INSIGHTS

Innovation & Agriculture

Innovation in agriculture is the need of the hour. With an ever increasing global population, it is imperative that we find sustainable ways to nourish people. Agriculture, a relatively commoditized and conservative industry when compared to other technology areas, is a sector that has been unfortunately neglected and underinvested. This trend is particularly prominent when comparing the development of novel human health drugs to crop health products, where human pharmaceuticals has progressed significantly over the last few decades, whereas agricultural innovation has stalled – for example, of the top 10 herbicides in the market today, 7 were launched before 2000.

So far, the industry has largely been dependent on old crop protection products, many of which need to be used in large quantities and have a detrimental ecological impact – a solution that is not sustainable in the long-term. The lack of new solutions has also contributed to their decreasing effectiveness, as pests build resistance to these familiar pesticides. Paired with an increasing consumer and societal awareness of issues around food quality and environmental sustainability, this heightened sense of urgency is facilitating a significant shift in the way the sector is adopting new technologies to tackle current challenges. With more talent and capital focused on solving some of these most pressing issues, now is a good time to start identifying companies who will bring about the change we want to see, creating a sustainable and healthy future. Having met the leadership team and after numerous conversations, we were convinced that Enko will be one such company.

Today, the small molecule crop protection industry faces multiple innovation challenges:

• Pace of innovation in the crop protection ag-chem segment has reduced

Until recently, the last major herbicide mode of action was discovered in the 1980s and fungicide and insecticide discovery has slowed down significantly since the early 2000s. Over the last two decades, the number of new crop protection molecules being introduced in the crop market has been reducing.

• Cost and time taken for discovering new crop protection molecules has increased

With environmental and safety requirements becoming more stringent, the cost of developing and registering new active ingredients has increased 1.9x since the mid-1990s. This has been accompanied by an increase in the time taken for development and launch of new active ingredients which has gone up from 8 to 11 years. Reversing this trend will require a major shift in the technologies and methods being used to discover molecules for crop protection.

• Small molecule crop protection innovation is still dominated by a few large crop majors

Unlike the biopharmaceutical industry, which has a large number of small, VC-backed companies driving innovation, the small molecule crop protection industry has very few independent and innovative companies. Only c. 1% of venture capital investments in ag-biotech are being made in start-ups focusing on small molecules.

• Environmental concerns regarding impact on non-target species, soil and water quality

The traditional R&D approach tends to rely on the “spray and pray” approach, without a systematic way to screen for or design chemistries, thus yielding very few lead molecules to bring forth. The limitations of this methodology is apparent – products on the market tend to be broad-spectrum, notorious for causing detrimental harm beyond just their target pests, and can leech into water supplies. With very few targeted solutions, the implications on the health of our ecosystem and environment become alarming.

New age technologies, which have already proven effective in healthcare and consumer tech, have the potential to spur innovation in ag-bio industry

Our team has been closely following novel technologies such as DNA-encoded libraries and AI-driven solutions across multiple industries – including but not limited to agriculture, healthcare, and consumer tech. This multifaceted assessment has built our strong conviction that these technologies will be instrumental in positively disrupting the status quo. We have already seen these principles validated across a number of our global healthcare and technology portfolio companies.

While there is a large untapped opportunity in the small molecule crop protection space, our team strongly resonated with Enko’s mission to develop crop protection products that have superior effectiveness while also being better for human health and the environment. We were also very impressed with Enko’s leadership team, all of whom are very seasoned and experienced professionals with expertise in program management, research and development, field trial management, and business development, all aspects required to develop and commercialize a crop protection product.

Enko: Building a unique ag-bio platform

Enko has developed a unique crop protection molecule discovery platform which leverages DNA-encoded libraries and machine learning. The platform is capable of screening billions of molecules against biological targets of interest in a few weeks to generate large number of hits in a cost and time effective manner. This is a step up from the traditional sequential target-molecule affinity identification process which can cover only a few thousand molecules at any given time. Due to these enabling technologies that both generate a significant number of hits and help parse through the large amounts of data, Enko can essentially “program” their screens to specifically identify chemical leads with favorable characteristics that contribute to their efficacy and environmental safety.

The platform has demonstrated its productivity and effectiveness in generating novel chemistries at significantly lower R&D costs than market benchmarks and as a result has produced a proprietary pipeline of novel herbicide, fungicide, and insecticide molecules. Enko’s lead pipeline molecules have already demonstrated their effectiveness in field trials across multiple seasons.