The Biotech Start-Up Making Vaccines for Bees and Shrimp

Think of a biotech company and most people will think of a business trying to come up with cures and treatments for human illnesses. There's not a lot of discussion about companies trying to do the same for animals, insects, or even... crustaceans. And yet, healthy animals are a key part of the ecosystem and important for our food supply. In this episode we speak to Annette Kleiser, CEO of Dalan Animal Health, which has developed the world's first vaccine for bees and is now working on a similar treatment to protect shrimp. We talk about the development and regulatory process, plus what it's actually like raising money for a brand new business. Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

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  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.

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• 2:10Tracy Alloway?

  Hello, All Thoughts listeners. So you are about to listen to an episode that we recorded back in April when there was a lot of news around trade and tariffs. So you might hear us reference that quite heavily. It's a very interesting episode, and I think you'll enjoy it. Take a listen.

• 2:48Tracy Alloway?

  Hello, and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway.

• 2:52Joe Weisenthal?

  And I'm Joe Weisenthal.

• 2:53Tracy Alloway?

  Joe, do you remember when you were a kid, presumably you went on road trips like across America? Do you remember how filthy cars used to get on road trips because of like hitting millions and thousands of insects? Do you remember this?

• 3:10Joe Weisenthal?

  I thought you were gonna say how cars, how filthy cars get inside. And I was like, my car is filthy inside. It's disgusting. But I do remember that. And I, you know, there are like weird things like people like, you know, like insects and like, people have talked about how like, this is like one of those mysteries. It's kind of like chemtrails. Why don't car windshields get filthy anymore?

• 3:30Tracy Alloway?

  Yeah.

• 3:30Joe Weisenthal?

  I didn't know this was ever going to become an All Thoughts topic. So I'm pleasantly surprised.

• 3:34Tracy Alloway?

  Well, I have a lot of thoughts on this. So one, the buggiest place I ever used to visit was in Arkansas with my grandma in the summer. And I remember like the car just being like disgusting, not only because of insects, but because there are also a lot of armadillos there. And armadillos, I don't know if you know this, but when they're frightened, they jump up. So they tend to get caught in like truck grills. Anyway, this is probably too much information. But I also, I tried to read a book on insects once and the lack thereof in today's natural world, I guess. And it was called The Insect Crisis. And it's one of the few books that I had to stop reading after like three chapters because I just found it too depressing.

• 4:15Joe Weisenthal?

  By the way, I just want to say, A, I like that whenever this episode is getting released, we're recording this April 24th, I appreciate a break from like, oh, we're not talking about tariffs every second. Two, you mentioned armadillos. It reminds me of the famous sort of left-wing Texas populist, Jim Hightower, wrote a book, There's Nothing in the Middle of the Road But Yellow Stripes and Dead Armadillos, A Work of Political Subversion. So, thank you for reminding me of that book. And three, I don't remember the other thing I was gonna say, so keep going.

• 4:45Tracy Alloway?

  Okay. Well, anyway, you know, I'm starting on a depressing topic, which is, there has been this notable decline in insects over the past couple of decades. And if you talk to old people like us, Joe and me, we will say that there is a notable lack of insects just when you're out and about and, you know, driving on highways or whatever. But, all of that said, this isn't a doom and gloom episode, because we're actually gonna be talking about some interesting efforts to kind of arrest that decline. And, you know, Joe and I, we've taken an interest in biotechnology recently, especially in the context of the US versus China. But, human biotech is not the only thing out there. There is a pretty

• 5:27Tracy Alloway?

  big industry around animal and insect biotech, and I know nothing about it, pretty much, and I find it very interesting, and we should talk about it.

• 5:35Joe Weisenthal?

  We should. And also, look, pets and animals are a huge industry. And so, for when it comes to biotech, non-human animals are huge. And of course, the other context besides the US versus China in biotech is, of course, the cutting, or the gutting, some would say, of sort of core research from the federal government level. So, this intersects with industrial and political trends. And so, even though it's not a tariff episode, I'm looking forward to it.

• 6:01Tracy Alloway?

  Well, not just that. So, you know, one of the foremost examples of insect species that has been in decline is honeybees, of course. And those are constantly in the news, the lack of honeybees. And we all know, if we don't have as many honeybees, well, then we don't have as much honey. But we also don't have as much other types of foods, because they are very important pollinators.

• 6:21Joe Weisenthal?

  You know, I just, one last thing from me. When I was in college, I lived in a vegan, a vegan co-op at the University of Texas.

• 6:27Tracy Alloway?

  Did you have a beehive?

• 6:28Joe Weisenthal?

  No. But I had this business idea, oh, we should have hand-pollinated produce and sell it to grocery stores as saying, this is the only true vegan produce you can have, because we don't even use bees in the process. I never did it, but I thought that'd be a good business.

• 6:43Tracy Alloway?

  Oh my God. Have you ever hand pollinated something?

• 6:45Joe Weisenthal?

  No.

• 6:45Tracy Alloway?

  It's fun.

• 6:46Joe Weisenthal?

  Oh, so you can do it?

• 6:47Tracy Alloway?

  You, yeah, I mean, you got like a little like feather or a little rag and you sort of spread the pollen around while doing your best like zzz impression. You have to be in the mindset of a bee.

• 6:55Joe Weisenthal?

  If I were back at, you know, 22 years old, I'd make a big radical stand about only eating hand pollinated produce.

• 7:01Tracy Alloway?

  Don't, don't make the bees work.

• 7:02Joe Weisenthal?

  Yeah, that's right.

• 7:03Tracy Alloway?

  It's cruel. Okay. All right. Clearly, we could talk about bees and insects and armadillos for probably another hour or so, but why don't we get straight to our guest?

• 7:11Joe Weisenthal?

  Let's do it.

• 7:11Tracy Alloway?

  We have the perfect guest. We're going to be speaking with Annette Kleiser. She is the CEO over at Dalan Animal Health, which has been doing some really, really interesting things in the field of animal biotech. So Annette, thank you so much for coming on All Thoughts.

• 7:24Speaker 05

  Thank you so much for having me. It's a pleasure to be here.

• 7:27Tracy Alloway?

  I'm very excited to talk about something other than the tariffs for a start. And I do like talking about the natural world, but like first off, why don't we just kind of add some context to where we are? Why is animal biotech an important field to be investing in?

• 7:44Speaker 05

  Well, a lot of what we depend on in food and agriculture, you've talked about pets, of course, they're, you know, companions, they're very, very important to us. But a lot of what we eat depends on animals. So not just the typical production animals that we think about, which, you know, the cows or chickens, but also, you know, fish or shrimp. And then one of the most important workhorses probably that we have is the honeybee. Because our most nutritious foods wouldn't grow, wouldn't exist if it wasn't for these

• 8:24Speaker 05

  little animals that buzz around and pollinate them. So apples and it's actually the most nutritious foods that we have wouldn't exist, whether it's almonds or pumpkins or onions. So they're extremely important and we need to protect all of these animals, not just our companion animals, but also these really important production animals, livestock, everything that falls under it. And so biotech has a big role to play, not just on the human side, but also on the animal side.

• 8:58Joe Weisenthal?

  What do you tell us what Dalan Animal Health does and your role there? And give us some background about your work specifically.

• 9:05Speaker 05

  Yeah, happy to do so. So Dalan Animal Health focuses on these animals. So we are a biotech company. We're about six and a half years old, so we're relatively young still. But we focus on what we called underserved animals, which are primarily insects, invertebrates. And we developed the world's first vaccine for honeybees to protect them from diseases. They get diseases, they get sick, just like any other animals, just like we do. They get viral infections, they get bacterial infections. And despite the fact that they are so important for our survival, and so not just food production,

• 9:48Speaker 05

  but biodiversity, you had mentioned that the whole insect declines are extremely, extremely important in a bigger picture. There is nothing, or there was nothing out there to really help them fend off diseases. And so we decided to set out and change that and decide, you know, these animals, they need, they need the protection, they need our care. And we can't just complain about insects. We also need to, we need to protect them. And so that's what we do.

• 10:21Tracy Alloway?

  I have so many questions already, but perhaps my biggest one is how does a honeybee vaccination actually work? Because I imagine you're not all going out there with tiny little syringes and inoculating millions of bees, which would kind of defeat the purpose of having all these pollinators do our work for us. How does it work?

