The Anti-Organic: Super Salmon for Dinner

Imagine a world where our supply of food is never threatened. This is the world that Intrexon Corporation, a leader in synthetic biology, is hoping to create.

What is synthetic biology?

Synthetic biology alters the genetic code of living organisms to create new “novel organisms”. Companies like Intrexon build gene programs stored within DNA vectors that are reinjected into living cells to create improved products[1]. This technology is being applied to create biofuels, essential foods, and more resilient seeds for agriculture.

Intrexon seeks to industrialize technology to create less costly and more sustainable products. Intrexon is the company behind two commercialized products: a non-browning apple and a genetically modified salmon that can grow to market size in half the time with 25% less feed[2]. The AquaAdvantage Salmon is the first engineered food animal approved by the FDA and the Arctic Apple is the first USDA approved non-browning apple that doesn’t use chemical or antioxidant treatments[2]. The company’s pipeline of products also expands into the healthcare and environmental sectors: they are currently developing a genetically engineered mosquito to fight the Zika virus (a controversial product) and an activator technology to regulate the timing of plant flowering[3].

Why “super salmon”?

Intrexon’s business opportunity has been created by climate change’s impact on our planet’s agricultural supply and its dichotomy with global population growth. Climate change forces species to adapt to environmental conditions that are changing faster than they ever have before. Changes that have affected fisheries include rising sea temperatures, rising sea levels, lower ocean pH levels, and changes in ocean circulation[4]. In addition, the projected increases in the frequency of storms that will impact the number of “fishable days” and insurance costs point to increased costs for fishing.

Fish contribute to 1/6th of the animal protein that humans consume and seafood demand has continued to rise with human population growth, yet fish supply has stagnated. According to the World Resource Institute, farmed fish supply will need to more than double to meet demand by 2050[5]. Intrexon’s engineered salmon is designed to increase efficiency in aquaculture production necessary to meet global protein demand in the face of negative climate change impacts on fishing.

The faster development cycle for a AquaAdvantage Salmon (1.5 years vs 3 years) also allows it to be raised entirely on land rather than transferred to the sea after 1 year[3]. By raising the salmon on land in major cities rather than transporting the salmon from sea to land, this method reduces carbon emissions from transportation and decreases environmental risks to fish populations.

pic1 

Source: Intrexon Corporation, September 2016 Corporate Presentation.

 

Why is this a good business?

Intrexon’s business model is primarily as an incubator of technology: Intrexon provides the proprietary technology and early R&D, and then partners with an exclusive channel collaborator (ECCs) or joint venture partner. The better-capitalized collaborator provides expertise and development resources to bring the product to market. This model is unique from typical biotech models: the collaborator is responsible for the entire development cost, leaving Intrexon free (and leaner in personnel and costs) to research new products in their R&D pipeline. As a result, Intrexon has built itself as a low-cost platform for scaling synthetic biology technologies to development milestones across a wide range of industries, including food, healthcare, and the environment. The company went public in August 2013 and has a current market capitalization of $3.1bn.

The market for synthetic biology is estimated at $4.5bn and is the fastest growing segment in the biotechnology field, estimated to reach $18bn by 2018[6]. If Intrexon’s technology can be applied more broadly and even replace existing practices, they can target the global market for aquaculture which is $157bn[2]. As a highly-regarded company with publicly traded stock and low capital requirements, Intrexon can assemble a diversified portfolio of technologies to identify and accelerate commercialization of technologies in this emerging growth industry. This will allow them to continue to attract investor capital to capture a large market opportunity created by the need for climate change adaptation.

pic2

Source: Intrexon Corporation, September 2016 Corporate Presentation.

 

What are the next steps?

Intrexon has created a valuable business model but concerns have been raised about human health and safety issues. Activists believe that rather than adapting to climate change, synthetic biology may create invasive species that reduce our species’ richness. Regulation of synthetic biology is still nascent and in order to effectively move this technology forward, companies like Intrexon will need to take an active role in helping the FDA, EPA, and USDA create a more defined set of guidelines to bring products to market starting from the beginning of R&D processes. To demonstrate that these new species do not harm existing ecosystems, Intrexon and its collaborators must also get buy-in from farming communities that are willing to show proof-of-concept in different regions of the world that experience different ocean environments.

 pic3

Source: Intrexon Corporation, September 2016 Corporate Presentation.

