July 22nd, 2010
The distance between food, cosmetics, chemicals, and medicine keeps shrinking, as evidenced by several recent commercial announcements. In May, food giant Kraft and its partner Medisyn, which specializes in discovery of novel active ingredients, announced an expansion of their collaboration. Specifically, in addition to developing health and wellness actives, they’ll be developing additional compounds aimed at improving food quality, food safety, and product performance. Delivering functional actives in food products is meant to keep the company growing in the face of a general stagnation in conventional food and beverages.
Meanwhile, BASF recently said it would spend $3.8 billion to acquire Cognis, which supplies raw materials for pharmaceuticals, food and beverages, dietary supplements, and cosmetics – new markets that the chemicals firm wants to enter. Now comes word that GlaxoSmithKline’s (GSK’s) consumer products division is close to launching sports nutrition drink Lucozade in the U.S. The company’s consumer business offers a more predictable revenue stream than the larger but more volatile pharmaceutical unit.
What’s behind the convergence of these ostensibly separate industries? It’s the growing understanding that chronic, lifestyle-associated diseases like obesity and diabetes (and their opposites of lifelong health and wellness) require lifestyle products – not simply medicines, procedures, or healthy habits, but a combination of them all.
DSM’s CEO recently bemoaned the pharma-grade scrutiny that European regulators are applying to foods. But foods are increasingly part of a larger strategy (among individuals as well as corporations) for addressing aging, increasing affluence, and chronic conditions (see the November 18, 2008 LRBJ*). Specifically, that strategy combines food with over-the-counter medicines, nutritional supplements, oral care, and skin care. Moreover, established players in these fields are looking to escape competition from generic drugmakers like Teva and lower-cost petrochemicals from rising Middle East rivals (see the January 5, 2010 LRBJ*). As such, these aren’t opportunistic moves by GSK, BASF, and Kraft – they’re a harbinger of the companies’ and the industries’ futures. Rivals like Pfizer, Bayer, DSM, and Unilever should take note.
*Client registration required.
Tags: BASF, Bayyer, Cognis, DSM, GlaxoSmithKline, Kraft, Medisyn, Pfizer, Unilever Posted by Mark Bunger in Targeted Delivery
July 16th, 2010
Last month, we released the Q1 2010 version of the Lux Research Solar Supply Tracker (see Solar Supply Tracker, Q1 2010 – client registration required). It includes figures on production and capacity data throughout the value chain through 2013.
Notably, the Tracker revealed that total module production for 2010 will be 12.6 GW, an increase of about 4.7 GW from 2009 production. We’ve also updated the Lux Research demand forecast, which predicts 12.1 GW of market demand in 2010, signifying a slight oversupply this year.
Crystalline silicon (x-Si) will account for 76% of total new module production in 2010. Most of the remaining share will be split between inorganic thin-film PV – particularly thin-film silicon (TF-Si) fueled by a slew of entrants – and cadmium telluride (CdTe), overwhelmingly provided by First Solar. Each will each account for 11% of 2010 module production. Companies like Avancis, Würth Solar, and Solibro will each produce a handful of Copper indium gallium diselenide (CIGS) modules in 2010, to round out the balance of new module production.
In terms of geography, Asia continues to dominate the manufacturing scene, accounting for 45% of polysilicon production, 78% of wafer production, and 71% of module production in 2010. Though Asia dominates in absolute production, several companies are adding capacity in North America, hoping to capitalize on promising demand in the U.S. and Canada, including Canadian Solar, SunPower, and Yingli.
A number of companies made notable changes to production and plans in Q1. Upgraded metallurgical silicon (UMG-Si) producers Dow Corning and Timminco stopped production at their Brazilian and Canadian facilities, respectively. Both companies cited decreased market demand, and will leave capacity idle with plans to reevaluate demand in a few years.
While UMG-Si players are hurting, top-tier polysilicon suppliers are thriving. The top six polysilicon producers – Hemlock, Wacker, GCL, OCI, REC, and MEMC – will supply 75% of the total polysilicon to the market in 2010. Further downstream, several companies beat expectations and are accelerating ramp schedules. Taiwanese wafer player Green Energy Technology, cellmaker Neo Solar Power, and Chinese module manufacturer Solarfun all increased or accelerated capacity addition plans, citing increasing customer demand. Although Solarfun garnered more market share with its increasing capacity, it could not crack the top five module manufacturers. First Solar remained in the top spot, followed by Suntech Power, Sharp, Canadian Solar, and Trina Solar.
