1.Cash crisis at Viragen close to terminal stages
2.NZ biopharming future uncertain
1.Cash crisis at Viragen close to terminal stages
The Herald, June 23 2007 [SHORTENED]
[image caption: AT DEATH'S DOOR: Despite praise in February from the First Minister, Viragen's future looks bleak]
Viragen, the Edinburgh cancer therapy pioneer, is facing a cash crisis that could drive it into bankruptcy by the end of the month, The Herald has learned.
The company has already shed many of its staff, curtailed its operations and abandoned some of its most promising lines of research.
In a flurry of filings this week with the US Securities and Exchange Commission, Viragen revealed that it has lost more than $26.7m (GBP13.4m) in the nine months to March 31, 2007, while earning less than $300,000, and that it has a working capital deficit of more than $1.1m.
The company also disclosed a notification from the American Stock Exchange (Amex) that its shares will shortly be delisted for failing to meet that exchange's capital adequacy rules.
Viragen, which has lost more than $193.8m since its inception, is best known as the co-developer, with the Roslin Institute, of cancer treatments derived from the eggs of genetically engineered chickens, and was praised as recently as February by then Deputy First Minister Nicol Stephen as an example of Scotland's "key strengths in life sciences".
In its statement to the SEC, the company revealed the extent of the cash crisis, noting: "We believe we have sufficient cash to support our operations, including those of our subsidiaries, through June 2007.
"However, we will require substantial additional capital to support our operations subsequent to June 2007. No assurance can be given that additional capital will be available when required or upon terms acceptable to us."
Viragen's filings note that the company has already begun staff reductions in Edinburgh and associated offices in the US and Sweden, is attempting to withdraw from lease obligations or sublet unused space, and has begun to defer or abandon many of its research and development activities.
Among the projects Viragen has abandoned is its collaboration with the Roslin Institute to grow genetically-modified eggs whose whites contain high volumes of therapeutic proteins used in cancer care. The OVA project received worldwide publicity earlier this year when an influential US genetic journal reported positive results from early laboratory trials.
Viragen announced that it would withdraw from the OVA project in a press release issued quietly in Florida earlier this week. The company received GBP916,000 in two SPUR-Plus grants in 2002 and 2004 from the Scottish Executive to pursue its research.
Earlier this year, Viragen abandoned another research partnership with the US's prestigious Memorial Sloan-Kettering Cancer Centre, in which Viragen had spent more than $1.5m to research means of combating hard-to-treat solid tumours.
Viragen, which is now operating with a skeleton global staff of 46, was founded in Florida in 1985 and was one of the earliest large-scale life sciences investors in Scotland, beginning with small labs for development testing, then opening a 17,000 sq ft laboratory and manufacturing plant in Edinburgh's Pentland Science Park in 1995.
The company's Scottish research programmes are headed by Dr Karen Jervis, a graduate of both Glasgow and Edinburgh Universities, who was named one of Scotland's top 50 businesswomen in 2001.
Jervis yesterday declined to comment, and referred The Herald to the company's head of communication, Douglas Calder, in Florida. However, Calder could not be reached for comment last night.
Like IVMD, the Inverness-based medical device creator whose financial difficulties The Herald revealed earlier this month, Viragen has encountered problems evolving from a lab-for-hire to a commercially viable independent developer.
PPL Therapeutics, another joint venture with the Roslin Institute that once held the attention of the world for its part in the controversial cloning of Dolly the sheep, ran into financial trouble in 2003 and was eventually taken into private ownership with more than GBP7m returned to long-suffering shareholders.
2.NZ biopharming future uncertain
By Bernie Mitchell
Farm News, 23 June 2007
A Lincoln University study says it is too early to forecast what economics benefits, if any, are to be gained from New Zealand establishing a commercial biopharming industry.
Biopharming - the production of pharmaceuticals compounds from genetically modified crops and livestock - is touted by some as an emerging success story in both agriculture and the pharmaceutical industry.
Its advocates say biopharming has the potential to dramatically cut the cost of manufacturing compounds used in medicine, food manufacturing and dietary supplements.
A preliminary economic study by the Agribusiness and Economics and Research Unit (AERU) says that may be the case, but there is still scant information about the final cost of producing biopharmaceuticals, the demand from consumers, and possible impacts on New Zealand's reputation.
AERU Research Officer Dr Bill Kaye-Blake says until more is known about the value of biopharmaceuticals, including technical issues around their production, suggestions of the benefits of having a biopharming sector in New Zealand should be treated with caution.
"We need to be very clear that any forecast of the potential economic benefits of biopharming is impossible to verify. Several essential dimensions are still unknown, such as the total costs, the impacts of competing technologies, the actual market demand, and the impact on our existing primary sector industries and export markets."
The economic study, produced for the Constructive Conversations project, aims to provide New Zealand industries and policy makers with an economic overview of the biopharming sector internationally, and to set in place a map for use in new territory. Funded by the Foundation for Research, Science and Technology, Constructive Conversations aims is to enable better risk-assessment and decision-making for emerging biotechnologies such as biopharming by developing ways to improve knowledge of the contexts in which the technologies would operate.
The global biopharmaceuticals industry is valued at around $41billion, with an annual growth rate of 20 per cent. Biopharmaceuticals, which can cost $1000 per gram, are currently produced in expensive contained facilities. Previous research has estimated that using biopharming to produce these compounds on farms could reduce the production costs to around one-tenth to one-fiftieth of current levels.
The AERU study has taken a broad definition of biopharming, covering any modification to a crop that enhances it either medically or nutritionally. Dr Kaye-Blake says when considering how to apply biopharming, New Zealand should consider whether to develop a novel technology or adopt an existing one. It must also identify the possible spill-over effects on New Zealand agriculture, such as impact on the clean-green reputation, and whether these would outweigh the benefits.
"The potential impacts of biopharming are a function of the benefits and costs from one type of production system to another, coupled with the product advantages that the new system might afford.
"Therefore the impact of biopharming in its broad sense, including biopharmaceuticals, nutraceuticals and functional foods, will depend on how each of these dimensions change and how those dimensions contribute to the value of the products."
In addition to providing a stocktake of biopharming internationally, the study attempted to quantify the benefits of biopharming two specific products for New Zealand: recombinant human lactoferrin in cows' milk, and low-GI potatoes. Dr Kaye-Blake says that, again, much of information required for a complete assessment remains unknown.
Biopharming is one area of a much larger industry producing biological compounds of pharmaceutical interest. In biopharming, plants and animals are genetically modified to produce or express compounds such as proteins, antibiotics and enzymes.
The expression of these compounds may occur in part of the organism, eg in the seed of a corn crop, or the milk of a dairy herd.
Commonly biopharmed crops include rice, corn and tobacco leaves. International research has found there are currently around 95 approved bio-pharmaceuticals in use for the treatment of various human diseases, including diabetes mellitus, growth disorders, neurological and genetic maladies, inflammatory conditions and blood dyscrasis.
Almost all are produced with standard production methods, using cell culture, which requires major capital investment for growing, harvesting, processing and distribution.
About Constructive Conversations
For more information about the Constructive Conversations project, please visit www.conversations.canterbury.ac.nz or contact the Principal Investigator, Dr Joanna Goven, at [email protected]
The Agribusiness and Economics Research Unit (AERU) provides research expertise for a wide range of organisations on trade, agribusiness, environment and social issues.
Founded in 1962, the Unit has five main areas of focus: trade and environment; economic development, business and sustainability; non-market valuation; and social research. Research clients include Government Departments, international agencies, New Zealand companies and organisations, individuals and farmers.
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