Iademarco 2003

556 views
500 views

Published on

Published in: Business, Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
556
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Iademarco 2003

  1. 1. 1Disruptive Biotechnology: Revenue Growth, Strategies, Wins James Iademarco Director, Business Development
  2. 2. 2Anonymous
  3. 3. 3 Overview• Introductions• Discerning Disruptive Innovations – Harvard Business Review• Case study on disruptive biotechnology in a commodity chemical - Apply tools of a six step process to analyze the disruption• Biological innovations around the corner and the tools that are enabling them
  4. 4. 4 Discerning Disruptive Innovations • “How to Identify Your Enemies Before They Destroy You” by Farshad Rafi and Paul Kampas • “Disruptive Technologies: Catching the Wave” by Joseph Bower and Clayton Christensen • “Meeting the Challenge of Disruptive Change” by Clayton Christensen and Michael OverdorfHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  5. 5. 5 Discerning Disruptive Innovations What is disruptive innovation? “ Any product, service, process or business model that creeps up from below an existing business and threatens to displace it”HBR OnPoint 2002 by Harvard Business School Publishing Corporation
  6. 6. 6 How to Identify Your Enemies Before They Destroy You If you are an incumbent… Tools can identify potential disrupters and formulate responses If you are an insurgent… Tools can help you plan or conceal an attackHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  7. 7. 7 The Disruption Process foothold market entry main market entry customer attraction customer switching Yikes! incumbent retaliation incumbent displacement Disruption can fail at any stageHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  8. 8. 8 Using the Tool Enlist Train Define Tailor Score Interpret SellHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  9. 9. 9 Using the Tool Customize a list of Rate the Create a contributing innovation’s disruptiveness factors at each potential profile and a stage disruptiveness response plan Tailor Score Interpret A) Team Members rate contributing factors on a 7 point scale B) Weigh each factor on perceived level of influence/ Consensus C) Calculate the total score of each stage of disruptionHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  10. 10. 10 Contributing Factors (Tailor) • At each stage of the disruption process, some common factors can make a disruptive innovation more or less likely to occur. • Foothold Market Entry • Main Market Entry • Customer Attraction • Customer Switching • Incumbent Retaliation • Incumbent DisplacementHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  11. 11. 11 Contributing Factors (Tailor) • At each stage of the disruption process, some common factors can make a disruptive innovation more or less likely to occur. • Foothold Market Entry - Higher value niche markets - Underserved segments/geographies - Opportunities to market stripped-down markets • Main Market Entry - Protective patents/ New technology patents - Access to suppliers and channels - Need for capital investment/ Environmental requirementsHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  12. 12. 12 Contributing Factors (Tailor) • At each stage of the disruption process, some common factors can make a disruptive innovation more or less likely to occur. • Customer Attraction - Price - Performance, functionality - Reliability/ Assurance of supply • Customer Switching - Conformance to established standards - Downtime during switching and costs - Downstream customers and applicationsHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  13. 13. 13 Contributing Factors (Tailor) • At each stage of the disruption process, some common factors can make a disruptive innovation more or less likely to occur. • Incumbent Retaliation - Length of product development cycle time - Strength of culture • Incumbent Displacement - Amount of displacement in current and future markets - Diversification of incumbent/ Core competenciesHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  14. 14. 14 Rating the Disruption – Main Market Entry (Score) Forces disabling disruption Neutral Forces enabling disruption Contributing Contributing 1= some influence Factors -3 -2 -1 0 +1 +2 +3 Factors 2= substantial influence 3= very high influence Presence of Absence of blocking blocking patents by X patents by incumbent incumbent Need for Need for small Weight them large capital capital 1 to 3 X investment Investment upfront upfront Poor access Easy access to customers to suppliers and channels X and channelsHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  15. 15. 15 Rating the Disruption – Main Market Entry (Stage Score = 2.0 /2.0 = + 1.0 ) Avg. Score Forces disabling disruption Neutral Forces enabling disruption is 6/3 = 2.0 Weighted Weight Contributing Factors -3 -2 -1 0 +1 +2 +3 Contributing Factors Score Presence of Absence of 1 blocking blocking (1) (+3) = 3 patents by X patents by incumbent incumbent Need for Need for small 2 large capital capital (2) (+3) = 6 X investment Investment upfront upfront 3 Poor access Easy access (3) (-1)= - 3 to customers to suppliers and channels X and channelsAvg. = 6/3 = 2.0 HBR OnPoint 2002 by Harvard Business School Publishing Corporation
  16. 16. 16 Rate all steps in the Disruption Process foothold market entry Score main market entry +1.0 Yes customer attraction customer switching No incumbent retaliation incumbent displacement Disruption can fail at any stageHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  17. 17. 17 Interpret (Is disruption a genuine threat?) • Create and graph a profile for all six stages • One or four profiles are typical: 1) One or more disabling factors exists • Disruption is highly unlikely 2) Contributing Factors are neither strongly disabling nor strongly enabling  Disruption is possible but not assured 3) A key stage or contributing factor has a high level of uncertainty  A more aggressive response should follow 4) No factors are strongly disabling and some or all are strongly enabling • Disruption is highly likelyHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  18. 18. 18 What do you do? Disruption is highly unlikely: Attend Technology Conferences Review Market Research Reports Keep tabs on Emerging Competitors Disruption is possible but not assured Monitor competitive landscape Commission a more thorough analysis In-house development effort Explore possible partnershipsHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  19. 19. 19 What do you do? Uncertainty with important factors Use scenario planning techniques Develop a response which hedges bets Shift to a more aggressive scenario Disruption is highly likely Aggressive action Preemptive strike if possible Acquisition Launch internal group with authority/resources to catch upHBR OnPoint 2002 by Harvard Business School Publishing Corporation
  20. 20. 20Case Study on the Development of aBiological Process for a Commodity Chemical Acrylamide Hand-out
  21. 21. 21 Instructions for Interactive Session• Read case study and think about contributing factors that either enable or disable disruption for acrylamide• Divide into teams• All teams are incumbents• Each team responsible for a different stage of disruption process• On handout write down: - Tailor/ Contributing factors ( four or less) for your stage - Assign weights of influence (1 to 3) - Score and communicate team consensus - Take 30 minutes or less to complete
  22. 22. 22 What is Around the Corner? • Discerning Disruptive Innovations – Harvard Business Review  How to Identify Your Enemies Before They Destroy You • Case study on acrylamide - Six step process to analyze disruptions - Numerous methods for analysis, but have a systematic approach Biological innovations - What is around the corner and what genetic tools are enabling them?
  23. 23. 23
  24. 24. 24 Enzyme Technology ENZYMES CAN CREATE NEW VALUE• Provide differentiated product performance - Functionality, activity, stability• More efficient processing - Fewer unwanted by-products - Increased plant capacities• Reduction of harsh / toxic chemicals, less energy and water use - Reduced effluent costs - Lower environmental burden
