The Exchanges

Q So, but like with, with fetal bovine serum, is the reason you need to get away from that because you're, the whole point is to move away from like an animal-driven industry in cellular ag, or are you saying it's just expensive?

A It's both. In my opinion, if we want this mission-driven technology to be mission-driven, we should get away from the animal expenses, and it doesn't make sense for us to still be harvesting cows for fetuses to grow meat without, like, it doesn't add up for me. Um, but it also is a, a very big cost center, um, so that's true. And then the third reason is fetal bovine serum is like an organic Thing. Like, fetuses are different. If you've ever done research in the lab, you know that you can only do experiments where you use one batch of fetal bovine serum for your experiment because it's so variant from batch to batch. So that's another reason you'd want to get away from that is if you're trying to do this, like, big standardized manufacturing process, you don't want to be throwing this, like, mixture of random stuff in your In your lot. Um, so there, those are kind of three reasons. And those are, those are also three valid reasons for pharma too. So if, if we in cell ag world were able to kind of shift the standard away from FBS, and that was adopted by biopharma, which a lot of people say it is, you know, that would be a win for everyone too. But anyway, I'm a little bit getting off track here.

AI assessment note: “It's both. In my opinion, if we want this mission-driven technology”

Q sector. Like, there has been, there's been a wave of companies that have arrived. I think they have broadly underperformed expectations, at least from a, like, timing perspective. We don't see cellular ag products all over the supermarket aisles yet, so walk me through the history a little bit, and who has been out there, what have they been trying to do, and then, like, what has happened so far?

A Sure. I mean, depends how far back you want to go. I mean, we've seen mentions of growing food from cells like a hundred years ago. Alexis Carell was a, uh, researcher who was trying to grow heart tissue in a jar, and then Winston Churchill had a quote about it in the twenties. Um, so it goes way, way back, but I think the, the way back you are talking about is more, um, This kind of recent history, especially with the VC funded companies. And I would say that started around 20, 1415, 20, 1415. And what happened is we just saw a whole bunch of companies pop up at the same time, all saying, we're going to produce meat from cells. And Oh, it's almost 10 years later. Wow. It's 10 years later. Um, these companies, you know, you, you do see some announcements like little regulatory approvals, tastings here and there. There have been, you know, quote unquote products on the market, but I wouldn't say it's like in a disruptive way. You know, it's, I don't think it's displacing meat really. Um, and that first wave of companies from about 20 15, 20 16, 20 17 all came out saying, you know, I'm, we're the beef company. We're the pork company. We're the chicken company, which is a little bit funny because it's kind of mimicking the meat companies that we already know, like this kind of vertically integrated, you know, our business is determined by the animal. But of course, if you're growi…

AI assessment note: “I would say that started around 20, 1415... what happened is we just saw”

Q produce this stuff at scale. It's just way too expensive. And I could imagine a regulatory challenge. You, you mentioned little regulatory announcements, but like, it is actually hard, it turns out, to get this stuff licensed. So I'm sure it's some combination, but like, how would you rank order the reasons why we've seen a decade of, um, of work put into this, but not yet, like, widespread adoption?

A Yeah, I think, I think there's one, at least one I can think of right now, upstream challenge of all of those challenges, which is, A lot of the technology behind growing meat from cells really comes from like the biomedical, pharma, medicine world, and we're talking about food, and food and medicine are still extremely siloed when it comes to funding bodies, like we have the NIH, the USDA, so that's one example, but also in terms of schools, like a lot of land-grant universities are doing the Ag research, and it's kind of these, like, more coastal private schools that are doing the biomedical research, and it's also very separate in terms of just disciplines. Like, when you go to do a degree, it's unlikely you're going to do courses in both of those fields at the same time. So when you try to advance an idea like cellular agriculture, even in one lab at one university, it's extremely hard because you don't have the right skills in the right application. You have someone with biomedical fundings, like, why would I pursue an ag thing? Like, we have so much... Funding flowing. We don't need to be as cost sensitive with our research. And then someone in ag may not have as much familiarity with the actual cell culture techniques. So there's kind of that structural problem that's just way upstream of all these other things. If you can solve that problem, which I think New Harvest ha…

AI assessment note: “I would start with technical challenges as a first challenge”

Q Right, okay. Alright, so that's the CapEx side, and then on the media side, you mentioned growth factors are the big driver of cost, and also where there's this, this thing we need to probably move away from for other reasons as well. There's other OpEx, I mean, you mentioned not a lot of people, but, um, what are the other big components of OpEx?

