The new new thing

It’s fairly clear that nanotechnology is no longer the new new thing. A recent story in Business Week – Nanotech Disappoints in Europe – is not atypical. It takes its lead from the recent difficulties of the UK nanotech company Oxonica, which it describes as emblematic of the nanotechnology sector as a whole: “a story of early promise, huge hype, and dashed hopes.” Meanwhile, in the slightly neophilic world of the think-tanks, one detects the onset of a certain boredom with the subject. For example, Jack Stilgoe writes on the Demos blog “We have had huge fun running around in the nanoworld for the last three years. But there is a sense that, as the term ‘nanotechnology’ becomes less and less useful for describing the diversity of science that is being done, interesting challenges lie elsewhere… But where?”

Where indeed? A strong candidate for the next new new thing is surely synthetic biology. (This will not, of course, be new to regular Soft Machines readers, who will have read about it here two years ago). An article in the New York Times at the weekend gives a good summary of some of the claims. The trigger for the recent prominence of synthetic biology in the news is probably the recent announcement from the Craig Venter Institute of the first bacterial genome transplant. This refers to an advance paper in Science (abstract, subscription required for full article) by John Glass and coworkers. There are some interesting observations on this in a commentary (subscription required) in Science. It’s clear that much remains to be clarified about this experiment: “But the advance remains somewhat mysterious. Glass says he doesn’t fully understand why the genome transplant succeeded, and it’s not clear how applicable their technique will be to other microbes. “ The commentary from other scientists is interesting: “Microbial geneticist Antoine Danchin of the Pasteur Institute in Paris calls the experiment “an exceptional technical feat.” Yet, he laments, “many controls are missing.” And that has prevented Glass’s team, as well as independent scientists, from truly understanding how the introduced DNA takes over the host cell.”

The technical challenges of this new field haven’t prevented activists from drawing attention to its potential downsides. Those veterans of anti-nanotechnology campaigning, the ETC group, have issued a report on synthetic biology, Extreme Genetic Engineering, noting that “Today, scientists aren’t just mapping genomes and manipulating genes, they’re building life from scratch – and they’re doing it in the absence of societal debate and regulatory oversight”. Meanwhile, the Royal Society has issued a call for views on the subject.

Looking again at the NY Times article, one can perhaps detect some interesting parallels with the way the earlier nanotechnology debate unfolded. We see, for example, some fairly unrealistic expectations being raised: ““Grow a house” is on the to-do list of the M.I.T. Synthetic Biology Working Group, presumably meaning that an acorn might be reprogrammed to generate walls, oak floors and a roof instead of the usual trunk and branches. “Take over Mars. And then Venus. And then Earth” —the last items on this modest agenda.” And just as the radical predictions of nanotechnology were underpinned by what were in my view inappropriate analogies with mechanical engineering, much of the talk in synthetic biology is underpinned by explicit, but as yet unproven, parallels between cell biology and computer science: “Most people in synthetic biology are engineers who have invaded genetics. They have brought with them a vocabulary derived from circuit design and software development that they seek to impose on the softer substance of biology. They talk of modules — meaning networks of genes assembled to perform some standard function — and of “booting up” a cell with new DNA-based instructions, much the way someone gets a computer going.”

It will be interesting how the field of synthetic biology develops, to see whether it does a better of job of steering between overpromised benefits and overdramatised fears than nanotechnology arguably did. Meanwhile, nanotechnology won’t be going away. Even the sceptical Business Week article concluded that better times lay ahead as the focus in commercialising nanotechnology moved from simple applications of nanoparticles to more sophisticated applications of nanoscale devices: “Potentially even more important is the upcoming shift from nanotech materials to applications—especially in health care and pharmaceuticals. These are fields where Europe is historically strong and already has sophisticated business networks. “

5 thoughts on “The new new thing”

  1. Source:

    Time To Dump A Pioneer
    GS Early, Editor
    The Real Nanotech Investor

    My colleague Tim Harper has just gotten back from Asia where he had a chance to talk at length with an Oxonica competitor in the fuel additive market. Tim’s piece in this month’s Sector Spotlight gives you the scoop on what’s been going on with the world’s first publicly traded exclusive nanotech company.

    On the investment side of this story, I’ve been concerned for a number of months about the lack of transparency in management and the lack of movement in any of its product lines. Although I can pat myself on the back for issuing a hold on this stock before real trouble hit, I also have to eat some crow for not selling it outright more quickly when we still had a small profit on the trade.

    But this is indicative of these small companies, and it’s why Tim isn’t a big fan of their long-term potential. Management will do anything it takes sometimes to make a buck or keep investors excited, if not informed.

    A similar philosophy battered Electro Energy a few years ago; Altairnano’s previous CEO went “nano” in name for a few bucks in the stock market, as did pSivida’s former management team, leaving the bio-nano in tough shape. The latter two have solved these problems by completely changing management. The jury is still out on the former, even though the technology is solid.

    As I’ve said before, management is just as important as the technology. And Tim notes that neither makes much difference if there isn’t a market. With two strikes against it at this point—management and technology—and the third just leaving the pitcher’s hand, it’s time to bite the bullet and sell Oxonica.

    The Inside Isn’t Pretty
    Tim Harper, Contributing Editor

    We discussed Oxonica a few weeks ago, and as promised, here is the inside scoop. If you are long on this stock, then you may want to sit down.

    Oxonica’s big product–and the one causing all the current problems–is Envirox, a fuel additive based on cerium-oxide nanoparticles that should help diesel fuel to burn better. In fact, in trials with UK bus company Stagecoach in 2004, the additive produced savings of 5 to 10 percent, prompting the company to become an investor.

    The technology was originally licensed from a small development company, Neufetec. The deal was supposed to be a joint venture, but Oxonica had some problems with its legal status. After a few years, they licensed the technology on very favorable terms and started manufacturing.

