Phytonix Turns Photosynthetic Bacteria Into Tiny Chemical Factories

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Dannenberg  to Phytonix’s intellectual property. Dannenberg found the technology that became core to Phytonix through a chance meeting with scientist James Lee, who had discovered a way to insert genes into cyanobacteria that code for butanol production. Lee, who worked at Oak Ridge National Laboratory, had developed his cyanobacteria technology apart from his Oak Ridge research and was looking for a company to license it. Phytonix licensed Lee’s technology in 2010.

Others are pursuing biobutanol, but as a fuel. Butamax, a BP (NYSE: BP) and DuPont joint venture, is researching biobutanol that could be produced in existing ethanol facilities. Venture-backed Cobalt Technologies, a startup in Mountain View, CA, is researching butanol made by fermenting biomass. Cobalt claims production costs between 30 and 60 percent less than petroleum-based butanol. The company most closely resembling Phytonix might be Bedford, MA-based Joule Unlimited, which genetically engineers cyanobacteria to produce ethanol, not butanol. Joule says recent test results from its New Mexico demonstration plant approach commercial-level ethanol production. Joule has raised $160 million to date, led by Flagship Ventures.



With Joule producing ethanol and Phytonix pursuing butanol, Dannenberg says the technologies and business goals don’t overlap. Phytonix’s technology was granted a U.S. patent in May; patents in other countries are pending. The company has financed its work so far with just $2 million, raised from angel investors and partners. Building a pilot production plant that could produce up to 5,000 gallons annually is the next step. But Phytonix needs new financial backers; Dannenberg is aiming for a Series A round of $6- $10 million that could come from strategic partners and venture capitalists.

Bruno-Barcena, the NC State microbiologist, says that unless Phytonix’s technology is considerably more productive than existing butanol technologies, the company will need a lot of land to reach commercial scale. Dannenberg acknowledges that commercial production could require thousands of acres but says Phytonix has no such construction plans. After the pilot plant, the goal is to license the technology to large companies for use at their facilities. In addition to being a cheaper way of producing butanol, Dannenberg says the technology fits industrial objectives to reduce carbon emissions and could slide in alongside oil, natural gas, and biofuel sites, feeding from their waste carbon dioxide.

Phytonix projects that every 138 gallons of butanol it produces will eliminate one metric ton of carbon dioxide. The potential to put carbon dioxide to beneficial use could be a huge selling point, Bruno-Barcena says. But he cautions that even when technologies work, they may not be economically viable. Phytonix must prove both the science and the economics of its technology.

“From the moment you grow an organism to the moment of a purified product, always, cost is what wins the battle,” he says.

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