BUSINESS
INSIGHTS BY MADELEINE JACOBS broader adoption of biotechnology have recently been overcome." Advances include a broad spectrum of available enzymes and fermentation systems, enhanced speed ofbiotech development, and higher yields and lower cost. Looking at the chemical industry by segment, Riese is most confident about the property competitive advantage, improved impact of biotech in the fine chemicals inperformance, innovation and technology, dustry Biotech affected about 15% of the sustainability We want it all. We want it now total fine chemicals market in 2000; by "What we need," he continued with a 2010, McKinsey estimates it will affect wry smile, "is symmetric partnerships, ac3 0 - 6 0 % of the total sales. This is also the cess to reality-based innovation and techarea that holds the promise of the greatest nology; shared intellectual property, marcollaboration between biokets, products, and services; technology and chemical and, of course, self-replicatcompanies. ing nanofactories!" Specialty chemicals in But the promise of 2 0 0 0 show the greatest biotechnology was quesrange in estimates: 0-15% tioned by Jeff Zekauskas, a in 2000, growing to 0-50% vice president atJ P Morgan. by 2010. Polymers, with an 'At this juncture, Wall Street impact of 1% in 2000, and believes that biotechnology bulk chemicals, with an improducts will constitute onpact of 3%, are expected to ly 2% of chemical revenues grow to 6-12% by 2010. in 2010. There's a fatigue However, McKinsey has a with how the market looks lower level of confidence in at bio tech." Attendees rethese two areas. ceived his remarks with CHANGE AGENT considerable skepticism. Riese sees the CTO as a The take-home message for the CTO, Riese said, is Enter Jens Riese, a Frank- prime player in forging that he or she must act as furt-based associate princi- partnerships. both an internal and exterpal at McKinsey & Co., nal agent for biotechnology "Internally" he with his crystal ball and a talk titled "Insaid, "the CTO must place biotech on the dustrial Biotech—From Potential to Reboard and management agendas of the ality" Riese, who received a Ph.D. in biocompany ensure sufficient budget funding chemistry from Cambridge University was for biotech investments, and balance decidedly more upbeat than Zekauskas. biotechnology and chemical business needs. McKinsey predicts that 1 0 - 2 0 % of Externally the C T O needs to build public chemical revenues will be "impacted" by awareness, support investor communicaindustrial biotech by 2010. The figure for tion concerning biotech activities, and po2 0 0 0 is estimated to be about 5%. By imsition the company favorably on the biotech pact, Riese means that biotechnology will recruiting market to attract talent." play a significant role in some stage in the production of a chemical product. So it's The CTO must also identify, select, and no surprise that his figure differs from that pursue the right opportunities and make of Zekauskas, who was talking about pure sure that the best technology platforms industrial biotechnology products. and networks are established. So what's next for biotech and the chemTo arrive at the 10-20% view, McKinical industry? More brainstorming sessions, sey consultants talked to chemical indusof course, and new business models for try executives and "analyzed trends in the partnering. Reichmanis also sees a role for chemical industry, inventoried current ACS to help identify "significant emergcommercial and R&D biotech activities, ing technologies and simultaneously proand combined a bottom-up and top-down estimate of likely impact by segment," vide a forum for discussion. I hope that this summit is just the first of a series of Riese said. such events." Riese points out that "many hurdles to
POTENTIAL AND REALITY Chemical companies and biotechnology firms meet to discuss potential partnerships
T
HESE DAYS, MEETINGS OF TOP
industry executives seem to occur at the rate of at least one a week. And so the meeting that took place on May 19-20 at a hotel in suburban Wishington, D C , might have been completely unremarkable, except that it brought together top executives from the chemical industrywith their counterparts in the biotechnology industry for what its sponsors—the American Chemical Society and Biotechnology Industry Organization (BIO)—billed as a C T O (as in chief technology officer) Summit. T h e meeting focused on industrial biotechnology: the application of life sciences to conventional manufacturing and synthesis processes. The field already is finding considerable use in biobased products and bioenergy, manufacturing of new materials, and nanotechnology The purpose of the meeting, according to ACS President Elsa Reichmanis and BIO President Carl B. Feldbaum, was to find ways to foster innovation and partnerships between these two groups. 'This is the first effort, to my knowledge, to bring the science and technology leaders from the chemical and biotechnology industries together to talk about future opportunities," Reichmanis tells C&EN. And so you found, among the 80 attendees, Thomas M. Connellyjr., DuPont chief science and technology officer; Emmo Meijer, DSM chief technology officer; and Gregory O. Nelson, Eastman chief technology officer, in the same room with Peter L. Lanciano, Altus Biologies president and CEO;John Grate, Codexis C T O and vice president of R&D; and Michael Arbige, Genencor senior vice president of technology, discussing such issues as what the chemical industry wants from biotechnology and vice versa. "What the chemical industry wants from bio technology is different from what the chemical industry needs" said Tom Lane, manager of silicon bioscience at Dow Corning. "We want market access, intellectual
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