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Since the year 2002 up to this year 2005 there is close cooperation between the two companies ATG and VitiGen AG resulting in a variety of projects.
The initial goal was to provide its customers with essential tools and licences for the era of biotech functional genomics. Two basic tools are needed or functional genomic analysis:
In its initial phase of operations, VitiGen established a collection of approximately 40,000 FLES from the grapevine ready to deliver as sequence data and genes to end users. VitiGen has also been able to identify in its current promoter program 30 candidates as products, which will be verified, patented and thus be available for licensing. The basic business model and future challenge of VitiGen is to develop from its current genetic “tool-company” identity into a product-driven enterprise. In large part this will be achieved through the identification and characterization of the functions of the pool of as yet unknown genes in VitiGen’s databank of grapevine gene sequences. This pool of unknown genes and unknown functions comprises 40% of the FLESs. It is anticipated that the pool of unknowns will resolve to include genes encoding products involved in secondary metabolism, wood and oil production and resistance to pests. This will broaden the VitiGen patent portfolio and strengthen its market position. These thoroughly validated targets will then be licensed or collaboratively exploited in various fields.
Based on its platform technology, grapevine gene sequence data, know-how and intellectual property VitiGen is able to serve customers high quality tools, products and services. Bioinformatic services via VitiGen’s searchable database, molecular biology services like full-length library construction and microarray services in combination with contract research will lead to a revenue of about 6 millions EUR in 2007. These services will establish VitiGen as a plant functional genomics product and service corporation, focussed particularly on VitiGen Inc.
Expressed sequences and regulatory regions that are of high interest for plant breeding in agricultural biotechnology are under investigation with collaboration partners. One of the dominant issues in conventional agriculture is that it relies heavily on agro-chemicals to be cost and yield efficient. Plant protection in particular is chemical based with all its negative impacts on the environment. The new and increasing requirement for environmentally sustainable agriculture requires alternatives for controlling pests and pathogens.
Attractive alternatives to agricultural chemicals are the utilisation of bioactive natural products (BNPs) or genetically modified resistant plants. VitiGen will use the FLESs as a source for these BNPs. However, successful commercialisation of these innovative approaches is often compromised by insufficient levels of plant protection. Until now comparative studies about the efficacy of BNPs vs. genetically modified plants are lacking. The abolishment of this blockade is achievable by the identification of novel more potent bioactive agents. This can be done by exploiting knowledge about natural defence mechanisms or by engineering optimised bio control agents and plants. VitiGen’s genomic R&D work, on for instance fungal resistance of the grapevine, targets development of alternatives for sustainable plant protection and maximisation of the possible protection levels that can be achieved.
VitiGen provides high performance molecular biological tools for the new era of functional genomics and proteomics. VitiGen provides a series of products to ease innovative biotech research and development, including:
VitiGen will also produce high-priced protein products (e. g. anti-fungal agents).
The Company’s initial goal is to provide its customers with essential tools and licences for the era of plant functional genomics. For functional analysis two basic tools are needed: Full Length Expressed Sequences (FLESs) and developmental and tissue-specific promoters. Based on the innovative platform technology, more than 80% of VitiGen’s clones from the grapevine contain FLESs. In its initial phase of operations (2000-2003), VitiGen established a collection of approximately 10,000 individual FLESs ready to deliver. VitiGen now has these FLESs available for sale to its customers in a searchable database via Internet (http://genome.vitigen.de and www.vitigen.com ).
Also, VitiGen was able to identify in its promoter isolation program 30 candidates which will be verified, patented and then be available for licensing. VitiGen intends to study the function of a variety of its yet unknown genes (40% of the FLESs) that are expected to encode products involved in secondary metabolism, wood production and resistance to pests. This activity would generate a solid patent portfolio. These thoroughly validated targets will then be licensed or collaboratively exploited in various fields. From the tool-company VitiGen will develop to a product firm. The execution of further R&D-work on enzymes and secondary metabolism, as well as for field releases of GM plants for molecular farming, VitiGen has set up a subsidiary company, VitiGen Inc., incorporated in Canada and located in Ottawa.
The value chain of the corporation will be three-fold and progressive. The first value element is the marketing of the FLESs of VitiGen’s transcriptome library. The second in the products, service and tools offerings, and the third, and most profitable, business opportunity is VitiGen’s high potential in molecular plant breeding, including the production of biological anti-fungal agents.
The primary tools in VitiGen’s technology are gene sequences and promoters. In addition to opening perspectives for a wide range of applications in biotechnology, the large assembly of VitiGen FLESs targets basic research (genomics and proteomics). The sale of such expressed sequences to the scientific community is a source of income during the next years of the Company’s existence.
