How this silkworm startup is taking on the pandemic

Bio-tech is messy because life is complicated.

A lot of attention is given to computers sequencing genomes, but some of the most advanced and important work is done by studying and using other living things to make our own lives better.

Kenta Yamato co-founded Kaico to commercialize a technique that uses silkworms to manufacture small-batch custom proteins. And Kico is involved with everything from veterinary medicine to Japan's search for a coronavirus vaccine.

We also talk about the challenges or creating startups based on university technology and the one e-commerce model in Japan that just won't go away.

I think you'll enjoy the conversation.

Show Notes

How to get proteins from a silkworm (It's not fun for the silkworm) Why silkworms, in particular, must be used The importance and uses of small-batch, custom proteins The start of a silkworm startup The most common (and least successful) Japanese e-commerce model Why it's so hard for Japanese universities to spin-out startups How Kaico silkworms are part of the fight against covid-19 How to scale a silkworm startup

Links from the Founder

Everything you ever wanted to know about Kaico Friend Kenta on Facebook Connect with him on LinkedIn A Kaico video explainer

Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Today, we're going to be talking about worms. No, no, wait, don't go, I promise this is going to be really interesting. Today, we're going to sit down and talk with Kenta Yamato of Kaico, a Kyushu-based startup that is using silkworms to rapidly produce custom small-batch innovative proteins that are used for bio-research, medicine, and they play a part in Japan's search for coronavirus vaccine. It's a fascinating process but admittedly one that's not particularly fun for the silkworms themselves. We also talk about the most popular and most unsuccessful e-commerce business model in Japan, the challenges Japanese universities in spinning out startups, and we even cover some practical solutions to that problem. But you know, Kenta tells that story much better than I can, so let's get right to the interview.

