Calgene Inc. said Friday it was granted a U.S. patent, No.5,188,958, for a method for making oils, strengthening thecompany's stake in a field that could surpass the importance ofgenetically engineered tomatoes.
The patent covers genetically engineered cells of Brassica, abotanical genus that includes oil-producing rapeseed, broccoli,cauliflower, cabbage and brussels sprouts.
"This is the most efficient transformation method for Brassicaspecies in the industry," said Vic Knauf, vice president ofresearch at the Davis, Calif., agricultural biotechnology company(NASDAQ:CGNE). He called it "a key technology of Calgene'sproprietary vegetable oils now in field trials."
Uses range from heat-resistant lubricants for high-performanceengines, biodegradable engine oil, hydraulic fluids andindustrial lubricants to food ingredients with either low or highsaturated fats.
Designing oils for food and industry through geneticallymodifying rapeseed production of canola oil is a "significantpart" of the company's overall business, said Andrew Baum,president of the oils division.
Calgene is also commercializing a Flavr Savr tomato withantisense technology to slow softening, allowing longer ripeningon the vine and longer shelf life. In a third branch of research,the company is developing herbicide-resistant cotton strains toincrease fiber yield per acre.
"I think the oils is a much bigger business," said GeorgeDahlman of Piper Jaffray & Hopwood in Minneapolis. "It's thereal crown jewel in Calgene's portfolio of developmentprograms and has a bigger market than the other twocombined. The market could be $10 to $15 billion total."
The oils business focuses on directing rapeseed to produce avariety of specific fats. A high-stearate canola oil could be usedto produce foods such as margarine, which do not have to behydrogenated to be solid at room temperature. Another varietyproduces laurate, an important ingredient in detergents, whichis not normally present in canola. Calgene plans the firstcommercial production of its genetically engineered oils in1995.
The diverse program potentially represents "several hundredmillion dollars in revenue, and could easily be a half billiondollar business," Baum told BioWorld.
But analyst Maureen McGann of Merrill Lynch noted thatCalgene's oils have escaped many people's notice.
"People who own the stock and follow it, such as myself, allagree the oils area is the single most important," said JimMcCamant, publisher of the Agbio Stock Letter, "and long termprobably even more important than the tomato."
Issuance of a patent implies that the technology is proven andthere is no risk of technical obstacles, he said.
The patent covers Brassica cells and their offspring that containan agrobacterium border region and a selectable marker, DNAhandles that allow genes of choice to be inserted and tracked.The method enables "unimpeded" gene transfer, Baum said,regardless of the type of Brassica plant used.
"We plan to license it to companies for applications other thanrapeseed oil modification," said Roger Salquist, Calgene's chiefexecutive officer. The technique could be used to modifyvegetables or introduce pest resistance or drought tolerance inrapeseed, Baum explained. Calgene, however, uses traditionalbreeding methods to improve cultivation of its rapeseeds. Thecompany also has contract growers, chemical processing andother components of the oils business in place to enable it toprovide products directly to market.
Competitors include Du Pont, which is working with DNA PlantTechnology Corp. in rapeseed and other crops, and Agrigenetics,a subsidiary of Lubrizol that is now subject to majority controlby Mycogen Corp.
Calgene has filed a patent with similar claims in Europe. Thecompany has the first filed patents in Europe on four other oilbiosynthesis genes -- plant desaturase, synthase, reductase andmedium-chain thioesterase -- and corresponding U.S.applications pending.
Calgene's stock closed Friday at $13.50 a share, up 50 cents.
-- Nancy Garcia Associate Editor
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