On September 2022, 9, U.S. President Joe Biden formally signed an executive order to launch a National Biotechnology and Biomanufacturing Initiative.

In a fact sheet released by the White House at the same time, the background to the plan was that "with biotechnology, we can program microbes to make specialty chemicals and compounds, a process called 'biomanufacturing.'" These advances have prompted industry to embrace biomanufacturing as a petroleum-based alternative to reinventing products such as plastics, fuels, materials and pharmaceuticals. "We face the challenge that we may be ahead of the curve in biofactories and synthetic biology, but if a company, especially a small company that doesn't have the capacity to make everything in-house, if we don't really expand the biomanufacturing base, it has to go abroad to find infrastructure." It can be seen that President Biden is very encouraging the development of synthetic biology, and feels that local biological facilities are in a weak position, and in an important part of the development of synthetic biology - that is, biological facilities that are scaled up by synthetic biology have the risk of relying on external forces to "stuck neck", and local biological facilities must be encouraged.

Let's take a look at the impact of the decree on synthetic biology in the secondary market.

On September 9, the United States released August CPI data, CPI rose 13.8% year-on-year, higher than market expectations of 8.3%, core CPI rose 8.1% year-on-year, higher than market expectations of 6.3%, the US capital market suffered a bloodbath, U.S. stocks recorded the largest one-day decline in two years, of which the Nasdaq index fell 6.1%, the Dow Jones Industrial Index fell 5.16%, but the founder of synthetic biology industrialization Amyris is a little red in the green bush.

On September 9, a number of A-share synthetic biology concept stocks rose, among which, the stock price of Huaheng Biotech hit a record high intraday, and Cathay Biotech closed up 14.9%.

 

According to CB Insights, the global synthetic biology market reached $2019.53 billion in 2020 and $68.2024 billion in 189, and is expected to grow to $29.1 billion by <>, with a compound annual growth rate of <>.<>%. From the current market distribution, the highest proportion are medical health, scientific research and chemical industry.

According to McKinsey, the economic impact of synthetic biology is expected to reach $2030.2040 to $1.8 trillion annually from 3 to 6.

The policy supports the synthetic biology track, and the "dual carbon" goal drives industrial transformation

The biological production of chemicals is an inevitable choice to promote energy conservation and emission reduction and develop a low-carbon economy. According to the statistics of the Tianjin Institute of Industrial Biotechnology of the Chinese Academy of Sciences, compared with the petrochemical route, the average energy saving and emission reduction of biomanufacturing products is 30%-50%, and the future potential will reach 50%-70%, which will play an important role in promoting the replacement of fossil raw materials, the replacement of high-energy-consuming material consumption and high-emission process routes, and the upgrading of traditional industries. Synthetic biology and biomanufacturing can provide solutions for carbon neutrality in many aspects such as bio-based materials instead of fossil materials, bioenergy instead of fossil energy, lightweight and energy saving. In the context of carbon neutral industry, synthetic biotechnology is expected to provide a new material new energy industrialization path with high scientific and technological content, good economic benefits, low resource consumption and less environmental pollution.

At present, the synthetic biology application model of using "cell micro-factories" to produce key compounds has attracted much attention in China, and the "Outline of the 2035th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Long-term Goals for 40" (referred to as the "2021th Five-Year Plan") mentions that we need to "strengthen original and leading scientific and technological research (genomics research and application, genetic cells and genetic breeding, synthetic biology, biomedicine and other technological innovations)". In the <>th Five-Year Plan of various regions of the country, "synthetic biology" has been mentioned more than <> times, and the synthetic biology track is currently on the investment cusp, and we can also glimpse one or two from the total investment in synthetic biology in <>.

New Value Capital actively deploys the synthetic biology track

Compared with the development of synthetic biology technology and related companies worldwide, China has a good industrial foundation and supporting industrial system in the manufacturing industry, and has significant advantages in downstream fermentation, separation and extraction and other industrial production. \

The investment research team of New Value Capital believes that the reason why Biden encourages the development of local biomanufacturing facilities is because they have strong front-end biotechnology capabilities, and downstream production and manufacturing often rely on external transfers, although China's current technology research and development capabilities are not as good as the United States, but China's infrastructure and process level is not worse than other countries, and the amplification of synthetic biology products is a crucial link, we have the ability to design and transform the screening "cell micro-factory", coupled with the large-scale production advantages brought by the advantages of China's fermentation industry, In the field of synthetic biology, it has the necessary conditions for overtaking on curves. Last year, New Value Capital participated in the nearly 100 million yuan A round financing of the synthetic biology track Sunruis project, and also actively empowered the Senruisi project after investment.