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The Quest for Supergenes


Craig Venter and rival genetic engineers are shaking up science--and venture investing--with plans for man-made organisms designed to pump out fuel and clean up waste.

By Bob Drummond Bloomberg Markets February 2008

High on a wall facing celebrity gene researcher Craig Venter's desk, there's a poster-size photo of unique colonies of bacteria that look like two luminescent sky-blue blobs. Venter's researchers made the microbes in his lab northwest of Washington by transplanting the entire genetic code of one species of bacteria into the cellular body of another type. Like horror-movie zombies, the intruder genes switched on and took control of their hosts.

Groundbreaking in its own right, the genome transplant was a practice run for Venter's more audacious project: creating a new life form--in this case, a species of built-to-order bacteria--using only man-made DNA.

Designer organisms, and the potential to profit from them, are sparking excitement--and debate--among scientists and venture capital investors. Researchers in an emerging field called synthetic biology envision microbes customized with artificial genes to enable them to turn sunlight into fuel, clean up industrial waste or monitor patients for the first signs of disease. Already, scientists are producing strings of man-made DNA, short for deoxyribonucleic acid, which directs the functions of all living cells. Then they splice the manufactured DNA into the genes of existing organisms, reprogramming bacteria to act like microscopic factories churning out biofuels. Venter's experiments are taking synthetic biology a step further by working to build new organisms from the ground up with wholly artificial genes.

"It's the coolest stuff of my career," Venter says in his office at the J. Craig Venter Institute in Rockville, Maryland. "We can go from 15 years of reading the genetic code to now maybe harnessing that information for the betterment of mankind."

Venter, 61, who rocked the scientific world in 2000 by mapping the collection of human genes in record time, is no stranger to big ideas--or to controversy. In 2002, he was ousted as president of Celera Genomics, which he helped start to decode the human genome, after the board decided to concentrate on drug development instead of selling genetic data. Later that year, Venter revealed on CBS's 60 Minutes II that his own genes made up most of Celera's database.

Venter's plan to use synthetic genes to create man-made life offers the most headline-grabbing potential to date. That's opening up Venter to suggestions of grandstanding. "You can win in business in multiple ways: You can either make a product, or you can make something that sizzles--that seems like a product," Harvard Medical School genetics professor George Church says. Church is a co-founder of LS9 Inc. in San Carlos, California, which plans to use modified E. coli bacteria to convert plant matter into a gasolinelike fuel.

Re-engineered microorganisms may inherit all sorts of jobs. For now, top gene researchers are particularly exÔcited about the potential for energy-producing microbes that may become single-celled refineries for ethanol, biodiesel or other petroleum substitutes without using food crops such as corn. Scientists are forming bioenergy companies with money from some of the same venture investors who once backed computer and Internet startups. "It's a huge, huge market, and at $100 oil, with the climate crisis and our geopolitical Ôsituation, it's the right market to go after," says Samir Kaul, a partner at Khosla Ventures in Menlo Park, California. Khosla Ventures, run by Sun Microsystems Inc. co-founder Vinod Khosla, is backing Church's LS9 and other synthetic biology companies.

Venter has founded a company called Synthetic Genomics Inc. to design microbes that make fuel from plant matter, carbon dioxide and sunshine or convert underground coal into a more easily extracted gas. The energy market is so much larger than biopharmaceuticals that there's room for a plethora of blockbuster products, he says. "With fuel, we're hoping there could be a hundred to a thousand different unique solutions," Venter says, wearing blue jeans and a sport shirt in an office crowded with awards, mementos and sailing memorabilia. "Each one could be a $100 billion industry on its own."

Synthetic biology's potential stems from life's vast array of single-celled organisms. Many of them already perform valuable tasks, such as fermenting grain into alcohol. "The reason biology is cool to me is that I look at all the things it can physically make," says Drew Endy, a biological engineering professor at Massachusetts Institute of Technology in Cambridge. "The list goes on and on and on and on."

