Developing Low-Carbon Renewable Fuels
Colin R. South Ph.D.; President
Oct 9th, 2007
Mascoma Corporation
Our
Our Mission
Mission
To
To become
become the
the leading
leading producer
producer of
of cellulosic
cellulosic ethanol
ethanol through
through advanced
advanced
biotechnology
biotechnology
•• Low-carbon;
Low-carbon; environmentally
environmentally sustainable
sustainable
•• Multi-feedstock;
Multi-feedstock; multi-state
multi-state and
and international
international
•• Low
Low cost
cost of
of production
production
Overview of Firm:
y 1.5 years old; venture-backed by Khosla Ventures, Kleiner Perkins, Flagship Ventures,
and General Catalyst
y 65 employees in Cambridge HQ and New Hampshire laboratory; growing to ~100 yearend ‘07
y Management team experience across ethanol, biotech, and chemical industries
y Active R&D program developing one-step enzymatic pathway for cellulosic ethanol
y Ramping up commercialization efforts: Tier I projects in three states; pipeline of Tier II
projects
y Recruiting in Business Development, Engineering, Operations, Finance, Legal
y Raising additional equity capital during Q4’07 – Q1 ’08 to fund growth
CONFIDENTIAL / Mascoma 2007 / Page 2
1
Experienced Management Team
Executive
Role
Bruce Jamerson
CEO & Director
Colin South, PhD
President
Ginja Collins
Senior VP Finance
Jim Flatt, PhD
Senior VP R&D
Andrew Richard, PhD
David Hogsett, PhD
CTO
VP External R&D
VP IP & Chief
Patent Counsel
Tim Linkkila
Jim Schumacher
VP Business
Development
Prior Experience
VeraSun Energy, U.S. Natural Resources (KKR
affiliate), Credit Suisse (First Boston)
ViaLactia Biosciences, Fonterra Cooperative
Group
VeraSun Energy, U.S. Bancorp
Martek Biosciences, Monsanto, Procter & Gamble
SunOpta, Procter & Gamble
Advanced Bioconversion Technologies, Inc.,
Bioenergy, Inc.
Biogen Idec
DLA Piper (formerly Gray Cary)
Siva Sivasubramanian,
PhD
VP Engineering
Aspen Technology, Inc.
Vineet Rajgarhia, PhD
Dir. Organism
Development
Cargill Dow, Eastman Chemical
Kevin Wenger, PhD
Dir. Bioprocess
Research
Novozymes
CONFIDENTIAL / Mascoma 2007 / Page 3
Industry Leading Scientific Advisory Board
Member
Professor Charles Wyman
Affiliation
SAB Chairman
University of California, Riverside;
Dartmouth College
Professor Frances Arnold
California Institute of Technology
Dr. Doug Cameron
CSO, Kholsa Ventures
Professor Bruce Dale
Michigan State University
Dr. Don Johnson
Formerly VP R&D, Grain Processing Corporation
Professor Lee Lynd
Dartmouth College
Professor Jack Saddler
University of British Columbia
Dr. Philippe Soucaille
Metabolic Explorer; INSA of Toulouse
CONFIDENTIAL / Mascoma 2007 / Page 4
2
Key Milestones
October
2005
Mascoma Corporation formed by biomass ethanol pioneers Drs. Lee Lynd and Charlie
Wyman from Dartmouth College
March
2006
Secured $9 MM in equity financing
November
2006
Secured $30 MM in equity financing
December
2006
Awarded $15 MM New York State grant for
construction of demonstration facility
March
2007
Received $5 MM U.S. DOE grant for organism development;
Bruce Jamerson joins as CEO.