  25. 25. 25 Innovation from Biodiversity and Gene Evolution DISCOVERY From the EnvironmentBiodiversity Small Molecules Proteins
  26. 26. Patented Access to Untapped Biodiversity Cultivated Microbes Uncultured Microbial Diversity Discovery and Evolution* Habitat Cultured (%) Seawater 0.001 - 0.1 Freshwater 0.25 Soil 0.3 Activated Sludge *Patented Technologies 1.0 - 15.0
  27. 27. 27 Natural Discovery Global Biodiversity AccessAll agreements in accord with the Convention on Biological DiversitySamples Acquired Pending Agreement Ecological Hot Spots
  28. 28. 28 High-throughput Screening Advanced Gene Mining Flow Cytometry Robotics • Fluorescence• State-of- -activated the art cell sorter• 1 million (FACS) samples • >1 billion per day samples per day GigaMatrix™ Technology • 100,000-well plates • >1 billion samples per day
  29. 29. 29 Innovation from Biodiversity and Gene Evolution EVOLUTION Broadest Platform Improving Environmental GenesBiodiversity Optimizing Human Antibodies
  30. 30. 30 Enzyme Optimization Through Directed Evolution Directed evolution allows the rapid optimization of enzyme properties such as: • Selectivity • Temperature stability • pH stability • Km • Inhibition (Ki) • Activity (kcat) • ProductivityDiversa Has Developed Complementary Strategies: 1. Gene Site Saturation Mutagenesis – GSSM™ 2. GeneReassemblyTM
  31. 31. 31 Innovation from Biodiversity and Gene EvolutionDISCOVERY EVOLUTION MARKETS PHARMACEUTICAL AGRICULTURAL CHEMICAL / INDUSTRIAL
  32. 32. 32 Summary of Core . Technologies Metabolic Protein Micro Plant Genomics Path Eng. Expression Biology Fermentation ExpressionDiversa’s Enabling Technologies:• Biodiversity – Unique access and patented approaches to capture nature’s enormous array of genes and microorganisms• High Throughput Screening – Ability to rapidly screen billions of samples per day to find the ideal enzyme or microorganism• Directed Evolution – Patented genetic manipulation of enzymes and small molecule pathways• Host Engineering – Revolutionary heterogeneous over expression of enzymes and small molecules
  33. 33. 33 Examples of How the Tools are being Applied Today…• Hydrolysis of nitriles using biocatalysis (pharmaceutical and chemical intermediates)• Breakdown of phosphorous with phytase (animal feed)• Where does chemistry struggle? - Biotechnology can be disruptive but also complementary
  34. 34. 34 Sequence Homology RelationshipsNitrilases Synococystis Only Nine Microbial Nitrilases Rhodococcus Previously Characterized Rhodococcus Gordonia Alcaligenes Klebsiella Pseudomonas Coma Bacillus
  35. 35. 35 Sequence Homology Relationships Synococystis XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX Over 200 newly Rhodococcus Rhodococcus Gordonia XXXXX XXXXX XXXXX discovered nitrilases XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX represented in blue symbols XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX Alcaligenes XXXXX XXXXX Klebsiella Pseudomonas Coma XXXXX Bacillus XXXXX XXXXX XXXXX XXXXX XXXXX XXXXXXXXXX XXXXX XXXXX XXXXX XXXXX XXXXXXXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
  36. 36. 36 DiscoveryPoint™ Nitrilase Making Drugs Better Hundreds ofNovel Nitrilases • Previously <15 nitrilase reported and characterized Chiral • Diversa discovered hundreds of novel Compounds nitrilases • Mirrored structures like right- and left- Advantages handedness • Crucial for the manufacture of pharmaceuticals and fine chemicals
  37. 37. 37 Lipitor® Intermediate: (R)-3-hydroxy-4-cyanobutyric acid More economical route: 99% ee complete conv.Lower cost starting materialSignificantly less process stepsProduce desired enantiomer with high ee
  38. 38. Numerous Carboxylic Acid Derivatives 38 Are Readily Accessible via Nitriles
  39. 39. 39Improved Phytasefor Environmentally Sound Feed Phytic acid is >80% of Pi in plants Pi currently added to monogastric animal feed Phytic acid: Environmental pollutantHigh activity phytase: -Removes phytic acid -Reduces pollution -Eliminates added Pi -Increases feed efficiency
