68254FungiMAXClosedStudyInnovate UK**BUSINESS NEED:** Materials derived from chitin (e.g. chitosans, chitooligosaccharides (COSs) and glucosamine) are of growing importance in biomedicine, cosmetics, healthcare, packaging and agriculture. Discussions with IVC Brunel, (the leading white-label supplier of supplements to UK supermarkets) and IVC Nutrition Corporation revealed that the: \* Supplements industry is under increasing consumer pressure to provide sustainably produced, non-animal, locally sourced products. \* Most chitin-derived materials are imported from Asia, with concerns about traceability, purity, sustainability and the environmental impact of their production methods. **STATE-OF-THE-ART:** Most chitin-derived products are manufactured from crustacean shells using large quantities of toxic chemicals, generating environmentally damaging wastes. Products containing these materials must also be allergen labelled. Some chitosan is now produced commercially from fungi such as _Aspergillus niger_, whilst glucosamine can also be produced by fermentation of corn. Frequently, the purity of products is unreliable; our testing showed significantly lower levels of glucosamine than stated. Laboratory studies have demonstrated that enzymes can potentially replace chemical processing of chitin, providing the desired product specificity and quality, whilst minimising environmental impact**\[1,2\]**. **THE TECHNOLOGICAL CHALLENGE** is to translate laboratory-scale batch production methods to industrial-scale continuous manufacturing, with competitive unit costs. Waste from edible mushroom production (e.g. button mushroom, _Agaricus bisporus_) is a cheap, abundant chitin source (UK; \>15,000 tonnes waste annually). Exploitation will provide local, high-value, high purity, allergen-free chitin-derived products. The performance of candidate enzymes immobilised on solid supports will be evaluated and optimised, an approach suitable for at-scale bioreactor processing and enabling efficient recovery and re-use to control costs. When combined with tangential-flow membrane micro-filtration and nano-filtration (technologies used for recovery of high-value chemicals from other agri-food by-products**\[3\]**), continuous separation of lower molecular weight reaction products (chitosans/COSs/glucosamine) will be achieved, increasing process efficiency and enabling 'one-pot' non-stop production. **This technology combination will be disruptive, enabling cost-effective production at-scale which will be patentable to enable licensing.** **THE MARKET OPPORTUNITY** for glucosamine and chitosan are estimated to be $1.2Billion and $6.8Billion, respectively**\[4,5,6\]**. IVC Brunel use over 200 tonnes of glucosamine annually costing them $6million/year; satisfying their requirements alone with a competitive animal-free, allergen-free glucosamine would provide the consortium with UK revenue \>$15 million over 5 years. A 5% share of the European glucosamine and chitosan markets through IVC Nutrition Corporation would generate revenue \>$282.M over 5 years. Oligosaccharide market data (galactooligosaccharides, $860M) suggests revenues from COSs \>$5M over 5 years**\[7\]**. **1**Ly\_et.al(2017)\_DOI:10.1039/c6gc02910h **2**Kaczmarek\_et.al(2019)\_doi:10.3389/fbioe.2019.00243 **3**BBI-H2020\_project\_https://www.activatec-bi.com/projects **4**Technavio(2019)\_ https://www.technavio.com/report/glucosamine-market-industry-analysis **5**GrandView Research(2019)\_https://www.grandviewresearch.com/press-release/global-glucosamine-market **6**GrandView Research (2019)\_https://www.grandviewresearch.com/industry-analysis/global-chitosan-market **7**Grandview Research(2019)\_https://www.grandviewresearch.com/industry-analysis/galacto-oligosaccharides-gos-market