Wednesday, June 12, 2024

Betting the farm on biotech

Companies use science to improve crops, livestock and other farm products.

by Allan Maurer

North Carolina is parlaying its heritage as an agriculture powerhouse to become a major hub for the ag-biotechnology industry, one of the hottest sources of scientific innovation. More than 80 ag-biotech companies statewide employ 8,000 people, including most of the world’s largest sellers of seeds, nutrients, feeds, pesticides and other chemicals. Ag-biotech research is expanding beyond crops and livestock to encompass fuels, medicine and early warning tests for biodefense.

“It didn’t happen by accident,” Gwyn Riddick, a consultant and former vice president for ag-biotech at the North Carolina Biotechnology Center, says about the industry’s growth. The Durham-based center opened in 1984 and added an ag-biotech focus in 2009, holding regular meetings of key industry executives and researchers to promote innovation. Growth of the industry in North Carolina followed Leverkusen, Germany-based Bayer AG’s $7.2 billion purchase of Durham-based Aventis CropScience in 2002. Multinational peers BASF SE of Germany, Novozymes of Denmark and Syngenta International AG of Switzerland also have divisional or regional headquarters in the state. Those companies, along with researchers at North Carolina universities, have sparked startups attracting some of the state’s best-known investors and entrepreneurs.

Syngenta could have chosen anywhere in the world for its biotech research arm, it but picked North Carolina because of its workforce and business climate, Michiel van Lookeren Campagne, Syngenta’s head of biotechnology, said at a November conference. The company employs more than 1,100 in the state and is spending $94 million on a 200,000-square-foot research lab at Research Triangle Park. The biotech firms are closely tied to North Carolina’s agriculture industry, which employs 16% of the state’s workers and remains a $78 billion annual economic force despite the decline of its famous tobacco industry.

While about 60% of North Carolina’s ag-biotech companies are in the Triangle, according to the biotech center, others are popping up throughout the state. Here are eight promising companies, cited by industry leaders.

1. Greensboro-based Piedmont Pharmaceuticals LLC is developing parasite-fighting treatments and drug-delivery systems for humans and animals. In 2010, Bayer purchased its chewable product, used for treatments such as flea prevention for dogs. New York-based Pfizer Inc. licensed the company’s Solitude IGR product, which helps control flies around horses, in 2005. (It’s now made by Pfizer spinoff Zoetis Inc.) The company’s head lice treatment is sold in the United Kingdom and Canada and is in clinical trials in the U.S., addressing a $5 billion global market. Twenty-five veterinary pharmaceutical products are in development “with a steady stream of approvals expected annually through 2020,” CEO Roland Johnson said in November. Former Wachovia Corp. Chairman Lanty Smith is a director.

2. Mycorrhiza Biotech LLC, based in Burlington, specializes in using fungi to improve plant production. It has a patent pending on technology that uses seedlings of loblolly pine trees to cultivate gourmet truffles, an underground mushroom that is one of the world’s priciest foods. Potential customers include timber-management companies, state forestry departments and truffle farmers. The company is researching farming, forestry and nutrition applications that could benefit from a type of fungus called mycorrhiza. CEO Nancy Rosborough, a Howard University graduate and truffle farmer, founded the company in 2006. It also sells DNA fingerprinting and analysis services and consults on using fungi to naturally break down pollutants.

3. SoyMeds Inc., based in Davidson, is developing a method for modifying soybean proteins and then grinding up the seeds into soy milk or soy meal to be used for a range of treatments. The company was founded in 2005 by UNC Charlotte professors Kenneth Bost and Kenneth Piller, who have enhanced research started by the university’s biology department. The company’s soybean treatment could one day be used to halt progression of autoimmune diseases such as multiple sclerosis. Soybean seeds and powder can be stored for extended periods of time without requiring a constantly controlled temperature, which makes it feasible to produce vaccines for distribution in developing countries with limited refrigeration.

4. Asheville-based Phytonix Corp. is working with a type of photosynthetic bacteria that secretes chemicals and fuels for industrial use. Bruce Dannenberg, an investor who founded the company in 2009, is developing technology that converts carbon dioxide into alternative fuels. With research partners including scientists at South Dakota State University and Uppsala University in Sweden, Phytonix is seeking an environmentally friendly approach to producing a fuel substitute that is more efficient and less corrosive than ethanol.

5. AgBiome Inc., based in Durham, announced a partnership in December with Syngenta, which will pay for research into microorganisms and their genes that could improve crop yield. The work involves studying organisms in the soil that help boost plant growth or help plants fight off pests. The company launched in 2013 after raising $17.5 million in startup financing led by Boston-based Polaris Partners LLC. Scott Uknes and Eric Ward, co-founders and co-CEOs, previously worked for large ag-biotech firms Bayer and Novartis, respectively.

6. Advanced Animal Diagnostics Inc., which raised $15 million in December, develops technology to detect and manage diseases in farm animals. Its first product helps diagnose mastitis in cattle, while the company has a pipeline of other products in the works. The $1 billion market for its tests includes dairy farms, vet labs, researchers and milk processors. The Morrisville-based company has filed for 10 patents and has licensed 12. Its 35 employees earn twice the statewide average salary. Chairman Randall Marcuson is former CEO of Embrex Inc., a Durham-based biotech company that created a poultry vaccine system and was bought by Pfizer in 2007 for $155 million.

7. Morrisville-based Benson Hill Biosystems Inc. develops technology to manipulate plant metabolism, driving significant increases in crop yield. Its target market has annual revenues of more than $12 billion and is projected to reach $50 billion by 2025. The company uses bioinformatics to identify plant genes that increase the efficiency of photosynthesis, the process by which organisms use carbon dioxide from the atmosphere with energy from sunlight to make sugars, fueling growth. Seed companies incorporate those genetic traits into commercial seed lines sold to farmers.

8. BioResource International Inc. develops animal-feed additives that help poultry and swine grow more efficiently. The Durham-based company has eight patents, with others pending, for technology developed at N.C. State University and licensed to the company. Its enzymes help animals take in more nutrients from feed, improving both productivity and profitability for farmers. “Many producers are turning to supplementing feed with natural enzymes to increase the nutritional value of feed ingredients and improve digestibility while keeping feed costs low,” CEO Giles Shih said in a January news release.

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