Colossal Biosciences Dire Wolf: Is the $10B Valuation Justified?

Reviving the Past: Colossal Biosciences' Dire Wolf Achievement

Colossal Biosciences, a company specializing in “de-extinction,” revealed its most significant accomplishment to date on Monday: the creation of a dire wolf. These magnificent creatures vanished over 12,000 years ago and gained renewed prominence through their depiction in the HBO series “Game of Thrones.”

A Secretive Operation

The reintroduced dire wolves currently inhabit a 2,000-acre preserve. The precise location remains confidential, even to journalists from TechCrunch who were granted the opportunity to observe the animals firsthand. Access to the compound, situated in the northern United States, was restricted. Instead, a separate, undisclosed location served as the viewing point, reflecting a concern about the reliability of photographic evidence in the current era of artificial intelligence.

During the visit, two male dire wolves, Remus and Romulus, aged six months and each weighing approximately 80 pounds, were observed. To the untrained observer, they resembled large wild dogs, distinguished by slightly larger skulls and an extended muzzle. A female, named Khaleesi, two months old, also forms part of the engineered pack.

The Science Behind the Revival

Colossal Biosciences asserts that these animals are far from ordinary. The dire wolves are the culmination of an 18-month project, utilizing genetic material extracted from a 13,000-year-old tooth and a 72,000-year-old skull belonging to the extinct species.

Earlier this year, when Colossal Biosciences secured funding at a $10.2 billion valuation, co-founder and CEO Ben Lamm expressed his belief to TechCrunch that the company’s worth was underestimated considering its scientific progress.

Addressing Skepticism

Given the propensity for startups to exaggerate their capabilities, Lamm’s assertions were initially met with caution. This was particularly true as the completion of Colossal’s ambitious de-extinction projects for the woolly mammoth and Tasmanian tiger wasn't anticipated until 2028.

Subsequently, the company presented advancements intended to alleviate doubts regarding its scientific achievements. Last month, the creation of a mouse exhibiting mammoth-like fur was announced, generating considerable excitement.

However, the introduction of the dire wolves demonstrably elevates the company’s animal creation efforts to a new level of sophistication.

Genetic Engineering Process

Researchers at Colossal Biosciences conducted a comparative analysis of ancient DNA with that of the gray wolf, revealing a 99.5% genetic similarity. CRISPR technology was then employed to modify gray wolf cells, incorporating 20 genes responsible for the dire wolf’s distinctive physical characteristics. These genetically altered cells were developed into embryos and implanted into a surrogate domestic dog, resulting in the birth of the dire wolf pups.

The company maintains that this represents the successful revival of the first extinct species.

Skepticism Surrounds the Dire Wolf Revival

Despite Colossal’s claims, numerous scientists unaffiliated with the project express doubt regarding the authenticity of a true species revival.

David Gold, a Paleobiology professor at UC Davis, conveyed to TechCrunch that while the genome editing is noteworthy, labeling it “de-extinction” is inaccurate.

He clarified that the created animals are, in essence, grey wolf / dire wolf hybrids, resulting from genetic modifications to a grey wolf. Their behavior is likely to diverge from genuine dire wolves due to the lack of upbringing within a dire wolf pack and natural hunting environments.

Alexander Young, a professor of statistical genetics at UCLA, similarly voiced his concerns on X, stating the project is significantly overpromoted.

Young pointed out that the creation involved only 20 edits across 14 genes in the grey wolf, meaning the result is a modified grey wolf, not a resurrected dire wolf. He acknowledged the achievement as “cool” but refuted the claim of bringing back the dire wolf.

When questioned about the focus on external characteristics during gene editing, George Church, Colossal’s co-founder and a professor at Harvard and MIT, indicated that some edits targeted the skull structure, considered an internal feature.

Church further explained that only 0.3% of the grey wolf’s genome was altered to resemble the dire wolf, with the remaining 0.2% of natural variation remaining untouched.

Lamm explained that the scientists deliberately avoided utilizing all recovered dire wolf genes due to concerns about potential adverse effects like deafness and blindness. Ethical considerations guided this decision.

Given that Remus, Romulus, and Khaleesi are not perfect replicas of their ancestors who existed until approximately 12,000 years ago, the designation of “de-extincted” remains debatable.

Gold suggests this is fundamentally a philosophical question. Furthermore, the rationale behind focusing on dire wolves specifically is also under scrutiny.

Conserving Red Wolves

The concept of recreating the dire wolf originated at Colossal through a fortunate turn of events, as explained by Lamm. “An influx of funding prompted us to explore additional species for potential projects.”

Dire wolves presented a unique opportunity, aligning perfectly with the priorities of a well-funded startup committed to ethical practices and appealing to investors with a strong understanding of the entertainment industry.

Lamm emphasized the company’s approach: “We aim to combine de-extinction efforts with ongoing conservation initiatives.”

Several years ago, Lamm and Matt James, Colossal’s chief animal officer, were informed by North Carolina officials that the red wolf population had dwindled to critically low levels, with fewer than 12 individuals remaining in the wild. The state had been actively working to prevent their extinction. This information emerged concurrently with conversations with indigenous communities in North Dakota regarding the cultural significance of wolves. Subsequently, George R.R. Martin, author of the “Game of Thrones” series, joined Colossal as an advisor.

“This convergence of factors was ideal,” Lamm stated. “We could revive a species with cultural importance, valued by our indigenous partners, while simultaneously utilizing our technologies to aid in the preservation of red wolves.”

The same technology employed in the engineering of the dire wolves was also utilized to produce four cloned red wolves. The company intends to expand the red wolf population and ultimately reintroduce them into the wild, potentially averting their extinction and bolstering biodiversity.

Regarding the dire wolves, Lamm indicated that the company anticipates creating approximately five additional animals to facilitate the formation of a pack, reflecting the natural social behavior of wolves. Colossal is also engaging with indigenous communities to discuss the possibility of re-wilding the dire wolves on their territories. Currently, the company’s scientists and animal care specialists are dedicated to observing and assessing the health and behavior of these newly created animals.

The Potential for a Billion-Dollar Enterprise

A crucial inquiry arises: does the scientific progress achieved by Colossal justify the increasing investment and company valuations? Only future developments will provide a definitive answer, yet several factors suggest a positive outcome is plausible.

Lamm has identified multiple avenues for revenue generation. To date, Colossal has established two independent companies and intends to launch three additional ventures within the next two years.

One planned spin-off will focus on the development of their artificial womb technology, which holds promise for advancements in the field of reproductive medicine and fertility treatments.

Furthermore, the company envisions a future where governmental bodies may be billed for assistance with the preservation of endangered species. Currently, Colossal offers its conservation technologies without charge, as stated by Lamm.

Should Colossal succeed in reviving and reintegrating extinct species into their natural habitats, a new revenue stream could emerge. This involves the potential sale of biodiversity credits, functioning as a market-driven system akin to carbon credits.

This innovative approach offers a financial incentive for ecological restoration and conservation efforts.

Exploring Revenue Streams

• Spin-off companies focused on specific technologies.
• Potential fees for government conservation assistance.
• Revenue generation through biodiversity credit sales.

These diverse strategies demonstrate Colossal’s proactive approach to establishing a sustainable and financially viable business model.