• 10:42Speaker 05

  Yeah, we want to be kind to them. We want to be, you know, careful. And you had, you know, some of us are older. And when, when I was a child, I remember the nurse came to school and gave us a sugar cube with the polio vaccine on it. And this is very similar. The queen gets a sugar paste to eat in her early stages before she gets introduced into the new colony. And we just mix the vaccine. It's an oral vaccine. It's a liquid. We mix it into that sugar paste and she takes it up by eating, in a nutshell.

• 11:20Tracy Alloway?

  And then she spreads it, I guess, to her offspring.

• 11:22Speaker 05

  Right. So insects have this interesting phenomenon that the maternal animal passes on information about a disease that is in the environment to the next generation. And the queen does this via the eggs. So there is a disease in the hive, there are pathogens in the hive, she can't get sick. A lot of these diseases are infant diseases, they're larval diseases, so they threaten the brood just when they emerge from the egg. And so the queen takes these pathogens up and passes little pieces of it to her ovaries and the

• 12:05Speaker 05

  developing larvae will see this piece of a pathogen and say, oh, there's something out there. The immune system gets upregulated and before they hatch and they are protected when they hatch. And this is a mechanism that is widely seen in insects and in butter breads and actually also in chickens and other animals. And so what we do is just use that naturally occurring phenomenon and where we only have to vaccinate the queen or expose the queen to a dead bacteria that can't infect anything and the next generation is protected. It's pretty clever, the little magic wand that you, you know, put over the hive.

• 12:49Joe Weisenthal?

  So within the field of animal biotech, or even more specifically rare animal biotech, or even more specifically bee vaccine biotech, I can imagine multiple different areas of what you'd call business or value add creation. So there's the raw science of like what There's the molecular structure of a B vaccine look like. Then I would imagine there is the challenge of turning raw science into something productized that can be distributed and sold at a profit. And then there's the actual sort of distribution of it. So going out to the actual customers. Here's a product that exists. Where does your company sit specifically? How much is it at the raw science level?

• 13:33Joe Weisenthal?

  And how much is it the productization of raw science?

• 13:37Speaker 05

  All of it. I'm laughing. You don't see me laughing, but I'm laughing because that was actually what we were faced with when we decided to do this company. This was very early academic research at the University of Helsinki. When I by accident stumbled across it. The university had brought me in to look at their life science portfolio, to see if there's a company that could be spun out, if technology, a patent that could be licensed to an existing company. And typically, when you do this, you know, you see a lot of really interesting research. I mean, universities are full with just amazing, amazing research.

• 14:21Speaker 05

  But, you know, often if they are incremental, small, you know, improvements that are really important to move us forward, but they're rarely these completely out of the box ideas.

• 14:32Joe Weisenthal?

  Right, right.

• 14:33Speaker 05

  Put it this way. And so I stumbled that the research happened to be in the office at the university when I was there. And the director called her in and said, you know, Dahlia, why don't you tell these folks about your idea for a B vaccine? And I just got really intrigued because, you know, somebody needed to do something. I told myself and, you know.

• 14:53Joe Weisenthal?

  This is your CSO, founding CSO. I'm looking at your website, Dahlia Freitag.

• 14:58Speaker 05

  Ah, Freitag, right. And so she's a professor at the University of Graz. She was at Helsinki and now she's in Graz. And so this was really early research, very early data showing that this might be possible.

• 15:14Speaker 05

  The company then had to start completely from scratch to find a strain, to go out and, you know, infected hives, build a strain collection, you know, go to the regulator. There was no regulatory pass, there was no development pass. How do you conduct clinical trials? Nobody had ever done this before. So there were, was the whole development of the product that could then go out into the market. And then there was no model of how, there were no channel. I mean, if you, if you develop a new shoe, you go to a shoe store and that's where you sell the shoe. For a bee vaccine, there was, that didn't exist. So there was no distributor.

• 15:57Tracy Alloway?

  There's no, there's no bee clinics out there.

• 15:59Joe Weisenthal?

  There's no retailer on Fifth Avenue where you get your insect vaccines. There's no channel.

• 16:05Speaker 05

  Yeah, you know, if your beehive is sick, you're, you're not going to call a veterinarian and say, well, carry the hive into the veterinary clinics. I can look at my queen, you know, right? That doesn't, you, you call your neighbor, you call, you know, your father or your grandfather that had bees. So it's a complete, even these large beekeepers, and in the U S, when we're talking large beekeepers, they have seventy, a hundred thousand, a hundred and twenty thousand colonies.

