High level production of L-malic acid by fermentation using Aspergillus oryzae:

An example of Novozymes’ activities in technology development for Biochemicals

Alan Berry, Ph.D. Managing Director Novozymes, Inc., Davis CA, USA

BIO World Congress on Industrial Biotechnology June 18, 2013

Novozymes: A world leader in Bio-innovation

Global leader in industrial enzymes and microorganisms

47% global market share within industrial enzymes

Market leader in all main industries

2012 global sales DKK 11.23B

Aggressive pursuit of new biotechology

14% of sales invested in R&D (~1150 employees at 10 R&D sites globally)

>50 new products introduced in the last 5 years

Over 6,000 pending and issued patents

165 new patent families in 2011

The fifth most patent active company globally in Biotech and Health care (2002-2006) - the only European company on the top 40 list

2 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

Continuous development of Novozymes’ biotechnology platform for enzymes…

…creates opportunities for new business areas

Molecular biology

Strain development using protein engineering, genetic modification, DNA sequencing, etc.

Bioinformatics & systems biology

Application of computer algorithms in discovery of enzymes in DNA databases

Screening systems

Application of high-throughput robotics to find the best biosolution

Industrial scale fermentation

Continuously optimizing and improving yields for 60 years

Microorganisms

Biochemicals

BioAgriculture

Biopolymers

3 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

Leveraging our capabilities

Novozymes has established outstanding development partnerships in Biochemicals

4

Bio-ethanol

Bio-chemicals

Metabolic pathway engineering enables higher yields & new products

Petro-based

feedstock

Fermen-table sugar

Chemicals (bulk, fine, specialty)

Enzyme techno-

logy

Fermen-tation

Advanced fermen-tation

Chemical catalysis

Enzyme techno-

logy

BY BUILDING A BIOCHEMICAL INDUSTRY TOGETHER WITH OUR PARTNERS

PAVING THE WAY FOR THE BIOBASED SOCIETY

Glycols

Green polypropylene Bio-acrylic acid L-Malic acid

Glutamic acid

(Outlicensing)

HMF/FDCA

Projects based on metabolic engineering +

chemical catalysis

Projects based on enzyme + chemical catalysis

Projects based on enzyme catalysis

4 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

BASF

Produced from renewables

Source: ICIS, SRI Consulting

Market potential

• Applications: Food & beverages (formulated with artificial sweeteners)

• Current DL-malic acid food additive market is 100-150 mUSD (60 mT with 4% annual growth)

• L-malic acid addressable market could exceed 0.5 bUSD

Price-competitive alternative

Estimated cost parity at:

• Maleic anhydride price > 600 USD/MT

(above 1,500 USD/MT in the last 12 months)

• Glucose price < 1,200 USD/MT

• Additional cost advantage if L-malate (bio route) has better performance than D,L-malate (petrochemical route)

Source: Nexant, SRI Consulting, Novozymes analysis

Example of leveraging our capabilities: Novozymes’ L-Malic Acid project

Petro-based feedstock

Maleic anhydride

D,L-Malic acid

Starch or biomass

Glucose L-Malic

acid

Price in USD 2000 2010

Malic acid 800/MT 2100/MT

5 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

Production of malic acid by wild-type Aspergillus species

Some wild-type Aspergillus strains produce high levels of malic acid under specific cultivation conditions

Concentrations up to 113 g/L malate (94% w/w from glucose) reported for A. flavus in fed-batch fermentations; also 20 g/L succinate, 2 g/L fumarate (Battat, et. al., 1991. Biotechnol. Bioeng. 37:1108-1116)

Malic production requires high C/N, aeration, calcium carbonate addition

Two-phase fermentation (growth→acid production) – ca. 80% acid

produced in 2nd phase

Strain

g/L (shake flask data)

L-Malic Succinic Gluconic

Aspergillus flavus ATCC 13697 39 13

Aspergillus oryzae ATCC 56747 35 6 8

Aspergillus sojae ATCC 46250 30 3

From: Bercovitz et al., 1990. Appl. Environ. Microbiol., 56:1594-1597.

