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May 06, 2023

Accelerating Biomanufacturing and Producing Cost

A number of biomanufactured products require amino acids and growth factors as

A number of biomanufactured products require amino acids and growth factors as inputs, but these small molecules and proteins can be very expensive, driving up the costs of biomanufacturing, slowing the expansion of the U.S. bioeconomy, and limiting the use of novel biomedical and synthetically produced agricultural products. Manufacturing costs can be substantially limiting: officials from the National Institutes of Health and the Bill & Melinda Gates Foundation point to the manufacturing costs of antibody drugs as a major bottleneck in developing and distributing treatments for a variety of extant and emerging infectious diseases. To help bring down the costs of these biomanufacturing inputs, the Biden-Harris Administration should allocate federal funding for a Grand Challenge to research and develop reduced-cost manufacturing processes and demonstrate the scalability of these solutions.

Amino acids are essential but costly inputs for large-scale bioproduction. To reduce these costs, federal funding should be used to incentivize the development of scalable production methods resulting in production costs that are half of current costs. Specifically, the U.S. Department of Agriculture (USDA) and ARPA-H should jointly commit to an initial funding amount of $15 million for 10 research projects in the first year, with a total of $75. million over five years, in Grand Challenge funding for researchers or companies who can develop a scalable process for producing food-grade or pharmaceutical-grade amino acids or growth factors at a fraction of current costs. ARPA-H should also make funding available for test-bed facilities that researchers can use to demonstrate the scalability of their cost-saving production methods.

Scaling up the use of animal cell culture for biosynthetic production will only be economically effective if the costs of amino acids and growth factors are reduced. Reducing the cost of bioproduction of medical and pharmaceutical products like vaccines and antimicrobial peptides, or of animal tissue products like meat or cartilage, would improve the availability and affordability of these products, make innovation and new product development easier and more cost effective, and increase our ability to economically manufacture bioproducts in the United States, reducing our dependence on foreign supply chains.

For a better understanding of the use of amino acids and growth factors in the production of biologics and animal cell-based products, and to accurately forecast supply and demand to ensure a reliable and available supply chain for medical products, the Department of Defense (DoD) and USDA should jointly commission an economic analysis of synthetic manufacturing pathway costs for common bioproducts and include assessments of comparative costs of production for major international competitors.

Amino acids are necessary inputs when synthesizing protein and peptide products, including pharmaceutical and healthcare products (e.g., antibodies, insulin) and agricultural products (e.g., synthetic plant and animal proteins for food, collagen, gelatin, insecticidal proteins), but they are very expensive. Amino acids as inputs to cell culture cost approximately $3 to $50 per kg, and growth factors cost $50,000 per gram, meaning that their costs can be half or more of the total production cost.

Biomanufacturing depends on the availability of reagents, small molecules, and bioproducts that are used as raw inputs to the manufacturing process. The production of synthetic bioproducts is limited by the cost and availability of certain reagents, including amino acids and small signaling proteins like hormones and growth factors. These production inputs are used in cell culture to increase yields and production efficiency in the biosynthesis of products such as monoclonal antibodies, synthetic meat, clotting factors, and interferon (proteins that inhibit tumor growth and support immune system function). While some bioproducts can be produced synthetically in plant cells or bacterial cells, some products benefit from production steps in animal cells. One example is glycosylation, a protein-modification process that helps proteins fold into stable structures, which is a much simpler process in animal cells than in bacteria or in cell-free systems. The viruses used in vaccine development are also usually grown in animal cells, though some recombinant vaccines can be made in yeast or insect cells. There are benefits and drawbacks to the use of plant, fungi, bacteria, insect, or animal cells in recombinant bioproduction; animal cells are generally more versatile because they mimic human processes closely and require less engineering than non-animal cells. All cells, whether they are animal, plant or bacteria, require amino acids and various growth factors to survive and function efficiently. While in the future growth factors may no longer be required, amino acids will always be required. Amino acids are the most costly necessary additive on a price per kilogram basis; the most costly of the supporting additives are growth factors.

Growth factors are proteins or steroids that act as signaling molecules that regulate cells’ internal processes, while amino acids are building blocks of proteins that are necessary both for cell function and for producing new proteins within a cell. Cells require supplementation with both growth factors and amino acids because most cells are not capable of producing their own growth factors. Biosynthetic production in animal cells frequently uses growth factors (e.g., TGF, IGF) to increase yield and increase production speed, signaling cells to work faster and make more of a particular compound.

