Business Concentrates BIOTECHNOLOGY
New enthusiasm for biobased chemicals Four start-ups boasting fermentation technologies that produce specialty chemicals have notched recent wins, suggesting that investors and manufacturers are taking another look at what has been a dormant arena in recent years. Checkerspot, a materials firm named one of C&EN’s 10 Start-Ups to Watch in 2018, has raised $13 million in its first round of venture funding from investors Builders VC, Breakout Ventures, and others. The start-up is focused on producing polyurethanes and textile finishes by customizing the triglyceride output of microalgae. The company’s founders, Charles Dimmler and Scott Franklin, know a lot about algae. Both are veterans of the algae firm Solazyme, which first made a splash back in 2009. That now-bygone era brought an explosion of start-ups promising to make chemicals and fuels from renewable raw materials. At scale, they claimed, their algae- and sugar-based technologies could compete with fossil-fuel-derived incumbents. But then petroleum and natural gas prices plummeted, and firms like Solazyme that borrowed heavily withered or went out of business. “What we’re doing now is absolutely built on the shoulders of our past expe-
rience, both positive as well as the hard lessons learned,” Dimmler says. Solazyme showed that algae can be produced and processed at scale, he says. But Checkerspot will have a different cost structure, Dimmler argues. Working at a smaller scale, the firm is focusing on valuable, in-demand specialty molecules that can’t be made from fossil sources. The strategy is appealing to investors.
Checkerspot’s Scott Franklin works in the firm’s lab on specialty chemicals made from algae.
In a blog post describing Breakout Ventures’ interest, Scientific Director Hemai Parthasarathy touts “the power of biological systems to design material building blocks with new properties.” In three other cases, firms are getting a boost from Asian chemical firms keen for new materials. San Francisco–area Zymergen, which uses automation and machine learning to produce molecules using modified microbes, has signed a development pact with Sumitomo Chemical for biobased polymers and other electronic materials. Zymergen’s neighbor, the biobased specialty chemical firm Lygos, will also get to prove it can improve consumer electronics. The venture arm of LG Group added an investment of $5 million to Lygos’s second round of funding. Lygos and LG aim to replace petroleum-derived materials with sustainable substances. The Chinese fine chemical company Zhejiang NHU has different end markets in mind for its $6.2 million seed round investment in Cysbio, a spin-off from the Technical University of Denmark. Cysbio’s fermentation expertise is in producing amino acids and sulfated biochemicals for markets like food, nutrition, and cosmetics. But as for the other startups, the draw of Cysbio is the ability to make new functional chemicals for new applications.—MELODY BOMGARDNER
INFORMATICS
Watson shifts from drug discovery to the clinic Responding to reports that it will no longer sell its Watson artificial intelligence system for use in drug discovery, IBM says it is “not discontinuing our Watson for Drug Discovery offering” and that it will continue to support current users. At the same time, IBM says, “We are focusing our resources within Watson Health to double down on the adjacent field of clinical development.” The initial report of changes at IBM was published in the life sciences newsletter Stat and attributed to “a person familiar with the company’s internal decision-making.” IBM has struggled to adapt its Watson
12
C&EN | CEN.ACS.ORG | APRIL 29, 2019
computing system to drug discovery. It had to halt a marquee installation of Watson for Oncology at the University of Texas MD Anderson Cancer Center in 2016. Both MD Anderson and IBM said they scrapped the project because of procurement improprieties. AI has made only small advances in drug discovery generally, and industry watchers were not surprised to hear IBM is backing away from the field. “I’m surprised it lasted this long,” says Michael Elliott, CEO of the science informatics consulting firm Atrium Research, noting that AI is limited by the quality and accessibility of data it works with. “Data
at pharma is often trapped in Excel or PowerPoint and lacks consistency in formats and quality across domains.” Drug companies continue to develop AI for research, however. The Machine Learning for Pharmaceutical Discovery and Synthesis Consortium at the Massachusetts Institute of Technology, for example, is working on tools for molecular generation. And IBM notes that Watson for Drug Discovery users include Baylor College of Medicine, the Barrows Neurological Institute, and Toronto Western Hospital.—RICK MULLIN
C R E D I T: CH EC KE RS P OT
Downloaded via UNIV OF CALIFORNIA SAN FRANCISCO on August 20, 2019 at 09:56:37 (UTC). See https://pubs.acs.org/sharingguidelines for options on how to legitimately share published articles.
New crop of start-ups promises unique and in-demand molecules from fermentation
