Team:UZurich/Entrepreneurship

Best Supporting Entrepreneurship

1. Introduction

We started this project with the hope of finding a novel approach to protect plants from pathogens. As our laboratory results show, we are able to induce an immune response in plants with the help of our engineered OMVs. When we interviewed local farmers and industrial vegetable producers, most of them indicated that they would indeed be interested in trying out our technology. The success in the laboratory and the positive feedback by target customers spurred us on to analyze the pesticide market, and to identify if our technology would be competitive enough for commercial viability.
Below you can find a short introduction into our project, followed by a market assessment and financial assessment of our technology. Lastly, there is an outlook and a description of our next steps.

2. The Source of Value

2.1 The Problem

With roughly 1’950 tons of pesticides used annually in Switzerland [1] having negative impacts on the health of humans, biodiversity and soil quality, it’s clear that alternatives need to be found. Additionally, studies conducted by Agroscope [2] which observed a clear correlation between the amount of different pesticides used, and the reduction of symbiotes in the ground such as mycorrhizal fungi, show that we are eroding away the basis needed for a sustainable agriculture.
Producers also often share a similar view on the issue between each other, as they are open to reducing the amount phytosanitary products, but the lack of cost efficient, ecologically sound and easy to use alternatives remain scarce. Hence, an alternative that fulfills these requirements is beginning to show demand.


2.2 The Solution

To reduce the general amount of pesticides used is therefore a desirable outcome. And whilst alternatives such as biopesticides constitute a solution that organic farmers may use instead of more conventional synthetic ones, the problem remains that there is consequently a so-called selective pressure on pathogens.
This selective pressure favors mutations in pathogens that allow them to circumvent pesticides aimed at their elimination. As Beat Keller, a professor of molecular plant biology and phytopathology put it: „Globally, genetic engineering today is mainly used by big companies. They focus a lot on the aspect of herbicide resistance and of course, the use of herbicides is in principle somewhat problematic.“ [3]
Hence, instead of applying selective pressure on pathogens with pesticides then, we boost the plants' immune response at the appropriate time to eliminate the pathogens. This is a more sustainable solution in the long term, as it is less prone to mutations in pathogens, rendering some pesticides ineffective. (Of course, the selective pressure is only relieved if we don't take away a pathogen's only food source.) Our project envisions to use Outer Membrane Vesicles (OMVs) with the aim of triggering Pattern Recognition Receptors (PRRs), which can elicit an un-specific immune response, priming the plant to defend itself more actively short-term.


2.3 The Underlying Magic

Using Vesicles, by default natural buddings of the bacteria, we can solve several problems at once.
On the one hand, the aforementioned selective pressure on pathogens is alleviated as a result of boosting the plants immune response, rather than eliminating the problematic pathogen.
On the other hand, the need for potentially harmful pesticides can be reduced, if not eliminated completely, and therefore the long-term negative effects on health and soil quality can be alleviated.
Read more about the project here.

3. Potential Value

3.1 The Market

There is a clear trend towards organic farming in Switzerland [4], which shows that as time goes on, and as less conventional synthetic pesticides are used, the rising need for a functional, easy to use and financially competitive solution becomes clearer by the year. As such, and knowing that approximately 1’950 tons of pesticides are used annually nationally, it becomes clear that the market is a vast one.

To make a rough estimate of the potential market, we will use numbers published by the Federal Agriculture Office (Bundesamt für Landwirtschaft). In order to do so, we must first get a feel for the type of pesticides used.
According to SwissInfo: “Herbicide sales have decreased for six years in a row with sales of the controversial glyphosate shrinking by 63% over ten years. The top five best-selling pesticides in 2019 were sulfur (fungicide), paraffin oil (insecticide), glyphosate (herbicide), Folpet (fungicide in viticulture) and Mancozeb (fungicide). It is worth noting that sulfur and paraffin oil are permitted in organic farming and are also used in conventional agriculture.” [1]

Let’s use fungicides as an example then with currently about 980 tons annually, as its use hasn’t declined much in recent years. Now, through the structural reporting “Strukturberichterstattung Nr. 60/1” from the Swiss State Secretariat for Economic Affairs [5], we may take as reference points the cheapest fungicide per kg at 9 CHF* (9 USD), Bordeaux-Brühe (BIO) by Schneiter Agro AG, and the most expensive one at 126 CHF (135 USD) per kg, Cantus by BASF, and we’ll end up with the middle being at 67.50 CHF (73 USD). Let’s even be generous and round down to 60 CHF (65 USD) for good measure. If we now assume that about 1 in 5 farmers will be willing to move from conventional pesticides to solutions around OMVs like ours (based on the knowledge that about 15% of farmers today are organic farmers in Switzerland [4], and have therefore shown the will to change), we arrive at an approximate potential market value of around 11.7 Mio. CHF (12.6 Mio. USD) in the short-term for fungicides alone, with significant growth to be expected in the middle and long term.