Looking out several years, supply remains slightly above demand throughout the value chain – except at polysilicon, where a significant supply overhang remains. As we witnessed this quarter, this supply overhang forced more expensive producers to shut down production lines, as their processes are no longer economically viable. Expect more consolidation and additional polysilicon players shutting down production facilities, as well as significant shuffling of market share as new technologies gain traction, the vertical integration trend continues, and delayed subsidy cuts in Europe keep demand high.
Tags: Avancis, Canadian Solar, Dow Corning, GCL Silicon, Green Energy Technology, Hemlock, MEMC, Neo Solar Power, OCI, REC Group, Sharp, Solarfun, Solibro, SunPower, Suntech Power, Timminco, Trina Solar, Wacker Polisilicon, Wurth Solar, Yingli Posted by Andrew Soare in Solar
July 7th, 2010
Makers of products containing active ingredients – ranging from pharmaceuticals to perfumes – are increasingly aware that delivery systems are more than just packaging. They are often the enabling technology. Hence, an explosion of new approaches to targeted delivery of actives is coming to market, and we’ve launched the Lux Research Targeted Delivery Intelligence Service to bring you the latest analysis and updates of developments in this expanding field.
Targeted delivery is the collective name for technologies that steer and release active ingredients like drugs, nutrients, flavors, or pesticides to an intended place, time, environment, or other condition. In a recent report, we forecast that today’s $10 billion market for targeted delivery technologies in drugs, medical devices, food, personal care, and agricultural chemicals will grow to $24.6 billion by 2013, with approximately 89% of the market focused on drug delivery.
This week’s graphic highlights a selection of targeted delivery companies, specifically those developing platforms based on bio/chemical targeting. The companies we evaluated exploit a huge diversity of technologies, ranging from recombinant analogs of human proteins to light-activated compounds. As the Grid shows, Halozyme and Starpharma are emerging as Dominant winners driven by good clinical results and multi-million dollar milestone payments from top-tier partners. Companies like Armagen are in the High-potential quadrant with potentially breakthrough technologies getting drugs across the blood-brain barrier, but many have yet to achieve their business potential. Armagen has funding of just $15 million so far.
In the next two to ten years, developers like Halozyme and Starpharma have the potential to own blockbuster platforms that, like blockbuster drugs and diagnostics, and sell products for more than $1 billion annually. But fast followers will force them to keep improving in new and different directions, paralleling the “stent wars,” with breakthroughs and lawsuits aplenty.
Source: Lux Research report “Ranking Targeted Delivery Technologies on the Lux Innovation Grid.”
Tags: Armagen, Halozyme, Starpharma Posted by Mark Bunger in Biosciences, Targeted Delivery
July 7th, 2010
Johnson Controls reached some surprising conclusions in its latest Energy Efficiency Indicator Global Survey results, which it released in June. The survey includes feedback from 2,882 respondents. Among them, CEOs, CFOs, real estate leaders, and facility managers from organizations ranging from small businesses to global corporations, and from a variety of industries, including manufacturing, healthcare, information and communication technology, construction, consulting, retail, and government sectors.
It found that 71% of respondents say they are paying more attention to energy efficiency now than they were one year ago, and 85% indicate that energy efficiency is a priority in planned new construction and retrofit projects. Moreover and most surprisingly, 56% claimed to have invested more in energy efficiency in the last 12 months compared to historic levels – despite the global recession. Overall, 60% say that energy management is extremely or very important to their organizations. What’s more, respondents from India and China are more likely to consider energy management very or extremely important – 85% – compared with 53% of those in EU and the U.S.
Not surprisingly, 97% of the respondents said that cost savings was the top reason for interest in efficiency measures, which far outstripped other priorities, such as greenhouse gas reduction and enhancing public image and government/utility incentives. The results also showed that building owners and managers prefer to decrease the energy footprint of a building, rather than install onsite renewable energy and purchase renewable power by a 3:1 and 4:1 margin, respectively.
