Take the Test: Evaluating Commercial Readiness, Parts 1 and 2

by Mark Warner (Warner Advisors LLC/Biofuels Digest) ... The focus of this series will be to provide a framework to allow ventures to assess their current state of process development and whether they are ready to make the next step on the commercialization path from a technology standpoint. There are significant product sales and commercial issues that need to be considered in any commercialization determination which drive technical requirements; however this series will focus just on the technology portion of the evaluation. The final installment of the series will provide a self-assessment tool to evaluate overall readiness and highlight gaps.

The evaluation process begins by determining expectations. ... While technical data is important to the evaluation process, the first question to be answered is what does success look like? A company cannot determine if they are ready to start the next step in the commercialization journey unless they understand the realistic goal.

The more rigid and aspirational the expectations, the longer it will take and the less likely the venture is to meet the goal.

The most common factors that come into play when determining expectation of scaling-up a process are capital cost, project timeline, manufacturing cost and projected production capacity. The level of certainty that is required for each of these criteria at the front-end of the process will set the overall definition of success. This can generally be broken into 3 categories:

High probability (slow and easy wins the race) ... This is the typical expectation for debt funded projects like traditional corn ethanol, but is generally aspirational for advanced biotechnologies. As new biotechnologies represent processes that have never before been built, the technology risk makes reaching this standard very difficult.

Balanced (no risk, no reward) ... Company has reasonable equity reserves to be able to take modest risks and can absorb increased capital cost, extended timeline and slower than projected production ramp-up.

Speed to Market (ready, fire, aim) ... Often early leaders in technology areas that are able to raise significant venture funding have such a forward lean towards rapid commercialization, they are willing to accept cost, schedule and production risks to get product on the market as soon a possible and keep their first-mover advantage over competitors. ... Only a viable option for equity funded projects. READ MORE

Now, let’s move into the details of evaluating the state of technology and readiness for commercialization. At the end of the document there is a link to an excel based worksheet that provides a scorecard to evaluate the state of development. The value and reliability of the analysis is significantly affected by the accuracy of the data used, ...

In looking at any advanced biotechnology, there are 5 primary criteria that are used to evaluate readiness for process commercialization as outlined below. None of these criteria individually are a deciding factor, but rather in aggregate are the information needed for the analysis and will be the inputs required for the evaluation tool:

Number of unit operations – ... The more unit operations, the higher the level of effort required to make a fully integrated process that functions effectively with them.

Scale-up factor – ... The larger the scale up factor, the more risk involved. It is also possible to look at the scale-up factor of each unit operation and then average them. This approach can show a lower level of risk where scaling up involves multiple pieces of identical equipment (fermenters, centrifuges, etc.)

Status against key process criteria – ... To determine the overall status against process criteria, divide the the current status of each criteria against its target, then average them.

The risk in key criteria comes both from how far any individual criteria is from the target and also how far the overall average process criteria is from the target. In cases where there is a significant difference of importance between criteria, the individual criteria can be weighted in the calculation, as appropriate.

Fully integrated versus independent operation – ... It is critical when gathering data at bench or pilot scale for a process, that the process is fully integrated, meaning it is run in a continuous manner in the same location from feedstock to final product.

Length of testing at previous stage – ... As contaminants can build up in a process over time, it is common for some problems not to be demonstrated until after weeks of operations. 1,000 hours of continuous operation of the process at the planned conditions is the industry standard.