FOCUS ON LIFE SCIENCE

The battle for sustainable energy intensifies

BY JESPER LØVENBALK HANSEN

US President George Bush at the Novozymes’ research facility in North Carolina.

Two of the world’s greatest global challenges are the rapidly increasing need for energy and the threat of global warming. Which explains why the world’s energy companies and politicians are now turning their eyes towards the Danish manufacturers of enzymes, Danisco and Novozymes, which are developing technologies that make it possible to produce biofuel from waste

The President in conversation with Steen Risgaard, Managing Director of Novozymes (far right).

When US President George W. Bush visited the Danish enzyme manufacturer Novozymes’ research facility in North Carolina, it was to take a look into the near future. President Bush wanted to see for himself how developments are progressing for the enzymes which will make it possible to produce fuel for cars, buses and trucks from agricultural and industrial waste.

Because just like any other place in the world, US energy policy depends on biofuel replacing an increasingly large proportion of the world’s consumption of petrol and diesel in the coming years.

Biofuel is produced from biological material, where sugar is extracted and fermented to convert it into ethanol, which can be poured directly into the petrol tank. But whereas biofuel today is made from sugar cane, maize, wheat and other food crops, the aim is to make liquid fuel from plant residues and waste products. This is called ’second generation’ biofuel.

“Second generation biofuel uses residual products such as the stems and leaves from plants, essentially all the rest of the plant when we grow for example maize for food or animals,” says Lene Lang, professor of biotechnology and vice dean of Aalborg University.

The atmosphere is thus saved a significant proportion of the enormous CO₂ emissions that the transport sector accounts for today, just as problems with increasing energy prices and supply security can be solved locally by converting waste to fuel.

And that is exactly why the US government and the rest of the world are keeping a watchful eye on the Danish companies Danisco and Novozymes, which together have a 70 per cent share of the global market for enzymes. They are currently competing to be first with the enzymes that will realize the political dream of making biofuel from waste.

FROM FIRST TO SECOND GENERATION
In USA alone, biofuel already accounts for 5 per cent of the fuel market. In 2020 it will be 17 per cent. In China, India, Brazil and the EU, politicians have set similar future requirements for petrol and diesel to be mixed with biofuel.

It is an enormous and constantly developing market, which according to one of the world’s leading management consulting companies, McKinsey, will be worth between USD 75 and 140 billion by 2020.

At the present time, market growth is being assisted by direct subsidies for fuel produced from biomass. But over the coming years, political demands concerning production will be tightened.

Whereas today it is possible in the USA, EU and many other countries to receive direct financial support for production of biofuel from food crops, in a few years’ time there will only be subsidies for second generation biofuel. And that is morally, economically and environmentally the right way to go, opines Professor Lange.

“The basic fact is that we need other forms of energy than coal, gas and oil. We need renewable energy, and biofuel is one of the most important solutions,” says Lene Lange, who explains why a shift from first to second generation is important:

“If you calculate the amount of energy required to make a gallon first generation biofuel – from planting, fertilising and harvesting to the finished biofuel – it is hardly worth doing today. We use almost as much energy as we extract in ethanol. At the same time, it is naturally an enormous problem that at a time of increasing food prices and lack of food, we are making biofuel from our agricultural products,” says Lene Lange, who asserts that biofuel will only provide a real solution for the future when it becomes possible to produce competitive biofuel from waste and residual products.

READY IN YEAR 2010
That day is coming, say the directors of the two enzyme manufacturers, who are both confident that the scientific code for producing second generation biofuel has already been cracked.

Managing director of Danisco, Tom Knutzen, says that since 2001 Danisco has been able to produce bioethanol from residual products, and that now it is only about refining the processes so that production becomes financially cost-effective.

That message is echoed by Steen Risgaard, managing director of competitor Novozymes: “We will be ready in 2010. Then we will have a process that makes it possible to produce bioethanol from the resi duals of the maize plant – that is the stem and leaves. And it is financially cost-effective.”

Claus Felby, research scientist at the life science faculty of the University of Copenhagen, is similarly optimistic in relation to both second generation biofuel and the future market. He points out that although the focus today is on developing fuel for cars and trucks, it is very different markets that await Novozymes and Danisco.

“Right now the car industry is giving the market the development momentum it needs. But in the long term it is about fuel for aircraft and ships, and replacing oil in the chemical industry. It is these enormous markets that are the real target,” says Claus Felby.

But it needs politicians to set requirements for those industries, otherwise the development process will be too slow, says Claus Felby.

“It is crucial that we understand the long-term challenges we are facing. If we continue as now, nature will set clear limits for us before long. So we had better make a start ourselves before we lose control,” says Claus Felby, who explains that the political focus is also very much on energy and security policy.

“Globally, there is a great desire to be self-sufficient in energy, and so a tremendous need has arisen for technologies that can both reduce the global environmental impact and energy dependency,” says Claus Felby.

Global warming and the increasing global demand for energy is accelerating the development of new technologies for renewable energy. Second generation biofuel made from agricultural waste such as the stems and leaves of maize will reach the market very soon thanks to enzymes produced by Novozymes and Danisco. Photo: Scanpix Denmark.

Chateaux du pill: Red wine tablet prolongs your life

BY JESPER LØVENBALK HANSEN

The Danish undergrowth of biotech companies is sprouting up. Fluxome Sciences is one of many new companies focusing on the booming biotech niche for health and nutrition – they aim to sell red wine in tablets

Fluxome Sciences is entering the booming market for nutraceuticals – a biotech niche for health and nutrition products with a documented disease-preventing effect. Fluxome Sciences produces pure resveratrol, a substance normally found in grapes that helps prevent coronary disease. Photo: Scanpix Denmark.

