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Ginkgo Acquires Biomaterials Maker as Industry Consolidates

Digital DNA

(Pete Linforth, Pixabay. https://pixabay.com/illustrations/dna-life-biotechnology-evolution-4068826/)

25 July 2022. A developer of synthetic biology tools and components is acquiring a biological materials developer for its automation assets as the biotechnology industry consolidates. Ginkgo Bioworks in Boston is buying Zymergen Inc. in Emeryville, California in an all-stock deal that values Zymergen at $300 million, a sizable reduction from the company’s IPO last year.

Zymergen designs and develops materials derived from biological sources for a range of industries including health, agriculture, electronics, and manufacturing. The company says it maintains libraries of molecules based on genomic analysis to create new materials, and develops synthetic microorganisms with the desired genomic characteristics to produce proteins with the chemical properties for those materials.

According to Zymergen, its core processes employ data science and machine learning, along with genomics and molecular biology to design new biomaterials. Those materials, say the company, act as inputs for polymers in additive manufacturing, thin films and composites in electronics, enzymes for developing therapies, and fertilizers on farms. Science & Enterprise reported on Zymergen’s initial public offering in April 2021, with its shares valued at $31.00.

Ginkgo Bioworks is also a developer of synthetic biology materials, starting with synthesized DNA and other nucleic acids to design microbes that express enzymes and other bio-based chemicals. The company says its library of genes, cells, and proteins called codebase makes it possible to accelerate design of new biological components. In addition, a Ginkgo division called its foundry offers software and robotics systems that support the company’s synthetic biology programs.

Consolidate workforces of both companies

Ginkgo is particularly interested in gaining Zymergen’s software and automation assets. Ginkgo says both companies offer synthetic biology solutions that cut horizontally across industries with complementary skills and experiences. “We are thrilled to integrate Zymergen’s capabilities into our foundry,” says Ginkgo co-founder and CEO Jason Kelly in a joint statement, “which we expect to accelerate the growth of our platform as we continue to deliver on our mission to make biology easier to engineer for our customers, helping us drive down the costs of cell programming as we invest in scale.”

The deal calls for Ginkgo Bioworks to offer Zymergen stockholders 0.92 shares of Ginkgo stock for each Zymergen share, valuing Zymergen at about $300 million. At its IPO in April 2021, Zymergen’s raised more than $500 million. As a result of the acquisition, Zymergen stockholders are expected to own 5.25 percent of Ginkgo’s shares. Ginkgo says it’s that company’s largest acquisition so far.

The acquisition is also expected to consolidate workforces of both companies. Zymergen already planned to spin-off its advanced materials and drug discovery activities, with reductions in staffing in both areas. The companies say those spin-offs will continue. Ginkgo says integrating Zymergen’s software and automation personnel will fill its planned workforce growth instead of additional hiring.

Ginkgo Bioworks also announced completion of another acquisition, an agricultural biologics research lab in California, from global chemical and pharmaceutical company Bayer, as well as an extension of its partnership with Bayer. As reported by Science & Enterprise in Apr. 2022, Ginkgo is gaining Bayer’s agricultural biologics R&D site in West Sacramento as part of the five-year collaboration between the two companies begun in 2017. Ginkgo says today it’s paying $83 million for the lab, and extending the agreement with Bayer for another three years.

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Updated 26 July 2022.

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