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Title: Pitchbook US template


1
N O V E M B E R   2 0 0 8
S O L A R I G E N E A P L A T F O R M F O
R B I O F U E L S A N D C O M M O D I T I E
S
Inventing Breakthrough and Commercializing
Science Harvard Business School Team Autumn
Klein Phillie Silverman Ali Wasti
Silver Labs, Department of Systems Biology
Harvard Medical School
S T R I C T L Y   P R I V A T E   A N D 
 C O N F I D E N T I A L
2
Executive Summary
Intellectual Property
Market Opportunity
Competitive Landscape
Recommendation
Backup Slides
3
Executive Summary
Photosynthetic Cyanobacteria
CYANOBACTERIA Photosynthetic AND genetically
modifiable
High Quantity Outputs
Few Inputs
Sunlight

CO2

CO2 Fixing Process
4
Intellectual Property
Current Patent Status
No Existing IP on Cyanobacteria making Palm Oil
or Biodiesel
Genetic Engineering of Algae/Microbes other than
Cyanobacteria
  • Genetic Engineering of Cyanobacteria
  • Pathways to manufacture Isoprene, Biodiesel,
    Ethanol
  • Large Scale Production
  • Patent applications to manufacture large
    quantities of Isoprene and Biodiesel

No Existing IP on large scale Cyanobacteria
production from Photosynthesis
Exiting Patents to Cyanobacteria producing
Ethanol and Isoprene, BUT different pathways and
small scale
5
Market Opportunity Biofuels
Large, growing, addressable market
  • Higher costs of gasoline versus ethanol are
    driving market demand for biofuels
  • Corn ethanol producers suffer from feedstock
    pricing volatility, food versus fuel debate
  • Alternatively, Cyanobacteria based Solarigene
  • Does not need feedstock
  • Has potential to produce more lipids (plant
    oils) per acre than other terrestrial plants --
    potentially 10X to 50X
  • Has been engineered to directly product
    biodiesel, ethanol or lipids
  • Cultivate on marginal, non-arable land and use
    non-potable water
  • Reduces worlds carbon footprint by sequestering
    CO2

Higher costs of gasoline versus ethanol are
driving market demand for biofuels
6
Comparison of biofuel yields from different
feedstock
Obstacles with Exiting Technology
  • Todays biofuel producers face increasing margin
    pressures and sustainability concerns around
    feedstock
  • Corn ethanol producers suffer from significant
    feedstock pricing volatility and scrutiny from
    the food versus fuel debate
  • Traditional biofuel production facilities have a
    much lower yield. Corn ethanol biorefineries and
    soy biodeisel refineries require layers and
    iterations of separation processes to arrive at a
    marketable energy source. Solarigene entails a
    direct path to manufacturing without the waste
    produced in traditional biofuel production.

Source NREL
Solarigene Solutions
  • Cyanobacteria have potential to produce more
    lipids (plant oils) per acre than other
    terrestrial plants -- potentially 10X to 50X
  • Lipids are the preferred starting point to make
    diesel or jet fuel
  • Cyanobacteria cultivation can utilize
  • Marginal, non-arable land
  • Non-potable water
  • Large waste CO2 vent resources (e.g. flue gases
    from coal electricity plants)
  • Minimal competition with food, feed, or fiber

7
Commercial Viability
Market Assessment for Commodities
  • Analyzing historical and forward prices, and
    yields and extractability of various commodity
    products, our team has selected Palm Oil as an
    alternate commodity to develop using the platform
  • Customers will include dependent manufacturers
    of food, chemicals as well as palm oil based
    biofuel producers and suppliers
  • Future development may include developing
    products for companies exposed to commodity risk

Selecting Commodities
Source Silver Labs . 1YIELDS of product aim to
be 40-60 g/m2 per day 50 of Cyanobacteria is
lipid (membrane)
8
Industry landscape
  • No direct competitor in the photosynthetic
    Cyanobacteria space