Pharmaceuticals

Although pharmaceutical products are expensive, relatively small demand volumes prevent market forces from exerting sufficient cost pressure to spur innovation in their production. The biosynthetic production of pharmaceuticals involves engineering cells to produce large quantities of a molecule, such as a protein or peptide, which can then be isolated, purified, and used in medicine. Peptide therapeutics is a $39 billion global market that includes peptides sold as end products and others used as inputs to the synthesis of other biological compounds. Protein and peptide product precursors, including amino acids and growth factors, represent a substantial cost of production, which is a barrier to low-cost, high-volume biomanufacturing.

For example, the production of antimicrobial peptides, used as therapeutics against antibiotic-resistant bacteria and viruses, is strongly constrained by the cost of chemical inputs. One input alone, guanidine, accounts for more than 25% of the approximately $41,000 per gram production cost of antimicrobial peptides. Reducing the cost of these inputs will have substantial downstream effects on the economics of production. Antimicrobial peptides are currently very expensive to produce, limiting their development as alternatives to antibiotics, despite a growing need for new antibiotics. The U.S. National Action Plan for Combating Antibiotic-Resistant Bacteria (CARB) outlines a coordinated strategy to accelerate the development of new antibiotics and slow the spread of antibiotic resistance. Reducing the cost to produce antimicrobial peptides would support these goals.

The high costs of synthetic production limit the growth of the market for synthetic products. This creates a local equilibrium that is suboptimal for the development of the synthetic biology industry and creates barriers to market entry for synthetic products that could, at scale, address environmental and bioavailability concerns associated with natural sources. The federal government has already indicated an interest in supporting the development of a robust and innovative U.S.-based biomanufacturing center, with the passage of the CHIPS and Science Act and Executive Order 14081 on Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy. Reducing the costs of basic inputs to the biomanufacturing process of a range of products addresses this desire to make U.S. biomanufacturing more sustainable. There are other examples of federal investment to reduce the cost of manufacturing inputs, from USDA support for new methods of producing fertilizer, to Food and Drug Administration investment to improve pharmaceutical manufacturing and establish manufacturing R&D centers at universities, to USDA National Institute of Food and Agriculture (NIFA) support for the development of bioplastics and bio-based construction materials. Federal R&D support increases subsequent private research funding and increases the number of new products that recipients develop, a positive measure of innovation.

The effort to reduce biomanufacturing costs is larger than any one company; therefore, it requires a coordinated effort across industry, academia, and government to develop and implement the best solution. The ability to cost-effectively manufacture precursors will directly and indirectly advance all aspects of biomanufacturing. Academia and industry are poised and ready to improve the efficiency and cost of bioproduction but require federal government coordination and support to achieve this essential milestone and to support the development of the newly emerging industry of large-scale synthetic bioproducts.

Synthetic meat

Developing cost-effective protein and peptide synthesis would remove a substantial barrier to the expansion of synthetic medical and agricultural products, which would address current supply bottlenecks (e.g., blood proteins, antibody drugs) and mounting environmental and political challenges to natural sourcing (e.g., beef, soy protein). Over the past decade, breakthroughs in the manufacturing capability to synthetically produce biological products, like biofuels or the antimalarial drug artemisinin, have failed to reach cost-competitiveness with naturally sourced competitors, despite environmental and supply-chain-related benefits of a synthetic version. The Department of Energy (DoE) and others continue to invest in biofuel and bioproduct development, and additional research innovation may soon bring these products to a cost-competitive threshold. For bioproducts that depend on amino acids and growth factors as inputs, that threshold may be very close. Proof of concept research on growth factor and amino acid production, as well as techno-economic assessments of synthetic meat products, point to precursor amino acids and proteins as being substantial barriers to cost competitiveness of bioproduction—but close to being overcome through technological development. Potential innovators lack support to invest in the development of potentially globally beneficial technologies with uncertain returns.

Reducing the costs of these inputs for the peptide drug and pharmaceutical market could also bring down the costs of synthetic meat, thereby increasing a substantial additional market for low-cost amino acids and growth factors while alleviating the environmental burdens of a growing demand for meat. Israel has demonstrated that there is strong demand for such products and has substantially invested in its synthetic meat sector, which in turn has augmented its overall bioeconomy.

