Understanding Advanced Biotechnology Commercialization, Pt 2

Mark Warner HeadshotPart 2 – Project Execution

By Mark Warner, PE, Founder, Warner Advisors LLC, Special to The Digest

In the first release of the Understanding Advanced Biotechnology Commercialization series, the overall commercialization process was outlined and a detailed review of the project development phase presented. It covered early concept development and preparation of sufficient engineering detail to obtain funding from sources such as commercial banks or through federal loan guarantees. This is an exciting time for a new technology company, as it is the point when a technology startup is given the green light to turn their process into steel in the ground. While exciting, it is also a make or break moment.

The best analogy I can give to represent the challenges and rewards of the new biotechnology commercialization process is watching the movie Apollo 13. In the movie, after having major mechanical issues, the crew is facing the challenge of re-entering the earth’s atmosphere. There is a long discussion of the re-entry window and the sliver of angle that allows for a safe return. Try to re-enter the atmosphere at too shallow of an angle, and you will bounce off; come in too steep and you will burn up in the atmosphere. It is only those who can hit the narrow re-entry window that survive and prosper. This is ironically similar to new biotechnology commercialization. Commercialize too aggressively and you may start up a money losing operation that burns through all of your cash. Study the concept for too long and you will run out of cash before you can bring the venture online. It is the proper balance of lean-forward aggression and smart risk-based decisions that allows certain ventures to reach commercial operation.

The amount of funding secured for project execution is often equal to all of the funding burned by the organization to date, and will ultimately be routed through a large construction firm to execute the project. Understanding how to make the selection of the right engineering and construction firm, along with the process that will follow, is critical to gaining commercial success. This second installment of the series will cover engineering and construction of a first-of-a-kind commercial scale biotechnology. It will answer common questions including:

  • How does my funding source impact my options for construction contracting?
  • The capital cost estimate is higher than our funding, what can we do to reduce the capital cost?
  • Am I ready to order my key equipment and what is involved?
  • What is an “EPC” and a “wrap” and how are they related?

This series is intended for anyone who is working to take a new technology from the bench/pilot stage to a commercial operation. This includes engineers, scientists, management and investors, and anyone who will benefit from a detailed understanding of the process before they begin. The in-depth review of the project execution phase that can be found here:

About the author

Mark Warner is a registered professional engineer with 30 years of experience in process commercialization, focusing for the last 10 years on taking first-of-a-kind-technologies from bench-top to commercial operation. He has worked for four companies who have held the #1 spot in biofuels digest’s top company list, in a range of advanced biotechnologies including biodiesel, cellulosic ethanol, phototrophic algae, heterotrophic algae and innovative food products. He is the founder of Warner Advisors, providing consulting services and acting in interim engineering leadership roles for advanced bioeconomy clients. He can be reached at mark@warneradvisorsllc.com or visit www.warneradvisorsllc.com.

 

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