However, the economic incentive for improving energy efficiency also has its inverse; namely that 65% of respondents cited lack of capital budgets, uncertainty over savings, and insufficient payback as the primary barriers for adopting energy-efficient measures. Thus, cash is king and will remain the primary driver in decision-making in the buildings sector (as noted in our recent report “Diamonds in the Rough: Uncovering Opportunities in the $277 Billion Green Buildings Market“).
Fortunately, energy-efficiency technologies and their purveyors are getting due recognition from those in the position to adopt, and Property Assessed Clean Energy (PACE) bonds and similar financial packages in the EU and the U.S. (see the May 3, 2010 LRGJ – client registration required) will go a long way to solve capital issues and return on investment (ROI) problems. Also, the survey makes clear that technology developers – and investors looking to put money to work in the building efficiency space – should look to provide equipment and IT as a service, with its attendant lower upfront costs and risk, rather than traditional sales.
Tags: Johnson Controls Posted by Mike LoCascio in Green Buildings
July 2nd, 2010
It’s said that history doesn’t repeat itself, but sometimes it rhymes. Shortly after the BP Deepwater Horizon explosion in the Gulf of Mexico, biofuel supporters were chanting “Till, Baby, Till!” in a parody of offshore drilling supporters’ cries of “Drill, Baby, Drill!” at Sarah Palin rallies last year. In the same spirit, political commentators have sought the right rhyme for the giant oil spill itself among prior comparable catastrophes. The disaster was initially called “Obama’s Katrina” by the President’s political enemies, comparing his inaction to President Bush’s widely criticized slow response to Hurricane Katrina. When the scale of the disaster became known, BP’s chairman made a comparison to “Three-Mile Island,” implying that this disaster could put a stop to petroleum as the 1970s disaster effectively froze the U.S. nuclear industry. And now, as the spill has become the worst environmental disaster in U.S. history, even the president’s supporters are comparing it to 9/11 – with “The World is Flat” author Tom Friedman and others making the case that Obama is squandering a historic opportunity to unite the country and possibly the world behind renewable energy.
Given that biofuels are the most direct substitute for the petroleum that’s central to the current crisis, they are likely to receive the most attention from politicians and citizens alike. Moreover, they’re a natural fit for the climate and the economy of the southern U.S. states directly affected by the spill: if Mendel’s 1,200 gal/acre yield claims hold true, Alabama farmers could replace their 360,000 acres of cotton (worth about $250 million at 850 lbs/acre yields and a price of $0.78/lb) with miscanthus, and convert it using technology being developed in neighboring states, like BlueFire’s* cellulosic ethanol biorefinery in Mississippi or DuPont Danisco’s 250,000 gal/yr cellulosic ethanol plant in Tennessee to produce 432 million gallons of ethanol (worth nearly $1 billion at today’s spot price of $1.98). Gulf-state algae companies like PetroAlgae* and PetroSun could get a political and economic boost with their potential to provide biocrude and biodiesel. The risk, however, is that many sketchy biofuel startups will reap millions of taxpayer and investor dollars as they use the oil spill catastrophe to opportunistically promote technologies that have no chance of ever working.
What’s the best path forward for the U.S. government? Despite his acknowledged missteps, Bush’s response to 9/11 provides useful analogies and ideas. At the bottom line, there’s the scope: the total cost of the wars in Iraq and Afghanistan is $2.4 trillion according to the nonpartisan Congressional Budget Office, which would amount to a pretty large check for cleaner energy. Where neither Bush nor his then-rival Kerry opted to tax gasoline to fund the war and invest in alternative fuels when gas prices cost half what they do today, Obama should seize the moment and push to tax carbon. A carbon tax would encompass not just oil but also the coal industry, which the recent mining catastrophe shows is also ripe for action. As Bush united 22 federal agencies ranging from Defense to Transportation to Treasury under the Department of Homeland Security (DHS), Obama should create a Department of Energy and Environment Security that unites overlapping and conflicting activities at the U.S. Departments of Energy, Transportation, and Agriculture, as well as the Environmental Protection Agency. The envisioned agency would also expand the Coast Guard, and totally overhaul the corrupt and ineffective Minerals Management Service – effectively absorbing it, as the DHS absorbed the Immigration and Naturalization Service. And as Bush invested in developing and deploying new airport security technology like terahertz scanners, the country needs investment in developing and deploying new technology like biorefineries, bioremediation, and other alternative fuels (such as coal-bed methane) in development by startups like Luca, Taxon, Ciris, Profero, and in an ironic rhyme, by Synthetic Genomics in collaboration with BP.
