Recently, Biden signed a new executive order, and the United States will have more than20A capital investment of hundreds of millions of US dollars has been made to promote the launch of its 'National Biotechnology and BioManufacturing Plan'. As a result, the domestic synthetic biology concept has received renewed market attention. The industry leader, Kaeser Bio(688065.SH)Huaheng Biology(699639.SH) has risen for several consecutive days.
What changes have synthetic biology made to current medicine? What is the recent 'hot topic' (facing market attention) reason for this? Previously, what stage has the domestic synthetic biology industry developed to? Compared with foreign countries, what are China's strengths and weaknesses in synthetic biology? Frost & SullivanFrost & SullivanLiu Weiqi, Executive Director of Frost & Sullivan Greater China, was interviewed by CBN to discuss the current development status of synthetic biology in China.
Caijing.com
"Assembling life is like assembling a circuit,"2010In [year], Craig Wente, the first scientist to create 'synthetic single cells' using synthetic biology technology, described synthetic biology in this way.
As born from21A branch of science at the beginning of this century, synthetic biology has developed nearly20year. In the capital market,2022The year was a breakout year for the synthetic biology track. A research report by CFT Securities pointed out that against the backdrop of global carbon neutrality, synthetic biology has become a new frontier in the biopharmaceutical field.
Recently, Biden signed a new executive order, and the United States will have more than20A capital investment of hundreds of millions of dollars has been made to advance the launch of its 'National Biotechnology and Bio-Manufacturing Plan'. As a result, the domestic synthetic biology concept has received renewed market attention. The industry leader, Kaeser Bio.(688065.SH)Huaheng Biology(699639.SH) has risen for several consecutive days.
What is synthetic biology?
The so-called 'synthetic biology' is the use of engineering methods by humans to design and combine a series of genetic components. It is like assembling cars, step by step constructing parts and then piecing them together to ultimately create organisms that meet human needs.
Zhao Guoping, an academician of the Chinese Academy of Sciences, has also explained: 'The main task of synthetic biology is to design corresponding 'products' according to people's needs.'
Synthetic biology has a wide range of applications, including medicine, agriculture, chemicals and energy, food and consumer goods. It can reduce dependence on non-renewable resources such as oil and coal, solve high-energy consumption and pollution problems in chemical engineering, and significantly lower production costs.
A report released by the McKinsey Global Institute points out that in global economic activities60%Material products can be produced using biotechnology. Synthetic biology technology in the future10 - 20In mid-year, it will bring to the global2 - 4Trillion-dollar direct economic benefits.
In the pharmaceutical field, the application of synthetic biology is mainly focused on drug intermediates./The synthesis of active pharmaceutical ingredients and the artificial modification of living organisms for diagnosis and treatment are two major areas.
Among them, in drug intermediates/In terms of bulk drugs, synthetic biology methods can reduce costs and alleviate the supply-demand imbalance caused by the scarcity of related plants. Among them, the biosynthesis of artemisinin is the most typical example. In addition to synthetic drug intermediates/In addition to bulk drugs, synthetic biology can also achieve diagnostic and therapeutic purposes by modifying bacteria, viruses, and human cells, but it is currently still in the research phase.
In the agricultural field, synthetic biology can be applied to microbial nitrogen fixation, detection of soil harmful bacteria, etc., to increase crop yield and nutritional value, and reduce the use of chemical fertilizers.
From the perspective of industry sub-markets, the healthcare sector has dominated the market application of synthetic biology. According toCB InsightsIt is estimated that the global synthetic biology market size will2019year53USD billion growth to2024year189billion US dollarsCAGR 28.8%Among them, the market scale of synthetic biology in the healthcare field has grown from2019year21USD billion growth to2024year50billion US dollarsCAGR 18.9%),2019The proportion reached40%, which is the largest application domain.
Synthetic biology is in the spotlight
Since Biden9month12Since the signing of the executive order, domestic synthetic biology concept stocks have received renewed market attention, with the stock prices of Kaisai Biotechnology and Huaheng Biotechnology rising for several consecutive days.
It is understood that Kaesai Biotechnology mainly engages in the research, development, production, and sales of new bio-based materials. Its main products include a series of bio-based long-chain dicarboxylic acids, bio-based pentanediols, and bio-based polyamide (nylon).2022In the first half of the year, the company achieved revenue12.89100 million yuan,Year-on-year growth13.53%Net profit attributable to the parent company3.365Yuan, a year-on-year increase7.71%.
Regarding the impact of the United States' release of the 'National Biotechnology and Bioengineering Initiative', Kaisai Biosciences told CBN that 'it is good news for the global synthetic biology industry. Bioengineering, and even synthetic biotechnology, will receive more attention, leading to more opportunities in the industry and related fields. Naturally, countries will also place more emphasis and investment.'
