Calgene Inc. announced Tuesday that it has formed a newcompany with Quadrant Holdings Ltd. to develop andcommercialize the food-related applications of the naturalsugar trehalose.

Calgene of Davis Calif., and Quadrant of Cambridge, England,will each initially own 50 percent of the new company,Osmotica Foods. Quadrant contributes its U.S. and foreignpatents covering the uses of trehalose in all food applications;Osmotica gets Calgene's (NASDAQ:CGNE) license for thetrehalose-synthesizing genes.

"We intend to develop a family of products that can be directlyused by the food companies as ingredients in soups, cereals andpre-prepared meals. In addition, we intend to develop a low-cost method of producing trehalose to enable food companies toadd trehalose to processed products such as sauces and juices,"said Lloyd Kunimoto, Osmotica's chief executive officer. As well,Osmotica "plans to take advantage of existing technology tolower the cost and ultimately to use genetic engineering toproduce trehalose at commodity prices," Kunimoto said.

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