When genomics pioneer J. Craig Venter stepped before the cameras last week and claimed that he engineered the first bacterial cell with an entirely synthetic genome, he actually had a lot of help. One of the key players he relied on behind the scenes was a privately held company in Bothell, WA, called Blue Heron Biotechnology.
Venter’s team in San Diego and Maryland went through an elaborate process to “boot up” the bacterial cell by stitching together more than 1,000 stretches of DNA that were each more than 1,000 chemical base units in length. The sequences were designed on a computer, but Venter’s team hired the people at Blue Heron to take care of the next vital step—the job of synthesizing all that data into genes that gave rise to the famous bacterial cell. Blue Heron was singled out for a kudo in the J. Craig Venter Institute’s press release, and got a line in Nicholas Wade’s story in the New York Times. (Blue Heron even got a little publicity from hometown KOMO-TV.)
Beneath the scientific implications and ethical debate, there’s actually an intriguing business story. For Blue Heron, it’s emblematic of its growing capabilities in the emerging field of synthetic biology, and the increasingly powerful things it can enable its customers to do. The company is one of five contract firms around the world that are ushering in an “industrialized” era of molecular biology. The idea is to take a time-consuming, costly process of synthesizing genes in the lab, and automate it into something much cheaper, faster, and more reliable.
While the Seattle-area company doesn’t disclose its revenue, or say whether it is profitable, it currently provides its service to 19 of the world’s top 20 pharmaceutical companies and a growing cadre of academic researchers, says John Mulligan, Blue Heron’s founder and chief scientific officer. The company’s business is “sustainable” for the future with its current team of about 35 employees, he says.
“Customers are saying ‘At this price, it doesn’t make sense to do any molecular biology internally anymore,'” Mulligan says. “Several companies have outsourced [DNA synthesis] completely.”
The field has made dramatic strides over the past decade. Mulligan, who previously ran one of the sequencing centers at Stanford University that played a role in the Human Genome Project, left to start Blue Heron in 1999. He got some seed investment in the early days from Leroy Hood and David Galas, a couple of the co-founders of Darwin Molecular, a one-time highflier where Mulligan worked for a time in the mid-90s.
Back in Blue Heron’s founding days, cost was the big barrier preventing the synthesis of DNA sequences in any systematic way. But the price per base pair, or chemical unit of DNA, plummeted about 90 percent over the company’s first nine years. That made it cheap enough for drug companies to order manufactured genes, rather than assign the task of making them to young scientists or skilled technicians in-house.
And the trend has only continued. Two years ago, Blue Heron would synthesize genes for about $1.50 to $2 for each chemical base pair of DNA—now the same genes can be had for 40 cents to $1 per base pair, Mulligan says, depending on their complexity. Some researchers order short genes that are only 200 chemical units long, but Blue Heron can synthesize really complicated genes that can go as long as 200,000 units long, Mulligan says. If a customer wants to slip in a single letter variation here and there, an insertion of an extra letter or a deletion, Blue Heron has shown over time it can deliver the exact sequence the researcher wants, within one to three weeks of turnaround time.
While falling per-unit prices sound bad for Blue Heron’s overall revenue, Mulligan says his company has been able to offset that decline a couple ways. One is
