Sea Clear
Executive Summary
At Sea Clear, we have developed a plan to carry our unique vision from the lab and into the real-world market. This plan continues to update as our team develops entrepreneurially. Due to the number of markets affected, there are many opportunities available for us to take our product and shape it to meet their high demands.
“In Florida, our environment is the foundation of everything from our economy to our way of life”
- Mark Rains, state chief science officer
Florida’s economy and environment are intrinsically linked. While Harmful Algal Blooms (HABs) are wreaking havoc on the ecosystem, they are simultaneously debilitating the economy. It is time we implement a solution that will clear the water of these blooms before the damage is irreversible to the health of our economy and environment alike.
Our primary target market is the state government. This will give us access to the tools and funding we need in the future, as well as begin our testing and distribution process. We also approach private markets as well and uncover promising results in the real estate industry. We further speculate on other potential markets such as fisheries, health care, tourism, and hospitality.
For now, our funding comes from Florida State University. In the future, we will obtain funding through government aid, business with industry leaders, and support from civilians. Our biggest support will come from the state government through the FDEP. We will apply for EPA grants as well. Financials are costly for this project; however, the market is vast. At Cercosporin’s current rate on the market, it is nowhere close to commercial use. However, we hope to change this.
Implementation Report
I. Industry Analysis
The global algaecide industry is currently growing at a CAGR of 5.3% and is expected to reach $3.3 billion USD by 2027. It is composed of several different types of algaecides, many of which are harmful to the environment. Since we will initially be competing in Florida and the US, we look at all the costs incurred due to HABs in different areas of the economy. This industry analysis is the foundation for our market analysis.
II. Marketing Plan
Our marketing plan will consist of a series of promotional events, donor opportunities, and fundraisers to spread awareness. As we aim to capture customers, we will have pitch meetings with leaders in all previously mentioned markets, where we shall discuss our financials in greater detail and hope to acquire their business and investments. No single consumer wants to bear the weight of the algal bloom disaster, but if everyone contributes to a combined effort, we can make a greater impact.
III. Implementation
As an algaecide, we must meet specific guidelines to ensure environmental safety. FIFRA controls the requirements at a federal level. We believe we are already qualified for approval.
IIII. Product Application
We have identified that cercosporin must be applied to the surface of the water for the algaecide to be most effective. Therefore, each market, while using our product for different reasons, would apply it in the same way. On a side note, our product may also be applied to cancer research.
V. Safety & Challenges
Given Cercosporin’s use as an algaecide, toxicity is required. The challenge lies in ensuring that this toxicity remains preferential to algae, and is facilitated by the compound’s light activation, preferential membrane binding, insolubility, and rate of degradation.
VI. Financial Projections
Perhaps our greatest challenge for this project, we hope to find ways to reduce costs and optimize our product. We can justify the expenses if we are able to dramatically reduce the current market price and target blooms early.
VII. Timeline
The timeline combines lab work and entrepreneurial developments to provide a basic projection of how we anticipate the next four years of progression.
Extended Report
Introduction & Company Description
HABs have presented sweeping problems in the state of Florida and around the world. Sea Clear is tackling the quest of developing an algaecide geared towards removing these blooms, specifically focused on environmental preservation so as not to harm surrounding marine life. With this approach, our arising product is natural and biodegradable to avoid creating additional problems in the ecosystems we apply in. In today’s market, we have discovered a need for such a product. Our engineering sub team has begun the process of synthesizing the compound Cercosporin, which has the potential to impede algal bloom infestations before they occur, as well as those that already exist, thus allowing sea grass to propagate at healthy rates. This compound has not only the potential to restore the habitat loss of manatees and marine life, but the potential to restore Florida’s booming economy as well. To learn more about the causes of the problem, visit the Human Practices page. To learn more about Cercosporin, visit the Engineering Success page.
Of course, this doesn’t come without challenges. The economic impacts of HABs are striking and costly across a wide range of industries, and there’s no simple cure to it all. For the purpose of this project, this market research was conducted under the assumption that our product can be safely applied and is cost-effective. However, there is still field research required to confirm these statements, as there is little known about the full potential of this compound. If the testing results put either of these statements in jeopardy, our project will no longer be feasible. With that said, we have carried forth with the project because the preliminary results are highly promising.
