Agribusiness Bionova Holding has announced that it will close its R&D operations, conducted primarily through its DNA Plant Technology subsidiary. DNAP focused on developing transgenic fruits and vegetables with improved disease resistance.

	BOUNTIFUL DNA Plant Technology acquired Monsanto's genetics and gene technology development program for berries in early 1999.
	USDA PHOTO

Concerns about the public acceptance of transgenic products and the overall downturn in agriculture have made it difficult to find partners and investors in R&D, Bionova says. With the absence of a customer base, DNAP could not attract sufficient venture capital or other financing. It will close its Oakland, Calif., facility, lay off nearly all employees, and concentrate on licensing or selling its intellectual property.

Created in 1981, DNAP was one of the first generation of small agbiotech start-ups. In 1996 it merged with Bionova, which is majority owned by Mexico's Savia. DNAP's R&D and business funding had come largely from Seminis, Savia's world-leading vegetable seed subsidiary, under an agreement that ended in late 2001.

Major chemical and agribusiness companies wanting to expand their technology bases bought up most of the first-generation agbiotech firms--including Calgene, Agracetus, Mycogen, and Ecogen--beginning in the mid-1990s. Lately, second-generation start-ups have been struggling.

In late 2001, Akkadix, founded by former Mycogen employees, shut down after it couldn't secure financing; Syngenta closed its Mogen plant R&D facility when it couldn't find a buyer. Recently, biopesticide producer AgraQuest halted plans for an initial stock offering. And Paradigm Genetics reorganized last month, cutting about 20% of its staff.

According to merchant bank Burrill & Co.'s agbiotech stock index, the sector dropped 12% in value in 2001 and was down another 1% last quarter, with Paradigm Genetics contributing to the decline. However, strong performers in April were Bionova, with shares gaining 38%, and Seminis, up 114%.

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