 

(Word Count: 793)

[1] Intrexon Corporation, 2015 Annual Report.

[2] Intrexon Corporation, September 2016 Corporate Presentation.

[3] Jason N. Butler, “Intrexon Corporation (XON)”, JMP Securities, May 3, 2016.

[4] Ingrid van Putten, “Fishing for the Impacts of Climate Change in the Marine Sector: A Case Study”, International Journal of Climate Change Strategies and Management, Vol. 6 No. 4 (2014), 421-441.

[5] Richard Waite, “Improving Productivity and Environmental Performance of Aquaculture”, World Resources Institute (June 2014).

[6] Research and Markets, “Synthetic biology market – global industry analysis, size, growth, share and forecast, 2018”, Manufacturing Close-Up (2012).

 

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10 thoughts on “The Anti-Organic: Super Salmon for Dinner

  1. This is incredibly interesting, and I wonder how this product will do alongside the current trend toward more “natural/organic” foods that you contrasted with in the title. In addition to claims of “greater sustainability”, naturally raised foods are also commonly considered to have greater nutritional value. For example, grass fed beef has been shown to have higher levels of Omega-3 fatty acids and conjugated linoleic acid (both of which are considered to promote heart health), than the grain-fed alternatives. If we are able to grow this new salmon more efficiently, but it is lacking in nutritional value, is it really a step in the right direction?

  2. Completely fascinating company! As a scientist I am a strong believer that GMOs are a critical instrument in our toolbox for leveraging technology to achieve sustainable agriculture, and that we as a society would be remiss if we did not explore the opportunities offered by recent advances in synthetic biology such as CRISPR technology. Despite how much I want this to work though, as an investor I would have several concerns about the viability of this business model. First, I agree with the above poster that consumer receptivity to GMOs is a significant risk (though I disagree with the concerns raised about the nutritional value of genetically modified salmon, as it seems like the growth advantage to the AquaAdvantage salmon is due to higher levels of growth hormone which mechanistically should not affect nutritional content; the analogy to two types of cows fed different types diets is not really a fair one, and grain-fed animals are not necessarily genetically engineered.) Second, the AquaAdvantage salmon was first submitted to the FDA in 1995 and did not gain approval until 2015 (source: https://www.wired.com/2015/07/eating-genetically-modified-animals/). My hope would be that the FDA becomes more receptive to genetically modified animals and shortens the approval process, but I wonder how viable a business can be if the current regulatory environment demands a two decade long process. Third, I think the point you raise about potential impact on the ecosystem is an important one – we need to be cautious about potential unintended consequences of our actions. Nevertheless I think this industry is extremely exciting and I hope that it brings about some of the solutions we so critically need. Humans have been breeding organisms for desired qualities for thousands of years – isn’t it only natural that we leverage modern technology to help us improve the process?

  3. I’m a bit skeptical of the ability for this or any company that designs organisms to provide ample proof that these new animals will not disrupt the existing ecosystem in a damaging, irreversible way. Local and global ecosystems are incredibly sensitive to outside influences and it can be years before any substantial change is observable. By then it is often too late to reverse any unintentional impact.

    You mention that Intrexon needs to get buy-in from the local farming community, but without hard, demonstrative data I worry that moving in this direction could have massive unintended consequences, especially if adopted on a large scale. I hope Intrexon and other companies involved in this are considering this issue in a responsible way.

    Thanks for helping us learn more about this approach!

  4. Thanks for sharing this piece. It’s a really interesting new field with great potential. But I think the most interesting part of the discussion is the ethical question about whether using gene drives to eradicate a species such as mosquitoes, or alter the genetic code of a species such as salmon, is something that we should be doing? This article from Science magazine argues for the technology to be used (http://www.sciencemag.org/news/2015/10/gene-drive-workshop-shows-technology-s-promise-or-peril-remains-far), but what are the ethical downsides of using the technology?

  5. MayC – a very well written article on a topic that is controversial. Many people who identify themselves as eco-friendly are also fervent dissenters of GMOs. I understand CMH’s response on unintentional impacts on the ecology by introducing genetically modified animals, but I think if done in a controlled environment, it is a very practical solution to a growing global middle class. For example, in my hometown in LA, if you drive a few hours east into the desert, there are large tanks that serve to grow salmon. These fish are cut off from the environment and pose no risk to more “wild” waters. On a similar note, companies like Monsanto get a lot of bad publicity from the media. But GMO corn has been a large driver of increasing protein consumption worldwide. This is because like fish, eating animals require more vegetable feed than the weight of the animal itself. 2.5 lbs of corn produce 1 lb of chicken. 5 lbs of corn produce 1 lb of pork. 10 lbs of corn produce 1 lb of beef! As the developing world continues to increase purchasing power (a good thing!), we need to weigh the practical demands of consumers with potential ecological effects.

