Vestaron Lands $82M to Commercialize Peptide-Based Products, Fuel More R&D
Any company commercializing a new product must persuade people to switch from what they already know. It can be a particular challenge in agriculture, where farmers have decades of experience with crop chemicals.
Vestaron is gaining market traction with its biopesticide, which has found its way onto more farm fields in the past two years. Now the company is showing that it is gaining more traction with investors. Vestaron has raised $82 million in financing to support commercialization of its current product lineup and fuel the R&D of new products.
Vestaron’s pesticides are based on peptides, which are chains of amino acids that are smaller than proteins. The Research Triangle Park-based company’s technology identifies naturally occurring peptides that have insecticidal properties. In 2018, the Environmental Protection Agency approved Vestaron’s first biopesticide, Spear-T, which controls greenhouse insects and pests. Its second product, Spear-Lep, was approved the following year for controlling lepidopteran pests, such as caterpillars.
Growers want to achieve environmental and sustainability goals but they don’t want to give up any of the efficacy they’re accustomed to with traditional pesticides, said Ben Cicora, Vestaron’s senior vice president of sales and marketing. For the past two years, Vestaron has worked to educate the market about peptide-based products, showing with demonstrations and field trial data that this technology can be just as effective as traditional pesticides while also remaining safe for beneficial insects, such as bees.
“As we continue to develop our portfolio, we see opportunities for growers to shift to these technologies and not give up anything along the way,” Cicora said.
Vestaron’s market traction extends beyond U.S. borders. Last fall, regulators in Mexico approved Spear-Lep for crops that include crucifers, tomatoes, and peppers. Brazil is another market where Vestaron’s technology has drawn interest, but the biotech company is eying Europe next. The European Union’s “Green Deal,” adopted in 2020, is a broad set of initiatives focused on sustainability. Included in the plan is the target of a 50% reduction in pesticide use by 2030. Cicora said that in order to achieve those goals, growers will lose a lot of the chemicals that they currently use today without much in the way of new products that can replace them. Biologics-based products can serve as such replacements and Vestaron is positioning its portfolio as a new choice for European farmers.
“When you truly look at efficacy and what is a true direct replacement, our products are a true direct replacement to the products that they’re losing today,” Cicora said.
The next Vestaron product, called Basin, was developed to address lepidopteran pests by targeting another site on the receptor that is targeted by Spear. The company submitted Basin for EPA review last year; Cicora said a regulatory decision is expected by the fourth quarter of this year, which would pave the way for a commercial launch in the second quarter of 2023. He added that the company also aims to develop a formulation of the biopesticide that can be used on row crops, which can help the company expand beyond the specialty crop market in the U.S.
Vestaron’s technology has its roots at Western Michigan University. In 2019, the company relocated to RTP but kept an R&D site in Kalamazoo, Michigan. The newly announced capital is a Series C round of funding that follows a Series B round of financing that was expanded last year. The lead investors for the latest financing are Ordway Selections and Cavallo Ventures. The round added Argonautic Ventures, Fortistar, and Endeavor8 as investors. Earlier investors Novo Holdings, Northpond Ventures, CGC Ventures, iSelect, and Syngenta Ventures also joined the Series C round.
Cicora said Vestaron started talking to investors about a new round last fall. The first closing of the round was in February. He said this latest fundraising effort also gave Vestaron the opportunity to connect with crossover investors, firms that invest in both private and public companies, supporting those companies that are laying the groundwork for an initial public offering. Those crossover firms aren’t backing Vestaron now, but Cicora said that with the connections made during the latest financing, “it’s going to allow us to engage with them in the future.”