WASHINGTON - Scientists at the FDA's Center for Food Safety andApplied Nutrition (CFSAN) have determined that the geneticallyengineered Flavr Savr tomato is as safe as other currently consumedtomatoes and that the kanamycin resistance gene (kan r gene) is safeas a food additive.The conclusions of CFSAN's scientists were published in abackground paper prepared for an FDA Food Advisory Committeemeeting on Wednesday and Thursday. CFSAN is the organizationwithin FDA responsible for reviewing scientific issues relating to theFlavr Savr tomato."This is the first publicly available document I'm aware of that statesthe views of our scientists," confirmed Brad Stone, director of pressrelations at CFSAN. "They've reached these conclusions on the basisof a scientific review of the data."In August 1991, Calgene requested an advisory opinion from the FDAon the Flavr Savr that would establish the genetically engineeredproduct as a tomato and subject to the same regulation as other non-engineered tomatoes. In January 1993, Calgene requested that theFDA approve the kan r gene [including its protein byproduct,APH(3')II] as a food additive.The CFSAN document demonstrates that the Davis, Calif.-basedcompany has won a safety ruling on both requests, at least fromCFSAN scientists. However, Calgene will not be allowed to market itstomato until it has final approval from FDA Commissioner DavidKessler.If Kessler agrees with the judgment of CFSAN scientists, the kan rfood additive regulation would be published in the Federal Registerand the Flavr Savr advisory opinion would be issued in the form of aletter. Calgene said last October that it believes the two events willoccur simultaneously.This week's meeting of the Food Advisory Committee has no formalrelevance to the Flavr Savr's progression through the FDA. Thecommittee is slated to discuss the process CFSAN used to come to itsdecision about the Flavr Savr, not to agree or disagree with thedecision itself. However, according to CFSAN's Stone, if thecommittee raises serious issues with the process, it could affect thetomato's fate. The Flavr Savr is the first genetically engineered foodever reviewed by CFSAN and is thus being used as a case study forpurposes of discussion.Rocky Regulatory RoadThe Flavr Savr has traveled a long and rocky regulatory road to reachthis point. Some believed that the tomato was poised for approval asmuch as a year ago. Analysts have expressed bewilderment as to whythe process has taken so long. Many said that sources within FDAhave indicated for a long time that the agency has no significant safetyconcerns about the Flavr Savr."Anyone who deals with the FDA knows that the process is fraughtwith uncertainty," Calgene's president and chief executive officer,Roger Salquist, told BioWorld. "Sure, we would liked to have had itapproved last October, but all you can do is make the best estimatesyou can." Salquist said that obtaining FDA approval for the firstgenetically engineered whole food will be a "watershed" event.He said that the CFSAN document confirms the company's belief thatthe FDA agrees with Calgene's scientific arguments that the product issafe.George Dahlman, agricultural analyst at Piper, Jaffry and Hopwood inMinneapolis, speculated that Kessler, who took some heat for lastyear's FDA approval of bovine somatotropin (BST), did not want agenetically engineered product approval too soon after the high-profileBST case. "This is a bittersweet victory for Calgene," said Dahlman."They've been strung along by the FDA for so long now."Dahlman downgraded his rating on Calgene in February from "buy" to"reasonably priced" (which he translated as: "There are better things toinvest your money in."). He said he changed his rating due to concernover the company's financial situation; Calgene had a cash balance of$20 million at the end of the last quarter and a burn rate of $25million. Dahlman estimated that the company will need another $50million or $60 million to reach profitability, raising concerns aboutdilution for shareholders and the availability of funds from WallStreet."After at least five public offerings, shelf offerings and cash infusionsfrom research partners, this story is no longer credible on Wall Street,"said Dahlman. "Promises have been made each time that it's the lasttime, and they are always broken."Salquist vigorously disputed Dahlman's assertions, claiming that thecompany's burn rate has dropped below $25 million since layoffs lastmonth and that the company has "plenty of alternatives on hand" forraising money. He did concede that at the current time, Calgene hasless than a year's worth of cash in the bank. But he added, "I don'tthink raising money is going to be a problem."Kessler's 'Cover'Jim McCamant, editor of the Agbiotech Stock Letter in Berkeley,Calif., predicted that the FDA will issue final approval of the FlavrSavr within one month of the April 6-8 meeting. "The meeting is toprovide cover for David Kessler, who's always been worried aboutwhat people think," said McCamant, who has a "buy" rating on thestock (NASDAQ:CGNE).McCamant estimated that the Flavr Savr will generate "significant"revenues for Calgene in 1994 and that by 1995, it could be a $200million product even if it captures less than 10 percent of the U.S.fresh tomato market. He said final approval from the FDA will drivethe company's stock price up in the short term. The stock closed at$11.63 a share last week.However, McCamant said that Calgene's biggest potential lies in theoils business, where it may market products in the margarine andindustrial oils markets.Salquist pointed out that the kan r gene is incorporated into productsin all three of Calgene's main potential markets: oils, tomatoes andcotton. Once a definitive ruling on the gene in the form of a foodadditive regulation is published in the Federal Register, the companymay have seen the last of FDA regulation, at least for now.
-- Lisa Piercey Washington Editor
(c) 1997 American Health Consultants. All rights reserved.