The nice thing about forgoing venture money as a biotech firm is that when a pandemic devastates the globe you can leave millions of dollars of revenue on the table in order to help scientists who are fighting the disease.
"Our customers were making these huge efforts to create drugs for Covid," says Claes Gustafsson, co-founder and chief commercial officer at ATUM, based in Newark, California. "Because there were no VCs breathing down our necks, there was no reason not to do it."
ATUM, which does not release revenues, manufactures synthetic versions of genes used in industries such as pharmaceuticals, chemicals, and agriculture. Extracting DNA from living things is slow and difficult; ATUM rapidly creates biological material to order from scratch, using organic chemistry. So if, for example, a researcher is looking for the optimal protein for an antibody that attacks breast cancer, "we can make 500 different versions and test them to see which works the best," says Gustafsson.
In the case of a communicable disease like Covid, synthetic genes have another advantage. "In the old days you would have to physically get the virus, ship it somewhere and grow it," says Gustafsson. "That, of course, has all sorts of safety issues."
With its Silicon Valley-proximate location and reliance on machine learning, ATUM has attracted plenty of VC suitors. But the company has declined every offer. The four founders met in the late '90s as young scientists in the biotech startup Maxygen, which went public a couple of years later, fueled largely, Gustafsson says, by VC hype. When the founders launched ATUM (then called DNA2.0) in 2003, they decided to "keep that whole VC world outside and build this business for the long term," says Gustafsson. (After struggling for years, Maxygen was dissolved in 2013. It re-launched in 2017.)
ATUM had been operating profitably for 17 years, doing lots of work in the agriculture and food space for companies like Archer Daniels Midland. Then, in January, the Wuhan Institute of Virology sequenced the genome of the first Covid virus and uploaded it to a large public database maintained by the National Institutes of Health.
"Within minutes we started getting orders from people who wanted to make different pieces of the Covid virus," says Gustafsson. That first wave comprised researchers working on diagnostic tools. When enough patients had survived and begun to develop immune responses, the focus switched to therapies. Now, of course, the world is hell-bent on creating vaccines.
Around 200 organizations working on Covid--large pharma companies, small biotech firms, government agencies, and universities--approached ATUM. "Their main concern is speed, but safety matters too," says Gustafsson. To meet demand, the company went to seven-day weeks, splitting employees into two teams and staggering work hours to enable social distancing in the lab.
The partners swiftly decided to, among other things, waive licensing fees, which are upwards of $100,000 for cell lines that generate commercial-grade antibodies at sufficient scale for mass production. All Covid-related work is processed as a rush order, typically four or five times more expensive than the standard price. ATUM also makes some gene and protein variants available at no or very low cost for Covid customers.
Virtually all the work is custom, so putting a price tag on it is difficult. "I can't even guess how much revenue we are missing out on," says Gustafsson, although he acknowledged it was at least several million dollars.
Jennifer Cochran, chair of bioengineering at Stanford University Schools of Medicine and Engineering, is part of a team of Stanford researchers who developed a test to detect antibodies for the virus underlying the disease. "ATUM generously donated reagents that were critical for scaling our Covid-19 diagnostic efforts," says Cochran. The company "prioritized support to combat Covid-19 over maximizing its own revenues during the pandemic."
ATUM's largesse may pay off for it in the long term. "We are building strong relationships with customers doing Covid stuff today who may be doing cancer stuff tomorrow," says Gustafsson. But the larger motivation is more selfless. "The scientific community is banding together with the primary goal of solving a massive medical need," says Gustafsson. "Figuring out how to finance these efforts is secondary."