In an effort to focus on core businesses, DNA Plant TechnologyCorp. said Monday it will acquire controlling interest of itsagricultural diagnostics partnership and has taken steps todivest its interest in Frostban microbial pesticide.

DNAP (NASDAQ:DNAP) of Cinnaminson, N.J., has reached anagreement in principle with Union Carbide, its partner at Agri-Diagnostics Associates, through which DNAP will expand itsownership in the joint venture to 90 percent from 40 percent,effective Jan. 31.

DNAP will pay for its increased share through an earnoutarrangement once Agri-Diagnostics becomes profitable, inabout 1994, said Richard Laster, chairman and chief executiveof DNAP. Union Carbide will receive 10 percent of cash flowuntil it recovers its investment, said Laster. Agri-Diagnosticshad 1991 revenues of close to $2 million.

Agri-Diagnostics develops and markets tests to detect cropdiseases, pesticides and environmental contaminants. Thepartnership has three products on the market. A kit to detectturf grass diseases for use on golf courses has been sold since1989. A test aimed at plant diseases for use in greenhouses andnurseries was introduced last year, as was a diagnostic forpesticide residues.

The company plans to introduce by midyear a test for theenvironmental contaminants benzene, toluene and xylene. Anda test developed in collaboration with Ciba-Geigy forSclerotinia, a wheat disease common in Europe, will beintroduced in the United Kingdom this year.

DNAP also has agreed in principle to grant Ecogen Inc.(NASDAQ:EECN) a 12-month option to purchase DNAP's 72percent share of Frost Technology Corp. Frost Technology wasformed to commercialize a pseudomonas-based naturalpesticide to protect crops from frost and certain diseases.

In exchange for the option, DNAP will receive an undisclosednumber of Ecogen shares worth in the six-figure range atcurrent prices, according to Laster. If Ecogen exercises theoption, DNAP will receive additional Ecogen shares worth closeto $1 million at current prices, plus royalties on sales ofFrostban. Ecogen shares closed at $13.13, down 38 cents.

DNAP shares rose 38 cents to $8.13. The company's corebusinesses are branded produce, agricultural andenvironmental diagnostics, edible oils and novel flowers.

-- Karen Bernstein BioWorld Staff

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