April
2007
Dr. Lee Lynd received inaugural Lemelson-MIT
Sustainability Award
May
2007
Named in Red Herring’s Top 100 private technology companies in North
America
June
2007
Senator Tom Daschle joins Board of Dir.; member of team
awarded $125M DOE Bioenergy Research Center Grant
Sept
2007
Announce $40MM funding from collaboration with University
of Tennessee to build 5MMGY Pilot Plant in Tennessee
CONFIDENTIAL / Mascoma 2007 / Page 5
High Anticipated Ethanol Demand
Federally Mandated
Ethanol Production (RFS)
160
40
140
35
120
30
100
25
B gal/y
80
Cellulosic
Carve-Out
Proposed
RFS
Existing
RFS
20
60
15
40
10
20
5
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
Current Gasoline
Potential
Consumption
Cellulosic Ethanol
Production
2009
0
0
2008
B gal/y
Cellulosic Ethanol Could Displace
Over 2/3 US Gas Consumption
Benefits:
y Energy independence and security
y Broad economic development
y Environmental improvement: 91% GHG reduction relative to gasoline
CONFIDENTIAL / Mascoma 2007 / Page 6
3
A Game-Changing Renewable Fuel
Energy Balance: 1 Unit of
Energy Input Yields...
Total Lifecycle Greenhouse Gas
Emissions Per Gallon
5
25
30
4
3
5.5
2
1
Pounds CO2 equivalent
Units of energy output
6
20
15
24.6
10
12.3
5
1.5
1.2
0
0
Corn Ethanol
Cellulosic Ethanol
Source: National Resources Defense Council, citing: Hammerschlag, Roel.
"Ethanol's Energy Return on Investment: A Survey of the Literature 1990Present" Environ. Sci. Technol., 40 (6), 1744 -1750, Feb. 2006. Values
shown are average of range for each fuel
Gasoline
Corn Ethanol
Source: See footnote below
Cellulosic
Ethanol
Compelling Opportunities for Cellulosic Ethanol:
y Reduce production costs
y Develop feedstock infrastructure
Source: Farrell, Alexander E. (UC Berkeley) and Daniel Sperling (UC Davis). “A Low-Carbon Fuel Standard for California: Part 1: Technical Analysis.” May 7, 2007. Available at
http://www.energy.ca.gov/low_carbon_fuel_standard/index.html. Page 8. Gasoline figure is for marginal gallon produced in California; corn ethanol figure is for Midwest corn ethanol
from natural gas-fired dry mill; cellulosic ethanol figure is for cellulosic ethanol produced from Midwest prairie grass—other forms of cellulosic ethanol modeled had lower GHG emissions.
CONFIDENTIAL / Mascoma 2007 / Page 7
Simultaneous Execution of Multiple Workstreams
Technology
development
Technology
Demonstration
Commercialization
Research & Development, licensing
yDeliver innovations with valuable overall COGs benefits
yDevelop technologies and processes under conditions giving relevant
indications of process performance and robustness
yWhere appropriate license best in class technologies
Process development and technology transfer operations
yEstablishes commercial value and milestones of process developments
yValidate the performance and value of new feedstocks, processes, and
biological systems.
yDemonstrate long term operability of innovations
yProvides platform for optimization of operating plants.
Rapid commercialization
yImplementation of Mascoma’s first commercial plant using current technology
with simple design in low risk format at advantageous sites.
yExtract value from first mover advantage in accessing favorable feedstock
locations, key infrastructures, and establishing early partnerships.
