IQT Explains: Breakthroughs in Biotechnology ft. Antheia & Alta Resource Technologies

Transcript

What if I told you the next breakthrough in US supply chain resilience might come from something smaller than a grain of sand? You'd probably think I was talking about microchips, but the real story here is microbes. Biology, long seen as just the domain of medicine, is now being engineered to produce high-v value molecules like active pharmaceutical ingredients domestically and to extract rare earth elements from minds we used to overlook. Welcome to IQT explains, a series on the IQT podcast where we explore technology trends and their impact on national security to provide insights and unique perspectives. Our discussion today will focus on how biotech is becoming an unexpected strategic lover for the United States. I'm your guest host Michelle Roso.

I am VP of technology at IQT where I am the technical lead for our investments in AI and bio and biio manufacturing. And I am thrilled to be joined today by my colleague Eugene from IQT as well as two CEOs from our portfolio companies Christina and Nathan from Anthea and Alta Resource Technologies. Before we get into the the interesting part of the conversation today, let me start with just a brief introductions on our guests. Um, Eugene Chu is the investment lead for IQT's B- Next practice, focused on the intersection of national security and biotechnology. He has led IQT investments across engineered biology and engineered healthcare in areas such as AI and bio, synthetic biology, genomic technologies, next generation vaccines, and therapeutics and diagnostics.

and I am thrilled to call Eugene a colleague and a friend and be able to work alongside him on these exciting deals. Thanks for joining me in the conversation today. Eugene Christina Smokey is a pioneer in synthetic biology and metabolic engineering where she has over 20 years of experience as professor of bioengineering and chemical engineering at Stanford University. Her laboratory led the breakthrough research to engineer baker's yeast to produce some of the most complex and valuable medicines known. Under her leadership, Anthea's NextGen biosynthesis platform enables new possibilities for drug discovery and efficient, sustainable, transparent, and ondemand drug manufacturing at scale.

We're really excited to have you on the podcast today, Christina. And finally, Nathan Ratlage is the founder and CEO of Alta Resource Technologies. Alta uses advanced biochemistry to separate minerals via a cheaper, faster, and cleaner method. Nathan has roughly 20 years of experience in the energy and technology space. He holds a PhD, an MA from Stanford University, and an MPA from Princeton University.

Thanks for being here, Nathan. >> Great to be here. >> All right, let's kick off the discussion today. Um, over the past few years, Washington has placed major emphasis on securing US supply chains. Everything from rare earth elements um to active pharmaceutical ingredients essential for health security.

what why has this issue become so central to national competitiveness and what role can biotechnology play in addressing this? Let's set the scene and I'll turn to each of you uh briefly to address this. Um Eugene, you want to kick us off? >> Sure. You know, I think one one of the things that we are seeing in the space is that bio biotechnologies uh have the ability to be impactful across such a wide range of technology areas uh and impactful from a supply chain standpoint with respect to you know bringing new materials, new chemicals uh and you know not only bringing those capabilities forward but uh bringing them forward in a sustainable way. And so with you know biotechnologies I think we have a way to to really uh address the future for uh for our nation here in a different way. >> Thanks Eugene.

Couldn't agree more. Um Christina over to you for some uh opening comments on on why supply chain security is so central to national competitiveness and how biotech can play a role. >> Yes. Building off of Eugene's comments. I mean, you know, if we think specifically about the types of molecules, products that we're discussing, um, these are products that are critical uh, for public health, um, and and specifically focusing on active pharmaceutical ingredients.

Um, and so our ability to source these to have reliable and resilient production of these types of products is critical for public health, for the health of our armed services. Um and what we're seeing now is that um and really realizing is that we rely uh for for countries outside of the US to source these um and and it's a similar story in other areas but 90% of our active pharmaceutical ingredients and the pharmaceutical precursors are sourced outside the US and in particular relying on countries like China and that is really raising a red flag because of the evolving geopolitical landscape. Yeah, Christina, you brought up some really interesting points about the geopolitical landscape and Nathan, that's obviously very relevant for rare earth elements and and what your company um is working on. So for you and your perspective, can you um add your your thoughts on why supply chain security has been so central to national competitiveness right now and again the role that biotech can play? >> Yeah, 100%. I mean, I think until a few years ago, most people never thought about minerals and metals really in the supply chain.