Huaheng Biotechnology is mainly engaged in the research, development, production, and sales of amino acids and their derivatives. Its representative product is alanine, which can be widely used in many fields such as daily chemicals, pharmaceuticals and health products, food additives, feed, etc.
domain.2022In the first half of the year, the company achieved operating revenue6.29Yuan, a year-on-year increase65.66%; net profit attributable to the parent company is1.29Yuan, a year-on-year increase107.60%.
In addition to Kaikesai Biotech and Huaheng Biotech,ASeveral listed companies in the pharmaceutical, food, and chemical industries have also made investments in synthetic biology.
For example, HuaXi Biologics, a leading medical aesthetics company, has its chairman and general manager, Zhao Yan, who has repeatedly stated in public that synthetic biology represents a new direction of future technology and is a key area of focus and deep cultivation for HuaXi Biologics.
2021year12In the month, Huaxi Biotechnology & 'Shandong Key Laboratory of Synthetic Biology for Bioactive Compounds (under preparation)' was recognized by the Shandong Provincial Department of Science and Technology. Additionally, its 'International Innovation Industrial Base for Synthetic Biotechnology' has been established in the Beijing Daxing Biomedical Base and is about to be put into use.
According to Huaxi Biotechnology, through synthetic biotechnology, the company's microbial fermentation technology has developed to the third generation, enabling the extraction of each liter of extract73gHyaluronic acid, the second-generation technology16 - 17 g/Lof4Multiple times more, production costs are significantly reduced, and efficiency is greatly improved.
Huadong Medicine is also2021In 2015, the 'Industrial Microbiology' strategy was proposed.
According to East China Pharmaceutical2022The semi-annual report for the year disclosed that it2022year5In January, the company established a wholly-owned subsidiary, Huiyi Biotechnology. By constructing and modifying the genes of highly efficient engineered strains such as yeast, Escherichia coli, and Bacillus subtilis, it has achieved widespread application of biotechnology in fields such as pharmaceutical engineering, fine chemicals, and new biomaterials.2022year7In January, the company's wholly-owned subsidiary Sino-US East China, the People's Government of Gongshu District, Hangzhou City, and Zhejiang University of Technology jointly established the East China Synthetic Biology Industry Technology Research Institute.
In addition, companies such as Anqi Yeast, Plum Blossom Biology, Health Yuan, and Weiguang Biology also have layouts in synthetic biology.
It is worth mentioning that in the secondary market, synthetic biology concept stocks are generally given a price-to-earnings ratio of six to seventy times.
Caijing.com has noticed that in addition to listed companies, Yikelei, Chuaning Biology, JuZi Biology, and others are all making every effort to sprint towards the capital market.
IPO listingThe climax further set off a wave of investment enthusiasm in the primary market.9There are several cases where financing has been announced to be completed this month: Synthetic biology company BaiKuiRui has raised tens of millions.Pre-A+Series financing; New synthetic biology technology company Sypeng Technology has completed tens of millions in angel investment; Microalgae synthesis factory Demeter, which focuses on algal biosynthesis technology, has raised nearly 100 million yuanPre-ASeries financing, etc.
According to statistics from Xingkuang Data,2021Nearly30A domestic synthetic biology company has announced financing, with almost the entire leading domestic investment institutions entering the market: Hillhouse Capital has invested in BlueCrystal Microbiology and Yinguang Biotechnology; Sequoia Capital has invested in Yanwei Technology and Microstructure Factory; Matrix Partners has invested in Enhe Biotechnology and Microelement Synthesis.
Is the biotech boom hereabouts upon us?
From industry analysis, the explosive popularity of synthetic biology in the capital market can be attributed to both policy and technological development.
Policy-wise,2018In [year], the Ministry of Science and Technology launched a key special project on synthetic biology. Recently10During the year, the Chinese Academy of Sciences and several domestic universities took the lead in deploying efforts for the construction of synthetic biology disciplines.
The National Health and Family Planning Commission is in2020year8In January, the 'Guiding Opinions on Expanding Investment in Strategic Emerging Industries to Cultivate New Growth Points and Polarities' were released, supporting various detailed rules including the construction of synthetic biology technology innovation centers, to promote the vigorous development of biotechnology.
2022year5month10On the same day, the National Development and Reform Commission issued a more significant '14th Five-Year Plan' for the development of the bioeconomy, clearly stating that the bioeconomy, including synthetic biology, is a new driving force for China's economic transformation in the future.
The second is the cost reduction brought about by technological development.
Co-founder of Blue Crystal Microbiology andCEOZhang Haokan once stated in an interview that the underlying technologies of synthetic biology mainly consist of gene sequencing, gene editing, and gene synthesis. These three parts have been present in the past10Costs decreased over the year1000Even more so. This means that R&D activities, which were previously only supported by large pharmaceutical companies, are beginning to 'enter ordinary households', giving startups in synthetic biology a chance.
