Ginkgo buys Zymergen, but may shed its drug discovery business –
Zymergen’s fledgling plan to grow from a synthetic biology specialist to a drug discovery player ended prematurely, with the sale of the company to rival Ginkgo Bioworks.
The all-stock transaction values Zymergen at around $300 million, a fraction of the $1 billion it raised in venture funding with an additional $530 million from its initial public offering in April 2021.
Zymergen was created to take advantage of synthetic biology technology to produce products typically made from petrochemical sources – including a polymer film called Hyaline used in foldable LED displays – in a more environmentally sustainable way. environmental, attracting deep-pocketed investors inspired by his vision.
Shortly after its stock market debut, however, it revealed there was no prospect of revenue in 2021 or 2022, and a few weeks later its chief executive Josh Hoffman headed for the exit, triggering a rush on its shares.
Fast forward a few months, and in January 2022, Zymergen announced a leadership change under former Illumina CEO Jay Flatley, centered on building a drug discovery business — aimed at oncology — that would be powered by Zymergen’s synthetic biology platform.
Ginkgo is buying the company to strengthen its own synthetic biology engine, particularly automation and software capabilities that will help drive productivity gains. However, he is less interested in the drug discovery business and will “evaluate strategic options” for this unit with Zymergen’s advanced materials business.
For its part, Ginkgo remains focused on its core business of producing custom cells that are used to make products — “from food to materials to therapeutics” — for other companies. In June, for example, it began working with Novo Nordisk on new expression systems for its medical products.
The Ginkgo merger has been approved by the board of directors of both companies and is expected to be finalized in the first quarter of next year. Zymergen shareholders will receive 0.9179 Ginkgo shares for each Zymergen share they hold.
“We share a common vision with Zymergen – that biology can transform a wide range of industries, including manufacturing, agriculture and medicine,” said Ginkgo in a statement.
While the takeover will likely provide job opportunities for some of Zymergen’s workforce, there will still be job cuts, as Ginkgo said the company will “continue its workforce restructuring initiatives. stand-alone costs, including headcount reductions and program streamlining”.