uh but that's really come to the four and I think we've realized that over the past 30 years we we've offshored that primarily to an adversarial country and as as you know advanced technology whether that's AI or robotics or electric vehicles take off we're realizing that dependency is just enormous and enormously focused on on one country and so you know if you look at Intel or Nvidia or Apple some of the products they rely on are 99% controlled by China gallium refining for example and so what we're being tasked to do is unwind that monopolization in a very brief period of time. And it's really critical, I think, not just for the US, but for the global economy to have diversified supply chains where we can meet, you know, industrial needs all the time, regardless of geopolitics or whatever, you know, challenges are happening like we saw with COVID. So, it's it's a near-term issue for the United States and I think a longer term issue for a healthy global economy. >> I couldn't have said it better of myself. That's um really helpful framing, Nathan, and I'm excited.

I obviously am tracking Christina, your technology, Nathan, your technology closely. I'm excited for the listeners to be able to hear a little bit more and we'll we'll spend some time with you all describing how you all are addressing the splicing challenges you've just identified for us. Before we get to that, Eugene, I'd like to turn to you um for a brief discussion around the perspective of IQT which has been investing in strategic technologies for decades and you um individually have been investing you know in these areas for for as long for a very long time. um how do you see how IQT is approaching biotechnology as a driver of industrial resilience and giving your you know long career in this space what signals are you seeing now that biology is gaining traction here >> thanks Michelle you know I think what we're seeing uh from a industry standpoint is the recognition that uh you know biology can be a force in in supply chain resilience uh in a variety of different ways and we're seeing investment come into the sector uh selectively to good companies that can make a difference. Uh and we're also seeing these companies uh transition from uh R&D to commercial scale.

Uh we're seeing that with Anthea. Uh we're seeing that with other companies as well. Uh and and that's very very exciting. From an IQT standpoint, uh we are particularly interested in platform technologies that have a wide range of applications uh that can you know be effective in high throughput cost effective production but also in uh resilient production and we're also very interested in the intersection of AI and uh by design as well as distributed by manufacturing That's a great leadin to to hearing a little bit more about our portfolio companies, Anthea and Alta Resource Technologies and how they fit into that investment thesis. So, Christina, turning to you um to hear a little bit more about how Anthea is reinventing API production um Anthea uses synthetic biology to produce active pharmaceutical ingredients or APIs as we've been discussing that have historically relied on long fragile overseas supply chains.

Can you break down a little bit more for us how biology is doing that? how your platform um accomplishes this feat and and thereby makes pharmaceutical manufacturing more secure. >> Yeah, absolutely, Michelle. So, what Anthe's platform enables is really a programmable biosynthesis platform. Um, and how it works is that we're able to take a microorganism like brewer's yeast, so the same yeast that we use to ferment beer and wine, um, and other food products, and modify its genetic material, its DNA, so that we ultimately put the directions into that microorganism that allow it to take a starting compound like sugar and convert it u within the cell into that active pharmaceutical ingredient or key precursors for those ingredients. Now, the benefit of doing this or really the advantages is that it really addresses not just issues of where these uh products are currently made, but it offers a more efficient um more predictable and more resilient way of producing these medicines.

To give you an example, if you look at how we currently manufacture these today or how they're being manufactured outside the US, the manufacturing cycle times can be two years or more. Um, and they are very susceptible to uh single source disruptions. And the technology takes that multi-step very complex supply chain and shrinks it into a process that can take 10 days or less. Uh, so dramatically reduces the time. uh and importantly, I think you highlighted this as well, allows for a distributed technology.

So really allows us to leaprog over these outdated technologies and be able to produce in the US um in a way where we're able to produce on demand and agile in response to different demands and shortages that come up with medicines. So given that Christina and the opportunities domestically, how is the US doing um in this sort of global competition to add biio manufacturing platforms like your own um and and what policies or partnerships might help accelerate that transition? >> Yeah, it's a great question. I think the US uh and and you know we can take ENT and certainly other companies as an example is has led and really continues to lead in terms of the technology and the platforms itself. When you look at Enthusa's technology, we really are the world's first and only company that has been able to program cells with very complex uh synthesis pathways. To give you a sense of that, the products that we are commercializing and now supplying to the market, they require these yeast cells to be engineered with 40 or 50 different proteins.