VitiGen’s first targeted customer for FLESs are universities and research institutes (with a revenue potential estimated at a few ten thousand EUR per year). Since most of VitiGen’s proprietary gene sequences have homologues in most plant species, interested parties should include a vast range of plant molecular and cell biologists. VitiGen is convinced that the scientific community will show a massive interest in these sequences as their commercial availability will save the groups months or even years of work. Furthermore the very strong competition in today’s research is likely to push the various research groups to buy these sequences from wherever they are available. VitiGen has already sold FLESs to Canada, Japan and Germany. While VitiGen sees the provision of these tools for basic research as a small market, it is important in serving to make the Company better known. Nonetheless, with an increasing number of available high-quality sequences, customer satisfaction and good publicity, an important growth in sales is expected to lead to a break even point by 2004.
There is a tremendous multi-billion dollar market potential for biotechnology in agriculture and plant breeding, especially when it comes to specificity and time. The world market for genetically engineered agricultural and food products and agro-biotech has been estimated to 20 billion US$ in 2004. While the current conditions in Europe are not favorable for either biotechnology research or marketing of transgenic agricultural products, this is expected to change over the next several years. Thus, it is important that a large collection of primary products and tools for biotechnology is available and thoroughly tested. In large part this was the reason for establishing VitiGen Inc. in Canada, and why VitiGen plans to start its field releases in Canada where public opinion and regulatory permitting is more favorable.
Most of the transgenic plants today use general strong promoters (e.g. the 35S CaMV promoter), with the consequence that the transgenes are also expressed in tissues where they are not supposed to. This can lead to undesired effects on fauna. The future of plant biotechnology therefore largely relies on the existence of a good collection of well-characterized tissue-specific promoters. VitiGen’s novel promoters are expected to be used in all areas of modern biotechnology involving transgenic plants and will therefore be a much coveted asset. These areas include for instance agricultural biotechnology as well as biopharming. The Company expect that its promoters can be used successfully to control the expression of transgenes not only in grapevine but also in other plants, especially in woody ornamental plants. According to the 1996 Yearbook of Statistics the market for ornamental plants reached 1.0 to 1.5 billion EUR alone in Germany. As VitiGen shifts more towards a product company (high priced end products, novel genes under patent, promoters under license), it can be part of the much larger pharmaceutical, agricultural and food & beverage markets.
Fungal resistance will be a major target in the future development of VitiGen. Sensitivities to fungal diseases are a major weakness of most popular plants. Only in Germany approximately 400 EUR/ha/year is spent on fungicide treatment of grapevine. The money spent worldwide on fungicide treatment was in 1997 5.5 billion US$. Sustainable agriculture gains growing influence worldwide. Many companies are working on natural biological active substances indicating that they recognized this new trend and the expanding (global) market for natural products. Pathogen defense is of outstanding necessity for breeders and farmers. The challenge to develop pathogen resistant crops or new (natural) substances and methods for plant protection is a common one across Europe and beyond. Especially the demand for new agro-chemicals makes this sector attractive for many companies worldwide. Thus, the world sales of agro-chemicals like insecticides, fungicides or herbicides are exceeding $20 billion a year. In collaboration with FCBR and FhG VitiGen will start a project to produce fungus resistant plants. The Company will use the FLESs under the control of its tissue-specific promoters.
For example, the potential market for disease-resistant plants includes all grapevine growers in Europe and possibly on other continents as well. With about 100,000 ha total grapevine cultivation area in Germany; 800,000 ha in France, 1 million ha in Italy and also in Spain, at a density of 5,000 plants/ha, and a price of 1,3 EUR/plant, the potential European market for transgenic grapevine would reach approximately 18.85 billion EUR. The royalties the Company can expect is at least 1% of the net sale (a market volume of 188,5 million EUR).
Another market target for FLESs is industrial synthesis. In VitiGen’s collection of FLESs is likely to hold many sequences for secondary metabolites for flavour, scent and colour, but in addition also products for human health (e.g. resveratrol), and plant defense mechanisms (e.g. terpene metabolism). Many enzymes and products in industry are produced synthetically or by extraction from plant material. Having the complete coding sequence could significantly speed up the purification process of these products, make it possible and thus lower the cost. In addition new biosynthetic processes could protect the natural resources. The world market for industrial enzymes was approximately 1.5 billion US$ in 1999, and for cosmetics 90 million US$ in 1998. VitiGen has about 1,000 FLESs for enzymes.
In conclusion, offering the VitiGen platform technology under contract research to plant breeding and mid-sized biotech companies will lead to an income of a few hundred thousand EUR per year. After further R & D work, which could lead to patents, the Company would be able to license these out to the pharmaceutical, agricultural and food & beverage industry. These contract R&D work and licensing agreements potentially sum up to a few million EUR per year for the Company and would guarantee VitiGen’s future value.
The company participated with posters and/or a booth at international genome meetings world-wide:
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