Ag-tech upstart is armed to take on Monsanto

Cibus Global uses bioscience to enhance plant genes with a different approach than agribusiness giants.

Enhanced crops, without fear. Photo: Cibus

Israeli crop-protection company Makhteshim-Agan is investing $37 million in San Diego ag-tech startup Cibus Global to spur the development of new strains of crops that will be resistant to various forms of disease, pests, and herbicides.

The investment, which will occur over five years and will eventually allow the Israeli company to acquire slightly more than 50% of the startup, provides a shot in the arm for the 8-year-old upstart whose grand ambitions could put it on a collision course with ag-tech giants like Dow Chemical (DOW), Monsanto (MON), and Syngenta (SYT).

Cibus’s primary asset is its so-called Rapid Trait Development System. Unlike the transgenic approach used by Monsanto, where a foreign gene is inserted into a plant’s genome to confer, for example, immunity to an herbicide (à la Roundup-ready cotton and soybeans), Cibus’s technology teases out such characteristics from the genome without inserting foreign material.

It essentially hurries along standard plant breeding in a highly controlled setting. In simple terms, a molecule is inserted into a plant’s cell, causing the plant to mutate in a desired way. What could take Mother Nature tens of thousands of years to accomplish through millions of mutations over myriad generations takes Cibus anywhere from three to five years, lab to market.

Winning over activists and international governments

This is an important breakthrough for a few reasons: PR, accuracy, and money. While the company is highly successful, Monsanto, for example, has battled a persistent public relations onslaught over its transgenic practices.

Genetically modified organisms (GMOs) have been largely resisted by European nations, rejected by much of Africa, and railed against by various environmental organizations that claim genetically modified crops are either highly infectious to other crops, potentially dangerous to our health, or both.

A technology that could achieve the same benefits — pest or herbicide resistance, for example — without inserting foreign material into a genome should gain the approval of the marketplace and activists alike.

What’s more, transgenic mutations are highly complex and notoriously difficult to get right — which makes for an expensive process.

Zigging while Monsanto zags

“Monsanto estimates that it takes as much as $50 million to launch a transgenic product, which includes all the regulatory work to get it cleared in the U.S. –- and in some parts of the world, it’s not even possible,” says Keith Walker, president of Cibus. “For us," Walker says, "it’s a $5 million to $7 million exercise to take a product to market. That gives us opportunities to work in crops that are smaller in acreage.”

The arrangement with Makhteshim-Agan allows Walker and his team of bio-scientists to explore any number of crops and characteristics. Walker won’t yet say which crops he’s targeting, but they won’t be the enormous ones where Monsanto already has a foothold: cotton, soy, and corn. But that still leaves plenty of opportunity. “The markets are multiple billions of dollars,” says Walker, “and you don’t have to go against Dow Chemical and Monsanto until you’re ready.”

Cibus has already gone through field testing with several crops and has two herbicide-resistant canola products in the works, one that was developed in-house and will debut in 2011, and another that was developed in conjunction with BASF, slated for introduction in 2013. 

Its success in the marketplace should pave the way for Cibus to launch subsequent products quickly, and there are few ends to what such a technology can accomplish. “Monsanto puts a whole gene in, but it’s not necessary,” says Walker. “Literally, as each day goes by, we see new information coming out of functional genomics research that creates new potential targets of opportunity.”