Competing Technologies
Solarigene Proposition
  • Superior production economics with product
    diversification and flexible technology.
  • Mitigates commodity risk and single product
    dependence.
  • Avoids reliance on quality of feedstock
    composition for yield and value
  • Separation, purification and conversion
    technologies down the value chain.
  • Genetic manipulation for increased product
    portfolio, efficiency and yield potential in
    less than ideal conditions.
  • Profit maximization by targeting and optimizing
    for higher value commodities and bi-products.
  • Monetization through partnerships with existing
    commercial biorefineries, suppliers, purification
    platforms and separation platforms.
  • Ability to address the need for high value
    compounds from advanced bacteria.
  • Competitors are small scale engineering firms
  • No winner in quest for high yield and scalable
    biofuels
  • Small, fragmented and specialized firms
  • Natural Algae Engineered
    microbes
  • Engineered Algae Traditional biofuels

Competitors have limited flexibility in product
proliferation and feedstock Exposed to
cyclicality risk of single commodity
9
Solarigene solution and differentiation
Flexible platform
Yield
  • Solarigene has the capability to manipulate the
    cyanobacteria to produce maximum yields, beyond
    the limits of competitive algae technology.
  • In order to achieve high levels of conversion
    from sunlight in to biomass, feasibility relies
    on the ability of Solarigene to engineer highly
    productive bacteria.
  • However, even with aggressive assumptions about
    Solarigenes productivity, estimated costs to
    produce biodeisel are twice that of current
    petroleum deisel fuel costs
  • Resource availability remains a hurdle to scale.
    While cyanobacteria uses much less land and water
    than traditional corn and oilseed crops and
    produces a higher yield of biodiesel, surface
    area to maximize exposure to sunlight is a going
    concern.
  • Since sunlight can only penetrate to limited
    depths, harvesting the cyanobacteria in storage
    vessels with maximum surface area is imperative
    to achieving yields.

Pharmaceuticals
Nutraceuticals
Rubber
Conversion Platform
Glycerin
Scalability
Biodiesel
Product Value (/ton)
Purification Platform
Food grade oil
Ethanol
Separation Platform
Fuel
Corn
Oilseeds
Algae
Cyanobacteria
Feedstock Productivity (ton/acre) Yield
Scalability
Photobioreactors Or Open Ponds
10
Business Plan Options and Recommendation
  • Offer Technology Licenses
  • Extend licenses based on different applications
    to industrial manufacturers, commodity
    distributors, energy producers
  • Benefits
  • Lowest Capital Expenditure
  • Considerations
  • Do not have sufficient target companies in the
    space
  • Limited return
  • Start a Company
  • Recruit leadership and scientific team
  • Benefits
  • Build on existing research to focus on scale and
    development of high yield cyanobacteria
  • Considerations
  • Need to raise capital in tough economic
    environment
  • Fold Technology into an Existing Corporation
  • Partner technology in return for equity
    participation and governance rights
  • Benefits
  • In house RD funding, resources, expertise
  • Considerations
  • Relinquish control and direction

11
Executive Summary
Intellectual Property
Market Opportunity
Competitive Landscape
Recommendation
Backup Slides
12
Commercialization options with funding
Use of proceeds
Business/Commercial Options
  • License out the technology to others
  • No current market for CB technology
  • Invest 140mm to start small scale company using
    milestones for staged investment
  • Spin off the lab/IP to existing competitor or
    strategic buyer
  • Commercially established cyanobacteria production
    and processing facility
  • Integrated separations, purification and
    conversion technology platform
  • Prototype for purification and conversion
    platforms
  • Large-scale cultivation pond and management
    facility
  • Marketing to off-taker relationships and
    networking with renewable fuel producers/suppliers
  • Brokering alternative fuels
  • Negotiated contracts and partnerships with
    chemical, agriculture and pharma companies

140mm to build mainstream infrastructure,
cultivation facility, extraction and purification
systems and distribution terminal
13
Production possibilities
Feasible production universe
  • By means of photosynthesis, cyanobacteria can
    produce 3 main components
  • Carbohydrates
  • Protein
  • Natural oils/lipids
  • Commercializing these possibilities include
  • Vitamins/ pharmaceuticals
  • Methane gas/ ethanol
  • Rubber
  • Cocoa butter/ palm oil
  • Glucose
  • Food grade oil
  • Glycerin
  • Nutraceuticals

Production of bi-products driven by demand
specific to customer
Due to Solarigenes flexibility, production of
bi-products can be rotated in order to hedge
exposure against the commodity cycle.
14
Harvesting and Extraction
Harvesting
  • Centrifugation (Spinning and separating)
  • Frothing (Aeration to froth, then separate out
    algae)
  • Ultrasound (In development)

Extraction (fats/lipids/oils)
  • Mechanical crushing /- Other extraction
    procedures
  • Chemical solvents (Benzene, ether hexane)
  • Enzymes (Degrade cell membrane, release product)
  • Expression (Dried and pressed)
  • Osmotic Shock (Lyse cells)
  • Supercritical fluid (CO2 liquifies and extracts
    oil)
  • Ultrasound (shock waves break open cell membranes)

15
Biological mechanics
Cyanobacteria
  • Bacteria that are capable of photosynthesis
  • Use sunlight to make product (algae and plants)
  • Require only sunlight, CO2, water, and minerals
    to grow and reproduce
  • Make sugars, protein, as well as fats, lipids and
    oils
  • Genetically engineered to make large quantities
    of a product
  • Products like Hydrogen, biodeisel, glucose,
    rubber
  • Solarigene scientists and researchers are
    genetically engineering CB to make these end
    products.
  • Fix carbon dioxide (CO2)

16
Biological mechanics contd
Photosynthesis
  • Photosynthesis makes the energy from sunlight
    usable in other organic forms to sustain life.
    Using a small amount of minerals, sunlight and a
    carbon waste (CO2), Cyanobacteria can convert
    these inputs into high density forms of energy in
    liquid or gaseous forms. (Hydrogen, biodeisel,
    glucose, rubber)
  • Cyanobacteria fixes sunlight and CO2 in order to
    produce biomass and other naturally occurring
    commodities with much more efficiency than algae
    due to their simple cell structure and ability to
    be altered to thrive in any environment or less
    than ideal conditions
  • Because of cyanobacteria's ability to be
    genetically manipulated, Solarigene has the
    flexibility to produce a variety of different
    commodities.

Cyanobacteria
  • Special bacterial species are altered genetically
    to focus on production of one commodity, such as
    biodiesel, ethanol or rubber
  • Cyanobacteria are the most economically viable
    due to their diversification capabilities in
    by-products and highly efficient productivity
  • Through genetic manipulation, the metabolic
    pathways of the cyanobacteria are altered to
    produced the desired commodity in variable growth
    conditions
  • By-products are stored in the lipid membrane and
    extracted through an organic process involving
    numerous ethanol distillations

17
Commodity Assessment historical pricing
Rubber Prices
Palm Oil Prices
Sugar Prices
Natural Gas Prices
18
Commodity Assessment future demand projections
Rubber (/metric ton)
Palm Oil (/metric ton)
Natural Gas (Henry Hub- NYMEX)
Sugar (/metric ton)
19
Land use for aquatic biofuels
AMOP aquatic microbial oxygenic photoautotrophs
20
Biofuels market details Spread between Ethanol
and Biodiesel
21
Interviews
  • Eyal Gutentag, PrimaFuel
  • Rye Barcott, Amyris
  • George Church, Founder, LS9, Founder, Codon
    Devices
  • Tod Perry, Technology Commercialization, National
    Renewable Energy Laboratory
  • George Church, Professor of Genetics, Harvard
    Medical School
  • Michal Preminger, Harvard Office of Technology
    Development
  • Pamela Silver, Director, Silver Labs
  • David Savage, Silver Labs
  • Jeff Way, Silver Labs
  • William Coleman, Partner, Mohr Davidow Ventures
  • David Silverman, Aragon Partners
  • Rob Koltun, RNK Capital

Industry
Technology
Investors
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