In a first for upstart synthetic biology field, Zymergen files for $100M IPO
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Five years after the synthetic biology company Zymergen raised $174 million from investors by piquing interest in designer microbes, the company has filed for an IPO.
The company penciled in a $100 million raise, although that figure has become a placeholder over the last year for life sciences companies that have their eyes on much larger troves.
Zymergen so far has specialized in engineering microbes for new materials, including electronics and insect repellent, or for manufacturing chemicals and fuels. But they’ve also quietly been involved in drug development and manufacturing biologics and their IPO haul, which could be significant, represents a major milestone for a synthetic biology field that has been trying to remake corners of the biopharma industry.
The amount they ultimately raise could provide a benchmark for the next widely anticipated synthetic biology IPO: Ginkgo Bioworks, which has played a much more direct role in drug development, teaming with Roche, Moderna and Synlogic. CEO Jason Kelly has said in the past that the company, which was valued at $4 billion in 2019 and dubbed as “a magnet for VC money” by the Boston Globe, has plans to do just that.
Zymergen’s first product, a film that allows customers to make foldable touchscreens, was launched in December 2020. Board member and Nobel Prize winner Steven Chu told the Financial Times in 2016 that identifying groups of genes inside microorganisms is the key to creating new organisms.
The company argues that “biofacturing” creates better products cheaper, faster and more sustainably than traditional chemistry.
“Our goal is to make our biomolecules by fermentation, which we believe is a safer process than making products with petrochemistry,” the documents stated. “Using new tools and building blocks derived from nature, we believe we can manufacture high-performance materials more cleanly and with less waste.”
Zymergen has yet to make any major public inroads into biopharma, but they say on their website in a section labeled “emerging areas” that they are actively using their genetic libraries, high-throughput systems and other technologies to develop drugs for oncology and infectious diseases. The idea is to cut the length of time it takes to get a candidate into clinical trials and make it easier to manufacture those candidates if they prove effective.
The company said in the IPO filing that the proceeds from investors would primarily be used for working capital, and expect that to take the shape of commercializing already existing products and furthering the development of the biofacturing platform and technology.
“We do not currently have specific planned uses for the proceeds of this offering,” the company said in their S-1 form.
In 2016, Zymergen took away an investment of $130 million in its Series B.
Entities affiliated with SVF Excalibur (Cayman) Limited own the most shares before the offering, with nearly 33%. Entities affiliated with True Ventures IV own 10.4% of shares, and those affiliated with Gamnat Pte. Ltd. own 5.5%. Co-founders Josh Hoffman and Zach Serber own 3.7% and 3.5%, respectively.
The company has acquired an accumulated deficit of $511.5 million and $773.7 million as of Dec. 31, 2019 and 2020.
“We have a history of operating losses and we do not expect to be profitable for the foreseeable future,” the S-1 report said.