Investors gave a 72 percent boost to Crop GeneticsInternational Corp. stock on Friday after the companyannounced an alliance with Du Pont to commercialize biologicalinsecticides.
The agreement is CGI's first corporate partnership. CGI shares(NASDAQ:CROP) rose $3.25 to $7.75.
The Hanover, Md., company and Du Pont of Wilmington, Del.,will develop insecticidal virus products (IVPs) targeted atcaterpillars that attack vegetables. The IVPs will consist ofnatural baculoviruses that infect and kill lepidopteran insects.
Du Pont will provide up to $3.75 million over the next twoyears to fund development of IVPs. In exchange, Du Pont willhave exclusive worldwide rights to distribute and market theproducts.
CGI will become the exclusive producer of virus products forthe alliance and will focus its InStar division on the low-costproduction of IVPs. The two companies will share profits undersales and supply agreements, which will be negotiated as eachIVP is developed.
The safety and effectiveness of IVPs has been known for years,but their success has been limited by relatively highmanufacturing costs, said Frank Owen, global product managerfor insecticides at Du Pont Agricultural Products. IVPs can beapplied using conventional pesticide application systems.
Joseph Kelly, CGI's chief executive, told BioWorld that thecompany has figured out how to produce commercial quantitiesof IVPs at low cost and consistent quality, making them cost-competitive with existing chemical and Bacillus thuringiensisproducts. He declined to elaborate, pending the issuance ofpatents on the company's technology.
Owen estimated the world market for insecticides at $7 billionto $8 billion annually. He expects the first of the alliance's IVPsto reach the market by about 1995.
The IVPs will be CGI's first products on the market, said Kelly.CGI has three other divisions. Its X-tend group is developingweed control systems that combine biological and syntheticherbicides; its InCide technology uses genetically engineeredplant inoculants to protect corn, rice and other row crops frominsects and fungi; and its Kleentek business markets disease-free sugarcane seed.
-- Karen Bernstein BioWorld Staff
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