Chemistry & Biology, Vol. 12, 503–505, May, 2005, ©2005 Elsevier Ltd All rights reserved. DOI 10.1016/j.chembiol.2005.05.003

Innovations

Diversa Builds a Business with Designer Bacteria

Three years ago Eric Mathur, VP of nscientific affairs and founding part- mner of Diversa, a 330-person San cDiego biotech company, went mi- wcrobe hunting in the Uzon Caldera nin Siberia’s Kamchatka Peninsula. BAccompanying him were two for- Dmer Soviet bioweapons scientists cunder a Department of Energy pro-liferation-prevention program. They bscraped up some sediment from can alkaline hot spring. “We isolated tthe genomes from the community Dof microorganisms residing in the nhot springs,” Mathur recalled. “We achopped them up, put them in labo- lratory hosts, and developed com- Pplex metagenomic libraries.” Theresult was Luminase, an enzyme forbleaching paper pulp.

“Luminase enzymes enable millsto reduce the amount of chlorine di- toxide (ClO2) used to bleach paper Ypulp by up to 28%, thus reducing

tboth costs and pollution. Diversa istargeting a quarter of the $2 billion fpulp-chemical market. Because the zoriginal microbe was collected from

ha hot alkaline spring, Luminase canfunction at high temperatures and eat pH values in the 8–10 range. Un- —der these conditions, most enzymesdenature. Diversa released Lumi- fnase, as well as Cottonase, an en- nzyme for textiles, as a commercial

aproduct in 2004.Diversa is one of a spate of com-

panies that sprang up in the last tenyears to use directed-evolution tech-

oniques to develop commercial prod-aucts. Diversa’s bioengineered en-azymes are precisely tailored tomvarious industrial-process and phar-lmaceutical applications, includingwpulp, vegetable-oil processing, ani-smal care, aquaculture, and anti-ainfectives. According to the Ohiomconsultancy Freedonia Group, the

U.S. enzyme industry in 2003 wasgworth $1.2 billion.wHealthcare Ventures, a venture-Dcapital firm, incorporated the com-1pany in 1992 as a sister firm to Hu-rman Genome Sciences to developntechnologies to identify and modifytmicrobial genes with industrial po-

tential, says Martin Sabarsky, Se- d

ior Director, Corporate Develop- slent and Investor Relations. The

ompany went through a few un-tieldy incarnations as Industrial Ge-qome Sciences and Recombinanttiocatalysis, Inc, but was renamedpiversa as a nod to its diverse mi-srobial sources and applications.iDiversa’s first products were sta-sle Pyrolase enzymes used in se-aondary oil and gas recovery. Onenype of Pyrolase was derived from

NA extracted from microorga-gisms found in a hydrothermal vent,end another version from a bug col-Dected from a Yellowstone Nationalcark hot spring.

gmh

The name of the game is aEo find the right catalyst.sou can do this by muta-

ion, or you can do it by neinding the perfect en-Myme in nature. But you t

ave to do it quickly and shfficiently.”vFrances H. Arnold, pro- ceessor of chemical engi-eeering and biochemistryb

t Caltech tw

p

Diversa’s scientists collect micro- srganisms in exotic locations such qs deep-ocean vents, the arctic,nd the digestive systems of ter- uites on the premise that it is a lot p

ess work to derive an enzyme that sorks in extreme conditions if one mtarts with microorganisms already sdapted to living in such environ- gents. uIn order to legally collect microor- t

anisms abroad, Diversa works within the Convention of Biological hiversity, a treaty ratified in 1992 by r88 nations. Diversa must negotiate ooyalties and access with the desig- cated environmental steward from ihat country. Collections are usually u

aone by local scientists and grad

tudents, although Mathur particu-arly enjoys going on expeditions.

There are 20 types of amino acidshat occur naturally; the specific se-uence of amino acids determines

he nature of the protein. At Diversa,rotein molecules are comprehen-ively mutagenized, and the result-ng enzymes are screened for de-ired attributes. Sometimes all thettributes already exist in the origi-al organism.Diversa scientists identify the

ene that encodes the enzyme andxtract that particular sequence ofNA from the organism. In a pro-ess of recursive ensemble muta-enesis, or “Direct Evolution,” theyutate the gene extracted from the

ost organism and transplant it intonother vector, such as a hardy. coli strain that is easy to grow bytandard commercial methods.“Earlier bioengineering compa-

ies such as Novazymes and Gen-ncor never optimized enzymes,”athur says. Companies reinserted

he engineered DNA back into theame organism to get high levels ofomologous gene expression. Di-ersa’s innovation was to metaboli-ally engineer the host and put thengineered DNA derived from thextremophiles into hosts that cane grown in industrialized quanti-

ies. “By engineering the organism,e can engineer a high level of ex-ression for heterologous genes,”ays Mathur, “then produce greatuantities out of it.”The processes that the company

ses to derive its enzymes androducts are proprietary and expen-ive. “With our ultra-high throughputethods we can process a billion

amples a day,” Mathur says. “Gi-amatrix, our premier platform,ses 400,000 wells per plate, usinghe same footprint but a number ofells at three orders of magnitudeigher than extant drug-companyobotics. Each microwell containsnly 50 nl of liquid substrates.” Theompany patented protein-engineer-

ng techniques such as Gene Site Sat-ration Mutagenesis (GSSM), which is

library of single-point mutations,

Chemistry & Biology504

and GeneReassembly Technologies. oThe optimization problem is not sim- o

hple; every enzyme usually containsbetween 100 and 300 amino acids w

aand the matrix that has to be opti-mized is N × 20, where N is the 1

pnumber of amino acids in the en-zyme and 20 is the number of amino z

bacids available. The number of pos-sible permutations is huge. Think on g

tthe order of 10106.