With the survival of the manatees in mind, we thought it was best to take an integrative approach in implication and attempt to engage with all markets that may potentially have a stake in an effective, eco-friendly algaecide. The more consumers we have on board, the more algae we can remove, giving the manatees the best chance at a comeback. Here is our plan to take this product onto the market, based off research and responses collected directly from those we would be doing business with.
Industry Analysis
Figure 2.1 Algaecide Industry.
Check this out: The algaecide market is dominated by North America (2)
The rise of industrialization and its discharges has created more environments where algae blooms are prone to cultivate. As a result of these worsening circumstances, the global algaecide industry is projected to grow at a CAGR of 5.3-6.5% between 2020 to 2027, with final estimates ranging from $3.3-3.7 billion USD (1) in 2027. As stated by Florida realtor David Schuldenfrei, “there is a monster market” when it comes to reducing algae in the water.
The leading types of algaecides (3) in today’s market are copper based. They contain inorganic materials, and when applied, leave behind an excess amount of copper ions. These ions can damage the enzyme functions and chemical transformations in living organisms. Acute copper toxicosis is another detrimental result of high copper intake. There are few alternatives either; some popular algaecides work in conjunction with chemicals such as chlorine and cause cells to burst, while others contain polyquats and sulfates, harmful byproducts that will linger in the environment after application.
Algaecides are segmented by physical state and grade (4). Two recent trends in the algaecide industry that we follow suit with are surface-level application products, and non-selective capabilities. Non-selective algaecides are favored because of their ability to kill no matter the species in an algae outbreak. Cercosporin is both.
Figure 2.2
Economic Impact in Florida and the US
Sources for each Bar: Top (5), Second (6), Third (7), Fourth (8).
This chart portrays a rough estimate of Florida’s annual economic losses due to HABs’ effects on tourism. It assumes all beaches generate equal economic activity, which is not true; some of Florida’s most popular beaches lie in the areas most impacted by HABs. Therefore, the beaches closed in the Tampa Bay and Sarasota regions would be responsible for increased levels of economic activity. Closures may be much higher during intense waves of HABs, such as in 2018. The counter is that a portion of the 25.5% of tourists would be capable and willing to rebook their trip to the less affected East coast of Florida. During outbreaks like in 2018, this would be more difficult due to blooms hitting both coasts. Algal blooms are most likely to spawn during the late summer/early fall months (8) of the year in Florida (hence 3 months/year), but some outbreaks have lasted up to 18 months.
Figure 2.3.
High concentration levels of HABs during the severe Red Tide outbreak in 2018. This led to increased health issues, beach closures, high fish kills and more economic downfall. This image uses past data to demonstrate just how much of Florida’s coastline can be impacted during an outbreak. These are beaches that are “Vital to maintaining the health of Florida’s economy and environment.” -FDEP (9)
Here are the combined and projected total costs of the major industries harmed by HABs from three decades ago. Since then, HABs have gotten much worse (7)in all dimensions, and it remains difficult to measure relevant information with accuracy regarding the complete outstretch of the problem. Beyond tourism, here is an overview on other heavily impacted industries.
Figure 2.4 (10)
Here are the combined and projected total costs of the major industries harmed by HABs from three decades ago. Since then, HABs have gotten much worse (11) in all dimensions, and it remains difficult to measure relevant information with accuracy regarding the complete outstretch of the problem. Here are some powerful statistics regarding the harm that HABs have caused to these industries, beyond just tourism.
Public Health
Red tide produces neurotoxins that damage central nervous system (18) in humans and animals- this caused a 54% increase (16) in respiratory diagnoses admissions, 19% increase in pneumonia and 40% increase for gastrointestinal illnesses (17) during red tide. Exposure causes unpleasant and potentially dangerous symptoms, such as coughing, headaches, wheezing, and much more.
Commercial Fishing
Florida is ranked 11th for fresh seafood production (19) in the US with a dockside value of $237 million annually. HABs decrease the catch from both recreational and commercial fisheries(16). This massive industry will take a huge hit if blooms continue becoming deadlier.
Hospitality
An older study found that monthly losses to restaurants and hotels/motels in the Ft. Walton Beach and Destin areas of Okaloosa County were estimated to be nearly $6.5 million (9) combined. This is 25% of their average total monthly sales revenue during the 3 months most affected by HABs.
