Life Technologies’ Recent Deals Reflect $100M Initiative in Synthetic Biology
Back on May 28th, Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) said it had agreed to pay approximately $47 million in cash to acquire a 74 percent stake in Geneart, a German company that specializes in making synthetic genes.
Less than a week later, Life announced that it had made an undisclosed investment (which later turned out to be $10 million) in Synthetic Genomics, the San Diego startup working to develop gasoline and other biofuels from genetically engineered algae.
A couple of other announcements followed in August and September. First, Life Technologies and SG Biofuels of Encinitas, CA, announced that they had completed sequencing the genome of the Jatropha curcas plant, which produces a walnut-size oil seed that can be used to make biofuels. And then, a few weeks later, SG Biofuels revealed that it had raised $9.4 million in a Series A round of venture funding that included Life Technologies.
Connecting the dots, it’s apparent that Life Technologies has decided to make some inroads in the emerging business of synthetic biology and algae-based biofuels. It’s also unlikely that a company that generated $3.3 billion in sales last year would make such a move lightly. So I arranged an interview with Nathan Wood, a vice president of genomics who is part of the company’s Molecular Biology Systems division.
In a nutshell, Wood says Life Technologies wants to do the same thing for synthetic biology that it has done for genomics—Life Technologies has become a global biotech by supplying the laboratory instruments, services, and supplies that scientists need to analyze the genetic code of any organism. Wood explained that the company near San Diego now wants to supply the tools that scientists need to assemble snippets of genetic code to create new organisms “so researchers won’t have to go somewhere else to get the tools they need.”
To accomplish this goal, Wood says Life decided in 2008 to undertake a $100 million initiative focused on synthetic biology. In 2009, the company began implementing its plans, which include developing a dedicated research group, in-licensing and acquisition, and other strategic moves needed to establish itself as a leading supplier of research services, laboratory instruments, and supplies to customers that specialize in synthetic biology. It’s a global market that Genome Web predicts will grow to $2.4 billion over the next three years.
“When we decide at Life to spend $100 million, we thoroughly think through the strategy,” says Wood, who also sits on the board of SG Biofuels and who oversees Life’s minority investment in Synthetic Genomics. He described it as “one of the medium-size initiatives” the company is doing.
Life’s $350 million acquisition in August of Ion Torrent, a leader in rapid gene sequencing, was not directly related to the company’s synthetic biology initiative, but it helped. While Ion Torrent was acquired as part of the genetic systems business, Wood says, “Simplifying the sequencing, and making it more affordable and faster is one area where there is overlap” with synthetic biology. Likewise, Wood says the company’s cell systems division makes dyes that detect certain molecules, which is useful as companies like Synthetic Genomics analyze cells that they have genetically engineered.
“So there are synergies across all of our divisions with this initiative,” Wood said.