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In Depth August 14, 2008, 5:00PM EST

I Have Just One Word for You: Bioplastics

(page 2 of 3)

Jason Grow

Peoples hopes to grow his plastic in plants such as switchgrass and oilseed Jason Grow

Greene, a professor in mechanical engineering and manufacturing at California State University at Chico, who was hired by the state to find the best bioplastic on the market. "It breaks down nicely with food or yard waste. Boom, 180 days later and it's nice brown dirt." What's more, the manufacturer determines how fast the plastic biodegrades into harmless plant materials and the conditions under which that happens. About 50 potential customers, including Target (TGT), Revlon (REV), Hewlett-Packard (HPQ), medical supply company Labcon, and the U.S. military, are testing Mirel in more than 70 different products. "We have to do something [because] most plastic just ends up in a bad place," says Jim Happ, president of Labcon, which is testing Mirel to replace some 3million pounds of plastic it uses each year in 800 products for hospital labs. "We love their polymer," says JoAnn Ratto, an engineer at a U.S. Army research center in Natick, Mass., which is evaluating Mirel as a liner for waste bags that are thrown overboard by naval ships. "We can't get enough of it."

Mirel is made in large vats of genetically modified microbes. They gorge on glucose from corn, then convert the sugar into fatty globules, which make up more than 80% of the cells by weight. These are harvested, dried, and turned into pellets. It all sounds painless enough, but getting the microbes to comply requires marvels of genetic engineering.

Peoples is an unlikely miracle worker. He grew up poor in Slamannan, a remote, windswept coal mining town between Glasgow and Edinburgh. His father died when he was 16, leaving little for his family of 11 children. "Olly" was spared a life in the mines by the attention of his high school chemistry teacher, who helped him get into the prestigious University of Aberdeen. After he earned his PhD in molecular biology in 1983, he landed a postgrad spot at the Massachusetts Institute of Technology. Pulling himself out of poverty and cultivating a competitive streak at MIT prepared him for the life of an entrepreneur, says Pamela Bassett, a Cantor Fitzgerald analyst in New York. "Most scientists want to publish, especially if you're at MIT," she says. "Olly wants to commercialize."

With a background in biochemistry, Peoples sensed early on that genetic engineering would open up whole new commercial landscapes. Most of his lab mates were interested in medical biotech, and several started companies that hit the jackpot, with lush buyouts by drug giants. Peoples yearned for a similar fate. But unlike many of his peers, he bypassed medicine and plunged into industrial applications. MIT filed for patents on his work in 1987, and by the time they were approved four years later, Peoples had negotiated exclusive licenses and mapped out a business plan for a new company. Metabolix was launched in June, 1992.

Perfecting his recipe for bioplastics proved harder than Peoples thought. And when he brought his business plan to Dow Chemical (DOW), DuPont, and others, they rolled their eyes. "We've been laughed out the door more than once," says Peoples. "We thought the sky would open and money would pour down from the heavens. But the reception was underwhelming." To stay afloat, the company went through 11 rounds of financing, plus an initial public offering in November, 2006. All the while, researchers struggled to raise the plastic content in cells.

BECOMING AN EXTRAVAGANCE

The breakthrough came in 2004, when Peoples finally hit the plastic yield target. "Biodegradable plastics had a lot of catching up to do, but the science has provided the means to go from research to industrial-grade applications and make it profitable,"

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