• 16:36Tracy Alloway?

  Wow.

• 16:37Speaker 05

  These massive operations that are pollinating our crop during this, our apples, you know, the beautiful apples that you get, you know, at Whole Foods. And it's like, they, they need these big beekeepers, these big producers. But still, there is no veterinarian that comes by. There is no, you know, so it didn't exist. So we have, we are creating everything done, basically is writing the playbook on how do they develop these products? How do you get them licensed? How do you commercialize them? How do you roll it out? How do you work with the industry?

• 17:19Speaker 05

  And not just with the industry, with state veterinarians, with it's much bigger. And these are, these are global problems. I, I was talking to one state government veterinarian in, in Europe, who was then asking me, well, we don't now really know what to do here. What's the opinion of the World Health Organization? And I say, you must be kidding me. You say the World Health, but let me call them, you know, let me pick up my phone and figure out what they have to say about this. So really, what, what we had to do is the whole from bench to customer and with the customer. And it's, it's exciting when you have an opportunity to do that and to figure it out.

• 18:17Speaker 00

  What's next for virtual assets? I'm Jacob Grease, host of Economy Scale, a series exploring growth in key global sectors. And in this episode, we're diving into the digital forces shaping finance. Sean McHugh from Dubai-based Virtual Assets Regulatory Authority has this to say.

• 18:33Speaker 06

  We're seeing a lot of institutional players come in, digital asset dedicated hedge funds, high frequency traders and that sort of thing, and folks who service institutional clients.

• 18:42Speaker 00

  As more capital enters the market, adaptive regulation is likely to become increasingly key. Reese America Ripple says.

• 18:50Speaker 07

  A lot of regulators globally would like to keep the industry at arm's length. That's the opposite here. I think also what you'll find is that regulation and frameworks can come out, but some of them are maybe a slight iteration on some 80-year-old policy and not actually in line with what the technology can do and offer. And again, that's very different in Dubai.

• 19:09Speaker 00

  Listen to the full episode wherever you get your podcasts. This series is brought to you by Bloomberg Media Studios and the Dubai Department of Economy and Tourism.

• 19:19Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume, so writes Bloomberg Businessweek's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 20:01Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 20:42Tracy Alloway?

  I have so many questions about this, not just the regulatory portion of this and the commercialization, but specifically to begin with on the funding side. So you're doing something relatively new, and I imagine if you go to a traditional venture capitalist or a traditional investor in biotech and you say, "I have a B vaccine," I'm sure some of them are very excited because it's novel and it sounds kind of cool, but on the other hand, it is this kind of brand new thing, and I could see some people being a little bit surprised. What are those conversations like when you're first trying to raise funding?

• 21:18Speaker 05

  Right. So it has changed a lot over the last six years, thankfully. But in the beginning, when I set out, it was really clear, we did not fit any investment themes.

• 21:33Speaker 05

  So we're not animal health, because even though bees are classified as livestock, they are not, you know, it's the pets, it's the companion animals, uh, which the biggest, but then the traditional ones, the cows and the chickens. But not bees, that just falls outside animal health investment. On the agriculture side, most architect investors will look at microbiomes of trees, uh, drones, surveillance, more precision agriculture, technology-driven, A I, those themes. And then you have the food tech investors, which are further upstream, right?

• 22:16Speaker 05

  They they look at the honey, but they don't look where the honey came from. So we fell into this complete no man's land. There was, in food tech, there were a couple of investors that, at the time, a lot of money was going into alternative protein production to lower, you know, to be more sustainable, lower C O two impact and. Oh, yeah, the big meats. Right, the mealworms and and and grasshoppers for animal feed and and human food production. They were really interested in this because they said, well, we had a complete blind spot that these animals could get sick too. But vaccines was not in their, in their target, so they couldn't invest in it.

• 23:00Speaker 05

  So there was literally nobody that, so it was, it was, in the beginning, it was heavily, um, angel funded. Hmm. Because angels, uh, yes, they want to make money, these are rich individuals that that want to, um, make, you know, money with their investments, but they also, they're driven by, by, they want to do, you know, good in the world with with their wealth. So the the return expectations are, the timeframe is a little bit different.