Bringing the cost of synthetic meat from current estimates of $250 per kg to the high end of wholesale meat prices at $10 per kg is infeasible without reducing the cost of growth factors and amino acids as production inputs but would also reduce the water and land usage of meat production by 70% to 95%. Synthetic meat would also alleviate many of the ethical and environmental objections to animal agriculture, reduce food waste, and increase the amount of plant products available for human consumption (currently 77% of agricultural land is used for livestock, meat, and dairy production, and 45% of the world's crop calories are eaten by livestock).

Bioeconomy initiatives and opportunity

Maintaining U.S. competitiveness and leadership in biomanufacturing and the bioeconomy is a priority for the Biden-Harris Administration, which has led to a national bioeconomy strategy that aims to coordinate federal investment in R&D for biomanufacturing, improve and expand domestic biomanufacturing capacity, and expand market opportunities for biobased products. Reducing the cost and expanding the supply of amino acids and growth factors supports these three objectives by making bioproducts derived from animal cells cheaper and more efficient to produce.

Several directives within President Biden's National Biotechnology and Biomanufacturing Initiative could apply to the goal of producing cost-effective amino acids and growth factors, but a particular stipulation for the Department of Health and Human Services stands out. The 2022 Executive Order 14081 on Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy includes a directive for the Department of Health and Human Services (HHS) to invest $40 million to "expand the role of biomanufacturing for active pharmaceutical ingredients (APIs), antibiotics, and the key starting materials needed to produce essential medications and respond to pandemics." Protein and peptide product precursors are key starting materials for medical and pharmaceutical products, justifying HHS support for this research challenge.

Congress has also signaled its intent to advance U.S. biotech and biomanufacturing. The CHIPS and Science Act authorizes funding for projects that could scale up the U.S. bioeconomy. Title IV of the Act, on bioeconomy research and development, authorizes financial support for research, test beds for scaling up technologies, and tools to accelerate research. This support could take the form of grants, multi-agency collaborative funding, and Small Business Innovation Research (SBIR) or Small Business Technology Transfer Program (SBTTP) funding.

Biomanufacturing is important for national security and stability, yet much research and development are needed to realize that potential. The abovementioned funding opportunities should be leveraged to support foundational, cross-cutting capabilities to achieve affordable, accessible biomanufactured products, such as the production of essential precursor molecules.

To provide the catalyst for innovation that will drive down the price of components, federal funding should be made available to organizations developing cost-effective biosynthetic production pathways. Initial funding would be most helpful in the form of research grants as part of a Grand Challenge competition. University researchers have made some proof-of-concept progress in developing cost-effective methods of amino acid synthesis, but the investment required to demonstrate that these methods succeed at scale is currently not provided by the market. The main market for synthetic biomanufacturing inputs like amino acids is pharmaceutical products, which can pass on high production costs to the consumer and are not sufficiently incentivized to drive down the costs of inputs.

Recommendation 1. Provide Grand Challenge funding for reduced-cost scalable production methods for amino acids and growth factors.

The USDA (through the USDA-NIFA Agriculture and Food Research Initiative [AFRI] or through AgARDA if it is funded) and ARPA-H should jointly commit to $15 million for 10 projects in the first year, with a total of $75 million over five years, in Grand Challenge1 funding for researchers or companies who can develop a scalable process for producing food-grade or pharmaceutical-grade amino acids or growth factors at a fraction of current costs (e.g., $100,000 per kg for growth factors, and $1.50 per kg for amino acids), with escalating prizes for greater cost reductions. Applicants can also demonstrate the development of scalably produced bioengineered growth factors that demonstrate increased efficacy and efficiency. Grand Challenges offer funding to incentivize productive competition among researchers to achieve specific goals; they may also offer prizes for achieving interim steps toward a larger goal.ARPA-H and USDA are well-positioned to spur innovation in cost-effective precursor production. Decreasing the costs of producing amino acids and growth factors would enable the transformative development of biologics and animal-cell-based products like synthetic meat, which aligns well with ARPA-H's goal of supporting the development of breakthrough medical and biological products and technologies. ARPA-H aims to use its $6.5 billion in funding from the FY22 federal budget to invest in three-to-five-year projects that will support breakthrough technologies that are not yet economically compelling or sufficiently feasible for companies to invest internally in their development. An example technology cited by the ARPA-H concept paper is "new manufacturing processes to create patient-specific T-cells to search and destroy malignant cells, decreasing costs from $100,000s to $1000s to make these therapies widely available." Analogously, new manufacturing processes for animal cell culture inputs will make biosynthetic products more cost-effective and widely available, but the potential market is still speculative, making investment risky.AgARDA was meant to complement AFRI, in its model for soliciting research proposals, and being able to jointly support projects like a Grand Challenge to scale up amino acids and growth factors provides reason to fund AgARDA at its authorized level. Because producing cell-based meat at cost parity to animal meat would be an agricultural achievement, lowering the cost of necessary inputs to cell-based meat production could fall under the scope of AgARDA.

