Blame it on drought, salt or hail, but devastating environmental conditions can depress agricultural crop yields by more than 70 percent.

A company based in West Lafayette, Ind. - the home of Purdue University - is trying to change that.

Formed in March 2001 as a spinout of the university, FuturaGene Inc. holds exclusive commercial rights to several patents on genes that improve crop tolerance to abiotic stress - such as salt, drought, cold and heat.

"It's a huge impact" on farmers, said Kannan Grant, FuturaGene's executive director and acting CEO. "Drought is a major problem around the world, including the U.S. And not only is the ground or the soil getting saline or salty, but also the ground water a lot of farmers use to irrigate is getting depleted, and it's becoming more salty."

Salinity is found in up to 37 percent of cultivated lands; cold spells can freeze the orange plants in Florida; and the changing environment has led to more heat than in years past, beating down important crops.

"The approach that we have taken is there are plants that are naturally tolerant to drought, naturally tolerant to environmental stress," Grant told BioWorld Today. Some plants are "growing in various salty conditions by the seaside. Our approach is to identify the gene in those plants that make it tolerant."

Since genes in plants are homologous - meaning the ones found in salt-tolerant or drought-tolerant plants are also found in crop species - FuturaGene identifies the genes and overexpresses them in the crops "so they are better able to withstand abiotic stress," Grant said.

Other agricultural biotech companies are working on creating crops that can withstand biotic stress. They develop pesticides and herbicides by taking genes from bacteria and inserting them into plants, making them more tolerant of pests and weeds.

FuturaGene is not using other organisms with its research.

"We are taking genes that are already in plants," Grant said. "It's a much greener approach."

It currently is working on tomato and rice prototypes that overexpress the SOS1 and LOS5 genes - basically allowing them to grow under high salt, drought and cold stress conditions

In a field trial conducted last year at Purdue, FuturaGene found its tomato plants could grow well in very salty conditions. The overexpressed gene that enabled that was discovered by scientists at the University of Arizona, which licensed some of its technology to FuturaGene in May 2002.

A study in rice is being conducted at the company's partner institution in Wuhan, China - Huazhong Agricultural University - and is focused on finding ways to make the plants tolerant to salt and drought.

In addition, FuturaGene is working on other crops, such as corn, soybean, cotton and wheat. All told, the company has a portfolio of 12 genes it is studying.

The tomato crop is the most advanced program of an edible plant, and with approvals from the U.S. Department of Agriculture, the Environmental Protection Agency and the FDA, it could reach the U.S. market in about four years.

FuturaGene is furthest along, however, with its non-edible ornamentals and floriculture products, which only require approvals from the USDA and EPA. They could be commercialized in two to three years.

It is difficult, at this point, for FuturaGene to know how much of an impact its technology may have on farmers. In Illinois alone last year, drought caused a loss in crop yield of $4 billion to $6 billion, Grant said. In addition, freezing temperatures can restrict the length of the growing season; about 64 percent of land area has temperatures of 0 degrees Celsius or less.

Despite what the company is trying to do - improve agricultural economics and provide a more bountiful food supply - financing always has been challenging.

"Right after we started the company, 9/11 occurred, so there were a lot of jittery investors in the U.S.," Grant said. "We were able to get our first round of financing from an individual in the UK."

The company raised $500,000 through the Series A round, and later $3.4 million through a Series B investment. It eventually went public on the Alternative Investment Market of the London Stock Exchange in 2004. The stock (AIM:FGN) is trading at about 58 pence.

"We found out that the capital in the UK is a little bit more sophisticated.," Grant said. "They understand environmental stress plant genetics a little bit better."

Although working in the field of genetically modified organisms (GMOs) may cause some investors to backpedal, FuturaGene found that its philosophy of overexpressing plant genes that already are present in plants made the company more eco-friendly and enabled it to conduct an initial public offering with more ease than other agbiotech companies.

"It's not easy here" in the U.S., Grant said, to find financing. "It's not easy by any stretch of the imagination, even in London. But I think what we have is we're targeting a problem that has been persistent for a long period of time."

The company, which has five full-time employees, conducts most of its work through universities. It was awarded in January a 10-year business license in China, and has set up a subsidiary in Beijing, where it works with the Chinese Agricultural University.

FuturaGene also has funded itself through government grants. In 2004, it won a Small Business Innovation Research award from the USDA, and its application was placed in the top 18 percent of the "must fund" proposals submitted.

"As one of the Nobel laureates put it, in the U.S. and a lot of parts of Europe, people irrigate their land to grow crops," Grant said. "The rest of the world, they really dance for rain. Water is not a sure thing for a huge part of the world, and we hope to make an impact."