Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Tue, Apr 28 1992 Date: Tue, 28 Apr 92 05:41:28 EDT Message-ID: 04-28 0000 BONUS: Ag-biotech building a better tomato USA TODAY Update April 27, 1992 Source: USA TODAY:Gannett National Information Network News flash: Sometime the next few weeks, the federal government will issue an important edict declaring just what constitutes, er, a tomato. A tomato? It may sound trivial. In fact, the statement by the Food and Drug Administration looms as a milestone for the young agricultural - biotechnology industry - about 20 companies aiming to biogenetically engineer better farm products. Among the first fruits of the industry's labor: A genetically enhanced tomato that can be picked ripe and won't rot for two weeks. WHAT WILL THE NEW TOMATO BE LIKE? It may not be as tasty as the homegrowns in your neighbor's garden. But the biotomato has far more flavor than any picked green to ripen while in transit to the corner grocer. "We're expecting the FDA to say our tomato is food like any other food," says Roger Salquist, chairman of Calgene, which has spent $20 million in eight years developing the tomato. Such a statement likely would signal full government approval of the tomato by year's end and thus allow Calgene to market it like any other produce. WILL MORE AG-BIOTECH PRODUCTS FOLLOW? It would also open the door to a salad bar of other bioengineered products - everything from carrots, celery and strawberries to insecticides and animal drugs, all being developed by ag-biotech companies. Ag-biotech is to plants and animals what health-care biotech is to humans. Both seek to change the genes that give certain life forms distinct traits. In so doing, for example, a biotech company may attack a human gene that allows cancer to flourish. HOW DOES IT WORK? An ag-biotech company may attack a plant gene that leads to rotting. Traditional plant science relies on natural breeding to create hearty strains of fruits and vegetables. But ag biotech goes far beyond that, manipulating gene structures in the lab in ways that could never occur in a natural setting. Exactly how much of the enhanced veggies consumers can stomach is unclear. And that, along with investors' newfound distaste for biotech stocks in general, has Wall Street wary. HOW HAVE PEOPLE REACTED TO THE CONCEPT? The ag-biotech industry has come a long way. Just a few years ago, those companies spawned widespread misunderstanding and fear. "People had all kinds of visions of plants and bugs eating Cleveland," says Jerry Caulder, CEO of Mycogen, which has a genetically engineered bug repellant. Today, environmentalists still harbor concerns about tinkering with Mother Nature, but few fear the catastrophic scenarios of old. WHAT DO INVESTORS THINK? At a recent investor conference sponsored by Piper Jaffray, 150 money managers, up 30% from last year, came to hear ag-biotech companies talk up their prospects. "It's an exciting industry," says Tatsuya Furukawa, strategist at Yamaichi Asset Management. "It has a huge potential to make money." George Dahlman, analyst at Piper Jaffray and a noted ag-biotech supporter, thinks the stocks on average will rise 25% annually the next five years. WHAT PRODUCTS ARE IN THE WORKS? You can't fault people for being intrigued. Some of the things in the works seem amazing. DNA Plant Technology of Cinnaminson, N.J., is working on longer-lasting vegetables and healthier cooking oils. It already has a few products on the market - sweeter carrots, celery with fewer strands that stick between your teeth and sweeter red peppers. So far, all its products have been developed by fancy plant breeding. Its next generation of foods will rely on genetic engineering. Genmark of Salt Lake City is experimenting with the DNA of cows, hoping to produce healthier milk and leaner meat. WHAT ABOUT NON-FOOD ITEMS? Last month, Mycogen, based in San Diego, received approval from California to sell its bioengineered insecticide, MVP, which in July became the first genetically engineered insecticide to win federal approval. MVP is essentially a bacteria that protects broccoli, grapes, lettuce and other crops from caterpillars and other pests. Escagenetics is working on a method to use plant-cell cultures to duplicate Taxol, a promising cancer drug that currently can be derived only from Pacific yew trees found in the Northwest. Other companies are working on drugs to treat a bevy of animal diseases. ARE AG-BIOTECH STOCKS HOT? Despite all the promise, Wall Street hasn't bid up those stocks. Many ag biotechs are trading toward the bottom of a narrow 52-week range. The stocks were generally ignored in the biotech binge that pushed some wonder-drug companies up 100% or more last year - before they came crashing down. Calgene, for example, went public at $14 a share in 1986. It's been as high as $16 1:4 and as low as $4 1:4. Monday, it closed at $11 7:8. WHY IS WALL STREET CAUTIOUS? Given the large markets some of the companies seek to tap, the group could eventually see a sharp rally. But the ag-biotech industry has drawbacks, so "Wall Street is taking a show-me attitude," says Margaret McGeorge, analyst at Sutro & Co. It's unclear exactly how veggie eaters and farmers will respond. And while medica -biotech companies are developing drugs for diseases that now have no cure - read: Guaranteed market - consumers have obvious alternatives when it comes to ag-biotech products. "A lot will depend on how they're marketed," McGeorge says. HOW DOES THE PUBLIC FEEL ABOUT THE PRODUCTS? The mere thought of genetic tampering turns some off. "It's like they're messing with my vegetables," says Karen Seigal, an assistant financial analyst in New York. "It's kind of weird when you think about it." Environmentalists agree. "Do we really need this tomato? Do we really need any of these products?" says Margaret Mellon, who monitors biotechnology for the National Wildlife Federation. "These are gene combinations that could not be produced by nature. And the history of technology is filled with unexpected effects." HOW ARE FIRMS APPROACHING THE MARKETPLACE? Still, Salquist is optimistic. "We've done extensive surveys and focus groups that say people like it," he says. "My sales strategy is to be boring - so that by the time it hits the grocery store, nobody thinks about the technology." Bonus Editor: Ed Kelleher. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM