Synthetic biology powerhouse Ginkgo Bioworks said today it will become a public company through a $17.5 billion merger with a special purpose acquisition company (SPAC) that is expected to provide up to $2.5 billion of gross cash proceeds.
The SPAC business combination with Soaring Eagle Acquisition Corp. implies a pre-money equity valuation of $15 billion for Ginkgo, the company said. Soaring Eagle will change its name to Ginkgo Bioworks Holdings, change its jurisdiction of formation to Delaware and change its ticker symbol from SRNG to a new symbol.
Ginkgo was launched in 2008 by co-founders who have worked together for close to 20 years since meeting at MIT, with the goal of developing a platform that could program cells as easily as computers across a wide variety of applications—including food, agriculture, industrial chemicals, and pharmaceuticals.
Applications of the cells produced by Ginkgo range from climate change to food security to pandemic response, according to the company.
Ginkgo’s engineering and data platform applies advanced robotic automation, proprietary software, and data analytics toward continuous improvement, both of its “Foundry” technology and the knowledge and re-usable biological assets or “codebase” required to engineer cells for the company’s various applications.
“The magic of biology is that cells run on digital code similar to a computer, except that instead of 0s and 1s it’s As, Ts, Cs, and Gs,” Jason Kelly, co-founder and CEO of Ginkgo Bioworks, said in a statement. “Ginkgo’s platform makes it easier to program this code, and we are making this platform available to organizations working to solve our most pressing problems.”
Ginkgo said the capital raised through the SPAC combination “will dramatically increase the scale of Ginkgo’s platform and empower an ecosystem for cell programmers, accelerating the number of new programs able to launch on Ginkgo’s platform every year.”
The company cited a McKinsey Global Institute report estimating that the overall market for bioengineered products from which Ginkgo could receive a value share is estimated to reach $2 to $4 trillion in the next 10–20 years.
Principle behind the Platform
Speaking with GEN in 2018, Kelly explained the principle behind the company’s cell automation platform: “What our foundry automation allows us to do is very rapidly screen many thousands of different strains, testing different enzymes to look for variants that are going to have the highest activity, for example. Using the same ‘chassis’ strain—a common probiotic strain that people have taken to promote gut health for decades—we can optimize the function of an engineered pathway that is going to have an effect on the patient’s metabolism.”
In 2019, Ginkgo invested $80 million equity in Synlogic and entered into a long-term strategic platform collaboration designed to accelerate expansion and development of Synlogic’s pipeline of Synthetic Biotic™ medicines using Ginkgo’s cell programming platform. In turn, Synlogic paid Ginkgo $30 million for synthetic biology services to be provided over an initial five-year period that can be extended.
The collaboration built upon a partnership the two companies launched in 2017 aimed at treating neurological and liver disorders through Synthetic Biotic medicine—“living” medicines in which engineered probiotics are designed to perform critical metabolic conversions in the gut that can replace physiological activity missing or damaged in patients.
“In this way, we not only can optimize existing strains that Synlogic has in its pipeline, but more importantly, it also lets us rapidly generate strains with pathways targeting other diseases, turbocharging the discovery process for living medicines,” Kelly told GEN at the time. “Ginkgo’s technology is useful across industries, and we see drug discovery and development, especially living medicines, as a natural fit for organism design. We have a very long-term view of where these technologies will take us, and we believe living medicines will become an important new modality for human therapeutics.”
Weeks of Speculation
Ginkgo’s SPAC combination had been speculated for weeks, with the company and Soaring Eagle declining comment last month after Bloomberg News reported that Ginkgo was considering going public through a merger with the SPAC whose value was estimated at potentially $20 billion.
Before the SPAC transaction, Ginkgo Bioworks had raised a total $797.8 million in financing according to Crunchbase—including a $290 million Series E financing completed in 2019.
On April 22, another synthetic biology powerhouse that raised nearly $1 billion privately, Zymergen, went public by launching a successful initial public offering (IPO) whose net proceeds were estimated to be $529.6 million, since underwriters exercised in full their option to buy additional shares.
Ginkgo and Zymergen “have embraced the power of computational biology to take the guesswork out of synthetic biology and drive this young industry into the mainstream,” GEN reported last year.
At Ginkgo, Kelly will continue to lead the company along with another co-founder and president/COO, Reshma Shetty. Ginkgo said the rest of its founding team will also remain, including chief technology officer Barry Canton, Head of Strategy Austin Che, and Tom Knight of MIT’s Computer Science and Artificial Intelligence Laboratory, nicknamed “the godfather of synthetic biology” for his pioneering research in the field, such as the invention of standardized DNA components called BioBricks.
Joining Kelly, Reshma, and Belldegrun to lead the combined company’s board of directors will be:
- Arie Belldegrun, MD, founder of Kite Pharma (acquired in 2017 by Gilead Sciences for $11.9 billion) and co-founder and executive chairman of Allogene Therapeutics.
- Marijn Dekkers, who previously served as CEO of Bayer and Thermo Fisher Scientific and as Chairman of Unilever
- Christian Henry, the CEO of Pacific Biosciences and former CFO/chief commercial officer of Illumina
- Shyam Sankar, the COO of Palantir
- Harry Sloan, the CEO of Eagle Equity Partners, former chairman and CEO of Metro-Goldwyn-Mayer (MGM), and founder and former CEO of SBS Broadcasting
The boards of Soaring Eagle and Ginkgo have approved the transaction—which still requires approval from stockholders of both Soaring Eagle and Ginkgo, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals.
Deal Expected to Close Q3
The transaction is expected to close in the third quarter of 2021.
The $2.5 billion in gross proceeds is expected to consist of $1.725 billion cash in trust from Soaring Eagle—subject to redemptions by its public shareholders—plus $775 million in proceeds from an oversubscribed private investment in public equity (PIPE).
Soaring Eagle is the seventh public acquisition vehicle led by partners of Eagle Equity Partners. Eagle Equity is co-sponsoring the Ginkgo transaction along with Bellco Capital, an investment firm co-founded by Belldegrun.
“At Bellco and across our portfolio of biotechnology companies and investments, we have seen first-hand how the ability to program cells has started to revolutionize how we treat disease with the birth of cell and gene therapies,” Belldegrun stated. “I am excited to join the Ginkgo family as a board member, with the hope of expanding use of Ginkgo’s state-of-the-art technology to assist biopharma companies and expedite drug development.”
Eagle Equity Partners and Bellco are investing in the PIPE, which is led by “anchor” investments from Baillie Gifford, Putnam Investments, and funds and accounts managed by Counterpoint Global (Morgan Stanley Investment Management).
The PIPE has also attracted new investors that include accounts advised by ARK Investment Management LLC, ArrowMark Partners, Bain Capital Public Equity, Berkshire Partners, and Franklin Advisers. Also participating are several existing investors, including Cascade Investment, Casdin Capital, General Atlantic, Senator Investment Group, funds and accounts advised by T. Rowe Price Associates, Inc., and Viking Global Investors.
“From mRNA vaccines reaching people’s arms to combating climate change, the opportunity to work with programmed cells has never been more apparent. We are thrilled to partner with Arie as well as the team at Soaring Eagle to bring this vision to life,” Kelly added.