Bill Gates, Cathie Wood, and John Doerr are just a few billionaires who have put money into synthetic biology.
The prospect of programming the DNA of microorganisms such as yeast as if they were computers has piqued the interest of venture capitalists.
Producing items more efficiently and with a smaller carbon footprint than traditional production is one of the promises of synthetic biology.
With advancements in scientific research and development, the pharmaceutical and biotechnology industries have seen the development of improved technologies for the development of more effective and safe pharmaceuticals. The invention of computers increased scientific progress by enabling the reading and modification of the design of minute particles such as cells or, more importantly, DNA.
The ability to manipulate the fundamental building components of organisms such as cells and DNA has resulted in the development of synthetic biology – the process by which man-made replicas of naturally occurring biological entities are created.
While biology is typically described as the study of living things and life itself, Synthetic Biology has elevated science to the status of the future manufacturing paradigm. Because microorganisms can theoretically produce a large number of the items that industrial processes currently manufacture, Synthetic Biology—the design and engineering of biological systems to create and improve processes and products—offers new ways to produce almost everything consumed by humans, from flavors and fabrics to foods and fuels.
Supply may no longer be constrained by raw material availability. Companies can create and manufacture an endless number of things from the ground up, cell by cell. Half a gram of beef muscle may create up to 4.4 billion pounds of beef—more than Mexico consumes in a single year. Syn-bio has already spawned an industry of science-based start-ups attempting to alter conventional products and processes, thereby altering the material world as we know it.
Market growth is anticipated in the synthetic biology market from 2022 to 2027. According to Data Bridge Market Research, the market is expected to reach USD 30.28 billion by 2027, rising at a CAGR of 23.63 percent over the projected period. It's comparable to investing in driverless vehicles to ensure the automotive industry's future viability.
As another trading week begins, investors will be on the lookout for solid stocks to invest in. If anything, emerging areas of the stock market, such as synthetic biology (SB) stocks, may be worth examining at the moment. Before we delve into the facts, you may be wondering what synthetic biology stocks are and what these companies do. SB is the research and development of novel biological components, devices, and systems. As the name implies, the end products are man-made replicas of naturally occurring biological entities. As a result, SB applications are numerous and distributed across various subdivisions. These include gene editing, vaccine development, and even research into alternative fuels.
While this is impressive, the industry is still in its infancy. Most would prefer SB to industrial biotech, as SB companies manufacture possible critical components for the biotech industry. Today, companies like Zymergen (NASDAQ: ZY) and Gevo (NASDAQ: GEVO) are utilizing cutting-edge technology in their SB work. Not to mention, even well-known figures in the technology industry, such as Bill Gates, appear to be positive about the industry at the moment. This is evident from his investments in the production of synthetic flesh Beyond Meat Inc. (NASDAQ: BYND). In general, the SB industry offers a lot in terms of potential long-term growth.
Humanity's Cells and DNA: A Disruptive Promise for Modern Industries
Synthetic biology is predicated on two tenets:
Each cell contains a unique code. You may be aware that we employ "0" and "1" symbols to create computer-readable binary code. To begin, each living thing (at least according to our definition of life) possesses a four-letter code (A, C, T, and G) called DNA, which we can write and read via DNA synthesis and sequencing.
Each cell contains a sophisticated molecular machine capable of deciphering this code and converting it to molecules (proteins, messenger RNA, etc.). It is a tried and true system, as evidenced by the fact that you are currently reading this.
Synthetic biology, in a nutshell, tries to create synthetic DNA, place it in a cell factory, and produce something valuable.
The applications of synthetic biology are vast, ranging from chemistry to agriculture and computer science.
Indeed, synthetic biology paves the way for a slew of future biotech sciences and economics opportunities. Scientists dare to push the boundaries of what is possible by merging molecular systems, computer science techniques, and engineering.