yOperational expertise and experiential learning
CONFIDENTIAL / Mascoma 2007 / Page 8
4
Process Today Leads to Value Added Products in Future
Key value
Generating
step
CONFIDENTIAL / Mascoma 2007 / Page 9
Simpler Ethanol Production via Advanced Biotechnology
Mascoma Approach
(In Development)
Traditionally Proposed
Approach
Feedstock
Supply
Feedstock
Supply
Harsh
Pretreatment
Simple
Pretreatment
Conditioning
Enzyme
Supply
Hydrolysis
Consolidated
BioProcessing
(CBP)
Fermentation
Steam
Generation
Waste
Treatment
Distillation
& Storage
Mature
Technology
Waste
Treatment
Steam
Generation
Developing
Technology
Distillation
& Storage
CONFIDENTIAL / Mascoma 2007 / Page 10
5
Low cost Process Development
De
ve Cel
lop lu
in lase
the
i
• Industrially proven organisms
dir s m
ec ajo
• External enzyme supply
tio
n o r pro
f r e ce
•Rate limited by cellulase costs
du ssi
2nd Generation Process
ce ng
dc
• Novel organisms
ell cost
ula
• Reduced enzyme costs
se
co
1st Generation Process
• SSCF process
Relative Ethanol Production Cost
High
Low
• Dartmouth/Mascoma IP
•Reduced Cellulase requirement
[<40% of mesophilic SSCF]
sts
Consolidated BioProcessing (CBP)
• Engineered organism breaks down
cellulosic materials and makes ethanol
Mascoma is developing the
best performing
biocatalysts for production
of cellulose ethanol
1 year
• Very low enzyme costs
• High productivity
• Broad IP opportunities
•No external cellulase, operates at
saturated rate
Projected Commercialization Timeline
5 years
CONFIDENTIAL / Mascoma 2007 / Page 11
Evolution of Biomass Processing w/Enzymatic Hydrolysis
CONFIDENTIAL / Mascoma 2007 / Page 12
6
Second Generation Process Technology
Goal
Goal
Reduce
Reduce ethanol
ethanol production
production costs
costs through
through aa significant
significant reduction
reduction in
in enzyme
enzyme
costs
costs
Mascoma is Pursuing Several Strategies
y Proprietary Mascoma thermophilic microbes (e.g. T. saccharolyticum)
y Engineered CBP microorganism (reduce enzyme requirement)
CONFIDENTIAL / Mascoma 2007 / Page 13
T. saccharolyticum JW-SL YS485
Isolated from a hot
spring in
Yellowstone National
Park
(Liu. et al 1993, B6AWeimer et al 1984)
• 30
- 66°C, Topt 60°C
• pH 3.85 – 6.5
• strict anaerobe
Substrates Supporting
Growth
Monosaccharides
• glucose
• xylose
• mannose
• arabinose
• galactose
• fructose
Disaccharides
• cellobiose
• sucrose
• maltose
Polysaccharides
• starch
• xylan
• mannan
• not cellulose
Main Products
• Ethanol
• Lactic Acid
• Acetic Acid
• CO2
• H2
Shown to produce near theoretical maximum yield of ethanol from key sugars
CONFIDENTIAL / Mascoma 2007 / Page 14
7
T. saccharolyticum ALK2 engineered to eliminate byproducts
Glycolysis
ADP
y transformable, knockouts
NAD+
ATP
Ldh
Lactic
Acid
NADH
H2
Pyruvate
2 H+
Fd(ox)
NAD+
y Dartmouth work: strain ALK2 = 2 KO’s:
NADH
Fd(red)
NADH
NAD+
CO2
– ack = acetate kinase
– ldh = lactate dehydrogenase
AcetylCoA
NADH
NAD+
ADP
– adapted in continuous culture
Acetyl Phosphate
Acetaldehyde
NADH
NAD+
ATP
Ack
Ethanol
Acetic Acid
y developing replicating & expression
100%
plasmids
80%
60%
Lactate
40%
Acetic acid
Ethanol
20%
0%
WT
ldh KO
ack KO
ldh-ack KO
CONFIDENTIAL / Mascoma 2007 / Page 15
Thermophilic Bacteria Have High Fermentation Rates
Hemicellulose,
soluble sugarsc
Cellulose
(crystalline)a
Temp. Substrate
C. thermocellum
Rumen bacteria
b
C. cellulyticum
T. reesei
60oC Avicel
0.17
Doubling
time (hr)
4.1
39oC Avicel, sigmacel 0.076 to 0.10
6.9
34oC MN301
0.083
8.3
0.028
22.8
o
28 C Cotton
1
0.69
Galactose
0.69
1
Xylose
0.51
1.36
Arabinose
0.32
2.2
Xylan
0.27
2.6
Mannan
0.83
0.77
Glucose
Thermoanerobacter sp.
µmax (hr-1)
55oC
a) Compiled in Lynd et al., MMBR, 2002.
b) R. albus, R. flavefaciens, F. succinogenes.
c) Weimer, 1984 & 1985
CONFIDENTIAL / Mascoma 2007 / Page 16
8
Third Generation Process Technology - CBP
Goal
Goal
Achieve
Achieve lowest
lowest operating
operating and
and capital
capital costs
costs through
through proprietary
proprietary CBP
CBP
technology.
technology.