Interview Tim: So I'm sitting here with Kenta Yamato of Kaico, a company that uses silkworm to produce specific protein used in medical tests and vaccine, and thank you for sitting down with me. Kenta: Yes, thank you for me and I have a very pleasure to explain our company's story. Yeah, thank you very much. Tim: It's great to have you on the show. I tried to explain very briefly what Kaico does, but I think you can explain it a lot better than I can, so at like a high level, what does Kaico do? Kenta: We started Kaico two years ago in 2018. Kaiko means silkworm in English. Maybe you know silkworm can make silk for clothes, but we will use this kaiko silkworm for making proteins. We are a startup company from Kyushu University and our products are many proteins, the protein the other companies cannot make because it is difficult to make it. We make this protein by silkworm. Tim: So if I understand the basic process, you inject the silkworm with a virus containing the target gene, and then it makes the proteins as part of its silk, and then you extract the proteins from the silk? Kenta: No, no. First, we'll incorporate the gene of target protein into baculovirus, so this baculovirus is safe for us humans and animals, but baculovirus damage to only silkworms and we will insert this recombinant baculovirus into silkworm and their body can make the specific protein in their cell, and finally, we'll collect and purify the body liquid from the silkworm. Tim: Okay, so it's not from the silk, it's from the silkworms themselves that you extract the proteins. Kenta: Yes, we don't use silk. Tim: Okay. So why silkworm? Is there something about silkworms that makes it easy to generate proteins in this way? Kenta: Yes. Maybe other insects can make same like proteins, but silkworm is the only one insect not moved and it's very cheap. Do you know the price of a piece of silk? Tim: I have no idea. Kenta: A piece of silk a silkworm can make is $0.20 or $0.30, so very cheap, silkworm, and we can plant a huge amount of silkworm in a very narrow space. Tim: So the advantage of the silkworm isn't genetic, it's the fact that they just eat the mulberry leaves and stay put, and you can control them? Okay. Kenta: Yes, yes, it's very easy to plant silkworms. Tim: So what is the normal process for producing these kinds of proteins? Kenta: Normally, people use very huge tanks like beer tanks, silver tanks, but the silkworm is like a biologic tank, so very useful and convenient for us. Tim: So they're little bio-factories? Kenta: Yes, a bioreactor. Tim: Little bioreactors? Kenta: Yeah. Tim: So you mentioned it was cheaper to use silkworms, so how long does the process take and how much cheaper it is than the industrial approach of large tanks? Kenta: Maybe many industrial tanks need to study and develop for the production ways and process but we don't need the scale up period and money because we can make proteins from silkworm. One silkworm, we will make a huge amount of protein because we just increase the number of silkworms, so it's easy to increase. No need to study for scale up. Tim: Yeah, I could see why that would give you a lot of flexibility for producing small amounts or very flexible amounts of the proteins as you need. So what is the turnaround time? How long does it take from the time that you identify a target protein that you want to produce to the time that you've isolated and you have that protein in the bottle? Kenta: Our setup time is about one month, we'll make the recombinant baculovirus, and after that, we will insert this baculovirus into the silkworm in three or four days so they can make the target protein in their cells. So after four days, we'll pick up the protein from a silkworm, just only four days. Tim: Oh, wow, that's much faster than I imagined it. Kenta: Yes, but we need about one month to make recombinant baculovirus, so total is two months. Regarding COVID-19, we already developed the spike protein of COVID-19, so earlier this year, we get approval from the Japanese government to procure this COVID-19 and two months later, Kyushu University and our company had finished this research and we can get s-protein in May 10 or 15th, yeah, about two months. Tim: I want to go into more detail about the COVID research you're doing in a minute, but in general, what kind of problems does this solve? So I mean, everyone's talking about COVID right now but what other kinds of medical research and testing is this technology likely to be used in? Kenta: Oh, we are now developing the diagnostic product with partner companies and maybe in September, we can show our demo kits to the domestic markets, and next, our target is vaccine for coronavirus. Tim: Actually, before we get into the details on the vaccine and the corona, I want to ask you a little bit about your own background. You mentioned before you started Kaico in April of 2018 but your co-founders, it's based on the research of two very prominent researchers, but your own background is in economics and business, right? Kenta: Yes, that's right. Tim: So how did you end up starting a silkworm startup? Kenta: [laughter] Yeah, mysterious, maybe mysterious but my history is long. So after graduation from Yokohama National University, I joined Mitsubishi Heavy Industries. I was responsible for the ship sales and procurement for materials for ship building and power plants, and after 15 years, I decided to make own company, name is Burio and we were handling Internet products because I was in the Kyushu island in 2004 or 2005 and in these days, the first stage of Japanese Internet trade, so I built Kyushu local products, for example, Castella and the other product produced Kyushu. Tim: So like e-commerce selling Kyushu products? Kenta: So using Rakuten commerce, but very busy. We could sell the product but nothing profit because we need packing and dispatching, everything needed for manpower, so no - Tim: I think that is - yeah, that is one of the most common and most commonly failed e-commerce models. Everyone wants to sell like, interesting food and crafts from local hometowns. Kenta: We can sell but no profit. So two years later, I decided to return to salaryman, but I thought I want to make one more startup company and I watched a commercial, Kyushu University has a business MBA course for businessman, evening class and Saturday and Saturday class only, so I joined. In the MBA course, I met these professors, Kusakabe-sensei and Kamiya-sensei, and we talked about silkworms problem and silkworms merit, so I found this is very interesting business and this is very Japanese domestic science. Tim: Yeah, definitely very uniquely Japanese, I think. Was this like a university program trying to match business and researchers or did you just run into your co-founders socially at the university? Kenta: We had some classes in the university, industry and academic collaboration program and I joined this class and I was taught how to make a startup, so one of the selections is the startup company we will make, so I negotiated with these professors: please make our startup company. After that, these professors agreed. Tim: That's great. I mean, we're seeing more Japanese university spin-outs but they're still pretty rare, so it's great to see this working out. Kenta: Thank you very much. And one more matter is Dr. Kusakabe was willing to spread their technology worldwide but he wanted to stay in the professor's position in Kyushu University. He didn't want to be a businessman, so he said, okay, I will stay in university but you have to make a business. Tim: Well, that's - I mean, I think that is,