Synthetic biology has the potential to assist in addressing critical issues confronting the planet and its inhabitants. Synthetic biology research may result in the development of novel technologies such as programmed cells that self-assemble in disease areas to repair the damage.
Consider the possibility of manufacturing biofuels from industrial waste gases. Enhancing or even replacing established chemical pathways with novel ones. Alternatively, developing new diagnostic techniques for medicine and imagination transforms into a potent force for invention.
My favorite concept is that of data storage in DNA. Advances in DNA sequencing and synthesis enable digital information storage in DNA. Catalog successfully archived the entirety of Wikipedia's English-language edition onto DNA in 2019.
DNA provides two significant benefits over conventional hard disk drives:
It is extremely thick, which means that it can store a great deal of information;
It is extremely resistant: it will not become corrupted or harmed after a few decades. Consider DNA in fossils!
With the annual expansion of digital data generated worldwide, it's easy to see why DNA storage has gained popularity over the years!
A Market With Attractive, though speculative, Financial Forecasts.
The synthetic biology market is essentially triangular in shape:
Sales of synthetic chemicals (synthetic DNA, enzymes, and so on);
Sales of technological apparatus (sequencers, synthesizers, and so on);
Providers (synthesis on-demand, outsourced R&D, maintenance, etc.).
Nonetheless, synthetic biology is founded on a fundamental component analogous to digital data in computer science. The "nucleotide base pair" is the fundamental unit of synthetic biology, and let us refer to it as a "letter."
By constructing letters sequentially, we can create sequences holding the data. It will decrypt it if you place it in a cell. Eventually, this minuscule machine begins to produce an interesting substance.
Since 1990, the cost of DNA sequencing has decreased dramatically. At the moment, DNA synthesis follows the same process. In 2000, it cost USD 10 per letter to synthesize DNA. A gene may easily have 1000 letters, yet, manufacturing an entire gene was prohibitively expensive at the time! By 2010, this price has gone below USD 1, and you can now compose a letter for between 0.1 and 0.2 USD. Even less so when dealing with enormous volumes.
Why is the cost per letter high? Because it increases the accessibility of synthetic biology! Bear in mind that democratizing DNA will increase the number of business models based on synthetic biology.
1. Twist Biosciences Corporation
Twist Biosciences is our first stop today. Twist is, in a nutshell, a market leader in the synthetic biology industry today. The company's primary focus is on its patented DNA synthesis platform, and twist's platform aims to industrialize biology engineering. This is accomplished by the use of a silicon chip to synthesize synthetic DNA and twist pioneered this technology.
The company claims that its technology may be used for a variety of applications, from medication discovery and development to digital data storage in DNA. TWST stock may be on investors' radars today because of its established SB offering. As a result, TWST stock is currently trading at a more than 350 percent premium to its pandemic phase low.
Twist continues to make strategic moves regardless of its present momentum. iGenomX, a producer of library preparation tools for next-generation gene sequencing processes, was bought by the business in late June. Twist would be increasing its ability to fulfill its clients' sequencing demands through the $35 million cash and stock transaction. According to Vijay Kumar of Evercore (NYSE: EVR), the move could result in more meaningful revenue potential for Twist in the long run.
2. Verve Therapeutics
Verve Therapies is a biotechnology company focused on the development of single-course genetic therapeutics for the treatment of cardiovascular disorders. The business is developing two preclinical programs that target genes involved in the regulation of blood lipids, such as low-density lipoprotein cholesterol (LDL-C). VERV believes that its medicines have the potential to give advantages to patients for the duration of their lives.
In June 2021, Verve Therapeutics completed its initial public offering ("IPO"). The selected indications provide major prospects for the company. Updates on the pipeline candidates' progress toward clinical development will be a critical element driving Verve Therapeutics' stock in 2022.
Since its first public offering, the stock has increased by 29.5 percent. Over the last 30 days, the Zacks Consensus Estimate for Verve Therapeutics' 2022 loss per share has stayed constant.
