16 May Sequencing the future
Björn Örvar, Chief Scientist, Co-Founder and Business Development Manager, ORF Genetics, has seen his company grow into areas that, just a few years ago, the human race would not have thought possible.
How would you describe your journey on both the scientific and corporate levels?
Many Icelanders do their graduate studies abroad, especially when it comes to scientific disciplines. For example, I did my Ph.D. at the University of British Columbia and then post-graduate work at McGill University in Montreal. However, although we tend to get our degrees elsewhere, we also have a tendency to move back to our home country. This means that we are in a pretty good position to get a very good education as well as exposure and knowledge from other cultures which we then bring home. It becomes like a melting pot when we return with these experiences. It really helps our progress, and it is probably one of the reasons that we have established some very good biotech, chemical and pharmaceutical companies here.
Starting a business in Iceland is easier than in many other countries. My colleagues with whom I worked in Canada had a harder time, for instance. Here in Iceland, the communication lines are short, so it is easy to get meetings with authorities or with players in the financial sector. Everything is much more reachable. We also have a risk-taking mentality; we are quick and the first adopters of new trends. All of this helps one start a company and introduce new ideas to interested parties. Of course, the size of the financial market can later be a challenge, and it can become increasingly difficult when you grow and need more capital. There are, as always, pros and cons. For our company, it was easy in the beginning, then we traversed a more difficult period, but today we have managed to reach a good place and things are going well.
How have Iceland’s regulatory environment, government incentives and education opportunities allowed for growth in your sector? What more do you think needs to be done to ensure this positive momentum continues?
I would say the government has done quite well in the last few years. They have improved the incentives for companies that do R&D like ours. However, we probably need to do better in certain areas. First, we need to make it easier for foreign experts or professionals with specific training to move to Iceland and enjoy a nice life here. Perhaps tax incentives or similar measures would help, and I believe the government is working on that.
How has ORF been affected by the pandemic over the last two years?
We have had some challenges just like everyone else, but we have also been extremely fortunate because COVID-19 never reached the same level as it has in most other countries. We never had any real lockdown and essentially, we have had the opportunity to run business as usual because there was an excellent control of the pandemic compared to the rest of the world. At the same time, we are an island, so the supply chain issues are what most affected us. For our skincare brand BIOEFFECT, our strongest market had always been travel retail, but that disappeared overnight. We had to be versatile and balance things out in other markets.
ORF Genetics received a grant from the European Commission, which was achieved by less than 3 percent of applicants. What set you apart from the others?
We can be very flexible. To give you an idea, we started ORF Genetics by developing a technology to produce recombinant proteins, or human growth factors, in barley seeds. We soon found out that it would be very difficult to enter this market as such a small company, as we would be competing with large U.S. firms. Because of that, we made a bit of a U-turn. We decided to use some of those growth factors to develop a skincare line, BIOEFFECT, to give us earlier revenues to fund side projects, such as producing animal growth factors for the cell-cultured meat industry. When we saw that BIOEFFECT was doing well, and we could do more with the side projects (and especially with the onset of COVID-19) in a matter of a few months, we began a completely new project which was producing a portfolio of animal growth factors and scaling them up for the cell-cultured meat industry. Part of that was to apply for an EU grant, which we had never done before. Part of us receiving it was being in the right place at the right time with the right technology. It has a lot to do with the environment, as well, reducing the CO2 footprint. At the same time, we had been producing human growth factors for 10 years already. Therefore, we had extensive experience and that helped us significantly.
What can be achieved with the cell-cultured meat? What are its advantages, and what is the timeline for actual consumption?
To be able to produce lab-grown or cell-cultured meat, you first have to collect stem cells from the muscle of an animal. You then multiply the stem cells and differentiate them into the different cells that make up the meat, mostly muscle or fat. To multiply those stem cells and differentiate them, you need those animal growth factors. We focus on the growth factors that these companies need in their production and differentiation of stem cells. These growth factors are extremely expensive today, but with our system, we believe we can bring down the cost more than 500 times. There are probably over 80 different companies worldwide working on this type of meat and the funding to these companies has increased incredibly in the last three to four years. Some of them have received over $100 million. This technology is developing incredibly fast, but it is difficult to say when the first products will be available on the shelves, but probably within just a few years they will be available in restaurants and high-end stores. The forecast is that, by 2030, you will probably be able to buy it at the supermarket. There are a myriad of benefits, from environmental to ethical issues around slaughtering animals, to health issues from the reduction of antibiotics, and many more advantages.
What is your growth strategy with your skincare products and what markets are you targeting? Are there any new products in the pipeline in this field?
The DERMOkine growth factors are human growth factors produced in barley seeds specifically designed to use in skincare products and we use them exclusively in our own BIOEFFECT product line. When we launched the BIOEFFECT line in 2010, it was the first consumer product in the world using plant-made human growth factors. Since then, it has been growing between 20 and 35 percent per year, excluding the last two years because of the pandemic. Our revenues went down about 20 percent, but this year we expect to surpass our 2019 figures. We are now in 27 markets around the world. It is a premium product, so we have been knocking on high-end doors, such as Bergdorf Goodman and Harrods, in addition to recovering our travel retail market. We in Japanese airlines ANA and JAL, in Korean Air and in Finnair. In the future, we will continue to recover that market and also put more emphasis on online marketing and sales in addition to our brick-and-mortar premium distribution. We are very optimistic about this line as it continues to still be a unique technology with strong ties to Iceland based on green fuel and biotechnology. We are proud that it is both developed and manufactured here.
Building on that, would you say that benefitting from a volcanic-based hydroponic system is one of the key competitive advantages in ORF Genetics’ production?
We produce and purify the human growth factors in the barley seed and obviously we need to grow these plants. Therefore we decided to develop a high-tech geothermal greenhouse here in Iceland. Running a greenhouse here in Iceland is relatively competitive because we have access to low-cost energy, both geothermal and hydropower, which is very sustainable. In addition to that, we cultivate our plants on conveyor belts hydroponically. We do not use soil, rather we use volcanic ash. That is something we developed, and it is quite efficient, highly productive, and brings down the bioburden indoors because we are not using soil.
What values do you wish to see attached to Iceland’s image on the international stage and particularly attached to Icelandic innovation?
Even as an Icelander, I still see nature here as quite special. We are also extremely fortunate to have all this geothermal energy, waterfalls, and our exceptionally clean environment. Iceland has an image of a clean, pure, and unique natural environment, and I would say it is important to protect that. At the same time, because we are so few, about 360,000, we are agile and flexible, and we can introduce new cultural trends and necessary societal changes. For example, we moved quite fast when it comes to inclusivity, such as with women’s, gay and minority rights, something which goes right along with the openness of our society. I am proud that Iceland is doing as much as it can in that regard. That is also something we need to protect and continue to improve.
Do you have any final comments for the readers of Newsweek magazine?
ORF Genetics wants to be part of a future that takes into consideration how we need to treat our environment and how we need to respect people.