Liu Weiqi, Executive Director of the Healthcare Team at Frost & Sullivan Greater China, told CBN that synthetic biology can be described as a new technological revolution. In the future, it could replace many industrial synthetic products and meet various development concepts such as green production and carbon neutrality. In the context where capital has cooled down in other medical sub-sectors, synthetic biology naturally has attracted many institutions to enter the market early.
Recently, brokerage firms have also shown a significant increase in their attention to synthetic biology.
"Synthetic biology, as the underlying technology of biomanufacturing, has established its status with Biden's signing of a new executive order, indicating its broad prospects. The United States leads in front-end research and development, while China has an advantage in manufacturing. Chinese companies have the opportunity to overtake on this curve," pointed out Peng Yi, an analyst at Shanghai Securities.
CICC Research Report believes that healthcare is an important application area of synthetic biology, with complete layouts in both the upstream and midstream industries. Application areas include drug synthesis, disease diagnosis, and medical aesthetics. With breakthroughs in enabling technologies such as gene sequencing and gene-editing synthesis, synthetic biology has entered a period of accelerated development, bringing about disruptive innovations in traditional pharmaceutical manufacturing and potentially leading the future of pharmaceutical manufacturing.
Domestic synthetic biology is still in its early stages
From the perspective of the industrial chain, the synthetic biology industry can be divided into three parts: upstream, midstream, and downstream, representing tool-based, platform-based, and product-based categories respectively.
Upstream tool companies mainly focus onDNAResearch on basic technical tools such as synthesis; midstream platform companies focus on synthesizing plasmids and microorganisms or provide design plans for synthetic biology platforms; downstream product companies emphasize the practical application of synthetic biology technology.
(The industrial chain division of synthetic biology in the biomedical field, source: Research Report by CICC)
Domestic tool-based companies include BGI Genomics, XinGenomics, etc.; platform-based companies include Enhe Biotech, Yikele, EnzymeSai Biotech, etc.; product-based companies include Kaixie Biotech, Huaheng Biotech, etc.
In comparison, product-based companies have integrated the entire industrial chain from biological transformation, fermentation purification to product modification, thus possessing greater profitability; platform-based companies aim to provide synthetic biology platforms such as organism design and software development. Due to their lack of practical products at the application level, their profitability is limited.
However, Wang Haijiao, a partner at GaoTEC Investment Partners, believes that in the short term over the next three to five years, it is definitely product companies that can emerge victorious or develop very well, as they are easier to scale. In the long run, platform companies that continuously provide new offerings will go further and become companies with a larger market value.
At present, what stage have domestic synthetic biology companies reached? The industry consensus is that they are 'still in the early stages'.
Liu Weiqi told CBN that domestic synthetic biology companies are still in a relatively early stage. Apart from the leading enterprises that have already launched products for market sale, many other companies are in the early stages of trial production or research and development, and it will take some time to cultivate the market. Compared with foreign countries, domestic companies are not lagging behind technically, and their talent advantage, policy support, and upstream and downstream supporting systems are also very evident. However, there is still a significant gap compared to foreign countries in terms of capital investment and product commercialization.
Chen Jia, an independent international strategy researcher at Finance Network, also stated that the synthetic biology industry has not yet taken shape. It has extremely high barriers in terms of technology, capital, and human resources, and it also requires relatively high levels of cross-border capital and technological exchanges. It is an emerging industry that requires careful planning and coordinated efforts from a large national market. Currently, in addition to Shenzhen, Beijing's Daxing Airport Economic Zone is building an international life and health port. In the future, China is likely to become an important global pole in biotechnology, especially in the field of synthetic biology.
*This article is reprinted from Caijing.com Author: Fan Mengdi , Original title: Standing at the forefront of biomedicine, why should synthetic biology matter? ">
QWhat changes have synthetic biology made to current medicine? What is the recent 'hot topic' (facing market attention) reason for this?
A: Synthetic biology has fundamentally changed the way of production by altering underlying technologies, allowing people to produce materials through biological synthesis by modifying known gene sequences. In the medical field, many companies have begun using synthetic biology techniques to develop new nucleic acid vaccines and cell therapies. Additionally, in the field of disease diagnosis, synthetic biology technology based on gene circuit construction and rapid iterative prototyping has also promoted improvements and innovations in diagnostic methods. It has been successfully applied to non-communicable diseases such as cancer and coronary artery disease, as well as infectious diseases like Ebola, AIDS, and COVID-19.
The main reason for market attention lies in synthetic biology, which can be considered a new technological revolution. In the future, it is expected to replace many industrial synthesis products and align with various development concepts such as green production and carbon neutrality. In other medical sub-sectors where capital has cooled down, synthetic biology naturally attracted many institutions to enter the market early.
QSome believe that 'product selection and large-scale production are the two major pain points in the synthetic biology industry.' What is your opinion on this?
A: I highly agree with this view. The ability to select products means the market space that can be captured in the future, while large-scale production and cost reduction mean the profit margin that can be achieved in the future. These two points are crucial for ensuring the stable development of an enterprise.
