPO last April and raised more than $1 billion
before the listing.
But in August, just four months after going public, Zymergen was exposed to the failure of its core biofilm product, which eventually led to the current company, including the CEO, more than half of its employees were forced to leave the office building, and the stock price plummeted by more than
90%.

Earlier this year, Zymergen, hoping to salvage the decline, announced a new drug discovery business that claims to use its proprietary synthetic biology platform and the world's largest metagenomics database to discover high-value oncology target drug molecules
.
As a result, the news did not boost investor confidence, but it may have sparked interest from
Ginkgo Bioworks.

Seven months after announcing the shift to drug discovery, Zymergen announced that it would be acquired by Ginkgo Bioworks for $300 million
.
Ginkgo Bioworks has taken a fancy to Zymergen's machine learning and data science tools for exploring the known and unknown genetic design space, saying it plans to integrate these technologies into its own foundry for designing living cells
.

The prevailing view is that the deal is lucrative for Ginkgo Bioworks because it both reduces competition in the lab services space and expands its own capabilities boundaries
.
What's more, this cost is fairly low compared to Zymergen's peak valuation
.

But at least from the current stock market performance, the benefits of the acquisition of Zymergen have not yet been revealed
.
Since the announcement of the acquisition, Ginkgo Bioworks' market value has not risen but declined, and even on September 13, Ginkgo Bioworks has caused the suspension of trading due to the triggering of the
circuit breaker mechanism.

Ginkgo Bioworks is a model for platform-based synthetic biology companies, with the goal of building a platform that will eventually enable humans to engineer organisms
in a way that resembles computer programming.
They believe that "biology is code," which is at the heart of
their business model.

Specifically, Ginkgo Bioworks has created a platform for cell programming across living organisms and will use it to serve a variety of customers who want to program cells, whether in food, medicine, or agriculture
.
Ginkgo Bioworks binds with downstream customers by selling services and takes the route
of cooperative research and development.

Ginkgo Bioworks believes that the platform is where synthetic biology really creates value, not further downstream
.
Since its inception, they have spent nearly a billion dollars building highly automated laboratories with advanced diagnostic tools that can be used to design, build and test genes added to microbes or other cells that claim to be able to produce 50,000 different transgenic cells
per day.

This almost obsessive business model has also aroused some investors' doubts, because the "old predecessor" Amyris next door has selected products from the perspective of the industrial chain, and since 2014, it has transformed into a high-value-added, small-batch fragrance business, and now the days are booming
.

At present, Amyris's business pillars are beauty, fragrance and health, and has achieved great commercial success
with the "2C" business model.
Amyris' revenue nearly doubled
in the past year by more than $340 million.
"Our consumer brands have been extremely popular with consumers, setting a new record
for our core income.
" Amyris' president said
.
And almost certainly, Amyris' sales record will be set
again this year.
In August, Amyris announced that its Q2 revenue increased by 54% year-on-year.
Among them, the revenue of consumer business increased by 108%
year-on-year.

Amyris's successful business model is in the forefront, and investors are always a little uneasy
about Ginko Bioworks, which insists on doing the platform "2B".
In fact, Ginko Bioworks has $145 million in revenue in Q2 2022, up 231% year-on-year, but there are too many uncertainties
in this data.

Since 2020, Ginkgo Bioworks has begun to provide Covid-19-related testing products and services to the U.
S.
Public Health Service, and this year's Q2 biosecurity revenue ($101 million) accounted for nearly 70% of revenue, far exceeding the original main business
.
If extended to half a year, this part of the business increased by 467%
year-on-year.

03 The geographical concentration is too high, and the bioeconomy is unevenly distributed

It's worth mentioning that whether it's Amyris, Ginkgo Bioworks, or Zymergen, it's no coincidence
that the old, middle-aged, and young generations of synthetic biology companies are either from California or Massachusetts.

Amyris, Zymergen's state of California and Ginkgo Bioworks' state of Massachusetts are the "booming lands"
of synthetic biology in the United States.
Over the past decade, two states have received the largest share of investment in synthetic biology in the
United States.
Of the $12 billion in total investment, California and Massachusetts took $5.
3 billion and $4.
4 billion,
respectively.
North Carolina, in third place, is less than one-tenth of the top two, and as many as 34 states have little to no investment in
synthetic biology.

In the past, California has always been famous for the "IT" represented by "Silicon Valley", but now, the "BT" of synthetic biology is trying to take the baton and become California's new growth engine
.

California has an inexplicable affinity with synthetic biology, and the first modern biotechnology company founded here was the well-known gene Tektronix, the first Biotech to synthesize human insulin using standard synthetic biology methods
.
Specifically, DNA synthesis is used to make human insulin genes, which are then sheared and spliced into bacteria for fermentation and brewing, and the sugar is successfully converted
.

In addition to the support of local policies, the absolute lead of California and Massachusetts is considered to rely on the support of the elite universities behind it
.
Not only does California have elite private universities like Stanford, but it also has the most economically vibrant public university system
.
Massachusetts enjoys Harvard University, as well as the Massachusetts Institute of Technology
.
The "father of synthetic biology" Venter's research institute is located there, and in 2010 the world's first artificial life (cell) was synthesized "Cynthia"
.

But regardless of the cards in hand, it's hard for players to reject the enormous potential of synthetic biology, and in addition to competition between nations, a new initiative called the "Biological Belt" has been born within the United States, hoping to develop a bioeconomy for other states as well, investing across the United States to meet the upcoming biological boom
.
There may not be top-notch research teams there, but they may have the land, raw materials, and labor
needed to scale up the manufacture of new synthetic biology products.