    Everything was hunky dory until just more than a year ago when Oxonica announced a big deal with Petrol Ofisi in Turkey and then told Neufetec that it had gotten around Neufetec’s patent, canceling the licensing deal. Not surprising, Neufetec became suspicious, especially when Oxonica refused to allow auditing of the royalty payments.

    Normally, that would be the end of it. The patent dispute would rumble away in the courts and lumber toward some eventual settlement. But this story has another twist.

    Whatever Oxonica did to circumvent Neufetec’s patent stopped the additive from working, and trials in Turkey with Petrol Ofisi were inconclusive enough to leave Oxonica sitting with GBP500,000 worth of Envirox while its shares were suspended from London’s Alternative Investment Market. At the same time the company engaged a PR agency specializing in disaster management.

    According to recent press releases, the Turkish deal fell through because the trials were in high-sulphur fuel. What wasn’t mentioned was that trials with the Neufetec additive were also in high-sulphur fuel and that Singapore-based Energenics (, which also uses the same technology, has few problems with sulphur content affecting performance in Asia.

    Another odd thing is that most of Petrol Ofisi’s gas stations sell low-sulphur diesel fuel, so it’s unclear why the trials were based on high-sulphur fuel. If we look at the big picture, things don’t seem to add up.

    Oxonica’s main product now appears ineffective, its odd behavior with Neufectec has slammed the door to any relicensing of the technology that does work, and it’s locked in a law suit with Neufetec, which demands that Oxonica prove that it’s not infringing any patents.

    The canceled deal with Petrol Ofisi was worth about GBP6 million. And from what I hear, Oxonica’s legal costs is approaching GBP1 million already, which will make quite a dent in its margins.

    Being a public company can severely limit the room to maneuver, but in Oxonica’s case, it had no option. Existing investors weren’t prepared to invest any more, so it was initial public offering or bust.

    One of the biggest problems for Oxonica–and one that may return to haunt it–is that it’s very secretive about everything it does. Rather than disclosing information that’s typically required by the markets, the company has to have information dragged out from it.

    Even editors of financial publications (such as this one) tell stories of a complete lack of response from whatever passes as investor relations at Oxonica–never a good sign. A typical example is the Oxford Mail’s recent announcement of redundancies at Oxonica, which was initially denied and then confirmed.

    There’s been little mention about the patent battles or any changes to senior management. (Anyone who left Oxonica after the recent cull of top management, which slashed the burn rate by GBP300,000 a month, may have dodged a bullet.) These are items I would expect to influence share prices.

    So let’s take a look at the future for Oxonica. I’ve heard persistent rumors that the company’s whole energy business is in such a mess that it’s effectively up for sale, so what’s left?

    Oxonica has three other divisions: healthcare, security, and materials. The healthcare business is based on the biomarkers developed by Nanoplex—a 2006 acquisition—in a hugely competitive sector. And there are rumors that the head of that division has resigned.

    The security division uses the same nanoparticles developed by Nanoplex for biomarkers and just received an order worth a USD1 million.

    The materials division owns the intellectual property for titanium-dioxide nanoparticles manufactured under license and supplied to Boots, a UK pharmaceutical company and drug store retailer, for use in sunscreens. Most of the toxicologists I speak to say that this material shouldn’t be on the market.

    So what we have is a company with a market cap of GBP33 million (USD66 million) with just nearly enough cash to last until the end of the year, USD1 million worth of unwanted stock in nonfunctioning fuel additives and annual sales of a couple of million dollars, most of which will be sucked up by legal fees.

    Some people are betting that Oxonica will make it big in one of its applications, but we’ve been here before with companies like Nanosys, which was even broader and better funded.

    In the end, it comes down to that old nanotech problem: attempting to push a nano-enabled solution on a market that doesn’t really need one. As long as companies start with the technology rather than the market, this sort of situation will always occur.

    Tim Harper is contributing editor to The Real Nanotech Investor and founder and CEO of Cientifica, a leading global nanotech development and assessment firm.

  2. Hi Richard,

    It is true that first generation nano applications are not exciting. But, they make a profit for their respective companies, which is the bottom line.

    More over, as pointed out by the great Economist Samuelson, 90% of all wealth creation is due to incremental improvements, and there is no doubt that Nanotechnology is already having a HUGE influence in fields as diverse from Lasers to cosmetics.

    The real question here is the need of the world for Nano hyped technologies to succeed.

    Quite simply as a species we need breakthroughs in:

    Energy production and distribution (aka room temperature superconductors, printed solar cells and radical energy efficient devices)

    2nd Green revolution in food prodution.

    And finally

    Space Elevators!!! (real sorry)

    Therefore don’t worry be happy,as we are the String theory of the high tech world: we are the only game in town!


  3. I just through a log through my @$$hole neighbour’s window 🙂

    Part of the problem for the above dichotomy may be research timelines confused with commercialization timelines. I can’t tell for sure because I’ve only slept one of the last 4.5 days (thus the log). Do the above timelines assume product lifecycle all the way through to initial commercialization?

  4. …and I’ve recently been harrasssed/stalked by a former friend named Dustin (for the record I’m not gay, not that there’s anything wrong with that), who keystroked my e-mail password while I tried to set up his CD burner over the winter….

    I wonder what people really mean when they say synthetic biology. There seems to be two different definitions. It can mean integrating plastics and polymers into existing biological structures. It can also mean any novel functionalization of existing biological structures. Gotta be careful or synthetic biology will become a marketing buzzword just like nanotechnology.

  5. Sorry to Phillip but my name is Dustyn………….ahh I hear the outrage you are venting. But where I come from it is very, very, rare. I wouldn’t dare pollute my own name with an “i”.

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