Approaches
y Engineer cellulolytic enzyme pathways into ethanol producing microbes
y Engineer ethanol producing pathways into cellulose-degrading microbes
Technical Challenges
y Expression and secretion of cellulase enzymes at high enough levels
y Tolerance of microbes to cellulose substrates and ethanol
y Ability of microbes to handle variability inherent in industrial processes
CONFIDENTIAL / Mascoma 2007 / Page 17
Engineering Development
y Completing development analysis and detailed engineering at three sites
Description
– Rome; New York
• Multi-feedstock demo plant
Production
Date
0.5MM gal/yr
Q1-Q3 ’08
– Niles Ferry; Tennessee
• Small scale commercial
5MM gal/yr
Q1-Q2 ‘09
– Sites to be determined
• Stand alone commercial
40MM gal/yr
Q1-Q2 ‘10
CONFIDENTIAL / Mascoma 2007 / Page 18
9
NY Demonstration Plant
CONFIDENTIAL / Mascoma 2007 / Page 19
NY Demonstration Plant
CONFIDENTIAL / Mascoma 2007 / Page 20
10
Tennessee Pilot Plant
y Governer Breseden’s Tennessee Biofuels initiative
– Establishing a biofuels industry in Tennessee
• Research and development
• Establishing Switchgrass as a dedicated biofuels feedstock
$2MMpa
• Construction of a 5MM gal/yr pilot plant
$40MM
– Mascoma is Partnering with UT to build a 5MM gal/yr ethanol pilot plant
• 200 dry T/day cellulosic feedstock, Niles Ferry, Monroe County
CONFIDENTIAL / Mascoma 2007 / Page 21
Feedstock Selection is Important for Market Entry
Hardwood
n, ble
tio ria
ga , va
e
gr me
Ag olu
v
w
Lo
ng re
pi tu
lo ruc
Stover
e
v st
De fra
n
tio
in Collec sues
is
rage
o
t
s
&
Lo
w
Ab vol
ras um
ive e
Rice hulls
Economic viability
Dedicated
Biomass crops
Operating experience &
technology development
Waste paper
sludge
CONFIDENTIAL / Mascoma 2007 / Page 22
11
Optimization of the Energy in Process Residue is Critical
Process Outputs
Input
Primary
Final
Process heat
Lignin Residue
CHP heat to waste
Electrical energy
kW.hr
Feedstock
Gas stream
Liquid Waste
Liquid Waste Solids
Biogas
Ethanol Product
CONFIDENTIAL / Mascoma 2007 / Page 23
Mascoma Partnering – Active Across the Value Chain
• > 20 Partners across all segments of the cellulosic ethanol value chain
Value Chain Partners
•Feed
•Enzyme supply
•Product distribution
Capital Partners
•Equity investors
•Utilities assets
•Sites
Technology partners
•Research provider
•Feed
•Enzyme
•Product distribution
CONFIDENTIAL / Mascoma 2007 / Page 24
12
Mascoma Priorities
y
Maintain and expand Mascoma’s world class team
– Ensure a blend of management, technical, partners and deployment skills required to execute
at the complexity of this business
– Investors with unequaled domain knowledge, contacts and capability
y
Maintain technological leadership in transition to CBP
– Complete development of a robust Xylose Fermenting yeast
– Launch of T. saccharolyticum and development of CBP organisms
– Focus on the continued development of defensible intellectual property for processing of
cellulosic ethanol
y
Development of pilot/pre-commercial plants to allow
– Establish in continuous operations
– Process refinement and development and experiential learning
– Operating basis for EPC guarantee
– Execute in low risk configuration and progressively reduce risk in subsequent
plants/configurations
– Validation of large scale manufacturing cost
y
Focus on the future
– Development of complementary long term partnerships
– Robustness/operability
– Long term COGS
– Large scale expansion
CONFIDENTIAL / Mascoma 2007 / Page 25
Developing Low-Carbon Renewable Fuels
Colin R. South Ph.D.; President
Oct 9th, 2007
13