The Next Profit Breakthrough: Synthetic BiologyCompanies / BioTech Dec 13, 2012 - 06:17 AM GMT
Michael A. Robinson writes: Drug, chemical, and biofuel firms are relying more than ever on artificial fragments of DNA to invent new products. It's called synthetic biology.
For example, teams all over the world are now in their labs looking to create novel biotech compounds or drugs by inserting synthetic DNA into cells, either living or artificial. They're also growing new microorganisms that yield biofuels to be used in lieu of oil.
Trouble is, the process is so complex that it can take days to synthesize these man-made genes, usually in small batches.
Not only is it time consuming, but it requires the use of costly robots and other advanced gear. Simply stated, if someone came along with a breakthrough that greatly speeded up the development of synthetic genes, it could affect several industries at once, not to mention its own value in the market.
Allow me to introduce you to Gen9 Inc. The company is blazing a trail in the development of scalable technologies for synthesizing genes.
Now, Gen9 is a small, new dynamic company. And its potential is huge.
It was formed last summer around a unique new device that greatly speeds up the process of creating synthetic DNA.
Even better, it cuts the cost of that process by leaps and bounds.
A Huge Breakthrough in Synthetic Biology
The system this company created is known as BioFab. This system can quickly and cheaply produce tens of thousands of double-stranded DNA fragments. Talk about economies of scale -- it's this bulk processing that gives Gen9 such a huge advantage over other firms.
It works like this: BioFab can produce tens of thousands of double-stranded DNA fragments that are between 500 and 1,000 base pairs in length. Gen9 says it can produce the synthetic DNA for less than 10 cents per base pair, which the company says is as little as 20% the cost of other firms.
No wonder the small company is attracting so much buzz from scientists and professional investors.
The world is moving at warp speed, and it is firms like Gen9 that are pushing the pace of scientific and medical breakthroughs. Of course, this field will play a big role in the future of the human race.
And more to the point, there also will be a payoff for us investors as well. That's why I think Gen9 needs to be on your radar screen. I predict this company will go public in the next few years. Failing that, I believe it will license its technology to other publicly traded firms.
In the meantime, I expect both biotech and drug firms to work with Gen9. Doing so will increase profit margins for those firms and their investors.
Gen9 is Poised to Make Investors Serious Money
Of course, great tech alone is no guarantee of success. But Gen9 has three bases covered that are critical for making money in this sector:
•It's a leader in a breakthrough field that is part of a major trend with strong global demand that will continue for at least two decades.
•Gen9 is attracting high-profile professional investors who know what steps a startup must take to have a profitable IPO and to succeed in the long run.
•The company has great management.
We've covered much of the first item already. But let me add this -- the field has grown by leaps and bounds just since 2010. That's when a team at the J. Craig Venter Institute created the first living cell controlled completely by synthetic DNA.
Teams all over the world are now in their labs looking to create novel biotech compounds or drugs by inserting synthetic DNA into cells, either living or artificial. They also are growing new microorganisms that yield biofuels to be used in lieu of oil.
Second, Gen9 has not disclosed its total venture funding, but it has received money from Draper Fisher Jurvetson (DFJ), which has a great track record. DFJ has backed dozens of tech stars like Skype, athenahealth Inc. (Nasdaq:ATHN), Baidu Inc. (Nasdaq:BIDU) and Tesla Motors Inc. (Nasdaq:TSLA).
And for the third item on the success list, two of its top leaders have deep experience at publicly traded firms. CEO Kevin Munnelly joined Gen9 last July from Life Technologies Corp. (Nasdaq:LIFE) and COO Martin Goldberg spent 17 years with small-cap biotech leader Affymetrix Inc. (Nasdaq:AFFX).
The cofounders are no slouches, either. Check out their credentials:
•Joseph Jacobson is an associate professor at MIT. He has won several major awards and authored 70 peer-reviewed articles for scientific journals.
•George Church is a professor at Harvard Medical School. He has a long track record of commercializing human genomes.
•Drew Endy is a noted associate professor of bioengineering at Stanford University.
Let me close by noting that Gen9 also shows why the U.S. remains at the forefront of cutting-edge technology. As I often tell investors, the U.S. has so many bright minds working in cutting-edge fields that we just can't help but succeed in the long run.
And Gen9 promises to be one of the firms leading the way.
©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: firstname.lastname@example.org
Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.
Money Morning Archive
© 2005-2013 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.