  40. 40. 40 Improved Phytase for Animal Feeds P P O 6 P Phytase 6 P 2 HO 2 P 4 4 1 P + HO P OH P 1 P P 5 3 OH 5 3 P P Phytic acid1) Dramatically reduces need for supplemental dicalcium phosphate2) Evolution technologies have improved performance3) Achieved heterologous expression for commercial production
  41. 41. 41 Where Does Chemistry Struggle? Industrial Enzymes Chemicals1. Oligosaccharide Degradation 1. Oxidations – Epoxidation2. Sugars to Products 2. CN Hydrolysis3. Delignification 3. C-C Bond Formation4. Fatty Acid Modification 4. Alkene Hydration, Amination Look for opportunities: • Chemoselective • Regioselective • Stereoselective
  42. 42. 42 The Application of Biotechnology to Industrial Sustainability* Other Case Studies: 1. Manufacture of Riboflavin (Vitamin B2) (Hoffmann La-Roche, Germany) 2. Production of 7-Amino-Cephalosporanic Acid (7-ACA) (Biochemie, Germany/Austria) 3. Biotechnological Production of the Antibiotic Cephalexin (DSM, Netherlands) 4. Bioprocesses for the Manufacture of Amino Acids (Tanabe, Japan) 5. Manufacture of S-Chloropropionic Acid (Avecia, UK) 6. Enzymatic Production of Acrylamide (Mitsubishi Rayon, Japan) 7. Enzymatic Synthesis of Acrylic Acid (Ciba, UK)*By OECD: Organization for Economic Co-operation and Development,2001
  43. 43. 43 The Application of Biotechnology to Industrial Sustainability* Case Studies (cont.): 8. Enzyme-Catalyzed Synthesis of Polyesters (Baxenden, UK) 9. Polymers from Renewable Resources (CargillDow, USA) 10. A Vegetable Oil Degumming Enzyme (Cereol, Germany) 11. Water Recovery in a Vegetable-processing Company (Pasfrost, Netherlands) 12. Removal of Bleach Residues in Textile Finishing (Windel, Germany) 13. Enzymatic Pulp Bleaching Process (Leykam, Austria) 14. Use of Xylanase as a Pulp Brightener (Domtar, Canada) 15. A Life-Cycle Assessment on Enzyme Bleaching of Wood Pulp (ICPET, Canada)*By OECD: Organization for Economic Co-operation and Development,2001
  44. 44. 44 The Application of Biotechnology to Industrial Sustainability* Case Studies (cont.): 16. On-site Production of Xylanase (Oji Paper, Japan) 17. A Gypsum-free Zinc Refinery (Budel Zink, Netherlands) 18. Copper Bioleaching Technology (Billiton, South Africa) 19. Renewable Fuels – Ethanol from Biomass (Iogen, Canada) 20. The Application of LCA Software to Bioethanol Fuel (ICPET, Canada) 21. Use of Enzymes in Oil-well Completion (M-I, BP Exploration, UK)*By OECD: Organization for Economic Co-operation and Development,2001
  45. 45. 45 Biotechnology is just scratching the surface!Industrial and Specialty Proprietary enzymesEnzymes • Sweeteners and biofuels • Biofilms, water treatment$3 billion Market • Pulp and paper Genes, enzymes, small moleculesAgricultural Products • Crop protection$66 billion Market • Animal feed additives • Animal health, nutritionChemical Processing Innovative bioprocesses • Specialty chemicals$570 billion Specialty • New polymers$400 billion Commodity • Chiral compounds
  46. 46. 46 Decisions, Strategies and Actions • Portfolio Assessment - Opportunities for new products/new markets - Substitution threats for your products and derivatives - Short balanced with long-term products/services • R&D Investment - Access/expand R&D expertise through acquisitions, and collaborations with academia and technology companies - Gain experience and/or develop in-house capabilities • Capital Investment - Assess investments in conventional assets - Process can often be modified - Fermentation capacity; Incrementally less expensiveAdapted from Industrial Biotech-New Value Creation, Mc Kinsey & Co., 1/23/2003
  47. 47. 47 Decisions, Strategies and Actions • Marketing - Superior customer understanding about future application trends - Create customer pull from new markets • Human Resources - Develop biotech profile by hiring experts and chemical engineers with understanding of biotechnologyAdapted from Industrial Biotech-New Value Creation, Mc Kinsey & Co., 1/23/2003
  48. 48. 48 AnonymousAcknowledge Dr. Medardo Chavez- Diversa

×