• 23:29Speaker 05

  And so they they really backed this. So we were entirely entirely angel funded and and a lot globally. So not not very few US, actually, European, Canadian growers um that came from the agricultural space, from the animal health space, but not VCs. And it was in two thousand twenty two. Um I don't. You might remember when the market went down, it was a Yeah, of course. horrible time for everyone, especially startups, was in a few weeks. All the discussions that I had and fundraising, you know, people were jumping off left and right. And somebody asked me to speak at a climate and space conference.

• 24:12Speaker 05

  And I said, climate and space. But when you're raising money, you take every opportunity you can to to spread the word. So I went and there were these amazing talks about, you know, refueling stations in space and and and, you know, hotels and, you know, whatever you have and these batteries and and everything. And and then I came with my with my B vaccine and it it telling the audience that this is this is great that, you know, because of climate change, we have to go to other planets and we have to be pre- prepared for this. But in the meantime, we really need to solve this problem because

• 24:52Speaker 05

  we're never going to be able to solve it here on this planet or any other planet if we don't protect insects. We may not like them, but they're incredibly important for human survival, plant survival, all living organisms need these little, you know, we we can do wetland restoration. It doesn't matter if we don't have insects to live in them. And sure enough, at the end of the night, I had was approached by several climate investors, VCs, sustainability and climate that understood the importance of what we were doing

• 25:31Speaker 05

  and had, you know, more flexible investment themes and a longer term horizon. And I I was able to get funding. And so now a lot of the investors who were talking to come from that space.

• 25:44Joe Weisenthal?

  I think this is so fascinating because something that's come up in the podcast before in various contexts is this idea that like, you know, we think of like this wall of capital out there that exists and it's seeking return. But whether it's banks, whether it's VCs, whether it's private credit firms, et cetera, there is specialization and there are categories of things. And we talk a lot about this, particularly more often in the context of certain energy techs, they sometimes they call it the missing middle. This idea that there are theoretically profitable investments out there, but it's just not in anyone's specific wheelhouse.

• 26:24Tracy Alloway?

  And no one is in charge of the B vaccine.

• 26:26Joe Weisenthal?

  Yeah, no one, you know, yeah. So it's like not something that someone has specialized. And so even the theoretically profitable on some time horizon investment doesn't happen because there isn't that, I guess, domain knowledge or very specific domain knowledge. Where are you today in terms of both funding, but also in productization and distribution?

• 26:47Speaker 05

  Right. And I think there is one really important aspect to it. I believe the, one of the reasons why there is, you know, you have the specialization and you have these, I mean, investors are, they are willing to take risks. Banks are willing to take risks, but there is still going to be an assessment of return. And assessment of return, you can only do if you know the market, if you have understanding of how the market works, how the go to market strategy is, who's going to pay for it. If you are developing a product that the world hasn't seen before.

• 27:29Joe Weisenthal?

  Yeah.

• 27:29Speaker 05

  How are you going to price it?

• 27:31Joe Weisenthal?

  Right.

• 27:31Speaker 05

  What, you know, it's like, it's a total crystal ball that's in front of you and investors are managing other people's money.

• 27:38Joe Weisenthal?

  Right.

• 27:38Speaker 05

  You know, it's like, they can't, you know, it's a, it's a huge hurdle to, to make the argument, we believe that, you know, somebody is going to pay X for this novel product. Because, you know, if you go out and do market research, and we've done that, and ask who, if there was a B vaccine, how much would you pay, right? An investor expects you to do that. And But people have no concept. This is like if you go out, you know, would you pay a thousand dollar for an iPhone? And you've never seen it, you say, are you? Yeah, yeah. Yeah. And so you have to really get push hard as quickly as possible, get the product out.