Recommendation 2. Reward Grand Challenge winners who demonstrate scalability and provide BioPreferred program purchasing preference.

Researchers developing novel low-cost and high-efficiency production methodology for amino acids and growth factors will also need access to facilities and manufacturing test beds to ensure that their solutions can scale up to industrial levels of production. To support this, ARPA-H should make funding available to Grand Challenge winners to demonstrate scaling their solutions to hundreds of kilograms per year. This is aligned with the test-bed development mandated by the CHIPS and Science Act. This funding should include $15 million to establish five test-bed facilities (a similar facility at the University of Delaware was funded at $3 million) and an additional $3 million to provide vouchers of between $10,000 and $300,000 for use at test-bed facilities. (These amounts are similar to the vouchers provided by the California Department of Energy for its clean energy test-bed program.)

To support the establishment of a market for the novel production processes, USDA should add to its BioPreferred program a requirement that federal procurement give preference to winners of the Grand Challenge when purchasing amino acids or growth factors for the production of biologics and animal cell-derived products. The BioPreferred program requires that federal purchases favor bio-based products (e.g., biodegradable cutlery rather than plastic cutlery) where the bio-based product meets the requirements for the purchaser's use of that product. This type of purchasing commitment would be especially valuable for Grand Challenge winners who identify novel production methods—such as molecular "farming" in plants or cell-free protein synthesis—whose startup costs make it difficult to bootstrap incremental growth in production. Requiring that federal purchasing give preference to Grand Challenge winners ensures a certain volume of demand for new suppliers to establish themselves without increasing costs for purchasers.

Stakeholder support for this Grand Challenge would include research universities; the alternative protein, peptide products, and synthetic protein industries; nonprofits supporting reduced peptide drug prices (such as the American Diabetes Association or the Boulder Peptide Foundation) and a reduction in animal agriculture (such as New Harvest or the Good Food Institute); and U.S. biomanufacturing supporters, including DoE and DoD. Companies and researchers working on novel methods for scalable amino acid and growth factor production will also support additional funding for technology-agnostic solutions (solutions that focus on characteristics of the end product rather than the method—such as precision fermentation, plant engineering, or cell-free synthesis—used to obtain the product).

As another incentive, ARPA-H should solicit additional philanthropic and private funding for Grand Challenge winners, which could take the form of additional prize money or advance purchase commitment for a specified volume of amino acids or growth factors at a given threshold price, providing further incentive for bringing costs below the level specified by the Challenge.

Recommendation 3. To project future demand, DoD should commission an economic analysis of synthetic manufacturing pathway costs for common bioproducts, and include assessments of comparative costs in major international competitors (e.g., China, the European Union, the United Kingdom, Singapore, South Korea, Japan).

This analysis could be funded in part via BioMADE's project calls for technology and innovation research. BioMADE received $87 million in DoD funding in 2020 for a seven-year period, plus an additional $450 million announced in 2023. Cost sharing for this project could come from the NSF Directorate for Technology, Innovation, and Partnerships or from the DoE's Office of Science's Biological and Environmental Research Program, which has supported techno-economic analyses of similar technologies, such as biofuels.

EO 14081 also includes DoD as a major contributor to building the bioeconomy. The DoD's Tri-Service Biotechnology for a Resilient Supply Chain program will invest $270 million over five years to speed the application of research to product manufacturing. Decreasing the costs of amino acids and growth factors as inputs to manufacturing biologics could be part of this new program, depending on the forthcoming details of its implementation. Advancing cost-effective biomanufacturing will transform defense capabilities needed to maintain U.S. competitiveness, secure critical supply chains, and enhance resiliency of our troops and defense needs, including medicines, alternative foods, fuels, commodity and specialty chemicals, sensors, materials, and more. China recently declared a focus on synthetic animal protein production in its January 2022 Five Year Plan for Agriculture. Our trade relationship with China, which includes many agricultural products, may shift if China is able to successfully produce these products synthetically.