That's about 5 to 7x more complex, more advanced than any other competitor in the world, including China. So, we lead there. and this is US innovated and developed. I think where the US is falling behind is in actual scaling to bring this to uh the population. So where we have found challenges is the infrastructure not the technology development but the infrastructure to actually allow this to be produced at scale and then um delivered to patients.

when you look at other countries particularly China um they've been very aggressive in investing in infrastructure for biio manufacturing and that is a place I think in particular where policies um set by the US government can be used to drive both more funding into building the infrastructure that will allow for agile manufacturing with this type of technology um as well as setting other policies that really um streamline regulatory and other aspects of bringing these new production methods um to patients in the industry. >> Um super helpful, Christina, and I think, you know, it's it's appreciate that the US leads in the innovation aspect of this. You know, it sounds like we're on strong footing here to really catalyze this transformation and and be able to use technologies like yours for supply chain resiliency. Um, Nathan, switching over to to Alta Resource Technologies and and what you all are building um in your company, you are tackling a different supply chain issue than Anthea. Alta is using engineered proteins to separate rare earth elements um and other strategic metals from complex feed stocks.

Given how strategically important rare earth elements are to everything from defense to energy and you said, you know, a few minutes ago, we may not have heard of these a few years ago, but now it feels like you can't turn on a news channel or read a newspaper without t hearing about rare earth elements, um, gallium and the like. So, what does it mean to apply biology to this challenge? And how could technologies like those are under development at Alta reshape us access to these critical minerals? Yeah. So I think it's important you know just level set for the audience where we are and I don't need to double click too much on you know the sort of the monopolization by the by the Chinese government that adversarial relationship but it's pretty critical. The second thing though is that you know most of the separation technologies that we're using are fairly outdated right and they're highly toxic right which makes them very challenging to permit in the US and other and western countries. So that puts us at a disadvantage in terms of competitiveness.

Um, and they're relatively expensive. You know, if you're doing hundreds of toxic wash steps to separate lanthnines, as an example, that that the costs add up over wa over time and you really need to think about how you're going to dispose of that. So, what biology allows you to do is basically replace, you know, hundreds of chemical steps with a single column chromatography run. And the primary difference there is just the selectivity of biology. So where chemicals might you know find it challenging to you know separate neighboring lantid on the peric table right they have similar atomic weights and radi proteins can tell the difference and so a big thing about the platform we're building is that we're taking known industrial products so mobilized proteins are widely used column chromatography is widely used and just deploying it in a new industrial setting right so it's largely derisked and for the viewers you know if you're not deep in the space uh immobilized proteins are non-living but they retain their functionality.

So the the most simplistic way to think of them is just a tiny little robot. And the key is being able to control that robot to both bind and then elute in high purity. That's really what you need. And so what that allows you to do is is compete in a way because you have a step change ch step change in technology, right? So it's not a marginal change in solvent extraction. It's really moving to a whole new tech that allows you to compete on cost because the number one thing in in mining and mineral production is who's the lowcost provider, right? And so if we can replace a very exhaustive process with a simpler one that has low labor requirements, you can really compete.

So you're primarily getting a cheaper reliable product, but you're also getting a cleaner product that you can deploy in the US or Australia or anywhere else. So >> I love this. We've now had biology cells as manufacturers and and proteins as robots. It's really helpful visualization of the cool things that biology do. But more importantly, as you both have described, how using this technology can help compete on cost, on region, um, and the US has clear advantages in being able to scale both of your types of applications to help us with our resiliency.

I'm also struck by the fact that your companies operate in completely different sectors, pharmaceuticals and minerals like rare earth elements, but both are using really cool um biology to solve national scale supply chain challenges. Um and we've we've highlighted how these are areas where the US has significant dependencies on China. What what does that say about what else biotech can do uh to help solve for our supply chain problems? Open that up to whoever wants to jump in. Yeah, I think we're just in the beginning uh stages of seeing what biology can do. You know, uh we can uh grow biology, if you will.

