Highlights and Analysis for the Broader Industry of Bayer's Crop Protection Product Development Report
Highlights and Analysis for the Broader Industry of Bayer's Crop Protection Product Development Report
Bayer recently released its report on product development, from initial R&D to commercialization, including everything in between.
The area I want to highlight is what Bayer calls “the evolution of the discovery process at Bayer”:
New and Selective Modes of Action
Profile-based design of new molecules
Biologicals
Formulations
Open innovation, partnerships, and collaborations
New and Selective Modes of Action
In the past, crop protection R&D efforts relied, in large part, on advancing existing modes of action (MoAs) – essentially creating improved versions of current chemistry.
The future at Bayer looks very different, according to the report.
Rather than screening and selecting molecular leads in the hunt for the next promising MoA, Bayer is focused on designing the next crop protection molecules with specific performance and safety profiles.
Bayer calls this their CropKey approach – a new approach to discovering “locks” that change or inhibit the action of a protein necessary to a weed, insect, or disease pest.
CropKey is what I’ll summarize as Bayer’s precision discovery platform, which is one of the efforts to speed up the identification of novel modes of action and overcome Eroom’s Law in Crop Protection.
From 2016 Phillips Macdougall data, we can see the costs to bring crop protection products to market have gone up along with the time to development:
I tend to over-index on the performance side of products. Still, the safety profile is incredibly important regarding the total cost of bringing a new product to market and the “development” side of things.
The “research” component has remained relatively unchanged— the development has outpaced. If Bayer can be more precise in the “design” of the molecule, it can not only speed up the time to market but also reduce the cost of bringing it to market by opting for safer products.
So far, CropKey has delivered more than 30 new molecular targets that are being looked at. More than ten newly validated targets have been moved to the early research stage, and more than five novel MoAs and screening technologies are being evaluated in advanced research. In June of 2023, Bayer shared a couple of examples at their Innovation Summit:
It’s unclear how the numbers in their pipeline compare to where they would have been a decade ago or if there is a cost advantage to getting that many molecules that far along the R&D process compared to a decade ago.
I am surprised there isn’t an emphasis on this from a company like Bayer— R&D is expensive and notoriously difficult to show a consistent return. However, when concrete numbers like the above are stated, it presents an opportunity for Bayer executives to illustrate whether they are truly gaining efficiency with their R&D spend.
Biologicals and Open Innovation
In June, at their Innovation Summit, Bayer quantified their bold ambitions to grow current revenue of biologicals revenue from €200 million to €1.5 billion in 2035:
Bayer is focused on developing biologicals in two categories, according to the report:
biocontrol (crop protection products)
biostimulants (crop nutrition products supporting plant processes, such as nitrogen fixation).
Biocontrol as a point of emphasis is not surprising, and they state their focuses in the report:
In biocontrol, our immediate priority is to strengthen our portfolio in fruits and vegetables, followed by arable crops.
Number two is the most notable:
With biostimulants, we are focusing on increasing our offering in nitrogen fixation seed treatment products, which will enable plants to get more nutrition from air or soil, leading to improved yield.
Bayer has actively called out crop nutrition as an area for growth in their business. This isn’t a surprise, as Bayer had been emphasizing the goal of their original Gingko Bioworks JV, Joyn Bio, as prioritizing N fixation from the start.
To this day, we have not publicly heard of Joyn Bio's progress.
I have discussed the blurring of crop protection and crop nutrition lines for the last couple of years within Upstream.
This blurring is a continued area of interest, which I have also highlighted within Upstream, including in The Sauce Paradox, alluding to the cultural and core competency challenges of organizations like Bayer when it comes to bringing nutrition products to market.
Their progress on the nitrogen-fixing biostimulant front is worth watching— even in the interim. Companies like Pivot Bio have stated a priority to collaborate directly with leading seed companies. Bayer has the opportunity to not only access an entirely different budget of the farmer to increase the profit pool it captures from (fertilizer budget) but also gain experience with nutrition conversations, product positioning, and product usage as they develop their products through Joyn Bio.
Bayer also emphasized its microbial library:
Our collection of more than 125,000 microbial strains allows us to use genetic diversity to develop new and beneficial products for farmers all over the world.
Biologicals are more than just living organisms, though. There are several macro categories and subcategories of bio-based molecules: