Biopesticides are en vogue in the world of agtech. Ever since Bayer acquired Agraquest for nearly half a billion dollars in 2012, start-ups have been raising significant money and jockeying for position as attractive partners and/or acquisition targets. The biopesticide market is still small – in the single-digit billions of dollars worldwide (see the Lux Research webinar “Planting Seeds for Future Success“) – but these products continue to take market share from the conventional pesticide market, which is worth more than $50 billion worldwide. While smaller companies like Marrone Bio Innovations and Stockton Agrimor have made headlines by developing promising biologicals, it’s really the world’s leading agrichemical companies that dominate the patent landscape for biopesticides (see figure below). Of the top 10 patent assignes in the biopesticide space, only five major companies and two smaller companies (Marrone and Qingdao Haolite) are represented. Notably absent from this group is Syngenta, a major player in the conventional agrichemical space.
DuPont is reportedly going to sell off some of its herbicides to assuage antitrust concerns, pending its upcoming merger with Dow AgroSciences. No specific herbicide portfolios or buyers are announced as of now, but details are likely will be released soon if Dow AgroSciences and DuPont hope to close the merger by the end of 2016.
We can expect that DuPont will divest one of its older herbicide portfolios, rather than letting go of one of its newer herbicide brands like its newly announced FeXapan brand. Other possible brands that DuPont may divest include its Breakfree and Cinch herbicides. These two brands of herbicides come in various formulations, some of which contain active ingredients atrazine, acetochlor, and S-metolachlor. Breakfree and Cinch target common grasses and broadleaf corn weeds, including foxtail and pigweed. The Breakfree and Cinch brands comprise eight out of 33 of DuPont’s current herbicide products approved for use in the U.S. targeting corn and soybean weeds. These products may be likely targets for divestiture because the safety of one active ingredient present in some formulations, atrazine, has recently been questioned by several regulatory agencies. In September of 2016, the U.S. Environmental Agency (EPA) released a draft ecological risk assessment recommending the ban of atrazine. Similarly, California listed atrazine as a reproductive toxin in July 2016. The changing regulatory attitudes surrounding atrazine may push DuPont toward divesting this specific technology, especially while the company is under pressure to trim its herbicide business. Continue reading
In separate press releases, both Dow AgroSciences and Valent BioSciences made announcements demonstrating new commitments to biological crop protection. Dow AgroSciences announced a partnership with Radiant Genomics, a metagenomics company. Sumitomo Chemical’s subsidiary Valent BioSciences announced a partnership with Evolva, a company with expertise in developing engineered yeast strains. Both collaborations will aim to develop and discover novel biological actives for crop protection, with Dow AgroSciences focusing on discovery and scale production of natural products and Valent BioSciences working on scale production of actives using engineered yeast. These partnerships are reminiscent of the December 2013 announcement by Monsanto and Novozymes (client registration required) of the BioAg Alliance, also targeting biological crop protection products.
Dow AgroSciences has demonstrated past success with its spinosad-based insecticide product lines like Entrust and Conserve. Spinosad is a natural product insecticide, isolated from a naturally occurring bacterial strain called Saccharopolyspora spinosa. The company has demonstrable expertise in scaling up production once a valuable biological active ingredient is identified – which is what makes the partnership with Radiant Genomics (client registration required) highly valuable. Radiant has expertise in identifying such promising candidates, using metagenomics to identify the genes required to synthesize candidate compounds. This partnership will bring together discovery and scalability, and should yield rapid progress.
Valent BioSciences has also demonstrated success with scale production of biological actives for crop protection. The company owns the largest purpose-built biorational facility in the world, which it just opened in mid-2014. To date, its catalog of agricultural products has been focused on microbials and plant growth regulators, rather than insecticides or fungicides. While Evolva has demonstrated expertise in producing specialty chemicals like resveratrol and vanillin, it is a new entrant to the agriculture industry. Evolva will need to successfully navigate a steep learning curve to apply its expertise to this new sector. While the two companies will work together on manufacturing, Valent BioSciences will likely use parent Sumitomo Chemical Company’s global distribution network to aid in commercialization.
While both partnerships have promise, Dow AgroSciences’ work with Radiant Genomics is definitely poised for quicker success as it brings together teams with existing expertise in this industry. Valent BioSciences and Evolva also appear positioned to work well together, but will need to navigate the transition of Evolva’s expertise from food and fragrance ingredients to crop protection ingredients. Regardless of speed, both bets are likely to pay off in new biological crop protection products. For others considering getting into the space, these announcements make clear that the time is now to find a partner and enter the fray. Clients should look to emulate these representative partnerships – earnestly identify your own expertise, and then look for a partner that fills your gaps and/or extends your reach for the best, most rapid success.
Biological and genetic technologies like DNA sequencing and synthesis are advancing rapidly, outpacing even Moore’s Law of semiconductor performance (as Rob Carlson has pointed out). Genetic technologies are now at a point where long-standing assumptions about a wide range of legal, ethical, and societal issues are being debated or even overturned:
- Ownership of genetic intellectual property versus fair use of genetic knowledge. Gene patents have been allowed for decades. But after a protracted legal battle between diagnostics company Myriad and the American Civil Liberties Union (ACLU) over testing for the breast-cancer related BRCA gene, the U.S. Supreme Court ruled that companies cannot claim ownership of naturally-occurring genes (client registration required). Industry organizations like BIO said the decision could reduce patent protections for biotech crops by making plant genes fair game for competitors to companies like Monsanto, Syngenta, and Dow Agrosciences. Just recently, university researchers launched the Open Source Seed Initiative, partially in reaction to seed IP-holders’ aggressive business practices (client registration required). However, are even free genes truly free? Social progressives also argue that genes can be “owned” by individuals or groups (see Henrietta Lacks, Cartagena Protocol). The iGEM Open Parts Registry strives to make its components (modular DNA sequences) freely available to all, but real and imagined patent thickets discourage almost anyone but amateurs from utilizing them. Despite needed changes to IP law, the mere possibility of David-versus-Goliath litigation is keeping genetic knowledge from being fully used (see the report “BioPunks and BioPatents: The Open-source Battle Comes to Synbio IP” — client registration required).
