Ginkgo Bioworks going public for $15bn SPAC deal

Happy Memorial Day to the blog’s US readers! My apologies for the sparse posts as I’ve been immersed with Tecnon OrbiChem’s new database platform which will be launched on 1 June that will be accessible to current Tecnon OrbiChem subscribers. This post has been delayed for several days but I think this is worthwhile to write up given the growing importance of SPAC-based deals.

First of all, what is a SPAC? A SPAC (Special Purpose Acquisition Company) is a public company that has no real operations and is formed specifically for the purpose of raising money through an IPO in order to seek and complete a combination with another company. Once it raises the money, it holds that cash separately and begins seeking a target. When the SPAC combines with a target company, that brings the target company public, and the SPAC name and ticker symbol usually changes to the target company’s (Ginkgo’s ticker is DNA at NYSE in this case).

After a few years of drought, public offering deals are being SPACkled (sorry I can’t resist the pun) across the renewable chemicals/biotech materials market – Ginkgo Bioworks, a synthetic biology company, being the latest. Gingko Bioworks announced on May 11 its plans to become a public company in the second half of the year through a deal with a special purpose acquisition company (SPAC) Soaring Eagle Acquisition Corp.

Soaring Eagle, a SPAC with $1.725 billion of cash in trust, is acquiring Ginkgo. As part of the transaction, Ginkgo has also raised $775 million (priced at $10/share of Class A common stock) in another financial transaction called a PIPE (Private Investment in Public Equity), by which investors commit to fund additional capital into the combined business when the merger occurs.

Soon after the transaction closes, Ginkgo will be a publicly-traded company on the New York Stock Exchange and will continue to make other filings with the SEC in line with public company requirements. The cash in trust plus the money in the PIPE, about $2.5 billion in total, is expected to be on Ginkgo’s balance sheet to help the company with its mission of making biology easier to engineer. Ginkgo’s platform is unifying various genetic engineering tools for programming cells across organisms and making this platform available to customers who want to program cells for applications in food, medicine, cosmetics, agriculture, materials or any other market.

While most of the excitement about this company seems to be focused recently on therapeutics applications (and vaccines), Ginkgo has been also busy collaborating in the renewable chemicals and materials space for several years.

Ginkgo also announced on May 17 that it has acquired Dutch DNA Biotech B.V., a company based in Utrecht, Netherlands with a proprietary platform technology focused on the development of fungal strains and fermentation processes for the production of proteins and organic acids. Ginkgo will integrate Dutch DNA’s team, assets, and operations into the broader Ginkgo platform for cell programming, and will, for the first time, expand Ginkgo operations internationally. The acquisition is expected to close in July. Dutch DNA’s significant expertise and assets for the large-scale production of proteins would reportedly add a valuable set of tools to the platform for Ginkgo’s customers across markets to access.

Dutch DNA was created in 2015 as a management buy-out from the Netherlands Organization for Applied Scientific Research (TNO) and has been for years developing and supplying fungal biotechnology processes for the industrial production of enzymes, proteins and organic acids. It has deep expertise in an important class of microbes — filamentous fungi — that is said to be incredibly efficient and used to make everything from the enzymes in laundry detergent to proteins for food. Dutch DNA has developed unique filamentous fungal host strains that can be developed into highly efficient producers of various proteins and enzymes.

Hmmm…are we going to see Gingko going head-to-head with companies like IFF/DuPont, BASF, DSM, Novozymes..?

I wrote a post about several synthetic biology companies in 2016 and so far the companies I mentioned including Ginkgo Bioworks are still going strong. Back to the company, here are other activities that Gingko previously announced in the chemicals/materials space:

• Ginkgo Bioworks has completed an acquisition of Novogy Inc.’s strain assets and IP portfolio. Ginkgo will integrate Novogy’s codebase and deep expertise in lipid production into Ginkgo’s bioengineering platform. Novogy reportedly has developed best in-class lipid-producing yeast strains with a particular focus on Yarrowia lipolytica. Ginkgo will be able to use Novogy’s assets to accelerate development of a range of commodities and fine chemicals and materials.

• Allonia, a bioremediation company based in Boston, was launched in late October with $40 million in series A funding. Allonia will engineer breakthrough systems to develop and commercialise new waste remediation and management solutions by leveraging synthetic biology. Allonia is the first company to launch from the Ferment Consortium, the investment vehicle formed by Ginkgo Bioworks. The company’s first focus is to develop microbial and enzymatic solutions focusing on eliminating contaminants such as per- and polyfluorinated compounds including PFAS, PFOA and PFOS.

