White Technology Review of Past Two Months - Drop in or Novel Chemicals
- Oct 10, 2011
The biotechnology world has lived for decades as a kind of sparring partner and niche competitor to petrochemical based chemicals. The principle seemed cemented that biosynthesis & biotechnology stand for unique molecules offered by nature (via microbial fermentation) like enzymes or whose chemical synthesis would have required numerous steps and high costs (e.g. Citric acid).
Since 2006 a new wave of biotech company findings, primarily in US, has changed the visual landscape that people had about the industry. Driven by big players and, to a large portion, venture capital new biotech companies propose to replace petrochemical originated raw materials like 1-3 propanediol, butanol or acrylic acid by chemical identical products originated from biomass feedstocks via fermentation. This family of bio-based products is nowadays called "drop-in" technologies because addressing markets of existing and identical or very similar products.
Like in previous market hype investors seem to be ready to invest in almost any biotech company provide they follow the mainstream which this time is the "drop-in" technology.
Novel chemicals market barriers are well known: product registration, performance & costs versus established products, switching costs, long market introduction cycles to name a few. The drop-in chemicals will experience quite different challenges than novel chemicals, converging to a large part around the cost of goods.