Synthetic biology builds on the more than three decades of genetic engineering behind trailblazing biotechnology companies such as Amgen Inc. and Genentech Inc. The science, also called gene splicing, typically involves transplanting a single gene from one cell into another to produce a particular protein, says Jay Keasling, a chemical engineering professor at the University of California, Berkeley. In synthetic biology, scientists implant a series of genes designed to work together, like stations along a biological assembly line. "It's one thing to throw a gene into a cell," Keasling says. "We're talking about putting in genetic circuits that will allow us to coordinate many different processes simultaneously." Genes from one type of microbe that digests wild grasses, for example, may be combined with those from another organism that excretes ethanol.

Instead of using actual genes plucked from other cells, scientists can create those genetic circuits to spec using the chemicals that make up DNA's four-letter molecular alphabet. The chemicals are commonly called by their initials: A for adenine, C for cytosine, G for guanine and T for thymine. Scientists feed the four ingredients in the desired order into DNA synthesizers. The machines are generally about the size of a laser printer and are studded with small bottles. The ingredients mix with chemicals that make the molecules join into relatively short strings, says John Mulligan, chairman of Blue Heron Biotechnology Inc., a Bothell, Washington-based company that sells synthetic DNA. The short strands are chemically linked into longer chains, which are joined into double-stranded DNA and copied, Mulligan says.

"We can go from completely inert bottles full of powder--for A, C, G and T-- dissolve them in an organic solvent and make long strings of DNA," Church says. "We put that into a cell, where it basically produces whatever you want it to produce."

There are various ways to get the DNA into a microbe. The genetic material can pass through a cell wall, with laboratories such as Venter's orchestrating millions of individual microscopic reactions at once. Or the genes can hitch a ride on a virus that infiltrates bacteria.

Microbes packed with custom-designed genes may be able to make all sorts of things; nobody has shown they can make money. And creating a cell from scratch, as Venter is trying to do, is many years away, says UC Berkeley's Keasling. "Far down the road it's going to be a very powerful technology," he says. "It's going to be a while before something like that is at all practical."

An older generation of drug-oriented biotech firms, squeezed by research costs and long product approvals, has suffered persistent losses even with investors' initial enthusiasm. When South San Francisco, California-based Genentech went public in 1980, its shares soared to $88 from $35 in less than an hour, a record at the time.

Through 2006, 30 years after Genentech was formed, U.S. publicly traded biotech companies as a group had never celebrated an annual profit, according to estimates from the Boston-based Ernst & Young Global Biotechnology Center. In 2006, 336 U.S. public biotech companies lost a combined $3.5 billion on revenue of $55.5 billion, falling short of the $59.5 billion in sales at Target Corp. stores that same year.

Human Genome Sciences Inc., a company Venter helped start in 1992 to find commercial uses for discoveries at his nonprofit research lab, lost money in 36 consecutive quarters through Sept. 30. Showing the hazards of DNA-based investing, Human Genome Sciences hasn't had a drug product reach the market since its debut.

All the same, Venter has gained celebrity for scienÔtific exploits such as decoding human DNA in a virtual tie with the U.S. government's Human Genome Project, which had an eight-year head start. The son of two ex-Marines, Venter was devoting his time to surfing Southern California's beaches before he enlisted for a three-year stint in the Navy in 1965. He spent a year as a medical aide in Vietnam, where watching the life-or-death struggles of wounded soldiers made him decide to study medicine after his discharge in 1968. While a student at the University of California, San Diego, Venter shifted to medical research. He earned his bachelor's degree in biochemistry there in 1972 and his doctorate in physiology and pharmacology in 1975. The next year, Venter moved to Buffalo, New York, to teach pharmacology and biochemistry at the State University of New York. Eight years later, he took a job at the National Institutes of Health, which is based in the Washington suburb of Bethesda, Maryland. He did research into faster and cheaper methods of reading DNA, a field that was exploding.

