Bayer, Ginkgo Join Forces to Form $100 mn Microbial Company

Bayer AG and Ginkgo Bioworks, a biotechnology company will create a new company focused on the plant microbiome.

Improving the microbes’ ability to make nitrogen fertilizer available for plants, offers a major potential benefit to sustainable agriculture.

The deal provides a Series A investment of $100 million by its parent companies and Viking Global Investors LP. The new company will be co-located with Ginkgo in Boston’s thriving biotechnology community and in West Sacramento, California, home of Bayer’s R&D activities around plant biologics.

The closing of the transaction is expected to occur in the fall of 2017.

The new company will focus on technologies to improve plant-associated microbes with a major focus on nitrogen fixation. While some crops such as soybeans, peas and other legumes can pair with specific microbes that live within the plant and fulfil their nitrogen needs, most other crops cannot.

Nitrogen fertilizer is, therefore, an essential component in modern agriculture. It can, however, add cost to growers when used inefficiently. In addition, use of nitrogen fertilizer is a major environmental concern, driving greenhouse gas emissions and water pollution. The endophytic microbes to be developed by the company aim to provide a platform to flexibly deliver new agronomic advantages. This is expected to have a profound positive benefit to growers, agriculture and society alike.

The new biotech company is the fifth investment by the Bayer LifeScience Center (BLSC), which operates as a strategic innovation unit within Bayer and directly reports to Bayer’s board of management.

Dr Mike Miille will be named interim CEO of the new company. He is a biotech veteran in the field of agricultural use of the microbiome, former CEO of AgraQuest and currently Vice President strategy and business management biologics at Crop Science, a division of Bayer. The board of directors of the new company will be composed of two representatives from Ginkgo Bioworks – Dr Jason Kelly and Dr Reshma Shetty - and two representatives from Bayer – Dr Axel Bouchon and Dr Juergen Eckhardt.

“Accessing the microbiome is part of Bayer’s innovation strategy. We are launching this enterprise to develop transformative agricultural products based on the latest synthetic biology technology,” said Kemal Malik, member of the board of management of Bayer AG and responsible for innovation.

“Biology is changing industries as diverse as flavour and fragrance to consumer electronics. Agriculture is the original biological technology, and the more we can learn to work with the soil microbiome, the more we can discover new ways to add value to farmers and return to its biological, and more sustainable, roots,” said Jason Kelly, co-founder and CEO of Ginkgo Bioworks.

“The plant microbiome is one of the next frontiers in sustainable agriculture. And it may enable us to take a major leap in plant physiology: producing nitrogen fertilizer directly in the plant. We are excited to combine state-of-the-art plant science and leading microbial technology to help tackle this challenge. With Ginkgo, we have found the best-in-class partner to achieve this fundamental breakthrough,” said Axel Bouchon, head of the Bayer Life Science Center.