3. Codexis
Codexis is a biotechnology company focused on discovering, developing, and marketing modified enzymes utilized by its partners to create successful medications. Additionally, the company licenses its patented CodeEvolver protein engineering technology platform to worldwide pharmaceutical companies for the purpose of producing enzymes. Codexis has partnered with well-known pharmaceutical companies, like Novartis, to license CodeEvolver.
Additionally, Codexis develops biotherapeutic drug candidates for novel new indications. The company is collaborating with Nestle on PKU treatment and with Takeda on Fabry Disease, Pompe Disease, and an unidentified blood factor deficiency treatment.
The company can create new treatments and seek new collaboration agreements by leveraging its technology platform. Codexis' stock will rise in 2022 as a result of the successful development of new partnered goods and new partnership agreements.
Codexis's stock has risen 53 percent so far this year. Over the last 30 days, the Zacks Consensus Estimate for Codexis' 2022 loss per share (EPS) has increased by 3.9 percent.
4. Ginkgo Bioworks
Ginkgo Bioworks strengthened its financial position in May by agreeing to go public through a $17.5 billion merger with a special purpose acquisition company (SPAC) that is expected to generate gross cash proceeds of up to $2.5 billion. The SPAC acquisition of Soaring Eagle Acquisition Corp. suggests a pre-money equity valuation of $15 billion for Ginkgo, which was founded in 2008 by co-founders who have collaborated for over two decades, dating all the way back to their days at MIT. Their objective was to create a platform that allowed cells to be programmed as readily as computers in a variety of applications, including food, agriculture, pharmaceuticals, and industrial chemicals. Ginkgo committed in June to apply its organism engineering knowledge to an undisclosed Sumitomo Chemical bio-based commercial product and to investigate bio-based manufacturing technologies that could be used in substitution of petroleum-based products.
5. Precigen
On June 10, Precigen's wholly-owned subsidiary Precigen ActoBio announced positive topline results from a Phase Ib/IIa trial (NCT03751007) evaluating its microbe-based therapy AG019—developed using the company's ActoBioticsTM platform—in patients with recent-onset type 1 diabetes. During the first six months following an eight-week treatment cycle with oral AG019 alone, 5 of 9 adults (56%) showed stabilization or rise in C-peptide levels, as did 7 of 10 adults (70%) and all four adolescents treated with AG019 with teplizumab. Precigen initiated a Phase I trial (NCT04724980) of PRGN-2012, the company's first off-the-shelf AdenoVerseTM immunotherapy targeting infectious illness, earlier this year. PRGN-2009 trials in HPV-associated tumors are also underway, as are the UltraCAR-T® trials investigating PRGN-3005 in ovarian cancer and PRGN-3006 in acute myeloid leukemia.
6. Amyris (NASDAQ: AMRS)
Indeed, it bears a strong resemblance to the conventional chemical industry.
Amyris was formed in 2003 to develop a new antimalarial chemical. Since then, the company has focused on the manufacture of a variety of specialty and performance chemicals. These are the building blocks for a variety of products and processes, including adhesives, cleansers, construction chemicals, perfumes, paints, automotive polymers, and synthetic textiles. In a nutshell, all that constitutes contemporary life.
Amyris has developed and marketed 13 sustainable components that are now utilized by hundreds of millions of people in over 3,000 prominent worldwide brands' goods. The product range is primarily focused on the cosmetics industry, as this is where Amyris gained its first significant success: synthetic squalene. Amyris counts among its clients companies including Givaudan, L'Oréal, and Estée Lauder.
The business now has an exclusive license to produce and use a coronavirus vaccine, effective July 1. To explain, the business created the RNA COVID vaccine in collaboration with the Infectious Disease Research Institute (IDRI), a non-profit organization situated in Washington, DC.
