Gautam Mukunda: Humans have found the keys to mother nature's R&D lab

The cover of National Geographic’s March issue featured a tractor tire dangling from a thread. Not metaphorically, but literally, because the thread is spider silk — five times stronger than steel but produced by genetically engineered silkworms. As National Geographic put it, this “supersilk” is “poised to upgrade far more than our clothing.” They’re right, but the real story is much bigger.

The next wave of economic impacts from the biotech revolution isn’t going to come from medicine, but rather the $6 trillion global chemical industry. Tools built to fight disease turn out to be even more powerful when they’re aimed at manufacturing.

Biotechnology was initially all about medicine. Treating cancer or fixing genetic disorders require altering living systems. Because you can’t do that with a wrench (well, not productively), naturally the first industry to invest heavily in biological engineering was the one that does it every day. And doing anything in the life sciences was initially really hard and expensive since the basic tools had to be invented from scratch.

Pharma was just about the only industry that could afford to keep throwing money against the wall until some of it stuck. Large pharmaceutical companies report gross profit margins around 76%, roughly double the S&P 500 average. Those margins exist because people will pay almost anything for a drug that saves their life. And the industry needed every penny of that cushion. Only about 7% of drugs entering Phase I clinical trials ever reach the market. The other 93% are write-offs.

The failure rate isn’t because pharmaceutical scientists are incompetent. It’s because living systems are almost inconceivably complicated. The human body may be the most complex system in the known universe. Your body contains roughly 37 trillion cells, each running an estimated billion chemical reactions per second. We can predict eclipses millennia in advance and land a robot on a specific crater on Mars. But we can’t reliably predict what a new molecule will do inside humans.

For example, Merck & Co. ran a major clinical trial of its Vioxx drug to prove the painkiller was gentler on patients’ stomachs than older alternatives. Instead, the trial revealed that Vioxx patients had twice the rate of serious cardiovascular events. A second trial, designed to test whether Vioxx could prevent colon polyps, confirmed the cardiac risk. An estimated 88,000 Americans had heart attacks from taking the drug. A painkiller meant to reduce suffering in one organ system was silently destroying another, and nobody saw it coming. This is what happens when you try to engineer a system you don’t really understand.

Decoding human physiology is the Everest of science. But when you’ve been training to climb Everest, normal mountains get a lot easier. Crispr technology has made gene editing fast, cheap and precise. The cost of reading a human genome has fallen from billions of dollars to about $200, and the cost of writing DNA has dropped by more than a factor of a thousand, following what’s called Carlson’s Curve and outpacing Moore’s Law. (Biotechnologists are the only people in the world who look at Silicon Valley and ask, “Why are you so slow?”)

These tools were developed to fight disease. But an enzyme doesn’t know whether it’s working inside a human body or a fermentation tank. And that’s what opens the door to the chemical industry. Because once you take the human body out of the equation, everything gets easier.

Gaurab Chakrabarti was doing PhD research on a pancreatic cancer drug at UT Southwestern in Dallas when he started talking to Sean Hunt, a chemical engineer at the Massachusetts Institute of Technology, about what biological tools could do outside of medicine. Ten years later – or about the time it would take a pharma company to bring a single drug to market – their company, Solugen Inc., converts corn sugar into industrial organic acids using enzymes instead of petrochemical processes. They’ve broken ground on a factory in Minnesota that will produce up to 120,000 tons of chemicals a year, backed by a $214 million Dept. of Energy loan guarantee. In a steel tank, you control the environment, tuning temperature, pH, and inputs. Mistakes stay in the reactor. You don’t need FDA approval. Nobody dies if a batch goes wrong.

The industrial biotech opportunity goes well beyond replacing petrochemicals. Evolution has spent billions of years optimizing biological materials, and some of them have extraordinary properties. Spider silk is just one example. Tooth enamel is harder than steel, ranking above iron, nickel, and silver on the Mohs hardness scale, but built at body temperature from calcium and phosphate. No forge required. The cartilage in your knee has friction 10 to a 100 times lower than ice sliding on ice.

We cannot predict which of these materials will prove commercially valuable first. But making materials that are tougher, slicker, and stronger has been a central endeavor of human science since cavemen first polished rocks. As our ability to engineer biology improves, the catalog of materials that evolution has already prototyped becomes available for industry to exploit.

You don’t need to go to a lab to see the proof of concept. It’s sitting right under your rib cage. Your liver synthesizes proteins, metabolizes toxins, regulates glucose, produces bile, and manages cholesterol, all at the same time, at body temperature, running on nothing but what you eat and drink.

No factory on earth can match it. The biotech revolution spent decades trying to harness that kind of power for medicine. The next chapter is harnessing it for everything else. Nature has been running the world’s most advanced R&D lab for billions of years. We’re just now figuring out how to use the results.

_____

This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Gautam Mukunda writes about corporate management and innovation. He teaches leadership at the Yale School of Management and is the author of "Indispensable: When Leaders Really Matter."

_____