People in southern France live longer and have a lower incidence of cancer and coronary heart disease. In scientific circles, they employ the term “the French paradox”. Because the secret of the French is not that they exercise more or eat more healthily than anyone else – they just drink a lot more red wine.

“The connection between red wine and health exists, and we call it the French paradox. Because although the French apparently eat just as much fat and unhealthy food as we do here further to the North, they live longer and have fewer problems with diseases such as coronary heart disease. One can simply say that consuming relatively large amounts of red wine has a beneficial effect,” explains Steen Andersen, CEO of one of the many small and relatively new Danish biotech companies, Fluxome Sciences.

Manufacturers of dietary supplements have also long known how to make dietary supplements with the substance resveratrol, which is the active substance that gives red wine its image as a healthy drink. But while the existing capsules and tablets on the market have been produced from grape extracts, Fluxome Sciences has created its product in a laboratory.

“We have a technology platform that enables us to design microorganisms, so that we can copy and produce nature’s own substances in pure form. We have developed a process where we can artificially produce resveretrol of 99% purity,” says Steen Andersen.

But why not just drink a lot of good red wine?
“That I can also recommend – and it should be wine made from the pinot noir grape, which is the grape that contains this active substance resveretrol. But if you want to use red wine as a dietary supplement, you need to consume amounts which the health authorities for other reasons would probably not recommend,” says Steen Andersen.

NUTRACEUTICALS: A BOOMING MARKET
The development from idea to finished production proceeded quickly for Fluxome Sciences. The red wine tablet concept was the brainchild of one of the company’s directors and founders, Professor Jens Nielsen of the Technical University of Denmark. In 2002, he started a company as a supplementary occupation to develop the idea of a red wine tablet, and in 2005 Fluxome Sciences was ready to list on the stock exchange. Today the company’s declared objective is to become a world leader in development, production and marketing of nutraceuticals.

“Nutraceuticals are ingredients that exist in the borderland between the food and the pharmaceutical industry. They are products with a documented preventive effect in relation to disease, in this case cancer – which the consumer takes either as dietary supplements or as foods to which nutraceuticals have been added,” explains Steen Andersen, who sees nutraceuticals as one of the biotech niche markets which at present easily attract venture capital.

According to Steen Andersen, this is because the life science industry in general and the market for nutraceuticals in particular will develop rapidly in the coming years. He points out that whereas the food industry is growing by 4-5 per cent annually, and the pharmaceutical industry has a growth rate of 5-6 per cent annually, the new biotech niches such as nutraceuticals are seeing annual growth rates of 20 per cent.

CHARTING THE DANISH BIOTECH BOOM…

Source: Danish Biotech

…AND THE VENTURE CAPITAL DRIVING IT

Source: Vækstfonden

The reason why nutraceuticals are doing so well is, in Steen Andersen’s view, because dietary supplements and health products are faster and therefore less cost-intensive to develop, since the products are not subject to the same strict requirements from authorities as pharmaceuticals. That is why it is easier to attract venture capital to new, promising products.

Steen Andersen also points out that nutraceuticals are a consumer-driven market that fits very well with current trends: “We want to live for ever, and today we take our health in our own hands. It is a market in rapid growth, where we are sitting on a winner.”

UNDERGROWTH OF NEW BIOTECH START-UPS
In July, one of Europe’s largest venture capital funds, Seventure Partners, put EUR 13 million into Fluxome Sciences. At the time, Isabelle de Crémoux, who is General Partner and Head of the Life Sciences team at Seventure Partners, explained that the investment in Fluxome Sciences was due to a generally high level of confidence in the Danish biotechnology market.

“We have a very strong interest and relationship with the Danish life sciences community, and have active investments in Santaris Pharma and Vivostat, making Seventure the most active international investor in Danish biotech. We believe there is great science and innovation in Denmark, which combined with excellent management and high-quality R&D personnel makes it a very attractive country in which to grow emerging businesses and create significant value.”

“And Fluxome Sciences is a very promising company with a strong R&D pipeline and an exciting first nutraceutical product in resveratrol,” said Isabelle de Crémoux.

The growth of modern biotechnology is a global trend. According to one of the world’s largest accountancy and consultancy companies, Ernst & Young, which publishes the annual “Beyond Borders: Global Biotechnology report”, modern biotechnology is the major new growth market to emerge after the IT industry’s total dominance through the 1990s. Figures from Ernst & Young show that despite a general decline on the capital market from 2001, when the IT bubble burst, the amount of capital available for biotechnology has grown by 117 per cent in the USA and 72 per cent in the EU in the period 1998-2007.

For Denmark, the percentage increase is much higher. An analysis conducted by the Danish investment company Vækstfonden shows that venture capital available for investment in Danish biotech has increased from less than half a billion in 1998 to between six and 12 billion DKK annually in the period 2001-2007.

It is also reflected in the number of new biotech companies that are sprouting up. From 2000 to 2002, between 12 and 18 new Danish biotech companies came into being each year, and overall the Danish biotech industry has mushroomed in the last 20 years from 20 to 120 active biotech companies. It puts the Danish biotech cluster in the top flight, and among Europe’s three most important biotech centres together with London and Basel.