7. Synlogic (SYBX)
Synlogic (SYBX) is a company at the interface of biology and engineering, pioneering the use of synthetic biology to create new types of living therapies. Currently, the stock is worth roughly $2.00. According to LinkedIn, they have over 80 employees, and they are based in Cambridge, Massachusetts. SYN is another option worth investigating.
The exciting part of the Synthetic Biology movement is picking the winners, yet many of them do not yet have a stock ticker. We are now seeing golden-age entrepreneurs receiving their first taste of venture capital funding.
The initial public offerings are imminent, and the following few years will be extremely exciting. There will be false starts, but when companies like Synlogic establish their footing, they have a chance to be a winner, among many others. Their CEO faces significant obstacles in the form of early discovery and unavoidable trials and errors.
8. Ginkgo Bioworks (NYSE: DNA)
Here is the selection's "hottest" company! In September 2021, Ginkgo Bioworks, America's first unicorn in synthetic biology, went public via a merger with a SPAC, Soaring Eagle Acquisition. Its ticker was renamed "DNA," a straightforward but effective method to stand out!
Ginkgo Bioworks is a company that specializes in using genetic engineering to produce bacteria with industrial applications on behalf of clients in a variety of industries. To summarize, I would argue that Ginkgo Bioworks is attempting to become the Amazon AWS of synthetic biology. You'll see why.
The company's business plan is based on three axes:
R&D: attempting to identify a commercially viable molecule, process, or strain.
Engineering: reprogramming an organism to adapt to the discoveries made in step one.
Manufacturing: in step 2, by optimizing and scaling up the transformed organism.
It is a reasonably basic and adaptable approach in that it can be declined in a variety of ways to meet the customer's demands. Additionally, by concentrating on stages 1 and 2, Ginkgo leaves stage 3 to its customers, a prudent method to offload riskier and more difficult industrial manufacturing.
Additionally, Ginkgo Bioworks maintains a massive library of DNA sequences and other elements used in synthetic biology, which any client can access for a fee.
Ginkgo, like a traditional engineering consulting firm, offers very competitive development and engineering rates to its clients as a result of its expertise. This is where the Amazon AWS analogy comes into play.
Due to Ginkgo's expertise, technology, and affordable pricing, a new synthetic biology company should outsource R&D and engineering steps rather than starting from scratch. This is why so many companies choose to use Amazon AWS cloud solutions rather than establish their own cloud platform.
9. Moderna Inc.
Finally, but certainly not least, is Moderna. This front-runner in the coronavirus vaccine race requires little introduction. Moderna's vaccination technology, in particular, inserts synthetic messenger RNA into human cells.
In turn, these cells seek to produce specific immune responses against specific pathogens such as coronaviruses. All of this has pushed MRNA stock into the spotlight, despite gaining more than 240 percent in the last year.
While the world remains in the grip of the epidemic, demand for Moderna's vaccine remains strong. Mexico announced plans to authorize it over the weekend, and Taiwan approved the combination of Moderna's vaccine with the first dosage of AstraZeneca's (NASDAQ: AZN) vaccine candidate. In sum, Moderna's market penetration appears to be increasing daily. Would MRNA stock have more room to run after Moderna was added to the S&P 500 index on July 21?
The industry of synthetic biology is still in its infancy. It began with biotechnology and is projected to spread to a variety of other application industries as economic opportunities present themselves. Cost reductions in DNA sequencing and synthesis should significantly boost the synthetic biology market.
However, it retains a degree of secrecy. We are definitely in the early stages of development, which makes us extremely risky. However, as you are aware, "high risk, high gain." As is the case with many revolutionary technologies, the disruptive potential of synthetic biology will not be realized unless a long-term investment horizon is established.
Conclusion
Synthetic biology is a critical component of the biotechnology economy's future, which is predicted to generate hundreds of billions of dollars in revenue for the US. To be a good investor, you must keep an eye on what science and technology can accomplish in the next ten to fifteen years and how this will manifest itself in the business and investing worlds.
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