• 28:17Speaker 05

  You know, most biotech products take ten, fifteen years and millions of dollars. We had to do this in rapid time to get there with total focus and show that the market, that there is a need, that we're solving a problem that actually exists. And that people are willing to buy it because the problem is so large. So we are, we completed our first year of commercialization, first full season. These animals are seasonal animals. They, they hibernate over the winter and then the, the almond pollination kicks off the new season,

• 29:00Speaker 05

  which just happened in, in California. So we had a lot of beekeepers interested in it. We had initial sales. We did a lot of, you know, this is high touch. You have to know these people. They have to learn. We, we weren't, you know, an unknown little company. And the first product, who are these people? So we had to overcome this. And so now the second year, the season just barely started and we already have like five times as many purchase orders than we had the same time last year. Many more customers. I think there was another

• 29:43Speaker 05

  five to six time increase in, in customer that come to us. Now people are coming to us. They've heard about it. So there's a lot of, um, you know, in, in, in agriculture, you know, if, if you're lucky who depends on it, you won't just purchase a new product and apply it in your entire operation, right? You will split it out in, you know, one percent, you know, in a couple of hives, maybe a hundred hives. Then the next year you'll say, okay, okay, this is fine. I'm going to test it in twenty percent of my operation. And then at some point, when, once you see. That it's really, it really turns the corner for you, then it's when you place, uh, when you, when you adopt it, hundred percent, either you're gonna adopt it or you're not gonna

• 30:28Speaker 05

  adopt it. And so that is what we are seeing that the customers that are, we have the returning customers that have placed larger orders, with more customers coming. So it's, it's going really in a right direction. I mean, this is a licensed product, is an animal vaccine, it's not a supplement. So it's, we can tell people it is working, preventing, you know, American foul root. But it's a journey, it's a real journey.

• 31:14Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Businessweek's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices, but according to recruiters,

• 31:58Speaker 01

  advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 32:36Tracy Alloway?

  Quick question for you. How much of your day is spent typing? Email, Slack, notes, prompts to ChatGPT? Whisperflow is a voice-to-text app. Instead of typing, you talk and it types for you in any app on your Mac, Windows, iPhone, or Android. It takes out the ums, fixes the typos, and the result sounds like you wrote it. Four times faster than typing. So the email that used to take two minutes now takes 30 seconds. Whisperflow is free. Download it at whisperflow.ai. That's W-I-S-P-R-flow.ai. So the bee vaccine is not the only thing you've been working on. You're also working on a shrimp vaccine, which, as far as I understand, it operates on similar principles. Would you anticipate that the development

• 33:20Tracy Alloway?

  and the funding and the commercialization of a shrimp vaccine, would that be easier now that you've done the bee vaccine? Or is it still the case that, you know, shrimps in aquaculture are completely different to bees operating in commercial hives or in agriculture?

• 33:39Speaker 05

  Actually, the reason why we... So, yes, it's going to be easier. It is easier. So investors that we're talking to now, because you know the market. In bees, nobody understands, you know, what are the losses? You know, how many millions is this actually? What's the impact on, you know, losing three hives? What does that... What are the real, you know, solid numbers? Are much more difficult to get to. Shrimp industry? We know that there are $4 to $7 billion of losses due to disease every single year. These are staggering numbers.

• 34:18Speaker 05

  One disease white spot can be a billion dollar in losses a year. This is very well documented. We know it's a $43 or $46 billion industry. Because the market is much better known, because people have tried to develop prophylactic solutions, tried to develop vaccines. There is, in the last 15 years, the emergence of...

• 34:47Tracy Alloway?

  Wait, what's a... Sorry, what's a prophylactic solution to white spot in shrimp?

• 34:52Speaker 05

  Oh, vaccine that you give to prevent a disease.

• 34:56Tracy Alloway?

  Ah, okay.

• 34:57Speaker 05

  You know, make sure you don't get sick before the disease rather than treating once the the disease.

• 35:03Tracy Alloway?

  Okay. I had a slightly different image in my mind, but go on.

• 35:08Speaker 05

  So, yeah, so it's it's much better understood. People have tried to develop it. There are there are many approaches through better feed, through better genetics of the shrimp that are more disease resistant. So there's a lot of money flowing into this area and and and the market is much better understood. And so you can do price calculations much more easily and the return on investment. And all the, you know, most of the big animal health companies are looking at this space. They they might already be in aquaculture with salmon or tilapia with with other species and might want to expand into this.

• 35:52Speaker 05

  And then the big feed companies, whether it's it's, you know, they have they have a bunch of them that sell into that industry and understand it very well. And investors, then it makes it much easier for investors to to assess the risk profile.

• 36:09Joe Weisenthal?