* Client registration required.
To read more insights from Lux Research analysts visit Lux Populi.
Tags: BlueFire Ethanol, British Petroleum, Ciris, DuPont Danisco Cellulosic Ethanol, Luca, Mendel Biotechnology, PetroAlgae, Profero, Synthetic Genomics, Taxon Posted by Mark Bunger in Biosciences, Carbon
June 25th, 2010

Since 2000, solar technology has attracted enthusiastic support from venture capitalists (VCs), who have cumulatively invested over $7.5 billion. However, 2009 was a harrowing year for the solar industry and for its VC backers. In a recent Lux report, we observed that VC funding for solar firms had dropped 55% in 2009 to $1.52 billion. Deal sizes were down across the spectrum of products and technologies. The exception was late-stage deals (Series D and later).
For solar firms of every size, 2009 was not just a difficult year, it was an outright fight for survival. As we outlined in recent reports (e.g. Finding the Solar Market’s Nadir and Solar’s Impending Shakeout: Europe Loses Leadership as China Rises – client registration required) solar companies looking to “break out” in 2009 saw their plans delayed or squashed, while early start-ups unable to raise cash were forced to hunker down to wait out the storm. In reviewing VC funding by stage, M&A activity, and IPO data, we found that the overall deal value of early-stage deals fell more than 65% across Series A, B, and C investments. However, a select few companies – including Amonix, Solyndra, Siliken, and Innovalight – pulled in large sums during D series and subsequent rounds. Just as in 2008, select investors in these firms built on earlier investments, racing time and start-up costs en route to fully scaled production.
Consequently, late-stage rounds ballooned in 2009 as investors “doubled down” on their investments. In 2009, Series D or later investments garnered 43% of the total deal value, up from just 11% in 2008. Moving forward, the largest solar VC deals will be directed at late-stage rounds for cell and module companies as investors concentrate on their existing portfolios.
Source: Lux Research report “2009 Solar Financing: Double or Nothing.”
Tags: Amonix, Innovalight, Siliken, Solyndra Posted by Johanna Schmidtke in Solar
June 25th, 2010
We presented at the recent RadTech 2010 conference, a showcase for UV-curable coatings, inks, and adhesives. All technologies involved offer lower energy needs, faster throughput, lower volatile organic compound (VOC) releases, and/or lower-temperature operation by avoiding the need for heat-curing or long drying times. Many RadTech attendees were seeking new market opportunities for their technologies; and for many, solar headed their lists.
The photovoltaics section of the event featured a talk from Joshua Oliver of Sartomer, a division of oil giant Total, and a leading supplier of monomers, oligomers, and other raw materials for UV-curable products, including some used in solar applications. Joshua discussed the potential of UV-curable materials as encapsulant and barrier films, but explained that most UV-curable polymers can’t provide the barrier properties needed for solar applications. He added, however, that Sartomer found mixing UV-curable elements into a polymer similar to ethylene vinyl acetate (EVA) leads to a material that compares favorably to EVA in performance and durability after curing. Even so, UV-curable materials will have uphill battle to get into solar, however, unless they can eliminate the need for lamination altogether, as module manufacturers will be loath to add an additional curing tool to their lines.
Also on hand was transparent conductive film producer, Cambrios, which uses a UV-curable polymer as an overcoat to protect the silver nanowires that form its conductive layers. Teresa Ramos presented results showing that Cambrios could achieve sheet resistance as low as 50 ohm/sq with 96.6% light transmission, or 15 ohm/sq at 93.5% transmission, which signifies a performance improvement over incumbent transparent conductor indium tin oxide (ITO). Teresa noted that 10 ohm/sq to 20 ohm/sq is needed for inorganic thin-film PV users. However, when she discussed how Cambrios had achieved uniform properties over large areas – scaling up to large areas is one of the key challenges for non-active solar materials (see the report “Driving Down Solar Costs: Non-active Material Opportunities)” – the data were from films with 225 ohm/sq and 91% transmission. While Teresa was cagey in response to questions about its cost metrics (another critical factor for adoption) and commercialization plans, it appears that Cambrios still has some way to go before being able to address solar applications. That said, it remains a strong contender for transparent conductive films in display applications (see the March 22, 2010 LRNJ).
