OPX Biotechnologies, a Boulder, CO-based industrial biotechnology firm, achieved several crucial milestones with its acrylic acid production platform in 2011. Here’s a CliffsNotes version of my interview with company CEO Chas Eggert:
- Big name chemical industry partnership to help advance to commercial-scale? Check. In April, OPX signed a JDA with Dow Chemical, the largest U.S. producer of acrylic acid and the second-largest globally. Dow brings to the table know-how, a path to market, and (soon) front-end expertise in sourcing sugar thanks to its Mitsui & Co. ethanol-to-polyethylene project in Brazil.
- Proven cost advantage: OPX has already demonstrated at pilot scale that it can produce acrylic acid for 70 cts/lb, 20% less than current prices. This cost advantage will widen as OPX advances its technology and as ethane-based olefins production in the U.S. tightens propylene availability, Eggert says.
- Big, existing market for first product? Yes. The global market for acrylic acid is around 8 billion lbs annually and valued at $10 billion, Eggert says. Demand is growing 2%-3%/year, with developing regions showing growth at around 5%/year. Superabsorbents, paints and coatings, and adhesives are the largest consumers; acrylic acid is also used in home and personal care and construction applications, he adds.
- Timeline: Eggert says OPX and Dow are planning to begin a demonstration-scale unit in the first half of 2012. If certain milestones are achieved, the two companies would move to commercial-scale. Eggert hopes to have the first commercial-scale unit come online in 2015, using corn sugar in U.S., cane sugar in Brazil, or dextrose in Asia or India. Location, timing, and size would ultimately be determined jointly with Dow, he adds.
- Technology: OPX’s organism produces 3-hydroxypropionic acid (3HPA), which can be catalytically dehydrated to acrylic acid. Its Efficiency Directed Genome Engineering (EDGE) technology enabled the company to identify genes that control microbial metabolism and implement genetic changes more quickly than conventional genetic engineering. “The EDGE technology enabled us to achieve high rates and yields from our organism,” Eggert adds.
- Competition is out there, but still in the rear-view mirror. The outlook for sustained high propylene prices is driving other firms to pursue biobased acrylic acid from a variety of routes. Cargill was working on a 3HPA process for a number of years, but was ultimately unsuccessful in getting sufficient yields, sources say, and put the intellectual property into a licensing deal with Novozymes. Meanwhile, Nippon Shokubai (Tokyo) and Arkema are working on glycerin-to-acrylic acid processes. Metabolix (Cambridge, MA) is working on leveraging its polyhydroxyalkanoate expertise to produce acrylic acid, while SGA Polymers (South Charleston, WV) is looking into a conversion based on lactic acid.
- Future targets include acrylamides, fatty acids. The EDGE technology is not specific to acrylic acid, Eggert says. “We chose acrylic acid because of high demand and the attractiveness of a biobased route.” Potential future targets include acrylamides and chemicals based on fatty acids. The company is also working on a synthesis gas to fuels process with some support from the U.S. Department of Energy.
- Financing climate favorable for some, icy for others. OPX recently raised $41.2 million to help it move through to demonstration-scale production.Money appears to be available for firms that have promising technologies and actionable business plans. A report, released recently by Lux Research (Boston), says venture funding in biobased chemical and materials hit a peak of $806 million in 2010 and is on pace to match that in 2011.
Others seem to be having a much more challenging go of it. TetraVitae Bioscience (Chicago), a producer of biobased n-butanol and acetone, was acquired in October by Eastman Chemical. Market sources have suggested TetraVitae was having trouble raising funds. Draths (Lansing, MI) laid off almost all its employees in October, shortly after being acquired by Amyris (Emeryville, CA). Draths had been developing a purified terephthalic acid production process based on biobased muconic acid.
- IPO Market: Hot or Not? Eggert’s expects companies looking to raise funds by going public might have a tougher go at it than those who began trading in the first half of the year. “Successful IPOs like Gevo, Amyris, and Solazyme generated a fair amount of momentum,” Eggert says. “But the market has changed in the second half of the year, and public market investors are more reluctant to invest in early-stage firms.” Companies like BioAmber, Myriant Technologies, Elevance Renewable Sciences, and Genomatica have all registered to go public since June.