To support the development of an expansive and nimble biomanufacturing economy within the United States, federal agencies should ensure that the necessary inputs for creating biomanufactured products are as abundant and cost-effective as possible. Just as the cost to produce an almond is greatly dependent on the cost of water, the cost to manufacture a biological product in a cell-based manufacturing system depends on the cost of the inputs used to feed that system. Biomanufactured products that require amino acids and growth factors as inputs range from the medically necessary, like clotting factors and monoclonal antibodies, to the potentially monumental and industry-changing, like cell-based meat and dairy products. Federal actions to increase the feasibility and cost-effectiveness of manufacturing these products in the United States will beneficially affect the bioeconomy and biotechnology industry, the pharmaceutical and biomedical industries, and potentially the food and agriculture industries as well.

Partnerships for Innovation. This program funds translational research to accelerate technology development, which could apply to research aimed at scaling up the production of amino acids and growth factors, and developing innovative and low-cost methods of production, purification, and processing.

Similar grant funding through NINDS (CREATE Bio) and NIST (NIIMBL) for biomanufacturing initiatives devoted $10 million to $16 million in funding for 12-14 projects. The USDA recently awarded $10 million over five years to Tufts University to develop a National Institute for Cellular Agriculture, as part of a $146 million investment in 15 research projects announced in 2021 and distributed by the USDA-NIFA Agriculture and Food Research Initiative's Sustainable Agricultural Systems (AFRI-SAS) program. AFRI-SAS supports workforce training and standardization of methods used in the production of cell-based meat, while Tufts's broader research goals include evaluating the economics of production. Decreasing the cost of synthetic meat is key to developing a sustainable cellular agriculture program, and USDA could direct a portion of its AFRI-SAS funding to providing support for this initiative.

Yes. Current production methods for biological products, such as monoclonal antibody drugs, are sufficiently high that developing monoclonal antibodies for infectious diseases that primarily affect poor regions of the world is considered infeasible. Decreasing the costs of manufacturing these drugs through decreasing the costs of their inputs would make it economically possible to develop antibody drugs for diseases like malaria and zika, and biomedical innovation for other infectious diseases could follow. Similarly, decreasing the costs of amino acid and growth factor inputs would allow synthetic meat companies greater flexibility in the types of products and manufacturing processes they are able to use, increasing their ability to innovate.

In fact, a few non-U.S. companies are pursuing the production of synthetic growth factors as well as bioengineered platforms for lower-cost growth factor production. Israeli company BioBetter, Icelandic company ORF Genetics, UK-based CellRX, and Canadian company Future Fields are all working to decrease growth factor cost, while Japanese company Ajinomoto and Chinese companies such as Meihua Bio and Fosun Pharma are developing processes to decrease amino acid costs. Many of these companies receive subsidies or are funded by national venture funding dedicated to synthetic biology and the alternative protein sector. thus, U.S. federal funding of lower-cost amino acid and growth factor production would support the continued competitiveness of the national bioeconomy and demonstrate support for domestically manufactured bioengineered products.

Reducing the supply chain costs of manufacturing allows companies to increase manufacturing volumes, produce a wider range of products, and sell into more price-sensitive markets, all of which could result in job growth and the expansion of the biomanufacturing center. As an example of a product that has seen similar effects, solar panels and photovoltaic cells have seen substantial decreases in their costs of production, which have been coupled with job growth. Jobs in photovoltaics are seeing the largest increases among overall growth in renewable energy employment.

The techniques required to lower costs and scale production of amino acids and growth factors should translate to the production of other types of small molecules and proteins, and may even pave the way for more efficient and lower-cost production methods in chemical engineering, which shares some methods with bioengineering and biological manufacturing. For example, chemical engineering can involve the production of organic molecules and processing and filtration steps that are also used in the production of amino acids and growth factors.

Increased synthetic meat production will help address growing demands for meat and for protein-rich foods that the livestock industry currently struggles with in combination with other demands for land, water, agricultural products, and skilled labor. As an example, the recent U.S. egg shortage demonstrated that the livestock industry is susceptible to external production shocks caused by disease and unexpected environmental effects. Many large-scale meat companies, including giants like Cargill and Tyson Foods, see themselves as in the business of supplying protein, rather than the business of slaughtering animals, and have invested in plant-based-meat companies to broaden their portfolios. Expanding into synthetic meat is another way for animal agriculture to continue to serve meat to customers while incorporating new technological methods of production. If synthetic meat adoption expands rapidly enough to reduce the need for animal husbandry, farmers and ranchers will likely respond by shifting the types of products they produce, whether by growing more vegetables and plant crops or by raising animals for other industries.

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