- Collective (bioethics) versus individual (grass-roots funding) rights. Several U.S. states voted on mandatory labeling of GMO foods as a consumer protection, but sloppy science and sloppier lawmaking led to their defeat (client registration required) at the ballot box – and a victory for ag biotech. At the same time, civil society advocates ETC Group tried to stop the Kickstarter crowdfunding campaign of Glowing Plant, a house plant genetically modified with a bioluminescent non-toxic protein. ETC did convince crowd-funding site Kickstarter (client registration required) to prohibit future campaigns for genetic technologies, but – possibly eyeing GlowingPlant’s massively successful $484,000 campaign – Kickstarter competitor Indiegogo rolled out the welcome mat (ironically, ETC’s “kickstopper” campaign there raised just 10% of its goal). In both cases, popular sentiment sustained pro-genetic technology, even though the developers ranged in scale from global giant to garage startup – the latter putting ETC in the odd position of being the bully. Even if you wanted to stop it, could you? As startups and garage biotech groups like DIYBio and BioCurious disseminate access, know-how, and funding, they are sharing data electronically on how to make their own glowing pets and plants and snacks, circumventing antiquated restrictions and IP schemes.
- Patient rights versus personal privacy. Just how easy is genetics getting? The U.S. Supreme Court ruled in Maryland v. King that police don’t need a warrant to take genetic samples, which are now “as simple and normal as taking a photograph.” However, genetic data that’s easy enough for police to handle is apparently too dangerous for citizens: last year, the U.S. Food and Drug Administration (FDA) prohibited personal genomics startup 23andMe from marketing its $99 DNA analysis kit directly to consumers. The accuracy of the kit’s results is not in question (the test runs on a gold-standard chip from Illumina), but rather the right to communicate potentially disease-related results (such as BRCA) to the consumer. That’s silly because such information is already freely and widely available on the Web, and futile since the cost of even more comprehensive tests is making both tests and data highly accessible: 23andme’s supplier Illumina just “broke the $1,000 genome barrier,” and ICL spinout QuantumDX (client registration required) will soon launch a hand-held DNA analyzer and sequencer that “will enable any layperson to run DNA analysis” in less than 15 minutes, for under $20. While the company’s Indiegogo campaign failed, other successful ones like Scanadu’s indicate that crowdfunding could even become a key part of FDA device approval strategies (client registration required).
Is it time for a Genetic Frontier Foundation?
To someone from the information technology (IT) world, these and other genetic technology (GT) issues will sound very familiar: open source, patent trolls, privacy, security, innovation – and the list goes on. The similarity is not coincidental: electronic and genetic data have both transitioned from a past when they were closely tied to a physical substrate, to a future where they are simply data – easily copied, changed, simulated, and transmitted. In IT, the non-profit Electronic Frontier Foundation (EFF) has played an indispensable role in representing citizens, entrepreneurs, and other smaller and newer players – but larger ones, as well, e.g. on Net Neutrality – in both updating and preserving technology-associated rights from regulatory overreach and unfair, uncompetitive practices.
The EFF addresses issues ranging across ownership of intellectual property, free speech and information transparency, ethics, and innovation – witness IP (Open Source, Fair Use, patent trolls) access (Rebroadcasting, Digital Rights Management, Broadcast Flag), privacy (Do Not Track, NSA spying), and many other topics. As such, the EFF offers a model for how the users and developers of genetic technologies might collaborate to address the issues they jointly face. Its website says:
When our freedoms in the networked world come under attack, the Electronic Frontier Foundation (EFF) is the first line of defense… New ideas challenge the status quo. That’s why people who make cool tools get so much heat from the old guard – and their lawyers.
Do genetic technologies need a similar body? Many GT organizations and laws do exist to address these and similar issues – like Genetic Alliance in personal genetic privacy, BioBricks Foundation in open-source gene IP, BioFAB in bioethics, and BIO in regulatory matters. Sometimes these groups are on the same side, but they can also be unaware of each other or even in opposition (when their economic interests diverge). And they are frankly not as aggressive or effective as the EFF has been. The legal, economic, and ethical aspects of genetic technology are deeply interwoven, and they share many of the same stakeholders, which is why it makes sense now to consider them together. Moreover, these issues are just beginning in genetic tech (whereas the EFF has stayed pretty busy with new IT issues throughout the nearly 25 years since its founding).
Just as the EFF was founded to reinforce or reform law, regulation, and policy around digital technologies, we now need a “Genetic Frontier Foundation” to ensure the same beneficial co-evolution of genetic technologies and the rules that govern their use in treating disease, increasing food supply – and yes, glowing house plants. Despite today’s outmoded regulatory, IP, and ethical environments, genetic technologies – and the number of people who know how to use or make them – have grown so far and so fast, it’s nearly magical. They will only accelerate, not slow or retreat back into the bottle. With coordinated advocacy, developers and users will continue to reap the benefits we all wish for.
 The same protein is used to make GloFish pets, which are approved by the U.S. Food & Drug Administration (which has jurisdiction over biotech animals), and found to be safe by the United States Department of Agriculture and United States Fish and Wildlife Service. They are banned in only one state, California. Notably, FDA considers GFP to be an “animal drug,” and GFP is in the middle of a notoriously complex patent pool (started by GE Healthcare), opening up further legal and regulatory questions around its ownership and use.