Statistical methods help to re- vaduce the number of experiments

that need to be performed. Thismethod is known as DOE, design of Aexperiments. This algorithm was Dactually developed during WWII for moptimizing many input/output prob- olems and processes. DOE is com- Emonly used in combinatorial chem- mistry such as drug screening. Mathur fexplains that they take all 19 pos- lsible changes for each amino acid iand screen for phenotype improve- ements. Once they find the residues oand amino acids that result in im- oprovement, they combine these mu- stations and screen that library for bthe best variant. “And that is how fwe get around the big, giant num- cbers,” says Mathur. m

dcBusiness Strategy

Diversa’s near-term revenue sources cAare industrial, chemical—such as

Luminase, which was commercial- sized within 30 months—and animalfeeds, products that have a rela- c

wtively brief development cycle of sixto nine months. These products r

aonly require the EPA to determinewhether they are toxic, as opposed t

wto more extensive FDA review. Me-dium-term (about 5 years) but higher- f

lvalue-added products are pharma-ceutical intermediates, such as an 3

3intermediate enzyme for Lipitor (aregistered trademark of Pfizer, Inc.) (

asynthesis. Long-term products aresmall-molecule drugs and protein m

ttherapeutics such as antibodies.But how much can Diversa dif- w

tferentiate its products? Mathur ac-knowledged that understanding bwhat the market will bear is an is-sue. Diversa has a group of market m

oanalysts who figure out potentialmarket opportunities for the com- a

vpany’s products. “Our challenge isto come out with lead candidates t

ereally quickly,” Mathur says. “In thespace of evolution, we have many m

acompetitors, but we own the space

f accessing unique methods of bi-logical diversity.” The companyolds 200 patents. Some processesere patented close to 10 yearsgo. Because the life of a patent is7 years, the company faces com-etition from potential generic en-ymes as well as enzymes derivedy other methods, and in other or-anisms. In these brutally competi-ive industries, innovation is onlyalued when it lowers costs. “It isll about costs,” Mathur says.

pplicationsiversa and its competitors areaking enzymes for the productionf specific compound enantiomers.nantiomers are isomers that areirror images of each other and dif-

er in the way they interact with po-arized light. Because all our biolog-cal functions are performed bynzymes and enzymes are enanti-mer-specific, i.e., they can act onne enantiomer and not the other,pecific chirality (the property ofeing right or left handed) is crucial

or anything that relates to biologi-al function. For example, the L iso-er of Thalidomide causes birthefects, whereas the D isomer isompletely safe. The FDA requireshirally pure chemicals for drugs.nd enzymes are an exquisitelypecific way to achieve this.An example of an enzyme with

hiral selectivity is Nitrilase. Thereere originally nine types of bacte-

ial nitrilase in the public domain,nd Diversa patented 237 sequenceshat the company had discoveredith its patented approach involving

unctional screening of metagenomicibraries. Diversa’s nitrilases convert-hydroxyglutaronitrile to either (S)--hydroxy-4-cyanobutyric acid or

R)-3-hydroxy-4-cyanobutyric acid,precursor of Lipitor. With the un-odified enzyme, only 89% of the to-

al 3-hydroxy-4-cyanobutyric acidas the (R)-enantiomer. Diversa fur-

her bioengineered the enzyme toe 99% specific.Enzymes that are added to ani-al feed to improve the digestibilityf certain food elements make upnother big market. Since 2003, Di-ersa has sold hundreds of tons ofhermally stable Phyzyme XP, annzyme that helps monogastric ani-als such as hogs and chickens

bsorb phosphorus from grain, in

the U.S. alone. The product is nowwaiting final approval in Europe. To-gether with Bayer Animal Health,Diversa recently co-developed afish vaccine for Salmonid Rickett-sial Septicemia (SRS), an infectionthat was destroying up to 20% ofthe crop of Chilean salmon farmers.The vaccine eliminates the needto use antibiotics to contain thedisease.

The FutureDiversa is moving into what it terms"metagenomics,” or how multiplegenes act in concert to perform atask, as in a multi-step process onan assembly line. “We are a sciencemoving beyond the biology of sin-gle organisms,” says Mathur. One ofthe main challenges put forth atBIO, the biotech industry meetingthis year, was how to break downlignin cellulose and other biomass.Diversa is looking for the solution intermite guts. The company is se-quencing everything it finds there.“We don’t know what we are look-ing for,” says Mathur. “All organismshave pathways to encode for smallenzymes. Microbial consortia in thehindgut of termites are responsiblefor producing the suite of enzymesnecessary for the conversion of lig-nocellulose to fermentable sugars.”

Professor of Chemical Engineer-ing and Biochemistry at CaltechFrances H. Arnold was an earlyconsultant to the precursor to Di-versa and rival Maxygen. “It soundsgreat, but it all comes down to whatit costs,” she says. She consideredtheir main challenge to be targetingthe right problems, namely thosethat give enzymes a chance to com-pete. Arnold believes that the cata-lyst-engineering technology is pow-erful but worries that process andengineering issues still limit manyapplications.

Another issue is that the pool ofcatalyst possibilities that exist in or-ganisms that live in extreme condi-tions is limited. “The name of thegame is to find the right catalyst,”says Arnold. “You can do this bymutation, or you can do it by findingthe perfect enzyme in nature. Butyou have to do it quickly and effi-ciently.”

Although all competitors say theirapproaches are unique, says Ar-nold, “In my opinion they are pretty

Innovations505

much the same. Diversa stands outin having a broad platform of ap-proaches, solving the problem frommany different angles. This is good,because it is not clear a priori whichapproach is going to be success-ful.”

Wendy Wolfson (wendywolfson@nasw.org)is a freelance science writer based in Som-erville, MA.