  What is the state, you know, either for your company directly or the peers that you talk to when you go to industry conferences and such, you know, we've talked about it a little bit on this show, the sort of cutback in funding for pure science, which is obviously the precursor to having a company, as you said, your co-founder had been working on this, in a lab in Helsinki. Can you give us a little bit of the landscape of like what you see happening on the pure science front and how it compares to Europe? And if you have any visibility into it, what's happening in China? But again, I don't know if that's something that you have it's easy, but I'm sure you have at least US and Europe visibility into the um, the science funding landscape.

• 36:52Speaker 05

  Right. From a company perspective, we so far have not relied on any government money to support science. There are a lot of, you know, SBIR and it's all these grand mechanisms that are out there to fund science in your product directed science. And we've stayed away for it from a from a number of reasons because it's. You know, you can get political and you're always, you know, wherever the the wind blows and and we just don't want to get distracted with this. They are very, very, very lucrative funding mechanisms in Europe where the European Union backs innovation.

• 37:35Speaker 05

  And it appears to be why they're very competitive. It's billions of dollars that are dedicated towards that. And a lot of, and and I think that's probably where a lot of research is gonna go. I would think if this if this continues, the lack of of resources available to universities in this country, we have to see how this plays out. But from a company perspective, I think from a regulatory environment or from the ease of accessing capital from private markets.

• 38:09Joe Weisenthal?

  Yeah.

• 38:10Speaker 05

  I would think US is still leading this.

• 38:13Joe Weisenthal?

  Yeah.

• 38:13Speaker 05

  Regardless, independent on what happens. Of course, do we feel it in in discussions with investors, the uncertainty in the economic climate? Before like two thousand twenty two, every investor would ask, if you had more money, you know, can you accelerate?

• 38:30Joe Weisenthal?

  Oh, yeah, yeah, yeah.

• 38:32Speaker 05

  That question doesn't come that often anymore.

• 38:35Joe Weisenthal?

  That's interesting.

• 38:35Speaker 05

  Can we de-risk this a little bit?

• 38:38Joe Weisenthal?

  So the US capital markets are still the best in the world, but they're not trying to basically stuff your pockets full of money the way they were a couple of years ago.

• 38:47Speaker 05

  That's correct. They're they're a little bit more, you know, how is this gonna play out? I think everybody is in a in a, you know, holding pattern. But there's definitely money out there to be deployed.

• 38:59Joe Weisenthal?

  Got it.

• 38:59Tracy Alloway?

  Hmm. So it strikes me that what we've been talking about, obviously very creative solutions to ongoing problems. And, you know, people might be aware of the decline of honeybees, but perhaps they're not as aware of the problem of white spot in commercially farmed shrimp. How do you go about actually selecting your next targets?

• 39:23Speaker 05

  It was a decision based on what do we know the most problematic diseases from the economic impact. And we know that, we knew that our approach of vaccination of the queen is effective against a number of diseases when we test it in the lab and when we see how the vaccine performs in the field. That we said, okay, what, what are the biggest bacterial and viral diseases for shrimp globally? Whether, whether this is in, in Southeast Asia, whether it's in, in, you know, in Ecuador, in China. What are the, the biggest problems? And that's where white spot just really is at the top.

• 40:08Speaker 05

  And then early mortality syndrome there, there on the bacterial side, but white spot is definitely the disease that can wipe out an operation when it hits a farm, when it hits in three to seven days, the entire shrimp are dead. Wow. And it, it's rapid and you lose an entire harvest. So for a farmer and typically you can't clean up. You know, so right now for bacterial diseases, farmers still use antibiotics because they don't have anything else. You know, chemicals, all kinds of treatments when they see that something is happening.

• 40:49Speaker 05

  But when white spot happens, it's very, very difficult to clean up the ponds. You pretty much have to abandon them and then find a new spot and make new ponds. And that impact on the environment, you know, shrimp is one of the most nutrient-rich lean protein that can be grown at large scale. It is consumed at, at, you know, big amounts around the world. And it could be the most sustainably grown protein. Hmm. It's not. It's not because of the chemicals that are needed because of the mangroves that have

• 41:33Speaker 05

  to be cut down, because of the the other impacts, because we don't have vaccines to prevent that from happening. And that's why we, you know, we need, we need more shrimp. We picked shrimp also because it is so and it's such an important protein and growing. The consumption worldwide is growing and it's relatively cost effective. Yeah. To produce, but the impact is just devastating. And rather than saying, okay, let's get rid of all the shrimp product. That's not a solution, right? We have to just what we did with chickens or cows or honeybees, make them healthier so that the impact on the environment is reduced. And of course, the shrimp don't die, you know, in the pond.

