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N O V E M B E R   2 0 0 8
S O L A R I G E N E A P L A T F O R M F O
R B I O F U E L S A N D C O M M O D I T I E
S
Inventing Breakthrough and Commercializing
Science Harvard Business School Team Autumn
Klein Phillie Silverman Ali Wasti
Silver Labs, Department of Systems Biology
Harvard Medical School
S T R I C T L Y   P R I V A T E   A N D 
 C O N F I D E N T I A L
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Executive Summary
Intellectual Property
Market Opportunity
Competitive Landscape
Recommendation
Backup Slides
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Executive Summary
Photosynthetic Cyanobacteria
CYANOBACTERIA Photosynthetic AND genetically
modifiable
High Quantity Outputs
Few Inputs
Sunlight

CO2

CO2 Fixing Process
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Intellectual Property
Current Patent Status
No Existing IP on Cyanobacteria making Palm Oil
or Biodiesel
Genetic Engineering of Algae/Microbes other than
Cyanobacteria

• Genetic Engineering of Cyanobacteria
• Pathways to manufacture Isoprene, Biodiesel,
  Ethanol
• Large Scale Production
• Patent applications to manufacture large
  quantities of Isoprene and Biodiesel

No Existing IP on large scale Cyanobacteria
production from Photosynthesis
Exiting Patents to Cyanobacteria producing
Ethanol and Isoprene, BUT different pathways and
small scale
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Market Opportunity Biofuels
Large, growing, addressable market

• Higher costs of gasoline versus ethanol are
  driving market demand for biofuels
• Corn ethanol producers suffer from feedstock
  pricing volatility, food versus fuel debate
• Alternatively, Cyanobacteria based Solarigene
• Does not need feedstock
• Has potential to produce more lipids (plant
  oils) per acre than other terrestrial plants --
  potentially 10X to 50X
• Has been engineered to directly product
  biodiesel, ethanol or lipids
• Cultivate on marginal, non-arable land and use
  non-potable water
• Reduces worlds carbon footprint by sequestering
  CO2

Higher costs of gasoline versus ethanol are
driving market demand for biofuels
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Comparison of biofuel yields from different
feedstock
Obstacles with Exiting Technology

• Todays biofuel producers face increasing margin
  pressures and sustainability concerns around
  feedstock
• Corn ethanol producers suffer from significant
  feedstock pricing volatility and scrutiny from
  the food versus fuel debate
• Traditional biofuel production facilities have a
  much lower yield. Corn ethanol biorefineries and
  soy biodeisel refineries require layers and
  iterations of separation processes to arrive at a
  marketable energy source. Solarigene entails a
  direct path to manufacturing without the waste
  produced in traditional biofuel production.

Source NREL
Solarigene Solutions

• Cyanobacteria have potential to produce more
  lipids (plant oils) per acre than other
  terrestrial plants -- potentially 10X to 50X
• Lipids are the preferred starting point to make
  diesel or jet fuel
• Cyanobacteria cultivation can utilize
• Marginal, non-arable land
• Non-potable water
• Large waste CO2 vent resources (e.g. flue gases
  from coal electricity plants)
• Minimal competition with food, feed, or fiber

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Commercial Viability
Market Assessment for Commodities

• Analyzing historical and forward prices, and
  yields and extractability of various commodity
  products, our team has selected Palm Oil as an
  alternate commodity to develop using the platform
• Customers will include dependent manufacturers
  of food, chemicals as well as palm oil based
  biofuel producers and suppliers
• Future development may include developing
  products for companies exposed to commodity risk

Selecting Commodities
Source Silver Labs . 1YIELDS of product aim to
be 40-60 g/m2 per day 50 of Cyanobacteria is
lipid (membrane)
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Industry landscape

• No direct competitor in the photosynthetic
  Cyanobacteria space

Competing Technologies
Solarigene Proposition

• Superior production economics with product
  diversification and flexible technology.
• Mitigates commodity risk and single product
  dependence.
• Avoids reliance on quality of feedstock
  composition for yield and value
• Separation, purification and conversion
  technologies down the value chain.
• Genetic manipulation for increased product
  portfolio, efficiency and yield potential in
  less than ideal conditions.
• Profit maximization by targeting and optimizing
  for higher value commodities and bi-products.
• Monetization through partnerships with existing
  commercial biorefineries, suppliers, purification
  platforms and separation platforms.
• Ability to address the need for high value
  compounds from advanced bacteria.