Government
Florida’s reliance on sales tax revenue is generated by tourist activity. (8) As the tourism industry is heavily impacted, the government is afflicted as well, which hurts the overall commerce of the state.
3.1 State Government
The most important markets we need to be successful are the state and local governments of Florida, as they will be able to control our distribution in the water most effectively. They will be the primary users, not only in purchasing the product but in funding the research, and they have the most advanced system for predicting algal blooms as well. This sets both of us up to benefit greatly from collaboration. Our contact in the state government is Ed Smith, the Director of Ecosystems Projects at the Florida Department of Environmental Protection (FDEP). Ed introduced us to a wide variety of resources provided by the FDEP, fully funded by the government. To stimulate the development of a HABs solution, the FDEP grants $10 million annually towards teams with innovative solutions and works frequently with Florida State. Ed was very kind and asked us to stay in touch as we develop our product, since it is still in its beginning stages, and help us prepare to receive money at the next opportunity.
Our value proposition of clearing the waters of HABs is enticing for many different markets. We confronted multiple different private industries to determine if there was any interest for our product outside of the government.
3.2 Fisheries
An insightful conversation we had with a marine biologist from a large commercial fishery brought us the information that Florida’s fisheries are mostly unaffected by the algal blooms. This reaffirmed what we had discovered through calling multiple fisheries in southern Florida, who all claimed their biggest problems had nothing to do with HABs. This opposes what we found in our research for the Industry analysis, but it appears they are uninterested in what we have to offer and have found ways to maneuver around the outbreaks. The scientist claimed that the reason Florida fisheries remain unaffected is because many of them are for charter and sport, with the bulk of the fish in southern Florida being imported from international waters.
The marine biologist also told us that the international fisheries are the ones facing immense trouble. They had worked for companies across Central and South America and told us that fishing was shut down for a month off the coast of Ecuador due to HABs. According to them, there are major issues in the Caribbean, Chile, and Peru as well. We acquired the marine biologist’s contact and agreed to return if we had more questions. If they are credible, the international fisheries would be a huge market to enter, as a shutdown at the wrong time would be extremely costly to such a highly profitable and seasonal industry.
3.3 Real Estate
We had the most success in connecting with the real estate market.
Dave Schuldenfrei, previously quoted in the Industry Analysis, is a four-time winner of the Realtor of the Year Award in Florida and has witnessed firsthand the transformation that HABs have had on the real estate market. His practice is on Sanibel Island. In a one-on-one discussion with him, we covered the detrimental impacts that algal blooms have had on realtors such as himself and on the neighborhoods in general.
Here is a portion of our dialogue:
Me: “I just want to confirm you sell properties on the West Coast area of Florida, in the Sanibel region?”
Dave: “Correct”
Me: “About how many of these homes are on the water?”
Dave: “That’s a tough question. All properties on the island are affected by water quality, whether they are right on the water or not. I would say at least 1/3 of them are certainly right on the water.”
Me: “So, does the algae affect the property value of all homes in the neighborhood?
Dave: “Absolutely.”
Me: “Do you believe the algae has a direct impact on the price of the properties?”
Dave: “It certainly can. There was a study done several years ago by Florida realtors… it pretty much delineated you could lose 20-30-40% of your value based on what’s going on with the water.”
The study Dave was referring to here is “The Impact of Water Quality on Florida’s Home Values” conducted by FloridaRealtors (20). The study found “a significant economic impact resulting from improved water quality and clarity”. The results in the counties studied demonstrated that “Lee County’s aggregate property values increased by an estimated $541 million”, and “Martin County’s aggregate property values increased by an estimated $428 million”. These increased property values also provide additional revenue for city and county governments.
Dave: “People come here for the outdoor recreational aspects, boating, you have to have water, or you got a real problem.
”Me: “Would you be willing to invest money in such a solution that was promising towards reducing the algae in the water?”
Dave: “It depends on the product… I think there’s a monster market for it.”
Most importantly, Dave confirmed potential interest in our product and would like to remain in touch regarding our journey. It would be a safe assumption that he is not the only realtor who would love to see their magnificent waterfront properties regain value for the benefit of everyone. After our productive conversation with Dave and realizing the hundreds of millions of dollars we could recover with our product, we believe Sea Clear has a chance to receive a substantial amount of capital as we assist the real estate market. While we continue our development, we will be meeting with local realtor committees in coastal regions and with other respected realtors such as Dave to gain investment and consumption of our product.