Tags: Cambrios, Sartomer Posted by Michael Holman in Nanomaterials, Solar
June 18th, 2010
It has been over two months since British Petroleum’s (BP) Deepwater Horizon offshore oil rig exploded, creating a massive oil spill along the Gulf coast. Earlier, we discussed BP’s use of Corexit, a chemical that breaks down the oil slick for bacterial consumption, or sinks it into the water to prevent it from reaching the shore. In that discussion, we noted Corexit’s potential health risks to humans, as well as marine life and water fowl.
Critics of how the massive oil slick has been handled so far have noted the technologies deployed to counter it are the same technologies used for the last several decades. Though many new technologies offer alternatives, many hurdles remain before a complete solution is found.
Part of the slowdown in adopting new technologies for this spill is that the process for vetting them requires analysis and approval from BP, the U.S. Coast Guard, and the Environmental Protection Agency (EPA), as well as other U.S. agencies. With the U.S. government taking charge it is unclear whether we can expect further “red tape” delays. The one silver lining is that all parties involved are entertaining the flood of new ideas and suggestions coming into the help lines – even those in the early stages of field testing – which could provide a potential market for a myriad of new technologies.
In the last several weeks many new technologies, especially companies with non-chemical water treatment technologies, have tried their hand at solving the problem. For example, Ecosphere Technologies has already gained approval from BP and is awaiting approvals from government agencies to deploy its Ozonix Systems, which uses an advanced oxidation process for water treatment. In an interesting convergence, actor Kevin Costner – star of the post-apocalyptic movie Waterworld – has privately funded the development of a centrifugal device with Ocean Therapy Solutions, which BP has approved for testing on the oil spill. The technology separates oil from water, stores it in tankers and returns purified water back to the gulf. John Houghtaling, chief executive of Ocean Therapy Solutions, claims that the largest of his company’s machines can separate oil from water at a rate of 200 gallons per minute.
Meanwhile, other companies fielding clean-up technologies – like MyCelx, AbTech Industries, and Gradek Energy – have since moved away from treating oil spills because of the approvals barriers. However, the Deepwater Horizon spill is also providing opportunities for software solutions and sensor technologies that help guide clean-up efforts. Software technologies that track the movement oil spills have an easier path into this market because they provide ongoing monitoring capability with lower capital costs, and we expect minimal regulatory hurdles given the nature of the services.
Tags: AbTech Industries, British Petroleum, Ecosphere Technologies, Gradek Energy, MyCelx, Ocean Therapy Solutions Posted by Reka Sumangali in Carbon, Water
June 9th, 2010
Sewage sludge from wastewater has long been narrowly viewed as an expensive nuisance, fit only for treatment and disposal. Utilities, however, have increasingly begun to explore technologies designed to help extract energy and other valuable products from wastewater sludge. As these technologies mature, the market opportunity for resource recovery will grow from $25 billion today to $45 billion in 2020, according to a recently released Lux Research report titled “Technologies Turn Waste into Profit.”
To evaluate the technologies competing for a share of the market, the report first separated them into two application segments: energy recovery and nutrient/material recovery. It then scored candidate technologies by their technical merits and maturity.
This week’s Graphic focuses on methods for recovering energy from sludge, mostly in the form of biogas or alternative fuels. The technologies in this category show the most promise, and are on track to capture 64% of the overall market in 2020.
Although recovering energy from sludge is relatively new as a business proposition, the basic technology has long been available in the form of anaerobic digesters. Notably, technologies that help improve production of biogas by enhancing anaerobic digestion offer the strongest value proposition. Hence, many of these technologies – including ultrasonic cavitation, mechanical disintegration and thermal hydrolysis – land in the Current Winners segment.
Deriving alternative fuels from sludge also shows promise, with caveats. Technologies, like gasification, pyrolysis, and supercritical water oxidation help to derive alternative fuels like syngas and biodiesel from sludge. These approaches scored highly on technical value due to their favorable energy balance, relatively low capital costs, and high solids removal. However, they are also equipment-intensive and, with a limited number of installations, they registered low on commercial maturity.