We can grow microbes, we can grow uh uh crops, we we can do a lot of things with biology in terms of scale up uh that uh we can do much more efficiently and um more sustainably than uh traditional industrial processes. And I think what we're also seeing today is that uh we are beginning to to understand how biology works to the degree that we can engineer it. >> Can engineer it to do a lot of different things. Uh and so we are now at the stage really at the beginning stages of understanding how biology of of leveraging our understanding of how biology works to uh to engineer it for for specific purposes. And I think that has very very wide ranging uh implications from a supply chain standpoint.

>> Great. I want to come back to that so we can talk more about how we get to have that that beginning stage is make sure that we're doing that faster, right? And then we can get to the end stage um as quick as possible as a nation. But let's let's turn to to Nathan and then Christina. >> Yeah. I mean I think that you know there's a variety of ways that biology can be applied to a number of different settings, right? whether that's designing cancer drugs or or separating minerals.

And I think the one thing that we've realized is that you really have to clearly understand the specific use case that you're deploying because like what we're doing is different from what you know the amazing stuff that Anthia is doing, right? And then putting that into a high value industry and I think that's something that's important for us is you know if we are going into a place you want to make sure that you're creating a product that sells at really high value and I could I could talk more about that. I think to complement what Eugene was saying, you also think of some of the underlying advanced technologies that really help us understand how biology works like what's the coordination chemistry that allows the binding to alanthanite, right? And that's critical if you want to move forward in really advanced ways. Fortunately, the US is really good at developing technology, right? The challenge, at least in our setting, is that we're being asked to do that on extremely fast timeline and so you need to move more quickly. Um, so as long as you can really focus on the specific use case, I think you can you can move fast and deploy biology in really unique and amazing ways that can really transform a variety of industries. >> I'll just add, you know, that I think we we're at a stage where many people recognize that biology is a general purpose technology.

You see it across the two examples that you're highlighting here today, but it is even broader than that. You know, taking a step back, I think about biology as sort of the 21st century manufacturing technology. Similar to how synthetic chemistry when it was introduced allowed for programmable bottom-up synthesis using the tools of chemical synthesis, we're now at that stage with a platform like what Anthea has commercialized enabling us to do bottomup programming of very complex synthesis but with the advantages that were highlighted of uh you know being able to do this in aquous environments, not having to use toxic solvents, not having to have huge labor forces and not really having to then perform at the scale that you've seen with a lot of these other technologies and that's where I think the possibilities really open up and they even expand over time because as we have these successes you know in these initial areas where we're focused on highv value products um you know it becomes something that is more distributed and becomes something where the platform will enable bringing different products to market um in more efficient cycles whether you branch into food whether you branch into materials and other products as Well, so it's really just extremely powerful and because of that, I think it's really important then that the US continue to lead um because it's going to want to really be able to direct how this technology is used broadly and how it's used to really improve uh you know flourishing basically of of all of society. If I could just if I could follow up quickly on Christina's comment, I think she was dead on there. And just to reinforce, I loved your your term about 21st century manufacturing technology.

I think one of the biggest challenges is, you know, young researchers or young career professionals thinking about bio applications outside of traditional use cases, right? So where can this be used outside of traditional places? And that's something where you know it's incumbent on all of us to get people thinking outside the box like how can I take advantage of this known uh advantage technical advantage but apply it to a new industry in a better way right >> yeah I couldn't agree more I um I spent a lot of time talking about biology to to the uninitiated if you will and and I say you know I'm a biologist and I'm continually amazed by what I see coming out of you know the the companies the labs the academic institutions in this country of all of the things that you can apply biology to like it continues to amaze me as someone in the field on a daily basis. Um, and we've just highlighted, you know, it's a platform technology. It can be applied to all of these potential areas. Eugene, you mentioned, you know, we're we're beginning to actually be able to engineer biology faithfully in a way that we that we want to. Um, but Nathan, as you point out, we're on a clock here, right? We have these supply chain dependencies that we know about that have become exacerbated by geopolitical tensions um that were you know made very clear across the last couple of years um in the pandemic and and afterwards that we need to resolve and and we have to get these technologies to scale quickly.

So you know private public collaboration is really going to be key here. um what's working in the partnership model today between investors, startups, and government. And what should policy makers or funders be doing to ensure that these technologies trans transition um to be able to alleviate the supply chain dependencies we've we've touched on? Christina, maybe to you first. >> Yeah, I mean I I would agree that public private partnerships are critical because of the scale of investment that's required to really deploy this and enable it to be commercial. I can give you some an example from Anthea's um some of Antha's recent progress in this as we have launched um our first commercial product and getting ready to launch our second um we have been relatively successful in um basically bringing together both private investment as well as partnership with the US government.