3.4 Other Markets
Other markets seemed plausible, but less likely.
To target individual consumers in tourism and hospitality-based industries, we will seek contact with the executive boards of companies such as Hilton. Hilton alone has 26 establishments along the coast of Florida. If we speak to owners at franchise meetings, perhaps we could strike a deal to receive a portion of their losses in exchange for clean-up. Even just 10% of the money that they are losing, as mentioned in the industry analysis, would give us $650,000 to use our product in their waters, and that’s just between two counties.
Funding
For now, we are lucky to receive funding and lab supplies from Florida State University, which allows us to access the labs and the equipment necessary to complete our synthesis. As we progress with our project, much of our funding will come from government grants and private investments. Our most promising funds will come from the FDEP, who have set aside $10 mil in funds specifically for what we are trying to accomplish. With success in the lab, we should be able to acquire an initial $500,000, as asserted by mentor Dr. Jeff Whalen, who has developed and launched water quality projects before.
We will apply for SBIR grants from the EPA, for which the portal opens next summer in 2023. This requires technical merit, feasibility, and commercial potential of the proposed technology to qualify for Phase I. (23) Phase II requires development and commercialization for two years. We can acquire further funding after this if we secure a third-party investment. We will shoot for all three of these grants over the course of the next two and a half years.
Fundraisers will also be key in getting our project off the ground. As mentioned in the marketing plan, this will raise capital and public awareness of our solution.
Governor Ron DeSantis recently added $35 million to the Environmental Budget for the 2022-2023 fiscal year to increase water monitoring and combat harmful algal blooms. (24) This is good news for our project as it means we will have access to more federal grants than in years past. If only half of the $35 million goes towards combatting HABs, and our product improves the situation by just 10%, we are eligible for $1.75 million in funding. 25%, $4.38 million.
Implementation
Before applying our product in the field, we must first register it with the EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) statute. Under FIFRA, cercosporin is considered a conventional pesticide. For Cercosporin to be approved, we must prove it “will not generally cause unreasonable adverse effects on the environment.” They account for “the economic, social, and environmental costs and benefits” of the pesticide. We have valid reason to believe there is an insignificant risk of cercosporin causing any noteworthy damage to the environment. Cercosporin degrades quickly, and will remain on the surface, where it will react with the algae it was designated to destroy. Also, HABs frequently create dead zones, where there is no chance of it harming aquatic life because there is so little left. After the cercosporin degrades, the area will be clear of algae and capable of habitat restoration. Our product’s benefits to the environment appear to outweigh its costs, and it wins in eco-friendliness when compared with other algaecides on the shelves. Because of this, we see no obvious reason as to why the EPA would oppose authorization of our product.
Beyond the approval of the algaecide itself, there are labelling and packaging constraints we must comply with as well through FIFRA. We are not designing anything beyond the cercosporin compound in its powdered form. Our packaging must be child proof, for which we will use a plastic jar with a child-protected lid, like how many medications are designed. Our label will include a warning that it must be applied solely to algae, and with specific instructions on how to do so. These instructions are outlined in our application segment.
To meet state guidelines, we must work with Florida’s Department of Agriculture and Consumer Services (FDACS). We pass two separate exams, which are based on the resources “Applying Pesticides Correctly” (13) and “Aquatic Pest Control” (14)After we pass the General Standards and Aquatic exams, FDACS will send us the application with a fee of $250. (15) According to Ed Smith at the FDEP, this part of the process is very straightforward, and we should face little to no difficulties. He said this of the EPA application as well. If all goes smoothly, we should have no significant trouble gaining our licenses and proceeding with testing in the environment.
Product Application
After meeting all federal and state regulations, and producing the amount needed to observe results, we will be in tight collaboration with the FDEP as it relates to testing in the field. Ed Smith told us we are eligible to have our travel and equipment expenses paid for when we reach the testing stages of our product. We will begin testing in tanks of water, then progress to ponds and small bodies of water in the environment. When we have enough product, we will take it to the Indian River Lagoon and begin application there. This process may take up to 3 years, depending on the synthesis development rate and optimization of the compound. This will determine how much Cercosporin we have at our disposal.
