NCBiotech Ag Showcase: Money in Manure, Pet Meds Too
By Allan Maurer, NC Biotech Writer
The possible investments stretched from sunflower rubber to poultry vaccines to crop boosters to pet meds.
A dozen ag biotech startups pitched their wares this week to a receptive crowd at the North Carolina Biotechnology Center’s 2017 Ag Biotech Entrepreneurial Showcase at the Cotton Room in iconic downtown Durham.
The presenters included five from North Carolina and others from Norway, Switzerland, Florida, California, Kansas, and Missouri. Hundreds converged on this event in the Triangle of North Carolina, affirming the global recognition that NCBiotech has successfully established partnerships and outreach to plunk North Carolina into the position of the premier magnet for cutting-edge agricultural technologies.
These young companies were vying for the interest of investors. That was evident. And the lure also included a cash prize of $10,000 and $3,500 in legal and financial advice. Event sponsors Smith Anderson, the Raleigh-based law firm, and Triangle accounting firm Hughes Pittman Gupton, provided those in-kind services.
The second-place winner stood to reap $2,500 in cash. NCBiotech announced the winners at the close of the two-day program. This year, neither of the top vote-getters was headquartered in North Carolina. And that's part of the ironic beauty of the event. NCBiotech is committed to the idea that ag tech genius lifts all boats. In the relatively nascent world of agricultural technology recognition, NCBiotech earns its stripes by welcoming all game-changers to experience this North Carolina "magnet."
PrairieChar, a Kansas company developing a system to convert animal manure into useful products, won this year's top prize.
Integrated Animal Health, also based in Kansas, which finds and commercializes medicines and foods for pets and farm animals, won the $2,500 second prize.
NC startups weigh in
Applied Life Sciences & Systems, of Raleigh, was the first of the N.C. startups to present. It's developing a poultry vaccine that the company says can deliver 99 percent protection against many chicken diseases while greatly reducing the use of antibiotics.
Current methods of vaccination are “all poor,” explained ALS-S CEO and Founder Ramin Karimpour.
Poultry production is a $200 billion industry and a major one in North Carolina. In response to the growing demand for antibiotic-free poultry and restrictions on antibiotic use, poultry producers are transitioning away from mass application of antibiotics. This is resulting in significant productivity losses.
Diseased chickens do not gain weight, leading to a poor feed conversion ratio, the number one metric in the industry. “Disease control is the industry’s greatest challenge,” Karimpour said.
The ALS-S solution detects, targets and delivers vaccines to each chick, ensuring effective vaccination. This boosts the natural immune response to diseases, improves overall flock health, provides for a cleaner, healthier chick, and safer meat quality.
Return on investment for effectively controlling one of the most common poultry diseases could save a hatchery.
The company received a Phase I National Science Foundation grant of $225,000 in December last year and expects to apply for a Phase II grant by the end of this year. Karimpour said the company sees a path to breaking even by 2027. It is seeking one or two professional investors.
Edison Agrosciences, of Research Triangle Park and Creve Coeur, Mo., is developing a technology to make natural rubber from sunflowers.
In the early part of the 20th century, carmaker Henry Ford asked inventor Thomas Edison to come up with alternative sources for natural rubber. He found more than 2,000 species of plants that make rubber naturally.
Natural rubber production is a $50 billion market, but current methods of producing natural rubber are becoming environmentally and economically unsustainable. Edison CEO Thomas Christensen explained that while there is currently a surplus of natural rubber on the market, within three to six years there will be a steep falloff into deficit territory.
He said the sunflower is an annual crop grown on 1.56 million acres in the U.S. It is especially attractive for development as a natural rubber producer because of its short growing season, relatively low water requirements and tolerance to stresses induced by both high and low temperatures.
Also, Chistensen said, “Farmers know how to grow it and it adapts to a wide range of climates, is capable of rapid genetic improvement, is drought tolerant and can grow on crappy land.”
The company is currently seeking an $800,000 seed round to transform plants into higher producers of natural rubber. It expects to close a $3 million round this summer and hopes to raise $4.5 million in 2018. The company plans a large pilot run in the field this year in Nevada.
NC companies pitching on day two of the event:
Biotality, founded by Tom Christensen, CEO of AgTech Ventures, is focused on safe, effective bio-protective products targeting the organic and green market segment.
The third company founded by Agtech Ventures (its Edison startup presented the first day of the Showcase), Biotality has developed a fungicide for organic producers, who lack effective crop protection products.
Fungal pathogens cause “catastrophic damage,” Chistensen said. They include blue mold, gray mold and pythium infestations. “More than 10 percent of produce is lost to post harvest fungal pathogens, 20 percent locally, so the ability to control this is an important issue,” he said.
The products currently available to organic producers generally cost more but are less effective than chemical pesticides.
The company’s first product uses bacteria that overproduces the fungicide and has been successfully tested. It shows effectiveness protecting fruits, vegetables, and cucumber seeds. Post-harvest apples were treated with efficacy comparable to the best commercial chemical standard.
The company expects its first revenue by 2020. Christensen said a total of $12 million in capital is needed and Biotality is seeking development partners.
Boragen was the first startup launched by the Research Triangle Park-based AgTech Accelerator with a $10 million funding in March.
John Dombrosky, CEO of the AgTech Accelerator and founder and CEO of Boragen, said the company’s first product is a fungicide that works on fungi resistant to conventional treatment. It can be used in combination with other products to reduce the amount of chemicals applied per acre.
Boron, he explained, is one of only six elements formed by cosmic ray spallation (elements formed by the impact of cosmic rays). Others are lithium and beryllium. Boragen has assembled an expert team of chemists with special expertise in boron, Dombrosky said.
The company’s novel boron chemistry has several other potential applications in agriculture, including insecticides, and in human health. Boragen plans to develop milestone-based partnerships with royalty arrangements.
Tethis, based in Raleigh, has developed and patented a new way to transform plant-derived feedstocks into polymers used in a wide range of applications and industries.
Tethis began in 2013 as a spinout of novel technology discovered at NC State University aimed at the water treatment market.
The Tethis superabsorbent polymer (SAP), made from cornstarch, has similar performance to synthetic petroleum-based SAPs with a global $8 billion market. They’re used in products such as diapers. agriculture payload carriers, and nonwoven wipes, and seed coatings.
Tethis SAPs have manufacturing, price and ecological advantages over existing synthetic SAPs. They have shown superior performance in brine, seawater, blood, oil and other ionic (salty) liquids.
Tethis makes the biodegradable SAPS with green materials and green processes.
The company has raised a $4.5 million equity round and signed a multi-million dollar licensing deal in the fracking area. It will be increasing headcount and raising funds again in late summer or early fall 2017.
Read more about the two Kansas companies that won the Showcase prizes here.