So our series C recently closed. We had a number you know of private investors support the company but in particular also had strategic investors like inel um like global health investment corporation which are closely aligned with um national security of biio manufacturing and in particular our pharmaceutical supply chains. Along with that uh we were able to then also partner with the US government through the biomap consortium which is a public private partnership between the US government and um different biommanufacturing companies with the goal of building out a network of domestic biommanufacturing companies that have the capabilities both technology but infrastructure to be able to deploy biology for critical needs uh from the US government and there we're partnering both with Barta and Asper um you know and and have received um significant funding to both develop but also scale up um our bioprocesses for uh essential medicines um that are critical to uh basically public health and national security. Um so so we have found all of that to to really be able to help support and accelerate our launch and our growth. But where I would say there's still a strong need comes back to this infrastructure and being able to have state-of-the-art um appropriately sort of uh built uh infrastructure to scale biotechnology within the US.

um when we launched our first product we launched it outside the US and Europe and that was because we really struggled um to find a a suitable facility to basically produce at um and it's still a challenge that we work on uh that we that we face today. So basically from a policy perspective tools and levers that would enable more investment to funnel into infrastructure bricks and mortar I think is really critical because companies like us many startup companies they're successful in raising from VCs but that's really towards technology not the infrastructure that's required to actually deploy this at scale whereas I think other countries um have been much more aggressive at at building out that infrastructure and capability to sort of um woo the technology um into um their different regions uh for so that they can see the benefits of it. Um so whether again that's through different you know funding programs, contracts etc. I think that's one key area and then the other one I would just say is really streamlining um regulatory uh and not really changing the process but streamlining and making sure that um the reviews go quickly especially for startups and US companies. Christina, you highlighted the sort of mismatch between VC funding and and wanting to derisk technology, but you all needing to build put steel in the ground in order to get to that next stage of development.

Eugene, this is a paradigm, you know, that you're familiar with it given your role um at IQT. Can you expand a little bit more on Christina's comments um and from your perspective, what else could policy makers or funders could be doing um to really drive these technologies forward? Yes, I think especially for platform technologies and also for some of these uh uh technologies where where scale up is a challenge, we really do need uh government funding to support uh these companies at all stages and in partnership with with uh private sector funding as well. I think what we're also seeing is that we need uh an environment that can foster uh growth of these companies at a global scale. And so we do also need an environment that enables uh uh global collaboration at IQT. We are uh investors here in the US but also internationally with our IQTI uh efforts.

And so you know I think the international collaboration, global collaboration will be important for growth uh for uh scaleup of these companies. And I think also uh additionally the uh recognition that this is an important area not just immediately what's right in front of us but for uh our future for many years to come. And so we need to have an environment where uh we are educating uh students and uh uh the next generation of talent for our companies here to be able to do this uh not only today but but in the future as well. >> Yeah. And I I think Nathan, you touched on this earlier with your comments around the the next generation of workforce and manufacturers to to understand all of what biology can apply towards.

Um, from your perspective, you know, is there other things you want to add to to this discussion around how how policy makers can help uh support the acceleration of your technologies and and speed up your timeline as you mentioned? Yeah, I mean I think first you know we should give credit uh over the past you know 9 to 10 months the US government at least in the mineral space has been pretty active and aggressive in deploying capital to start mitigating some of the supply chain challenges although there a lot more work to do right uh but they should be recognized for that but I think sort of to Christina's point about infrastructure it's really a whole supply chain issue right so you need the resources you need the refining technology and then you need the manufacturing technology. And if you're missing any one of those pieces, you're not really able to re-industrialize at the scale or speed that's needed. And and and I'll double down on what Christina said as well about the just the base level supporting infrastructure, right? It's like, do you have the capacity for protein production? Are the resin providers, you know, available? There's some underlying things as well. And so, you know, it's it's probably a longer conversation we have time for here, but I do think that while some progress is being made, the rest of government has some work to do on supporting policies to make this go more quickly. However, the one thing I'd like to flag as the third leg to this stool are the large corporates, right? Like they have an enormous amount of capital.