A Well, I, so this is a very, very tiny component, so I'm not really answering your question, but we need to, of course, have the cells in there that you're going to be feeding all this stuff to, but if we, you know, live in my ideal world, the cells are some standardized thing that people know how to use, and, you know, they're licensed or something, and it's a very low-cost thing, so the cells are part of that, um, and then I think the other big cost is the downstream processing, so after you actually grow up, A bunch of cells, and you harvest the cells, what, what are the multiple steps you're going to take to turn those cells into your final food product? That could be a huge range of things, depending on how clever you are in your process, or if you even want to sell a final food product, or if you just want to sell this, this cell mass as an ingredient, or something like that. Um, but I will say, you know, the cell mass is going to be More, you know, quote unquote, processed than, like, an animal carcass, in a, in a sense. Like, you won't have to be removing bones and tissue and that kind of stuff, but there will be some other kind of separation techniques. So, yes, to summarize, I think the downstream processing is probably the biggest next cost. And then, of course, there's kind of energy costs associated with the running the place.

AI assessment note: “I think the downstream processing is probably the biggest next cost.”

Q fact, this may be kind of what you're doing, but if, if you could wave a big magic wand and direct, like, lots of research to driving down costs, where would you be directing it? Is it focusing on the Growth factors. Is it focusing on the infrastructure, the equipment, the capex? Is it, is it something else? Like, where do you think is the biggest lever for cost reduction?

A Um, we need to build a few shared resources for the whole field. So I would build a shared facility, which is kind of a first pilot facility, because what's happening now is the companies are all building their own separate facilities. There's no standardization. If one works, great. If one doesn't work, like, no one would know why it doesn't work, and then it doesn't prevent the next person from spending their Fifty million dollars better on their facility. So I'd, I'd create a shared facility, which is kind of more of like an open research place, and it is designed not to manufacture at scale, it's designed to manufacture at some kind of reasonable pilot scale, but designed to be very tunable. So if something goes weird, it's, you know, the facility itself can be, and the bioreactors themselves can be tuned. Okay, we need to make it warmer, colder, blah, blah, blah, whatever. Um, And I think that shared facility would really generate a lot of data to help a lot of these companies, um, and inform them how they need to be building their stuff. We also need these facilities because with more open research around a shared facility, we can Guide, like, the regulatory and safety assessments a little bit more, um, in a way that kind of opens things up for everybody, rather than having whatever company is talking to the regulator right now set a standard for everybody else. You know,…

AI assessment note: “we need to build a few shared resources for the whole field. So I would”

Q ag for dairy and stuff like that. And, but then second, some of them doing the thing that I would have sort of anticipated, which is like the, the Tesla playbook, start high end luxury. So go after, right? Like something very expensive so that you can be closer to cost competitive sooner. Is, is that generally true? Like those are two new frontiers of cellular agriculture startups, I guess.

A Yeah. Well, I will say, you know, the 2014, 15 vintage companies, I don't know what they're actually doing now. Like, they came out of the gate saying we're the chicken pork. What they're actually doing now, I, I can't comment on. But I think those newer companies that, you know, they come up with a maybe more specific business plan that does tie to that, okay, we actually do need to come up with something that's a little bit higher cost density product. And they also tie it to some scientific reason for Why it needs to be that way. So, um, one company is called Gourmet, and they're making a foie gras. So, oh, that makes sense. You know, even if you don't care about being vegan or something, I think a lot of us will be like, yeah, flagra is a pretty cruel product to eat.

