Hoping to cash in on the green revolution, biological pestcontrol developer Biosys announced plans Tuesday to acquireits first company, pheromone-based AgriSense.

Biosys (NASDAQ:BIOS) has staked its claim in the fermentationof beneficial nematodes. The Palo Alto company has signedmarketing and development agreements with several largecorporate partners since its founding in 1983, and went publicin January 1992.

AgriSense was formed in 1988 in Fresno, Calif. as a jointventure between subsidiaries of Phillips Petroleum Co.(Provesta Corp.) and Dow Corning.

"The partners decided they really wanted to stick to their ownknitting and contract back to their core technologies," Biosyssenior vice president and chief financial officer Bruce Fielding,Jr., told BioWorld.

A letter of intent to purchase the company was agreed uponlate Friday afternoon. Biosys president Venkat Sohoni went toEurope to announce the acquisition to AgriSense's Europeansubsidiary, Biological Control Systems, while Biosys executivestold Fresno and Palo Alto employees of the deal, which shouldbe completed by the end of March. Biosys will compensate theAgriSense partners with a combination of cash and commonstock. Other terms of the transaction were not disclosed.

"We were impressed by the market share that AgriSense hasachieved in Europe and the patented technology available formanufacturing pheromone active ingredients," Sohoni said."The acquisition provides us with a European base formarketing, field research and distribution."

AgriSense already appears to have good sales figures for insecttraps and lures containing pheromones, chemical signals thatcan be used to disrupt insect mating behavior. Phillips broughtpheromone synthesis technology to the business, while DowCorning contributed micro-encapsulation and slow releasetechnology for use in traps and lures. Dow Corning alsodeveloped Pheast, an insect-feeding stimulant for larvae, whichcan be used in other biological pest control systems, Fieldingsaid.

Pheromones were one of the first substances closely examinedfor use in biological control of pests, commented Jim McCamant,editor of the AgBiotech Stock Letter in Berkeley, Calif.

Broadening to incorporate pheromone technology shouldcomplement ongoing Biosys programs, Fielding said, adding, "Ithink we're going to capitalize here on the same trend we'veseen with nematodes--the markets need safer products."

Nematodes, microscopic organisms that kill insects, have beendeveloped by Biosys for commercial growers and consumers toprotect turf and crops. Partners include Ciba-Geigy, ArcherDaniels Midland, Chevron Chemical's Ortho division, D. R. Maagof Switzerland, Rhone-Poulenc's German subsidiary Celaflor,and Sandoz Agro Inc. Archer Daniels Midland has entered amanufacturing agreement to produce high volumes ofnematodes in its Decatur, Ill. plant.

Sandoz and Biosys are jointly developing insect-specificbaculovirus insecticides. Biosys has also diversified intocontract manufacturing services for biological pesticides.

-- Nancy Garcia Associate Editor

(c) 1997 American Health Consultants. All rights reserved.

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