6 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

Overview of Novozymes’ Malic Acid project

Overall objective was to develop a microorganism that produces commercially relevant levels of malic acid and secure freedom to operate by timely filing of IP

Approach: Improve malic acid production in the natural malic acid producing filamentous fungus Aspergillus oryzae NRRL 3488 by overexpression of cloned genes and classical mutagenesis

Leverage Novozymes’ expertise in genetic engineering of filamentous fungi, including availability of A. oryzae RIB40 genome sequence and Affymetrix GeneChip

Project targets were defined by a minimum volumetric productivity and an overall Performance Factor (= Final product concentration * Volumetric Productivity * g/g Yield on glucose)

Target performance must also be achieved in commercially acceptable fermentation medium

7 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

Malic

transporters

Malic acid pathway in fungi

No net ATP or NADH generated from glycolysis thru rTCA pathway, so some carbon lost to oTCA cycle

Theoretical yield = 1.5 g malate/g glucose consumed

Practical max yield ~ 1.2 g/g

8 June 18, 2013

Novozymes presentation:

BIO World Congress on

Industrial Biotechnology

Aspergillus oryzae strain workflow

A. oryzae NRRL 3488

(natural high malic acid producer)

Recombinant strains

Evaluation in fermentors

New markers

Evaluation in shake flask

Transformation

(random integration)

“2nd generation” recombinant strains

Transformation (random

integration)

Classical mutagenesis

Transformation (targeted deletion)

Genomics & Bioinformatics

Systems Biology

Extensive genetic toolbox

for filamentous fungi

>75 different gene

combinations

(insertions/deletions) tested

Micro-scale cultivation

and robotics-based HTS

for filamentous fungi

(> 50,000 mutants

screened/week)

Extensive analysis:

Metabolite profiling

Enzyme activities

Transcriptional profiling

Fermentation conditions

9 May 8, 2013 Novozymes presentation: Cell Factories & Biosustainability

Multiple strain lineages in the malic acid project

R5

(R3 + Gene 5)

NTG

R4

(Genes 1-4)

M1

NTG

NTG

Mutants

R6

(Genes 1, 2, 3, 5) R3

(Genes 1-3)

Mutants

M2

NTG

NTG

NTG

Mutants

Mutants

M3

+Gene 5

M+R

NTG EMS

+UV

Recombinant malic acid producing strains before mutagenesis

M4 Mutants

10 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

The continued value of mutagenesis and HTS

Highest final malic acid concentration (Mutant M3) and highest volumetric productivity (Mutant M4)

0

50

100

150

200

250

300

350

0 24 48 72 96 120 144 168 192

Ac

id C

on

ce

ntr

ati

on

(g

/L)

Time (hrs)

Major Acids

Total C4 acids

Malic acid

0

50

100

150

200

250

300

0 24 48 72 96 120 144 168 192

Ac

id C

on

ce

ntr

ati

on

(g

/L)

Time (hrs)

Major Acids

Total C4 acids

Malic acid

Data from un-optimized lab scale fermentations (2-liters)

Likelihood of further strain improvements is high

~340 g/L ~2.5 g/L/hr

11 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

C4 Acids concentration is high – crystal formation in fermentation

Crystal size varies with strain/lineage

Smaller crystals give higher viscosity

>90% C4 acids (malic) in crystal form

Crystal formation also observed in A. flavus cultures by Peleg, et. al. (1988, Appl. Microbiol Biotechnol. 28:76-79)

Mutant M4 Mutant M3

12 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

Summary of Novozymes’ Malic Acid project

Combined genetic engineering and mutagenesis/HTS was

used to increase the malic acid production rate of

A. oryzae NRRL3488 by >4X

Fermentation performance targets (including acceptable

medium) were fully achieved on schedule, and further

strain and fermentation process improvements are likely

with additional development work

Comprehensive patent portfolio established (7 patent

families)

13 June 18, 2013 Novozymes presentation: BIO World Congress on Industrial Biotechnology

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We are interested in partnering with established chemical companies with production and commercialization capabilities

Novozymes’ L-malic acid

Forward looking statements

This presentation and its related comments contain forward-looking statements, including financial expectations.

Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations.

The uncertainties may include unexpected developments in the international currency exchange and securities markets, market-driven price decreases for Novozymes’ products and the introduction of competing products within Novozymes’ core areas.

15 August 14, 2012 Novozymes presentation: 2012 SIM Annual Meeting & Exhibition

Thank you!