  6. Thanks for this MayC, it touches on a topic that I try not to think about – genetic manipulation scares me. I worry that if we interfere with nature we will perturb the eco-system that supports the world and create an environment where uncontrollable disease can survive. I am somewhat Darwinian and believe in survival of the fittest and that “playing mother nature” is not wise because we will force nature in a direction that is not natural and therefore can be detrimental on a wider scale. A direction that the eco-system has avoided going in in the first instance – I think that nature evolves to takes the best path for the most species in it. The system is so tightly correlated that the slightest interference can have huge repercussions elsewhere. I just don’t think that it can be good, as lawgu2016 mentions, to grow fish in a tank in the dessert. I am sure that it affects the meat of the fish and on a moral level I find it somewhat inhumane. I am fine with a field of potatoes being grown to be harvested but treating fish in the same way by fish farming on such a large scale, with all the chemicals used to make the fish grow faster and have the characteristics that are deemed ideal will surely affect the evolution of man too. We will end up paying for our dabbling in the long term.

  7. Thanks for this MayC! Coming from a country that loves eating fish, I couldn’t help but comment. I must say, I was a bit surprised seeing how popular sushi has become in the US and abroad these past years, and can see why, with the population increase, supply is not keeping up with demand. My old company actually invested $1.6B in a Norwegian salmon farming company 2 years ago, in light of this S/D situation (http://dealbook.nytimes.com/2014/09/22/mitsubishi-to-buy-salmon-producer-for-1-39-billion/?_r=0).
    In regards to this company, I think what it’s doing is great. I just think there are a lot of challenges, in addition to regulatory issues, like the long term health effects (if any), effects on the existing ecosystem, and how to enforce correct labeling. The last issue, I think, is extremely important as we are being more and more exposed to illegal mislabeling practices by some companies. However, I do believe there are ways to enforce this and hope we never have to live a day without salmon.

  8. Thanks for this super interesting post! As someone with a background in environmental studies, I have long worried about GMOs and synthetic biology – for some of the reasons already mentioned, such as health and environment concerns, but also for the public policy challenges that it raises and the potential impacts on society. We desperately need to enhance food security around the world, and I’m hopeful that synthetic biology and other innovations will lead to agriculture developments that are truly safe, sustainable and equitable. But I’m not convinced we are there yet. There are so many different opinions on GMOs and synthetic biology, it can be confusing for consumers. As we discussed in our Indigo class, people also tend to dislike the idea of technology and science “messing” with their food. For companies like Intrexon to be successful, I believe they will need to focus significant resources on research that demonstrate safety, working with policymakers to develop regulations that protect people and the environment from unintended consequences, and communicating with consumers. Consumer buy-in will be critical, particularly given the existing concerns with GMOs.

  9. This is a very interesting article. I’m skeptical about synthetic biology altering the genetic code of living organism. At the end of the day this will end up on our plates and I ask myself if I would buy this AquaAdvantage salmon. I know that the engineered salmon had to go through a long testing and approval process before FDA finally approved it. My concern is that we don’t know the side effects we can develop by consuming genetically modified food for many years. Our grandparents used to eat anything they had access to without being concerned about their health. We live in a different era, where we have to pay premium for organic, non-GMO food. In the time when climate change is a real threat and the population is growing it will be inevitable to think about alternative sources of food. I’m still not sure if the companies that try to fight these issues by producing genetically modified food are the saviors or the threat.

  10. Oh hey there! Very interesting read and quite the delicious subject. I wonder as the technology develops for such engineered foods and as super salmon becomes commercialized if it will experience the same type of backlash as genetically-modified foods (GMOs). While it’s great that the super salmon grows in half the time as regular salmon, it would be interesting to see more in-depth studies on the nutritional value of these types of foods. In order to get broader buy-in from the developed world’s populations, I imagine there must be convincing evidence to support the claim that such novel foods are just as healthy as non-novel foods. What a world we live in.

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