WASHINGTON _ In a historic move, the FDA has ruled that CalgeneInc.'s genetically engineered Flavr Savr tomato is as safe as tomatoesbred by conventional means. Small quantities of the tomato could beon supermarket shelves in the Midwest and California within 10 days,marking the first time in history that a whole food produced bybiotechnology will be available to the American public.The Davis, Calif. company's stock (NASDAQ:CGNE) gained only 6cents per share on Wednesday to close at $11.38, perhaps anacknowledgment of the immense challenges that lie ahead. Thecompany has emerged from the regulatory fire with FDA approval inhand only to leap into the frying pan of growing, packing, distributingand selling tomatoes.The FDA took a total of five years to review the Flavr Savr tomato andCalgene has jumped through innumerable scientific hoops to prove theproduct's safety and nutritive value."We have approached our review of this product with scientific rigorand a commitment to full, public disclosure of that science," said FDACommissioner David Kessler. "Consumers can be confident that weremain committed to assuring that foods produced by geneticengineering are as safe as food in our grocery stores today."In addition to its ruling on the whole tomato, the FDA also plans topublish a food additive regulation in the Federal Register early nextweek allowing the use of an enzyme encoded by the kanamycinresistance (kan-r) gene. The kan-r gene can now be used by othercompanies developing food products.Analysts predicted that the FDA's endorsement of Calgene's tomatocould boost the entire agricultural biotechnology industry. "This wasn'tjust a battle for Calgene, it was a battle for the whole industry," MerrillLynch analyst Maureen McGann told BioWorld. (For moreinformation on other biotech whole food products in the pipeline, seethe related article, p. 1.)Flavr Savr tomatoes will be marketed by Evanston, Ill.-based CalgeneFresh, a wholly-owned subsidiary of Calgene, under the brand nameMacGregor's tomatoes. The FDA ruled that special labeling for theFlavr Savr was not required because the tomato maintains the essentialcharacteristics of traditionally developed tomatoes. Nonetheless,Calgene plans to provide a brochure for consumers about the geneticengineering process that produced the Flavr Savr."We're pleased that we will now be able to offer frustrated tomatopurchasers our MacGregor's tomatoes that taste as good as they knowfresh tomatoes can taste," said Calgene's CEO Roger Salquist. "They'llno longer have to be dissatisfied with the quality of fresh tomatoeswhen backyard and farm stand tomatoes are not available."Bad Timing For Immediate SalesThe FDA approval comes at an inopportune time since the summermonths generally see an influx of home-grown tomatoes which will bedifficult to beat, flavor-wise. It is during the cold winter months thatCalgene expects to sell the most tomatoes. According to spokeswomanCarolyn Hayworth, it will take at least a year for Calgene to distributethe Flavr Savr nationwide, but by October and November "much largerquantities" of the tomatoes will be on supermarket shelves."This is high season for farm-grown tomatoes so Calgene can use thistime to rebuild relationships with grocery store chains, work on itsdistribution network and gain consumer acceptance with a limitedrelease of product," said McGann. "The first hurdle was FDA approval,the second hurdle is getting people to buy the tomato."Piper, Jaffray and Hopwood analyst George Dahlman said Calgene'sfirst order of business will be to "unmothball their Chicagooperations." Last March, Calgene was forced to furlough staff,mothball its packing plant and plow tomatoes under in order to savemoney while waiting for FDA approval. The next pressing issues willbe contracting with growers and deciding on how to handle summerproduction, according to Dahlman."Now the honeymoon is over," he said. "The next stage will be a realtest of Calgene's ability to execute its marketing plans. It's notimpossible but it's not a slam dunk either."And Calgene can expect to face further challenges from consumeractivist groups. Jeremy Rifkin's Pure Food Campaign (PFC)announced plans on Wednesday to organize a national boycott of theFlavr Savr, claiming that its members will stake out grocery stores andrestaurants in over 800 communities. "We will inform all Americans ofwhich stores are selling this tomato and which are not," Rifkin vowed."Today marks the beginning of a `tomato war' in this country."In addition, the PFC will file a lawsuit in a federal district courtchallenging FDA approval of the tomato and the decision not to labelthe product. Rifkin's group has continued to argue that the kan-r genecould create bacteria resistant to antibiotics, posing a threat to publichealth. Numerous scientists and experts have disputed this view.Other groups have avoided attacking Calgene and its tomato but haveaggressively raised larger issues about FDA policy. Douglas Hopkins,senior attorney for the non-profit Environmental Defense Fund in NewYork City said his organization said that the Flavr Savr approval maygive consumers a false sense of security."What Calgene did voluntarily was responsible, it was good forconsumers," Hopkins told BioWorld. "But as more geneticallyengineered foods hit the grocery shelves there is a greater likelihoodthat more companies will not submit their products to the exhaustivepublic review process that the Flavr Savr went through. The FDA'sgenetically engineered food policy leaves a hole you could drive atruck through."Hopkins said his group wants the FDA to revise its food safety policyto require that all genetically engineered food products be reviewedand to issue a labeling policy that would require clear labeling of suchfoods.Calgene received U.S. Department of Agriculture approval tocommence commercial production of Flavr Savr tomato varieties inOctober 1992. However, the company requested an FDA ruling on theFlavr Savr's safety and submitted a food additive petition for the kan-rgene even though neither action was required by law.Calgene had $12.8 million in cash, short-term investments and cashequivalents as of March 31, 1993. Since that time, the company hasarranged a private sale of its stock at an undisclosed discount to themarket price which should bring in $20 million. At the current burnrate, its cash reserves should last for a little more than one year.Calgene lost $25.6 million in fiscal 1993 ended last June 30. It said inFebruary it expected its loss for fiscal 1994 to exceed the fiscal 1993figure.

-- Lisa Piercey Washington Editor

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