3.2 Competitive Positioning

Research clearly indicates that OMVs have potential in a “wide array of applications like adjuvants, vaccines, drug presentation, and fluorescence tracking” according to an article by Ruizhen Li and Qiong Liu, both from the Department of Medical Microbiology, School of Medicine, Nanchang University in China [6]. OMVs show a novel way of using proteins in nanotechnologies to our advantage.

Another article on “Decorating outer membrane vesicles with organophosphorus hydrolase and cellulose binding domain for organophosphate pesticide degradation” [7] states that OMVs are being tested for use in pesticide degradation, as this remains a serious problem as mentioned in 2.1.

So far though, we from iGEM UZH are amongst the most early adopters of using OMVs to boost the plants immune response in direct response to the need in case of infestation through pathogens. It is this early mover advantage that we see as a crucial part to our solution, and it is the, as far as we can see, different use of the OMVs to boost the plants immune response pro-actively, rather than reacting to infestation with pesticides that makes our USP.

3.3 Business Model

Although OMVs have an enormous potential in terms of range for applications, they are fairly simple to produce.
In theory, by using a small bioreactor in which the genetically engineered bacteria can be held and stimulated to produce OMVs on demand, followed by a short trip to the centrifuge to separate the actual OMVs from the rest of the bacteria by their lesser weight, it remains to be seen how that can be translated to larger production units.
After having spoken to representatives of larger firms in the industry, we found out that scaling up bioreactors would be more efficient up to a certain scale, after which the efficiency would drop down again. We were told that efficiency for nanotechnology scale productions in bioreactors was about 3-4 times higher in a lab setting, compared to a larger industrial production.
This means that peak efficacy can be reached by building up a network of regional production units for the OMVs, where qualified personnel would take care of working with the bioreactors, giving out the finished OMV-based product to producers for spraying in the field, for an easy use on side of the farmers, and maximum oversight and understanding of OMV usage on our side.
A conventional price per kg seems the most logical step as it’s closest to the Status Quo, and a price around or just below 60 CHF per kg would further strengthen our competitive positioning.
Also, we assume that price is elastic for most pesticides, as there are usually a few substitutes to any given product in this market. So if prices for conventional pesticides rise slightly, as confirmed by Roberto Mozzini, vegetable farmer in Magadino, Ticino (Southern Switzerland) [8], we will see demand rise for alternatives such as our product.

4. Realization of Value

4.1 The Plan

The next steps then include making sure that the OMV technology works. The proof of concept has worked already well for the OMVs, indicating that the ROS (Reactive Oxygen Species) response of the plants, which shows how much the immune response of the plant has been triggered, has been active by a factor of 2.5 more compared to the immune response caused by the bacteria that the OMVs are produced from.
Once that is done, field experiments will be needed to evaluate and confirm these solutions out of the lab.
Realistically, regulatory challenges are to be expected during this time, but with a sufficiently close collaboration and exchange in know-how with the Agroscope, the Swiss Confederation’s centre of excellence for agricultural research, getting an approval for field trials is feasible.

4.2 Finance and Funding

So far, the research behind the OMV solutions has been covered by sponsoring from the University of Zurich, as well as sponsors within the biotech and agricultural industry. For example, we pitched our project to the Max Schwarz AG, who is the largest bio-producer of seedlings in Switzerland. Their investment will help in further developing our idea into an applicable product.
If the project is to go on, the most likely funding will come in form of an initial investment from an angel investor, combining the need for financial backing to move along the development to a market ready solution, as well as the experience such an angel would bring to the StartUp that could be derived from the project.
Further down the road, venture capitalists could provide the needed funding for rapid growth, but that is to be further evaluated.


* All prices are based on the Swiss market.

[1] Swissinfo: Switzerland and Pesticides: Toxic Relationship or Necessary Evil?, 16. September 2021
[2] Medienmitteilungen Agroscope, 19. September 2021
[3] Research, Regulations and Resistance: An Interview with Beat Keller by iGEM UZH 2021, 10. October 2021
[4] Organic Farming Continues To Gain Ground in Switzerland, May 2021 by Le News, 19. September 2021
[5] Strukturberichtserstattung 60/1, State Secretariat of Economic Affairs, 12. October 2021
[6] Engineered Bacterial Outer Membrane Vesicles as Multifunctional Delivery Platforms, Frontiers in Materials, Vol. 7, p. 202, Li Ruizhen, Liu Qiong, 2020, 19. September 2021
[7] Su, Fu-Hsiang & Tabañag, Ian Dominic & Wu, Chih-Yun & Tsai, Shen-Long. (2016). Decorating outer membrane vesicles with organophosphorus hydrolase and cellulose binding domain for organophosphate pesticide degradation. Chemical Engineering Journal. 308.
[8] Greenhouses, Growth and G...Tomatoes: An Interview with Roberto Mozzini by iGEM UZH 2021, 10. October 2021