• Competitors are small scale engineering firms
• No winner in quest for high yield and scalable
  biofuels
• Small, fragmented and specialized firms
• Natural Algae Engineered
  microbes
• Engineered Algae Traditional biofuels

Competitors have limited flexibility in product
proliferation and feedstock Exposed to
cyclicality risk of single commodity
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Solarigene solution and differentiation
Flexible platform
Yield

• Solarigene has the capability to manipulate the
  cyanobacteria to produce maximum yields, beyond
  the limits of competitive algae technology.
• In order to achieve high levels of conversion
  from sunlight in to biomass, feasibility relies
  on the ability of Solarigene to engineer highly
  productive bacteria.
• However, even with aggressive assumptions about
  Solarigenes productivity, estimated costs to
  produce biodeisel are twice that of current
  petroleum deisel fuel costs
• Resource availability remains a hurdle to scale.
  While cyanobacteria uses much less land and water
  than traditional corn and oilseed crops and
  produces a higher yield of biodiesel, surface
  area to maximize exposure to sunlight is a going
  concern.
• Since sunlight can only penetrate to limited
  depths, harvesting the cyanobacteria in storage
  vessels with maximum surface area is imperative
  to achieving yields.

Pharmaceuticals
Nutraceuticals
Rubber
Conversion Platform
Glycerin
Scalability
Biodiesel
Product Value (/ton)
Purification Platform
Food grade oil
Ethanol
Separation Platform
Fuel
Corn
Oilseeds
Algae
Cyanobacteria
Feedstock Productivity (ton/acre) Yield
Scalability
Photobioreactors Or Open Ponds
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Business Plan Options and Recommendation

• Offer Technology Licenses
• Extend licenses based on different applications
  to industrial manufacturers, commodity
  distributors, energy producers
• Benefits
• Lowest Capital Expenditure
• Considerations
• Do not have sufficient target companies in the
  space
• Limited return

• Start a Company
• Recruit leadership and scientific team
• Benefits
• Build on existing research to focus on scale and
  development of high yield cyanobacteria
• Considerations
• Need to raise capital in tough economic
  environment

• Fold Technology into an Existing Corporation
• Partner technology in return for equity
  participation and governance rights
• Benefits
• In house RD funding, resources, expertise
• Considerations
• Relinquish control and direction

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Executive Summary
Intellectual Property
Market Opportunity
Competitive Landscape
Recommendation
Backup Slides
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Commercialization options with funding
Use of proceeds
Business/Commercial Options

• License out the technology to others
• No current market for CB technology
• Invest 140mm to start small scale company using
  milestones for staged investment
• Spin off the lab/IP to existing competitor or
  strategic buyer

• Commercially established cyanobacteria production
  and processing facility
• Integrated separations, purification and
  conversion technology platform
• Prototype for purification and conversion
  platforms
• Large-scale cultivation pond and management
  facility
• Marketing to off-taker relationships and
  networking with renewable fuel producers/suppliers
  
• Brokering alternative fuels
• Negotiated contracts and partnerships with
  chemical, agriculture and pharma companies

140mm to build mainstream infrastructure,
cultivation facility, extraction and purification
systems and distribution terminal
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Production possibilities
Feasible production universe