• Motif FoodWorks, a Boston-based synthetic biology company, is engineering microbes to produce proteins powered by Ginkgo Bioworks’ platform for biological engineering. Motif FoodWorks will engineer dozens of proteins derived from dairy, egg, meat and plants.

• Ginkgo Bioworks and Canadian vertically-integrated cannabis company Cronos Group Inc. have formed a partnership to produce cultured cannabinoids under a deal worth around $122 million. Cronos Group will reportedly bring to the partnership its deep understanding of the plant’s biological structure and function while Ginkgo plans to develop strains that produce cultured cannabinoids at high quality and purity in a process similar to brewing beer in a microbrewery. In addition, Ginkgo’s platform is expected to unlock access to potentially medically important and valuable cannabinoids that are present only in low quantities in the plant. The partnership will focus on the scalable and consistent production of a wide range of cannabinoids including THC, CBD and a variety of other lesser-known and rarer products.

• Ginkgo Bioworks has invested in Genomatica and has been collaborating with the company. The two companies started their partnership in 2016. Ginkgo will reportedly provide expanded access to its foundry capabilities and services while increasing its equity stake in Genomatica. Genomatica, has partnered with Ginkgo Bioworks to offer mainstream chemical producers in-license technology, enabling them to manufacture their high-volume chemicals with cost-effective and sustainable process solutions that include engineered microorganisms, complete process designs and technology transfer support. The alliance will have two-way sharing of technology and IP, along with joint technology development.

• In 2018, Ginkgo and Bayer formed a joint venture called Joyn Bio which is focused on improving a plant microbiome’s ability to make nitrogen fertiliser.

• In 2017, Ginkgo Bioworks partnered with Swissaustral, a developer of novel enzymatic products and processes from extremophiles, to design strains of microorganisms that will produce industrial enzymes at scale for use as a safe, low-energy replacement for traditional chemical reaction processes in industries such as pharmaceuticals, textiles, foods and household goods. Ginkgo Bioworks also announced a collaboration with food ingredients and nutrition company, Kerry, on more efficient production of specialty enzymes used in food.

• In 2017, Ginkgo Bioworks and Robertet USA successfully produced a commercial-scale fermentation of a key flavour and fragrance ingredient based on the lactones family produced using designer yeasts. The companies have teamed up before on rose scent derived from custom microbes. Ginkgo will primarily generate revenue from royalties on its customers’ products, with its first royalty-generating product expected from the fragrance ingredient made by Robertet.

• In 2016, Ginkgo Bioworks acquired DNA supplier Gen9 for an undisclosed amount. Ginkgo uses the DNA to build customised multigene enzymatic pathways and microbial strains for clients such as Cargill and ADM that are looking to produce chemicals and ingredients. Gen9’s capabilities for synthesising large amounts of DNA now directly feed into Ginkgo’s automated organism-engineered foundries.

• Ginkgo’s collaboration with Cargill will explore the development of customised organisms that can produce ingredients for flavours and fragrances (F&F). The collaboration with ADM will lead to the development of customised strains of microorganisms that will be used to produce a key cultured ingredient. Ginkgo is also collaborating with Amyris to jointly develop cultured products more efficiently and cost-effectively across several industries including food and nutrition, F&F, and cosmetics and personal care. The companies are expected to have more than 70 products under contract for delivery to leading brands across various markets.

• In 2015, Ajinomoto partnered with Ginkgo Bioworks to deliver an improved strain to Ajinomoto in the manufacture of food and amino acid-based products.

This year, Ginkgo announced a recently-launched spin-out in personal care space called Kalo Ingredients with the goal of building a new ingredient toolset for the beauty and personal care industry. The company is reportedly creating novel active ingredients using biotechnology to sustainably unlock previously inaccessible functionality and brand stories. Ginkgo plans to bring these ingredients to market through select B2B partnerships in several large addressable markets, as well as its own suite of brands.

In April, Ginkgo announced its multi-year collaboration with Corteva Agriscience to apply the power of synthetic biology to design innovative crop protection technologies based on renewable feedstock. The collaboration ultimately aims to provide farmers with new solutions to combat invasive pests and evolving resistance challenges.