The second category, the SynBio companies, was dedicated to building bio-based products, which include both traditional biotech companies and "typically earlier-stage and fast-growth" SynBio-specific firms.įinally, they defined the early adopters as established companies "whose core business has not traditionally focused on biology," but are now strategically "taking advantage of the potential disruption of SynBio."Īmong these three categories, Perkins and Rives identified seven stocks they believed were fit to capitalize on the SynBio trend. The first, which they deemed the technology enablers, consisted of the pick-and-shovel providers - the "companies that sell equipment and materials necessary to analyze, design, and build biological materials such as DNA, RNA, and microbes." "While we are still in the very early innings of this revolution, we believe SynBio will grow into a massive market and a potential multi-trillion-dollar opportunity." Investing opportunities in SynBioīroadly, Perkins and Rives split the investing opportunities in SynBio into three main categories. "Over time, we believe SynBio could impact nearly every part of the physical goods economy," Perkins and Rives wrote. ![]() ![]() Through DNA synthesis - the process of programming cells, which is possible today - they believed that scientists would be able to treat DNA code like any programming language "to benefit from an improvement curve similar to the one that has been demonstrated in computing." If SynBio companies can figure out a way to create nylon from biological materials, the analysts foresaw this intersection of technology and biology becoming a "powerful economic driver for many industries."Įven beyond these applications, Perkins and Rives said the potential was endless. The clothing industry, Perkins and Rives said, derives 60% of materials from hydrocarbons. Perkins and Rives also mentioned the athletic-apparel retailer Lululemon Athletica ( LULU) as a company "experimenting with SynBio-derived fabrics." Through a partnership with the materials producer Bolt Threads, Lululemon has spearheaded the development of "innovative and sustainable bags and yoga mats made from the root structure of mushrooms." Its flagship Impossible Burger, they wrote, "is made with a protein produced by genetically modified soy grown in bioreactors like the ones that Sartorius, a pharmaceutical and laboratory equipment supplier, sells to its customers to create biological drugs." And with demand for plant-based foods on the rise, the utilization of SynBio in the food industry may increase even more. For example, scientists are experimenting with SynBio in agriculture to modify crops and develop cement and chemicals from biological materials that can directly synthesize nitrogen from air, which would eliminate the need for applied fertilizer.Īs a specific example of a modern-day SynBio application, Perkins and Rives referenced Impossible Foods, a company that develops plant-based meat substitutes. Potential environmental benefits include the possibility of one day substituting SynBio for the chemical- and petroleum-based manufacturing processes in use around the globe. "SynBio is used to design and grow products of superior quality and, more important, to create products that are significantly more sustainable," Perkins and Rives wrote. The analysts also said that one factor investors might have overlooked were the exponential opportunities to apply SynBio outside of the healthcare industry. "The virus itself and the healthcare industry's response, most notably the development of vaccines, have highlighted the power in the process of engineering cells and proteins," Perkins and Rives explained. "It could help drive new areas of growth, and many companies can capitalize on this technology."ĭepending on the application, Perkins and Rives said, SynBio ranges from adjusting and repurposing existing microbes to "designing a completely new custom DNA sequence and inserting it into a cell." And, they added, with the pandemic still raging all over the world, the importance of biology has become more timely and emphasized than ever. Rives, a portfolio manager, in a December 2 note. "We believe SynBio could rival trends like e-commerce, cloud computing, and electric vehicles as the next big revolution," wrote Shep Perkins, the chief investment officer of equities, and William C. "SynBio," which is short for synthetic biology, is a concept many may not have heard of before.īut analysts at Putnam Investments say it's worthwhile for investors to commit it to memory. ![]() They share seven stocks poised to take advantage of this new wave of innovation.Analysts from Putnam Investments believe it could be the next big disruptive technology.Synthetic biology, or "SynBio," deals with redesigning systems and objects with organic material.
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