When leaders of the Human Genome Project refused to use some of Venter's techniques, he left the NIH in 1992 to start his own lab, the Institute for Genomic Research. Investors led by Wallace Steinberg, founder of HealthCare Investment Corp. in Edison, New Jersey, financed both the institute and Human Genome ÔSciences. In 1998, Perkin-Elmer Corp., now called Applera Corp., recruited Venter to start Celera Genomics, which it listed the next year as a tracking stock. Norwalk, Connecticut-based Applera also owns Applied BioÔsystems Group, a manufacturer of gene-sequencing equipment used in Venter's genome project.

The human gene-mapping project made Venter one of the world's best-known scientists. USA Today placed him fourth in its September ranking of the 25 most influential people from the past 25 years, behind Bill Gates, Ronald Reagan and Oprah Winfrey and just ahead of Osama bin Laden.

Venter says today's body of genetic knowledge is growing so fast that biology likely will dominate 21st-century science and technology, just as discoveries in physics revolutionized the past 100 years. "It's exciting to think that life is very different than we might have imagined--that it's not so complex at some levels, that we can design it and build it," Venter says. "These are things from science fiction."

Synthetic biology's ability to stretch the imagination may not be all blessing. The Sept. 11, 2001, attacks and the anonymous anthrax mailings the same year introduced American society to a heightened threat of terrorism. Today, teenagers with science fair projects can browse Internet databases for the DNA sequences Ôneeded to make a novel microbe. "Engineered biological agents could be worse than any disease known to man," the U.S. Central Intelligence Agency said in a 2003 report.

"The whole sci-fi end of this is the part that, from a public-perception point of view, is going to be the big threat to synthetic biology," says Kathy Hudson, director of the Washington-based Genetics and Public Policy Center. In debates about scientific or ethical limits on synthetic biology, Hudson says, it's important to avoid extreme viewpoints from enthusiasts promising the impossible or doomsayers predicting the apocalypse. "On the benefits side, you can't put on pompoms too early and oversell things. On the risk side, keep it as real as you can."

Still, some early entrants are expecting big things from the embryonic industry as researchers rush to start companies and venture capitalists hustle to fund them. "It's equivalent to building the first transistor," says Juan Enriquez, chief executive officer of ÔBiotechonomy LLC, a Boston investor in Venter's Synthetic Genomics. "It changes fundamentally the rules of the game across a whole series of industries."

Harvard's Church, MIT's Endy and UC Berkeley's Keasling started Codon Devices Inc. in Cambridge to sell made-to-order synthetic DNA and related services. Investors, led by Cambridge's Flagship Ventures, have contributed $33 million in two rounds of venture funding.

Venter started Synthetic Genomics in 2005 with gene researcher and longtime collaborator Hamilton Smith, who won the Nobel Prize in medicine in 1978. That October, the company sold $30 million of preferred stock to 12 investors in the U.S., according to a Securities and Exchange Commission filing. It's raised more money abroad. In June, BP Plc, Europe's second-biggest oil company, bought an unspecified stake as part of a research venture to study microbes living in coal and oil fields. Venter says he's investigating ways to engineer microbes to make hydrocarbons more environmentally friendly.

Another of Keasling's synthetic biology startups, Amyris Biotechnologies Inc. in Emeryville, California, has raised $90 million since October 2006. It's working on plant-based gasoline and diesel fuel substitutes. Amyris is also teaming up with UC Berkeley to create microbes to produce low-cost artemisinin, an anti-malarial drug that's too expensive for wide use in poor countries. That effort is backed by a $42.6 million grant from the Bill & Melinda Gates Foundation. "This is a very young field," Venter says. "There are a lot of startup companies. There's a lot of money floating around."

The hubbub around synthetic biology evokes an earlier era in Silicon Valley. And some young companies are drawing money from the same VCs that backed high-profile computer and Internet firms. Khosla Ventures is funding Amyris and Codon Devices in addition to LS9. Menlo Park-based Kleiner Perkins Caufield & Byers is backing Codon Devices. Kleiner partner John Doerr, known for his early support of Amazon.com Inc. and Google Inc., is on the Amyris board. Steve Jurvetson, managing director of Draper Fisher Jurvetson in Menlo Park, is a Synthetic Genomics director. A foundation headed by Intel Corp. co-founder Gordon Moore has given more than $15 million to Venter's nonprofit institute since 2004.

