Improving the microbes’ ability to make nitrogen fertilizer available for plants provides potential benefit for sustainable agriculture. The deal provides a Series A investment of US$100 million by its parent companies and Viking Global Investors LP. Bayer claims that the new company will co-located with Ginkgo in Boston’s biotechnology community and in West Sacramento, California, US, which is where Bayer’s R&D activities around plant biologics are carried out.
In the statement, Bayer claims that the new company will focus on technologies to improve plant-associated microbes, with a particular focus on nitrogen fixation. Although a number of crops (soybeans, peas and legumes) are capable of pairing with specific microbes that live within the plant and fulfill their nitrogen requires, Bayer claims that the majority of other crops cannot. Therefore, nitrogen fertilizer is a crucial part of modern agriculture. However, when used inefficiently, it can add cost to growers. In addition to this, the use of nitrogen fertilizer can lead to environmental concerns. The endophytic microbes that the new company will develop will seek to provide a platform to flexibly deliver new agronomic advantages. Bayer states that it expects this to provide a positive benefit to growers, agriculture and society.
The new biotech company is the fifth investment by the Bayer Lifescience Center (BLSC). BLSC works as a strategic innovation unit within Bayer, and reports directly to the Board of Management at Bayer. The centre’s goal is to discover, encourage and activate significant breakthroughs by developing new companies alongside entrepreneurial partners (i.e. Ginkgo Bioworks for synthetic biology).
Kemal Malik, member of the Board of Management of Bayer AG and responsible for Innovation, said: “Accessing the microbiome is part of Bayer's innovation strategy. We are launching this enterprise to develop transformative agricultural products based on the latest synthetic biology technology.
“We have exclusively partnered with Ginkgo to build a leading player in this field."
On top of the initial investment by Bayer, Ginkgo and Viking Global Investors LP of US$100 million, Ginkgo will also allow access to its technology, office and laboratory spaces, in addition to building a new facility especially for the new company. Bayer claims that it will also provide exclusive access to proprietary microbial strains and all relevant and necessary development know-how.
Mike Miille – the former CEO of AgraQuest and current Vice President Strategy and Business Management Biologics at Crop Science, a division of Bayer – will serve as the new company’s interim CEO. The new company’s board of directors will consist of two Ginkgo Bioworks representatives and two Bayer representatives – Jason Kelly and Reshma Shetty, and Axel Bouchon and Juergen Eckhardt, respectively.
Kelly, the co-founder and CEO of Ginkgo Bioworks, said: “Biology is changing industries as diverse as flavour and fragrance to consumer electronics. Agriculture is the original biological technology, and the more we can learn to work with the soil microbiome, the more we can discover new ways to add value to farmers and return to its biological, and more sustainable, roots.
"We're thrilled to be working with Bayer to bring this transformational aspiration to life."
Bouchon added: “The plant microbiome is one of the next frontiers in sustainable agriculture.
"And it may enable us to take a major leap in plant physiology: producing nitrogen fertilizer directly in the plant. We are excited to combine state-of-the-art plant science and leading microbial technology to help tackle this challenge. With Ginkgo we have found the best-in-class partner to achieve this fundamental breakthrough."
Closing of the transaction is expected to occur in Autumn this year, subject to customary conditions. It will operate out of Ginkgo’s Boston Seaport facility, with hiring already underway.