Posted by Heather Landis in Water
June 9th, 2010
Last month, scientists at the J. Craig Venter Institute (JCVI) announced the creation of a replicating “synthetic” bacterial cell – or, in other words, they may have created the world’s first synthetic life form.
The team synthesized a modified Mycoplasma mycoides genome about 1 million base pairs (bp) long from about 1,000 fragments that were each some 1,000 bp in length. Gene foundry Blue Heron fabricated the genome from basic biochemicals based on digital sequences, and assembled it in an Escherichia coli cell. The team then transplanted the genome into a third organism, Mycoplasma capricolum, the DNA of which was destroyed in the experiment. The cells began multiplying in culture, expressing the genes encoded only in the synthetic DNA – signifying what could arguably be synthetic life.
And argument is what ensued – predictably, since the achievement was pre-announced less than a year ago (see the September 1, 2009 LRBJ*), and foreseeable from the time the program was launched in 2007. So when Nature asked eight synthetic-biology experts about the implications for science and society, rival scientists sniffed that the synthetic cell “does not quite constitute a ‘synthetic cell’ by my definition” (Steen Rasmussen, Professor of Physics, University of Southern Denmark). At the same time, bioethicists fretted that “Nobody can be sure about the consequences of making new forms of life, and we must expect the unexpected and the unintended” (Mark Bedau, Professor of Philosophy and Humanities, Reed College, Oregon).
Friends of the Earth called for a stop to research until regulations are in place, and ETC Group (which cleverly named the then-uncreated organism “Synthia” in 2007) warned that “Craig Venter is handing this powerful technology to the world’s most irresponsible and environmentally damaging industry by partnering with the likes of BP and Exxon” (see the June 23, 2009 LRBJ*). The Vatican viewed the results as “positive,” before pointedly adding an injunction to “never forget that there is only one creator” (hint: not Venter). Meanwhile the White House called for a commission to study the implications.
Venter himself deflected the question, telling CNN it was a “living self-replicating cell” with “no genetic ancestors… whose DNA was made chemically and designed in the computer.” CNN’s response – “Some critics suggest you shouldn’t make life from a computer” – helped illustrate the profound vacuity of mainstream media on this topic.
So, did the JCVI create life? While the question is a philosophical and linguistic morass, for what it’s worth, we’d say the answer is yes. Although the first step was a cell with a synthetic genome rather than a “synthetic cell,” all of its progeny sprung from lab chemicals. Even if the initial M. capricolum cell was once alive, it was certainly not living with its DNA destroyed. And the synthetic DNA was not alive before it was patched into sequence by Blue Heron and the JCVI team. By combining two collections of non-living biomolecules and creating something capable of metabolism and self-replication, the JCVI set in motion a process that must die to end. However, as monumental as JCVI’s achievement is, it will soon be yesterday’s news. In practical terms, it may have manufactured life but did not even attempt to “design” or “control” life, as the genome it used has only cosmetic differences from M. mycoides’ natural genetic code. But designing novel genes is already common, and designer genes will certainly be put into future synthetic cells. In sum, this achievement represents both the culmination of many incremental steps (and the first of many more) on a spectrum of human-created life that will almost certainly advance beyond the point of dispute in coming years, and many people will always regard this as the watershed moment.
So what will the reception and impact of this work be? “Living” technologies ranging from organic chemistry to in-vitro fertilization have met huge initial ethical opposition, but ultimately lived or died on their merits (see the April 28, 2009 LRBJ*). Synthetic biology’s value will be determined by the benefit brought by products like biofuels and medicines from Synthetic Genomics, Gevo, Codexis, Amyris, and dozens of other firms using the technology (see the December 8, 2009 LRBJ*). Today’s “Synthia” cost $30 million to create. But the history of past technologies indicates that she will seem quaintly simple and exorbitantly expensive when costs plummet (see the February 10, 2009 LRBJ*), finance soars (see the August 25, 2009 LRBJ*), patenting battles begin (see the June 23, 2009 LRBJ*), and commercial success is widespread (see the report “Synthetic Biology’s Commercial Roadmap”) a few years hence.
* Client registration required.
Tags: Amyris, Blue Heron, Codexis, Gevo, Synthetic Genomics Posted by Mark Bunger in Biosciences
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