They control most of the resources and, you know, are in some ways the most exposed to some of these problems. And so it really is like a a collaborative or synchronized effort to make sure that you know new technologies are brought to market and those new technologies um have the access to the resources that they need whether that be funding or actual like product. And the one thing I would just encourage the listeners to think about is that you know sometimes you want to bring things to market quickly because they're better and cheaper and there's some problem but in the vein of national security it does increase that urgency. Um, and I think that's something that in both of our industries is is really crystal clear that that does take some unique policy environments and expedited approvals and continuity and funding if you really are to meet some of the geopolitical concerns. I will add one more thing which is that uh you know I I think one of the areas that there can be greater collaboration there should be greater collaboration is in the area of data uh and research uh in general in in general.

Uh you know I I think that we uh work on many things uh within you know the concept or within the construct of individual research groups or uh individual companies etc. But one one role that government can play is to bring folks together uh and bring platforms together that can uh advance uh research for uh you know for everybody together. >> And you all bring up some interesting points that we should be mindful of and policy makers should be mindful of. You know, as you say, Nathan, there's a national scare imperative to get these technologies to market. Um but we have to be mindful of the underlying supply chain elements.

You know, if we try to resolve a supply chain vulnerability that we have with biology but then have underlying vulnerabilities in the biological supply chain, the resins as you mentioned the the infrastructure Christina um you know some of the the data aspects Eugene then we are just creating additional supply chain dependencies in another area and so while this um has a lot of promise that's something that policy makers need to be mindful of as well. Um, one final thought as we close this discussion. It's been a really um, interesting time together. Um, and I appreciate all you all have raised. I think we we have already surfaced a lot of optimism here about the future of biology.

But, uh, as we're as we leave today, one final thought from each of you. Um, what do you think about the future of biology as foundation for American innovation and security? Christina, >> I mean I think it's critical as I said, you know, my perspective and I think a perspective of a lot of people and we're seeing this in some of the reports that are coming out, US China Commission, etc. is that biotechnology is probably the most important emerging technology when you look at just the scope of what it can enable and support. Um, and I have tremendous optimism in terms of the US being able to continue to lead it as long as we uh bring together strategic planning. Um, and and really recognize that we do need to uh pull policy levers.

We do need to do this with intent and purpose. But I think as a country we've always had tremendous uh innovation, tremendous entrepreneurship and are able to come together and build teams that make the impossible possible. Um that's what we've certainly seen with some of the examples that are now being scaled and commercialized. Um and and I and I think you know we're ready and there are people at all sides you know in the public uh market and the US government but also entrepreneurs etc that are that are really digging in and want to see um want to see the US continue to lead? >> Nathan, what gives you the most optimism about the future of biology here? >> Yeah, I'm I'm also super bullish on the use case. I think the environment is really rich.

I think there's a number of ways to incentivize, you know, risktaking. Um but I do think that you have to continue to provide a an environment where you know researchers and companies for that matter can take high risks right they can push super super hard and I think the the complement of that is is speed to market right and Christina referenced this and I think Eugene as well you know that is where policy comes in right so you're going to continue to have a very vibrant community of researchers and developers how do you deploy that really quickly that's where we're leaning on the policy folks and and dare I say at the end here with a little bit of a spicy comment I actually think AI can help here, right? It's not totally proven out and it won't help in lots of things, but in some use cases, like we want to continue to lead on that too, right? And as long as we continue this really rich environment where risk takers can go after big ideas, we're in great shape. So, we should just continue to support that and allow people to get to market so that the investors see, you know, the outcome that will allow you to keep underwriting these companies. Biology is an awesome use case for AI, especially for those who want to take some risks, right, Eugene? What what makes you optimistic? >> We've been leaders in in innovation for a long time. Uh we've been leaders in uh in in the area of biology.

uh but we do have to be aware that uh China and others are aggressively investing and are uh you know becoming significant players in innovation in the space uh not only in the therapeutics area but across the board and so we just need to continue investing uh against uh the sector and we need to have recognition at all levels that this is strategically important for us. >> Yeah. and and I'm optimistic because of companies like Anthia and Ulta and you know investors like IQT that are helping to pull all this together. Um really appreciate the conversation today. Thank you for listening to this episode of IQT Explains a series on the IQT podcast.

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