This is a continuation of the following 3 essays:
Synthesis prices over the last 9 years
DNA synthesis is an unattractive commodity market. Since it is primarily based on price, fierce competition eats all profits, and since it is technologically challenging and capital intensive, there are few new entrants. The companies in power have no incentive to innovate or drop prices, so they don't.
How do we build an organization that is incentivized to innovate and drop the price of DNA synthesis?
I believe DNA synthesis should be a loss leader, not the primary product, of a successful synthetic biology service company. Since DNA synthesis of clonal genes is so expensive, often scientists will design ways around having to use DNA synthesis. This complicates experimental design, requiring more hands-on optimization. Affordable DNA synthesis+cloning technology enables simpler experimental designs which lend themselves to automation, lowering the costs of execution to those with automation.
There are two different products that DNA synthesis organizations provide - "oligos" and "clonal genes". Oligos are short single stranded pieces of DNA that often have mutations. Clonal genes are long double stranded pieces of DNA that are sequence perfect. Most synthetic biologists need clonal genes to accomplish their experiments. While both are technically DNA synthesis, the usefulness of the output products are vastly different, and oligos are often used to make clonal genes.
Oligos themselves, currently, are not expensive. For example, you can purchase 15,600,220 base pairs from Genscript in an oligo pool for $6000, or about ~2600bp per $1, or ~0.038¢ per base. However, these are oligos, and the price for clonal genes is 9¢ per base (from Twist). There is over a 200x difference in price for oligos and clonal genes.
We can lower base pair costs, but what really matters at this point is lowering the cost of assembling the synthesized oligo pools into clonal genes, since clonal genes are what people actually use for experiments and engineering. If we can lower that cost enough, which fundamentally just takes bacterial media and sequencing, we can start building clonal genes for at least 10x cheaper than what they are sold for right now.
However, even if you use this route to make clonal gene synthesis cheaper, if you fail to align your incentives properly, you're going to end up in the same trap all the other synthesis providers.
The situation with current synthesis providers is dire (for consumers, not for the synthesis providers: they're doing just fine). Twist Bioscience is the largest clonal gene synthesis company in the world and they aren't trying to get better at gene synthesis - they have not lowered prices on synthesis in 3 years since their IPO - they are trying to get pharma bucks.
Twist acquisition of @AbverisAntibody
Twist has no reason to lower DNA synthesis prices, so they will not. New entrants have no reason to compete with Twist (competitive market vs $5B company), and so they'll do more profitable things (like make antibody companies). On all levels of these biotechnology companies, there is a drive towards pharma, whose value largely lies in patents and intellectual property. While pharma is important for the world, it does not fundamentally enable better access and use of the technology - which is what matters in the long term.
To actually lower the costs of DNA synthesis, there are 2 possible routes with the right incentives:
If you are actively building a company, the first option isn't very appealing, since you'll get stomped by the newer entrants. The latter option is more interesting to me: if there is a long-term strategy to make money by lowering synthesis costs, it may be feasible for a company to lower synthesis costs without depending on competitors forcing the price down. A cloud lab company is likely the best kind of company to undertake this work - selling services on top of gene synthesis, such as full experimental execution, should incentivize synthesis to act as funnel.
However, cloud labs have failed to truly disrupt the field of synthetic biology because they focus on the most profitable areas (ie, pharma), and get stuck there, serving the needs of those with capital, rather than building up synthetic biology in collaboration with all the people participating in the field. It is easy to forget that impact goes hand in hand with accessibility and that the leaders of tomorrow are the undergrads of today.
Keoni Gandall