• 42:17Tracy Alloway?

  Yeah. And so they can survive the industrialized scale at which we seem to form them nowadays. But Annette, that was so interesting. And I'd love a chance to talk about honey bean vaccines and shrimp vaccines. So thank you so much for coming on All Thoughts.

• 42:35Speaker 05

  Well, thank you for having me. It was a pleasure.

• 42:50Tracy Alloway?

  Jo, I just find this particular area of biochic just really interesting and also more and more relevant, right? It seems like there's no doubt that there's increased pressure on our food supply and we're having to be more creative in figuring out ways to feed everyone all the things that people seem to want to eat. And usually that means commercialized, industrialized farming, right? And a lot of those conditions for animals are not great, as we discussed in our chicken series. And so finding ways of keeping them healthier so that they can survive and preferably even thrive in some of those environments, although I'm guessing that's a long shot, but so that they can survive and and actually

• 43:32Tracy Alloway?

  Actually become food and satisfy people's needs. That seems more important than ever.

• 43:36Joe Weisenthal?

  While we were recording this, Tracy, I beat me and she says she hates shrimp. I didn't know that. I like shrimp a lot. I, I, I want, I, I could eat a lot of shrimp. Um, you know, I thought that was fascinating, you know, the sort of investing under extreme uncertainty. You know, we should have on the podcast again sometime is, um, we talked to, remember Bill Janeway?

• 43:57Tracy Alloway?

  Oh, yeah.

• 43:58Joe Weisenthal?

  The VC and he talks about like, he's a venture capitalist and he's also an economist. And he talks about like, basically, you know, investing under, and this is when, under extreme uncertainty. And this is extreme, extreme uncertainty because it's actual life science. As she said, you have no way of pricing it.

• 44:14Tracy Alloway?

  The stakes are huge for farmers.

• 44:16Joe Weisenthal?

  The market size, you don't know what they're going to pay. You don't have a distribution channel because it's not a veterinary medicine where the veterinarians are kind of a service salespeople, et cetera. So how you go about pricing that and how you go about from sort of lab to company and make that initial step. And then there's, it's not really falls in anyone's category is to me just such a fascinating.

• 44:39Tracy Alloway?

  Yeah.

• 44:40Joe Weisenthal?

  Economics question.

• 44:42Tracy Alloway?

  Absolutely. And the one other thing I want to, I want to put in here, this is a call to action for listeners. But I've been wanting to do an episode on gender selection technologies in agriculture for a long time. So, you know, there's a huge amount of waste if you're breeding something like cattle or chickens. Because you don't want a bunch of roosters if you're trying to farm eggs or you don't want a bunch of bulls. If you're trying to produce milk and I know there are companies working on this particular technology. I don't know the names specifically. I don't know if we can get them to come on the show. But if anyone has any connections to them, please, uh, let, let them know that we want to talk.

• 45:21Joe Weisenthal?

  Tracy, I'm going to bring this back to World War II history real quickly. This is my other takeaway of reading about the history of war. The males are very expendable. This is like, right? Like countries lose millions of men and continue to operate. And so it's similar to animals in that respect.

• 45:39Tracy Alloway?

  I'm not going to say anything.

• 45:40Joe Weisenthal?

  Okay.

• 45:41Tracy Alloway?

  Shall we leave it there?

• 45:42Joe Weisenthal?

  Let's leave it there.

• 45:43Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 45:48Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at TheStalwart. Follow our guest, Annette Kleiser. She's at Annette Kleiser. Follow our producers, Carmen Rodriguez at CarmenArmin, Dashill Bennett at Dashbot, and Cale Brooks at CaleBrooks. For more Odd Lots content, go to Bloomberg.com/oddlots. We have all of our episodes in a daily newsletter, and you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.

• 46:14Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when Joe brings up how expendable the males of the species actually are, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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