• By means of photosynthesis, cyanobacteria can
  produce 3 main components
• Carbohydrates
• Protein
• Natural oils/lipids
• Commercializing these possibilities include
• Vitamins/ pharmaceuticals
• Methane gas/ ethanol
• Rubber
• Cocoa butter/ palm oil
• Glucose
• Food grade oil
• Glycerin
• Nutraceuticals

Production of bi-products driven by demand
specific to customer
Due to Solarigenes flexibility, production of
bi-products can be rotated in order to hedge
exposure against the commodity cycle.
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Harvesting and Extraction
Harvesting

• Centrifugation (Spinning and separating)
• Frothing (Aeration to froth, then separate out
  algae)
• Ultrasound (In development)

Extraction (fats/lipids/oils)

• Mechanical crushing /- Other extraction
  procedures
• Chemical solvents (Benzene, ether hexane)
• Enzymes (Degrade cell membrane, release product)
• Expression (Dried and pressed)
• Osmotic Shock (Lyse cells)
• Supercritical fluid (CO2 liquifies and extracts
  oil)
• Ultrasound (shock waves break open cell membranes)

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Biological mechanics
Cyanobacteria

• Bacteria that are capable of photosynthesis
• Use sunlight to make product (algae and plants)
• Require only sunlight, CO2, water, and minerals
  to grow and reproduce
• Make sugars, protein, as well as fats, lipids and
  oils
• Genetically engineered to make large quantities
  of a product
• Products like Hydrogen, biodeisel, glucose,
  rubber
• Solarigene scientists and researchers are
  genetically engineering CB to make these end
  products.
• Fix carbon dioxide (CO2)

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Biological mechanics contd
Photosynthesis

• Photosynthesis makes the energy from sunlight
  usable in other organic forms to sustain life.
  Using a small amount of minerals, sunlight and a
  carbon waste (CO2), Cyanobacteria can convert
  these inputs into high density forms of energy in
  liquid or gaseous forms. (Hydrogen, biodeisel,
  glucose, rubber)
• Cyanobacteria fixes sunlight and CO2 in order to
  produce biomass and other naturally occurring
  commodities with much more efficiency than algae
  due to their simple cell structure and ability to
  be altered to thrive in any environment or less
  than ideal conditions
• Because of cyanobacteria's ability to be
  genetically manipulated, Solarigene has the
  flexibility to produce a variety of different
  commodities.

Cyanobacteria

• Special bacterial species are altered genetically
  to focus on production of one commodity, such as
  biodiesel, ethanol or rubber
• Cyanobacteria are the most economically viable
  due to their diversification capabilities in
  by-products and highly efficient productivity
• Through genetic manipulation, the metabolic
  pathways of the cyanobacteria are altered to
  produced the desired commodity in variable growth
  conditions
• By-products are stored in the lipid membrane and
  extracted through an organic process involving
  numerous ethanol distillations

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Commodity Assessment historical pricing
Rubber Prices
Palm Oil Prices
Sugar Prices
Natural Gas Prices
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Commodity Assessment future demand projections
Rubber (/metric ton)
Palm Oil (/metric ton)
Natural Gas (Henry Hub- NYMEX)
Sugar (/metric ton)
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Land use for aquatic biofuels
AMOP aquatic microbial oxygenic photoautotrophs
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Biofuels market details Spread between Ethanol
and Biodiesel
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Interviews

• Eyal Gutentag, PrimaFuel
• Rye Barcott, Amyris
• George Church, Founder, LS9, Founder, Codon
  Devices
• Tod Perry, Technology Commercialization, National
  Renewable Energy Laboratory
• George Church, Professor of Genetics, Harvard
  Medical School
• Michal Preminger, Harvard Office of Technology
  Development
• Pamela Silver, Director, Silver Labs
• David Savage, Silver Labs
• Jeff Way, Silver Labs
• William Coleman, Partner, Mohr Davidow Ventures
• David Silverman, Aragon Partners
• Rob Koltun, RNK Capital

Industry
Technology
Investors