For this application to work, we will have to have an in-depth understanding as to how factors such as water depth, time of day, and amount applied all influence results. Unfortunately for now, testing is very expensive. We can run simple tests in petri dishes, but it will be much more efficient to use the Cercosporin we produce after synthesis and optimization. We would also like to experiment the results if we mix Cercosporin with other powders or solutions, such as Hydrogen Peroxide. This would help us reduce our costs per square meter. With a liquid solution, however, we would need to alter our current application method.
The solution might also be used in conjunction with other treatments specified in the human practices section , as well as solutions developed by previous iGEM teams to treat HABs and the toxins released.
Application note: It will be key to detect algal blooms before they blow out of proportion.It’s also worth mentioning that Cercosporin has shown promising results in areas other than algicidal use, including photodynamic tumor therapy and antimicrobial applications.
Safety
Despite cercosporin’s role as a reactive oxygen species (ROS) producer capable of causing indiscriminate damage (28), the compound’s distinctive properties facilitate a more targeted application. Cercosporin preferentially binds to cell membranes and upon reacting with sunlight produces ROS that lyse membranes, causing cell contents to spill out which are then further degraded (29). In the case of algal blooms, the idea is that given this molecule’s light activation, insolubility (30), and lipophilicity, molecules will preferentially bind to algae on the surface of contaminated bodies of water. Cercosporin also seems to degrade reasonably quickly in dark culture containing bacteria (31), as well as in culture containing algae in the presence of light (29).
Toxicity data has been established for several crops, fungi, bacteria and human cell lines, primarily in the context of light activation (32). In the dark, and upon ingestion by mammals such as mice and humans, the compound is minimally toxic (29,33,34). Data from model organisms used as readouts for ecological toxicity, such as Artemia salina (brine shrimp) and Daphnia magna (water flea) is limited (35,36), and only exists for related molecules but not cercosporin itself. Despite damage to larvae and some smaller organisms, its application might still be feasible under the correct conditions, as toxic algae matted at the surface of water columns would take the brunt of the damage. That being said the product is hazardous, and we will treat it with caution when conducting our ecological experiments.
Financial Projections
There is still a lot to be done in research to determine a full projection of our costs. Our best estimate is that we will be able to reduce the production costs of Cercosporin from their current price of $55/mg to anywhere between $0.50/mg and $5/mg through optimization of the pathway and culture conditions (37,38,39,40). In other words, we expect to see a 91-99.1% decrease in price.
The most beneficial projection at this point would be to determine how many mg of Cercosporin is needed per square meter of algae. In the following layout, we account for the thickness of the bloom, but we will need to know more about environmental factors before we are accurately able to say just how much cercosporin we need to eliminate a sizable bloom. Once we know this, we can calculate an accurate ROI. For now, we can scale upwards and hypothesize.
Let’s say we are treating algae in a tank, 1 x 1 x .1 m. (~.1 m is the average thickness of HABs)(41).
It has a capacity of 100L.
The current market has Cercosporin for sale in 5mg packets, for $275.
We need .001M to treat the tank.
Each packet contains 9.35 µM.
So, we need 213.8 packets to treat the tank.
In our current market, that means it would cost $58,795.
With our expected 91% reduction, we can bring this down to $5291.55.
With 99.1% reduction, we can hit as low as $529.16.
The surface area of this tank is 1m2.
Even $529.16 / m2 is not an ideal cost when it comes to algae removal.
Algal blooms vary greatly in size, but we can catch them before they get out of hand, with monitoring help from the government. This will be key in keeping our costs within reason. If we catch them at 1000 m2, we would be spending around $529,155, which is feasible to avoid a much greater disaster. However, as blooms continue to grow and spread the length of the coastline, they may extend for many kilometers. Trying to eliminate a bloom that is 1km x 1km would cost $529 million, which is way beyond reason.
Timeline
Development: Cercosporin production would initially be achieved by the reconstruction of its native fungal biosynthesis pathway in yeast, with enzyme expression and growth conditions being fine-tuned to maximize yield. The pathway would then be integrated into the yeast genome for long term stability and production, with product being extracted from culture and/ or yeast and purified into its powdered form. Product can then be directly applied in bodies of water demonstrating harmful algal bloom activity. The entire process could take anywhere from 1-3 years depending on the amount of people contributing and degree of optimization.
References
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