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Epicyte Pharmaceutical joins failing-biotech row

(Tuesday, May 18, 2004 -- CropChoice news) -- Penni Crabtree, San Diego Union-Tribune, 05/07/04: Epicyte Pharmaceutical, one of the last vestiges of the San Diego biotechnology community's attempt to become an agricultural biotech stronghold, has closed and sold its assets to a North Carolina company.

The privately held San Diego biotech, which at its peak employed about 50, has been purchased by Pittsboro, N.C.-based Biolex, another privately owned biotech. Financial terms were not disclosed when the deal was announced yesterday.

Epicyte helped pioneer the genetic engineering of corn crops to produce medicines, but suffered delays and setbacks in research efforts to develop drugs to treat herpes and respiratory syncytial virus, a respiratory ailment that afflicts infants and the elderly.

Last year, in an attempt to revive investor interest, Epicyte shifted its focus to creating plant-based versions of leading monoclonal antibodies, such as Biogen Idec's cancer drug Rituxan.

Yet that effort failed to bring in venture capital investment, in part because Epicyte's experimental products were too early in development, said Debbie Robertson, executive director of intellectual property for Epicyte.

"I'm happy, at least, that the intellectual know-how went to a company that can use it, that it didn't just go by the wayside, because I truly believe in it," said Robertson. "But . . . shoot."

Biolex, like Epicyte, is focused on so-called bio-pharming, the manufacture of monoclonal antibodies and other biological therapeutics in plants. But Biolex uses a genetically altered aquatic plant grown indoors in a secure facility, avoiding some of the concerns about outdoor cross-contamination with traditional field crops that have haunted the industry.

The demise of Epicyte is the latest casualty for the region's fledgling agricultural biotechnology industry, which just five years ago appeared to hold considerable commercial promise.

In 1999, Stephen Briggs, the head of the San Diego-based Novartis Agricultural Discovery Institute, which was building a major research campus here, predicted San Diego could become the "Silicon Valley of agricultural biotech."

Several small San Diego agricultural biotechs had already emerged, including Mycogen, Akkadix Corp. and Epicyte, and the research institute was expected to generate more agriculture-based ventures.

Yet, despite a sturdy start, the industry didn't retain a strong hold here. A consumer backlash against genetically-modified food, along with high-profile industry blunders, helped nip investor enthusiasm in the bio-engineered bud.

In 2000, Aventis, the maker of StarLink corn, was forced to recall taco shells and other products contaminated by genetically-modified animal feed, which had not been cleared for human consumption.

Two years later, a Texas biotech caused a scandal when federal regulators found that 500,000 bushels of soybeans and been contaminated by biotech corn engineered to produce medicine.

Those mistakes, along with a stagnant farm economy and an investment drought for biotech that has only eased in recent months, took its toll. In 2000, the Novartis Agricultural Discovery Institute was folded into Switzerland's Syngenta.

In 2002, Syngenta closed the La Jolla unit, laying off about 100 of its 180 employees, moving its plant genomics program to North Carolina and shifting the remainder of its employees and projects to another local biotech, Diversa Corp.

Other San Diego agricultural biotechs also disappeared: Mycogen was purchased by Dow Chemical, and Akkadix Corp. faded from the scene. Dow still retains a plant bio-pharmaceuticals research unit in San Diego, but moved a second agricultural biotech unit out of the state.

Briggs, one of 77 former Syngenta employees who now work at Diversa, said agricultural biotechnology has contracted, along with the farm economy and the companies that supply seeds and other products.

"Companies have had to reduce their investment in everything they do, including research," said Briggs, senior vice president of corporate research and technology at Diversa, which is developing some crop and animal feed enzymes.

Briggs said Epicyte faced one of the toughest tasks in agricultural biotechnology.

"Drug development is probably the most conservative industrial process in the world," Briggs said. "What Epicyte and the company that bought them is trying to do is revolutionize the production of therapeutics - and it is hard to make a revolution."

Source: http://www.signonsandiego.com/news/business/20040507-9999-1b7epicyte.html