AI assessment note: “newer companies that, you know, they come up with a maybe more specific business plan”

Q from another sector with a lot higher value capture, and then trying to apply them here and getting initially the same result, which is you can produce lab grown, you can produce cellular chicken breast or whatever it's going to be, but it's going to be Orders of magnitude more expensive than market prices. To a first order, is that, like, the right way to think about the cost challenge?

A Um, I think that is, that is a way to think about the cost challenge, but another way to think about the cost challenge is that biopharma has set this precedent that this is what the price of things should be, and they have no incentive to bring the prices down. Cellular agriculture does have an incentive to bring the price down, and it must bring the price down. Um, and, you know, there's a lot of, a lot of people are attracted to cellular agriculture for all these kind of different mission reasons, you know. Climate reasons, animal welfare, people want to see the end of factory farming. Recently, I've met some people who are into cell ag just because they think that's the only way that, that biopharma could become accessible to most of the world, is if we bring down the cost in a different place, because biopharma itself will never bring its own cost down. Um, so yes, if we're using biopharma mindset to grow chicken, Then yes, it will be very expensive. And it's going to be expensive just out of the gate anyway, because tech is expensive when you start. Um, but I also think if we're willing to have that same disruptive paradigm shifting mentality, that maybe the manufacturer of this looks more like vitamin or food processing or those kind of other still factories, still produce stuff that you consume, but isn't to the level of biopharma that we really can Bring those costs do…

AI assessment note: “so yes, if we're using biopharma mindset to grow chicken, Then yes, it will”

Q Right. Do we have any data points that you think are indicative or valuable at this point as to current production costs?

A I'm, so there's a great paper written by David Humbert on, um, producing cultivated meat, but I don't want to cite numbers from it because it is very much kind of from within the biopharma paradigm. So it's kind of like, if we use the technology that we have today to produce cultivated meat in this context, which of course is kind of higher regulatory standards and stringent and everything, it's, He thinks that cultivated meat is like, is not economically feasible. And I invite people to read that and kind of unpack that more if they'd like to. I'm not going to dig into those numbers because I don't think there are good apples to apples comparison of where we're actually trying to go with this technology, which is something that is more of like a food processing facility, different scale, and maybe looking at Dave, Dave's paper and saying, hey, all these places that are really expensive, that's exactly where science needs to be applied because it has not been In biopharma. It's not saying it's impossible. It's just saying no one has tried to do this because there's been no incentive to do so before. So. You can take that. And maybe I'll give you a number, you can choose if it's useful to you. But a couple years ago, someone put out this little kind of study where they, they're like, if I bought all laboratory ingredients to make a batch of chocolate chip cookies, how much would…

AI assessment note: “I don't think there are good apples to apples comparison”

Q the cost stack. Say I do want to produce cellular meat, whatever kind it's going to be. Um, what are the major components of my cost and what do we, what do we know about where the cost Lands today, to the extent that there is data that's relevant here, just to give us some kind of benchmark for like, how steep is the curve we have to go down?

A Uh, okay, so pretend I'm a company, and I'm gonna manufacture cultivated meat. So what I have to do first is build a facility. Well, actually, even that has, like, some asterisks beside it, because maybe there are existing facilities out there that could be adapted to what I need. I've heard everything from adapting, like, bioethanol plants to using even vaccine manufacturing facilities that are adaptable. So anyway... Yeah. We can go down those roots, but you, you want a facility that can grow salves at scale. Um, so that's a controlled facility. Imagine like a brewery kind of visual of like lots of stainless steel and so on. Um, controlled environment, not a lot of staff, like just to, you know, a few, once you get your process up and running and it's not like an R&D process anymore, you know, it's just a factory. You don't actually need that many staff. Um, so you build that factory. So that's your kind of first capital cost. The second thing and the kind of most ongoing cost is what you actually put into those bioreactors and what you put into the facility. Um, so the media that you're feeding the cells is probably going to be the thing that costs the most. Same, same like with animals. It's like the feed that's the biggest contributor to the cost of a cow. Um, so Media. So of the things in media, you know, there's a lot of basic, you know, water, amino acids, carbohydrates…

AI assessment note: “the media that you're feeding the cells is probably going to be the thing that costs the most”