Codon Devices – Outsourcing synthetic DNA creation

I had a chance to interview Kareem Saad, a serial entrepreneur who currently lives in Chicago, IL. Kareem has an MBA from the University of Chicago, is originally from Egypt, and has lived in the United Arab Emirates, Vancouver BC, San Francisco, Boston, and Chicago.

Our discussion was regarding Codon Devices which was started by Kareem in Cambridge, MA. Codon Devices was backed by a number of large, well-known venture capitalists including Kleiner Perkins, Highland Capital, Khosla Ventures and Flagship Ventures. Kareem was VP of Business Development and Strategic Marketing, he was responsible for inbound/outbound marketing, internal market communications, business development and partner management.

 

The company had a bunch of high-end IP it had developed in collaboration with Harvard and MIT which allowed it to rapidly and accurately create synthetic DNA that it would then sell as a service to companies engaged in basic research for product development. Those customers would then leverage the DNA samples in their R&D efforts.

The business model of the company evolved over time from one that provided these synthetic DNA samples as a service to R&D companies (e.g. in pharma, industrial foods, chemical sectors, etc…) to one that utilized its repertoire of IP for the development of its own pharmaceutical and chemical products.

 Initially, the target market was biotech/pharmaceutical companies such as Pfizer, Bristol Meyer Squib, and Merck. Also, industrial food manufacturers such as ADM, Cargill, Monsanto, and oil/chemical companies like Shell, and Dow Chemicals. When the company moved from being a synthetic DNA manufacturer to a product development company, the target market shrunk from a sell-to model to a much more collaborative/co-development model with these same companies. The idea was to move higher in the value-chain by leveraging the companies’ entire repertoire of IP and assets to ultimately reap more of the upside.

 Codon Devices was pursuing a new market. Traditionally, these same companies would attempt to manipulate the DNA to their specific needs in their own research labs. However, that process would require large amounts of capital investments in infrastructure and time.  Given that every lost day in the research effort translates to large opportunity cost, a more rapid and accurate way of generating DNA samples was something that these companies were more than happy to outsource.

The core of Codon Devices’ positioning was based on the strength of the Intellectual Property pool that the company had amassed and developed in collaboration with some of the most prestigious research/academic institutions in the world. Given the great value that their target market associated with the quality of the research in this space, this positioning strategy ended-up being extremely effective especially as the company transitioned from one business model to another.

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