Jurvetson says synthetic biology is taking computing's place as the cutting edge of technology. "There's a huge renaissance in learning that's going on in life sciences that's bringing some of the techniques and approaches we've used in information theory," says Jurvetson, an original investor in Hotmail Corp., the email service provider Microsoft Corp. bought in 1997. "It's as if we're finally able to decipher and re-engineer the code of life."

Analogies linking synthetic biology with computing aren't just superficial comparisons. Cells get marching orders from sequences of DNA's four chemical letters, just as computers take direction from programs written in strings of ones and zeros. "It's like a computer language, but it's base four instead of base two," says Chad Waite, who invests in biology companies as a managing director at OVP Venture Partners in Kirkland, Washington.

Once scientists decipher the sequence of A's, C's, G's and T's in a gene and determine what that gene does, they can write genetic software instructing cells--the hardware--to perform a desired function. "Life turns out to be in perfectly transmitted code," Enriquez says.

Like digital computer coding, DNA's letter combinations can be copied and shared. At MIT, Endy helped start a public database of DNA sequences called the Registry of Standard Biological Parts. Researchers can download DNA recipes showing how to build genes from various organisms. Endy is also president of the BioBricks Foundation. The Cambridge-based organization promotes so-called BioBrick parts, whose uniform features let the genetic pieces fit together like Lego blocks.

BioBrick-type specifications can cut research costs and spur innovation because they create a dependable set of components, says Noubar Afeyan, CEO of Flagship Ventures. "They're applying fundamental engineering principles to thinking about interchangeable parts and standard protocols," says Afeyan, who's also chairman of Codon Devices.

Synthetic biology's engineering potential is only as good as the inventory of biological building blocks. Venter added to the cache on an expedition he compared with Charles Darwin's voyage on the HMS Beagle in the 1830s. In research supported by Moore's foundation and the U.S. Department of Energy, Venter spent time in 2003 and '04 on a 95-foot sailing sloop, the Sorcerer II. His team collected water samples every 200 miles (320 kilometers) between Nova Scotia and Tahiti to find microorganisms whose genes might fit into useful combinations for transplant into a cell. "We published a single paper with 6 million new genomes, more than doubling the number of known genes," Venter says.

Discoveries of new genes, from microorganisms that survive in hostile environments, are giving synthetic Ôbiologists potentially powerful genetic tools for designer microbes. "We have organisms that can grow under extreme pressure, extreme temperatures, extremes of pH, extremes of radiation," he says. "We can't do any of those things. But if we can harness the power of those that can, it gives us a very different potential for the future."

Some environmentalists, fearing potential damage from microbes never seen in nature, are questioning Venter's plans. ETC Group, a Canadian public-interest organization pressing for government regulation of synthetic biology, has mocked Venter's proposed man-made microbe with the nickname "Synthia." Venter and his research partners want to make their customized microbe with the smallest number of genes required to keep it alive. Like an automobile chassis, the stripped-down organism could act as a frame, supporting strands of synthetic DNA designed to produce chemicals or digest pollutants, Venter says. "We have to understand the minimal cell to understand and build correctly the next phases," says Venter, who has applied for patents on a bacteria with a minimum complement of genes. He has tentatively picked a name for his minimalist microbe: Mycoplasma laboratorium. The name signifies bacteria built in the lab.

Church questions whether Venter's approach makes sense. Existing bacteria, such as E. coli, probably make better starting points for synthetic biology work, he says. "Mycoplasma is notoriously frail," he says. "If I were to pick a chassis, an organism to produce biofuels, it would be a robust, tough dude. It would not be some wimpy guy."

Keasling says Venter's goal of making a custom-designed cell as a foundation for synthetic engineering is too distant to be practical. And it's not even necessary. People die of malaria every day for want of the artemisinin his company, Amyris, is working to produce. "We can't wait for a synthetic cell that might have all of the traits we want," Keasling says.

Kaul, at Khosla Ventures, isn't surprised Venter is taking the engineering of synthetic DNA to the extreme by designing his own man-made organism. "Craig is always pushing the frontiers of biology," says Kaul, who was a biochemist at Venter's Institute for Genomic Research before moving to venture capital. "He's always on to the next big thing. When he puts his mind on something, it's always going to be pretty exciting."

While debate simmers inside the scientific community, the political, ethical and moral concerns targeting genetically modified crops and stem cell research aren't yet impeding synthetic biology research. The field is too new. "It's still under the radar," says Jim Thomas, research program manager at ETC. "We're at a very early stage in terms of people being aware of this."

Sooner or later, something is likely to happen to put synthetic biology in the spotlight. Thomas has a pretty good guess what that will be: "The interesting turning point is going to be when Craig Venter announces Synthia, his synthetic organism. That's going to take a lot of people by surprise."

Thomas says Synthia and custom-designed organisms like it, which have never been exposed to nature, will open a new realm of potential dangers. Regulators will need to rule out environmental threats before the microbes go to work outside a lab, he says. "You're building it entirely from scratch, so there's no reference point," he says. "Nobody really has an ability yet to work out how to assess the safety."

The risk of unanticipated dangers from unfamiliar microorganisms stoked fears in the 1970s with the birth of gene splicing. Cambridge, now a hotbed of synthetic biology work at Harvard and MIT, banned genetic engineering within the city limits. Researchers observed an ad hoc moratorium until a scientific conference in 1975 established safety guidelines. Similar concerns may have to be addressed with synthetic biology, OVP's Waite says. "There are going to be a lot of ethical issues we have to crawl through," he says.

The Washington-based Center for Strategic & International Studies, MIT and the Venter Institute released a 55-page report in October describing potential synthetic biology safeguards, from distribution of bioÔsafety manuals to registration of DNA synthesizers.

Genetic engineers have shown they can work safely after a generation's worth of experience and no damage from rogue microbes, Venter says. "We've had 30 years and tens of millions of experiments--all that have worked without incident," he says.

The Internet is changing synthetic biology's equation. In 2002, researchers from what is now Stony Brook University, part of the New York state university system, managed to make a synthetic, infectious poliovirus. They downloaded its genetic blueprint from a Web site and ordered the DNA from a commercial lab. DNA do-it-yourselfers browsing eBay in November could choose from a half dozen used DNA synthesizers for as little as $199 plus shipping. A secondhand Pharmacia Gene Assembler Plus model was selling for $995, while the owner of an Applied Biosystems 394 wanted $1,000. On its Web site, Codon Devices recently advertised gene synthesis for as little as 69 cents per pair of DNA letters with a Ôminimum order of synthetic DNA.

Companies that make synthetic genes have self-imposed guidelines requiring them to investigate orders and reject requests for DNA sequences that could be misused. "It's not that people are oblivious to safeguards," Codon Devices' Afeyan says. "The concerns are shared by people in the industry."

Oversight is growing in importance as the pace of discovery picks up. "The tools that are being developed are improving exponentially," Endy says. "The parts collection is doubling every year; the cost of synthesis is dropping by a factor of two every year."

Better technology speeds research and makes inventions possible that wouldn't have been feasible a few years ago, Endy says. Just as integrated circuits spread beyond computing to become ubiquitous--they're used to program dishwashers and are implanted in dogs as identity tags--it's hard to fathom what lies ahead. "You're going to see synthetic biology deployed in many surprising places," he says.

If synthetic DNA works as envisioned, one expected step is for research to move beyond single-celled organisms to engineered plants and animals. "We're entering a brave new world, where every year is going to feel a bit like future shock, and the pace of change is only going to accelerate," Jurvetson says.

It should be no surprise that Venter is looking beyond M. laboratorium, his first swipe at a man-made organism, to projects approaching the frontiers of knowledge. Along the way, he and other future-oriented geneticists will have to clear hurdles in the lab and in the marketplace before synthetic biology can produce real profits--and deliver on its promise.

Bob Drummond is a senior writer at Bloomberg News in Washington. bdrummond@bloomberg.net

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