[Updated 10:42 a.m., see below.] Synlogic, a developer of so-called “living medicines” comprised of engineered bacteria, is teaming up with synthetic biology company Ginkgo Bioworks in an effort to advance drug candidates to human testing more quickly.
Under an agreement announced Wednesday, Cambridge, MA-based Synlogic (NASDAQ: SYBX) will use Ginkgo’s technology to design and test thousands of microbial strains to find drug candidates. As part of the deal, privately held Ginkgo is making an equity investment of approximately $80 million in Synlogic. That investment comes in the form of a stock purchase and pre-funded warrants to purchase additional shares, both purchases at the price of $9 per share.
[Paragraph updated with share price, and story updated throughout with details from the conference call.] Shares of Synlogic closed at $6.27 on Tuesday. After the Ginkgo partnership was announced, Synlogic shares jumped more than 23 percent in mid-morning trading Wednesday.
The agreement expands a pilot program the two companies began in 2017. At the time, Synlogic said the partners would develop treatments for neurological and liver disorders. Working more closely with Ginkgo will allow Synlogic to do more work in those therapeutic areas, and potentially expand to new ones, CEO Aoife Brennan said during a conference call to discuss the collaboration.
If the alliance does produce any new drugs, Synlogic will hold exclusive rights to them, according to the agreement. Synlogic will use the cash from Ginkgo’s investment to start four new programs in the next six months, plus an additional fifth program within the next year. Brennan added that details of the initial Synlogic/Ginkgo pilot program in a rare metabolic disorder will be presented at the Synthetic Biology, Engineering, Evolution & Design conference later this month.
Synlogic’s medicines are pills comprised of living bacteria. The company engineers bacterial strains—each tailored to treat a particular disorder. Synlogic is targeting metabolic and inflammatory diseases, as well as cancer. Synlogic’s initial programs are built on E. Coli nissle, a non-pathogenic strain isolated from a human. This bacterium, which has an established safety record from its use as a probiotic, is the “chassis” upon which Synoligic builds its living medicines. These bacteria are intended to help regulate a dysfunctioning metabolic pathway or trigger an immune response that treats disease. The company’s technology is based on the research of MIT professors James Collins and Timothy Lu.
Synlogic has two programs in early-stage clinical trials. SYNB1020 is in Phase 1 testing in hyperammonemia, a buildup of ammonia in the body that is also called urea cycle disorder. SYB1618 is in Phase 1 testing for phenylketonuria, an inherited metabolic disorder that leads to the buildup of phenylalanine, an amino acid, in the body. Both studies are expected to report preliminary data in the third quarter of this year.
Boston-based Ginkgo has developed technology that uses robotic systems and software to engineer microbes. The company initially developed microbes used in the production of consumer products, such as beverages and fragrances. But in recent years, a number of Ginkgo’s deals have expanded the company’s scope to encompass drug development. Besides Synlogic, life science partners include Bayer and Cronos Group (NASDAQ: CRON).
Ginkgo also recently purchased the genome mining assets of Warp Drive Bio, including bioinformatics software and a database of more than 135,000 genomes. Ginkgo CEO Jason Kelly said on the conference call that those assets would be applied toward the partnerhip with Synlogic. Kelly added that Ginkgo’s previous work in fragrances and agriculture helped the company learn how to design and develop microbes at low cost and in large quantities. That experience will apply to engineering microbes for Synlogic, he said. Under a services agreement announced Wednesday with the deal, Synlogic has paid $30 million for Ginkgo’s services to produce microbes over the next five years. That period can be extended.
Synlogic held a conference call at 8 a.m. Wednesday to discuss its alliance with Ginkgo. Here’s more on the origins of Synlogic.