Targeted Growth Tinkers with Genes to See If Algae Can Fulfill Biofuel Potential

8/14/09Follow @xconomy

[[Correction 10:40 am Pacific: Targeted Growth's camelina program currently uses traditional breeding, not genetic engineering techniques like those for its algae biofuel program.]]

Targeted Growth‘s business depends today in large part on its ability to breed new camelina seeds as a source for biofuel. But the Seattle-based biotech/cleantech company also has its eyes on a more distant goal. It hopes to translate some of its genetic engineering skill into a far more efficient vehicle for making renewable biofuels—algae.

Even in a recession, the algae biofuel business sounds bubbly, as dozens of companies are competing for investors’ attention. Targeted Growth is no exception, having declared in a press release last month that it achieved a “breakthrough” in genetic modification of algae that would help make algae-based biofuels compete, once and for all, with petroleum on price. I wanted to dig beneath the headline, so I called up the general manager of Targeted Growth’s bio-based materials group, Margaret McCormick.

Algae has long captivated the imagination of scientists looking for a cheap source of renewable fuel. These fast-dividing microorganisms, known more glibly as “pond scum,” can churn out big quantities of biomass in a hurry. And algae doesn’t depend on a growing season like corn or soybeans, so it can pump out far higher yields of biofuel per acre. It can be grown even more efficiently inside closed bioreactors with artificial light, so it may not have to compete for land with food crops. Many big-name investors have flocked to this corner of the biofuel industry, including Bill Gates and Arch Venture Partners, with their favorite candidate, San Diego-based Sapphire Energy.

So algae gets people excited, and generates headlines, but McCormick really wasn’t trying to pull the wool over my eyes about where things stand with Targeted Growth’s algae biofuel work. “This is just a start for us,” she says.

Targeted Growth, regular readers will recall, has its roots in basic research into how genes play a role in making tumor cells flip into fast-growing, rapidly-dividing mode—work that has its origins at the Fred Hutchinson Cancer Research Center. This knowledge can be harnessed in a different way if you actually want to accelerate growth, like with almost any biological organism—including algae.

So what did Targeted Growth actually accomplish that was so groundbreaking? It used genetic engineering techniques to create a modified strain of cyanobacteria—a form of algae—that can produce 400 percent more lipid than an ordinary strain. Lipids are a key ingredient in making fuel from algae, so this is one of the keys to making it an efficient source for fuel production, McCormick says.

When most non-biologists think of algae, they think of a single species of green icky stuff, but in fact there are thousands of different organisms that go into it. Some of them are traditional eukaryotic cells, meaning they are complicated, like human cells with a nucleus full of DNA and other things in the body of the cell, or the cytoplasm. Targeted Growth chose to work on cyanobacteria because it is a single-cell organism, meaning all of its DNA is in the body of the cell, making it simpler and easier to work with than a “macro” form of algae, like seaweed, McCormick says.

The challenge has been to create a new strain with what sounds like a lot of experiments that amount to genetic tinkering. The company has worked on inserting new genes, turning off certain genes, and finding ways to amplify expression of existing genes, McCormick says. By making these adjustments, Targeted Growth hopes to keep the algae growing fast, and simultaneously pumping out lots of lipids, which isn’t something algae are inclined to do in nature, McCormick says.

We couldn’t get too much more specific about the modifications Targeted Growth is making to the algae, because the company has secrets it wants to keep from competitors, including Sapphire. When I asked if this work will be presented in a peer-reviewed scientific journal, or at a scientific meeting, McCormick didn’t make any promises. “First and foremost, we need to protect our [intellectual property] before we do that. We are pretty aggressive on our IP strategy.”

The business will depend heavily on how strong that IP is, and how much demand there is from other companies. Targeted Growth sees itself as a science company at heart that will license its genetic modification strategy to partners who will invest the big dollars in things like refineries. This technology could be used in algae grown in outdoor ponds, or indoors with artificial light. Regulators from the EPA and FDA will likely want to take a look and sign off before this stuff goes into commercial use. But in the future commercial phase, Targeted Growth sees itself extracting revenue from the technology, not from selling billions of gallons of fuel to the masses.

Even if all that goes according to plan, Targeted Growth will still have more genetic modifications to make to the algae to make it more economically attractive. Scientists will have to engineer in some useful byproducts, since the algae can’t make 100 percent lipids, but a shrewd business person could find some new markets if algae could make lipids for fuel, with a lot of leftovers, say, for animal feed or food additives.

That’s all in the future, and McCormick didn’t try to pretend that it’s further along than it is. She has a doctorate in biology from MIT, so she has a good understanding of the science, and she’s also a venture capitalist with Seattle-based Integra Ventures, so she has seen more than her share of faulty business plans. But she still sounded pretty upbeat about where this is all headed.

“We feel this is a real breakthrough,” McCormick says. “We have super-smart people trying to figure this out, and we are making progress.”

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