CEO interview BRAIN

CEO Interview

Interview with Adriaan Moelker, CEO of BRAIN Biotech AG


Dutchman Adriaan Moelker has been CEO of Hesse-based BRAIN Biotech AG since spring 2020. Founded in 1993, the company is considered a pioneer of the German biotechnology industry and committed itself early on to the topic of biobased products and production processes, more specifically the ability to develop more natural products and more sustainable processes based on microorganisms, enzymes and nature-based substances. In an interview with BIOTECH Insight, Moelker highlights the application areas of nutrition, environment and health.

BIOTECH Insight: Even for biotechnology insiders, BRAIN is not easy to put into one category. What exactly does BRAIN do in "industrial biotechnology" and what do you offer other companies in this sector?

Adriaan Moelker: Indeed, our business is not that easy to comprehend. One reason for this is that - unlike most other biotech companies - we do not base our business on a single technology. Instead, we have a wide range of technologies as well as sound scientific know-how, enabling us to develop creative solutions for many application areas. On the other hand, we have acquired several companies in recent years and expanded our product business, which may still be unfamiliar to those who know us as a pure tech service provider.

BIOTECH Insight: Which products can you specifically imagine or are you already producing where BRAIN is or will be making a significant contribution to manufacturing?

Adriaan Moelker: Products that customers can buy from companies of the BRAIN Group are primarily finished enzyme products or starter cultures for fermentations, for example for the food industry. In addition, we act as a technology service provider for industry at the Zwingenberg site. Customers come to us when the microbial production strain they use for their fermentation does not perform well. We then optimize this strain according to the customer's specific requirements. This could be, for example, to find a microorganism that achieves a very specific metabolic performance and delivers a reaction product that can be used as a feedstock for a product in the chemical industry.

BIOTECH Insight: Can you explain this in more detail with examples?

Adriaan Moelker: There are many products on the market or processes in industry with "BRAIN inside", i.e., in which BRAIN has a development share. Generally speaking, many of our customer projects are in the food sector, partly because so much is happening here at the moment - away from animal-based foods and toward plant-based foods. Examples of currently successful products of the BRAIN Group are enzymes for bread production, milk processing and cheese production, for fruit juice production and for brewing. Our customers are some of the largest companies in these sectors.

A good example is our cooperation with the Berlin-based foodtech start-up Formo: With our proprietary genome editing technology, we provide the expertise for the scalable microbial production of a bioidentical milk protein. We are talking here about so-called precision fermentation. The protein obtained will be the basis for the production of animal-free cheese products and will make a decisive contribution to a more sustainable diet - which corresponds precisely to one of our visions: We want to use our innovative strength to make industrial products and processes more sustainable.

BIOTECH Insight: Can you also explain with figures in which markets BRAIN is active? And how do you see business development opportunities in the near future?

Adriaan Moelker: We do not communicate our revenue figures by market, but on the basis of our two business segments: Our R&D business in the Bioscience segment generated revenues of EUR 5.8 million in the first two quarters of fiscal year 2021/22; with our product business in the Bioindustrial segment, we achieved revenues of EUR 17.5 million in the same period. We expect BRAIN Group revenues of approximately EUR 50 million in this fiscal year, which would represent an increase of around 30% compared to the previous fiscal year.

The markets we focus on are food, health and environment, with the majority of our customers coming from the food industry. Examples of promising incubator projects at BRAIN include the microbially produced protein brazzein as a sugar substitute, salt enhancers or substitutes, and bioactive substances for antimicrobial applications in the food sector.

When it comes to the environment, our customers come from a variety of industries. The aim here is to make industrial processes more sustainable, for example by shortening production times or reducing CO2 emissions or energy consumption. But it is also about promoting the circular economy. Here, for example, we are working with an industrial partner to further develop our biological process for extracting gold from waste streams for commercial application. We can also make the recycling of lithium-ion batteries more sustainable with our biomining technology. We see great potential in such recycling approaches in the future.

BIOTECH Insight: On the other end of the scale are research and development costs and acquisitions. BRAIN is not yet "in the black", is it? When will you break this threshold for the first time?

Adriaan Moelker: We communicated some very good news with the 6M figures, namely that we achieved a positive increase in adjusted EBITDA for the first time in decades. That is a great success for us! We are also progressing according to plan with our pipeline projects and regularly communicate the progress to the capital market. The fact that one of these projects - our CRISPR technology - gives us an enormous advantage in our research and development and that we are currently expanding the technology into a platform for a licensing business has unfortunately not yet really been rewarded by the capital market.

In view of the severe market turbulence and the weakened stock markets worldwide, we must also be realistic here. However, we remain confident that the market will recognize the great progress we have made towards sustainable growth in sales and profitability.

BIOTECH Insight: You yourself have been involved in the enzyme business for many years, and also now at BRAIN. What is special here scientifically or technologically, where do you see the challenges?

Adriaan Moelker: The diversity of technologies and the associated scientific competencies, united in a single biotech company - that was new to me. But it is precisely this diversity of possibilities that offers great opportunities for success, even with challenging issues!

The Zwingenberg site with its tech units can be seen as a kind of scientific or technological heart of the BRAIN Group; however, our subsidiary AnalytiCon Discovery can also demonstrate a high level of scientific expertise in its field of natural product chemistry. Our enzyme business in Cardiff has extensive know-how in the areas of fermentation and scale-up - a technological competence that is absolutely crucial for the commercialization of products.

BRAIN can therefore no longer be reduced to Zwingenberg, where we carry out enzyme discovery and engineering, strain development, active substance screening and bioprocess development on a laboratory scale. In fact, within the BRAIN Group, we are now increasingly able to offer our customers fully comprehensive solutions, i.e., much more than just finding a great new enzyme or bioactive substance. Within the Group, we have the know-how to scale up the associated production process to an industrial scale - essential for the customer's commercial success.

BIOTECH Insight: Next year, BRAIN turns 30. How does the company need to position itself in order to continue to play an important role in industrial biotechnology in the coming years?

Adriaan Moelker: BRAIN Biotech has just gone through a transformation process towards becoming an integrated company - with the aim of positioning itself well for the future. Accordingly, we will continue to present ourselves as a group that offers the industry biobased products and solutions for greater sustainability in business.

In fact, we need to reinforce in our communication that we have evolved from a bioarchive/discovery company to a solution provider operating across the value chain: we now have a significant product business and, most importantly, a fermentation plant that will further drive this evolution.

Especially in view of the fact that enzymes - one of our three product categories - are of central importance for achieving the UN Sustainable Development Goals and for meeting climate and environmental commitments, we believe we are well equipped for the future.

Adriaan Moelker (born 1964, nationality: Dutch) was appointed CEO of BRAIN Biotech AG at the beginning of February 2020. Prior to that, he held numerous management positions in the biotech sector. Among other things, he was Managing Director at Darmstadt-based AB Enzymes GmbH for nine years, and previously spent twelve years at Genencor (now IFF) and at DSM in the enzymes business.

 

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