From AgTech Nexus: 15 Minutes With… Dr. Jerry Feitelson, CEO & Co-Founder of Agribody Technology

July 24, 2019

By Michelle Pelletier Marshall, GAI Media

Agribody Technologies, Inc. (ATI) of San Diego, California, is an ag biotech technology licensing, co-development, and crop breeding startup whose customers/partners are seed companies with their own elite commercial germplasm. ATI’s unique crop genetic technology provides benefits throughout the supply chain, from improved crops for farmers to more efficient use of scarce resources, to lower prices for better products for consumers.

The company, founded in 2015, just closed on a $1.5 million Note funding round last week, with contributors that included venture capitalists, family offices, angel investors, and more. This week saw its co-founder and CEO Dr. Jerry Feitelson among the attendees at Global AgInvesting’s fifth annual AgTech Nexus USA in Chicago where he was making connections in support of his next Priced round of $2 million.

GAI News caught up with Feitelson for a brief Q&A while at AgTech Nexus, just before he and his team were going on-stage to present at the event’s AgTech Innovation Spotlight.

1.) Please explain how your novel target-validated genome editing platform, which includes the regulation of two genes (elF-5A and DHS), is expected to increase yield, stress tolerance, and shelf life of agricultural products.

Professor John Thompson, my co-founder who is now VP of R&D at the University of Waterloo in Canada, discovered this two-protein genetic switch that determines cell fate in plant cells. By that I mean that one protein basically decorates the other protein. What John found is that this particular protein gets highly up-regulated – about 15 times more prevalent – in dying leaves than in young, healthy ones. So he did what any good biotechnologist would do, which is when you see something in nature you don’t like, you do the opposite. So he down-regulated that protein – called DHS – in transgenic plants. He found that the leaves lasted longer. The surprise was that these plants also produced dramatically more seeds – three times the normal amount. He also found that they were more tolerant to abiotic stress, such as crowding, drought, high temperature, and lack of nutrients. These transgenic plants were much more robust, which was the result of shifting the balance of this one genetic switch toward continued cell growth and development and away from cell death.

 To note, this eIF-5A/DHS switch is universal – it is the same two proteins in five of the six kingdoms of life. This switch is not binary (on or off), it’s more like an analog switch (like a dial), that when down regulated too much you get undesired effects, and if you down regulate it too much, it’s lethal. So we have to find the sweet spot. John and his collaborators went on show that this switch worked the same way when modified by downregulation of DHS or upregulation of eIF-5A3 resulting in the same set of three traits – higher yields, more resistant to stress, and extended shelf life – in many different crops – annuals, perennials, dicots, monocots, trees, grasses, and even algae. This was proven not only in the lab, it was validated in the greenhouse and even in field trials. For example, there were two years of replicated field trials in alfalfa that showed an unprecedented 20 to 40 percent increase in yield with no negative consequences on quality. It was also found that there was 2-3x extended shelf life in bananas, tomatoes, lettuce, and carnations. These four crops, which went all the way through greenhouse studies, proved that by reducing the amount of DHS using transgenic methods, the shelf life of perishable products increased two to threefold, a dramatic improvement strongly validating these targets.

 Shelf life is really important because it directly impacts food waste. There are several physical and chemical methods to extend shelf life. The importance of food security can’t be overestimated. It’s thought that we need to increase crop yields by 70 percent in the next 31 growing seasons. I don’t disagree with this, but it’s obvious that if we didn’t waste a third of our food – about 1.3 billion tons a year – we might not have to increase yields at all. Now our traits are not going to completely solve the food security problem, but I think we can make a substantial impact. We’ve already proven it with bananas, tomatoes, etc. It’s obvious that if we combine current physical and chemical methods – cold chain, edible coatings, inert gasses, packaging – with our genetic technology, we probably have a home run winner.

 One important result is that the perishable products’ biochemistry is not changed because Agribody’s targets with DHS and its partner gene are really early in the cell fate pathway  – and the benefits are permanently built into the seed. There is no change in flavor or aroma so it’s going to taste the same as the conventional fruit or vegetable, except that it will last much longer. So, we don’t run the risk of messing up some downstream biochemical pathway because we are simply reducing the rate of programmed cell death.

 Plus, ATI holds exclusive intellectual property rights to the transgenic applications for this platform with 15 issued U.S. patents and foreign counterparts.

2.) Since filing for patents and licenses, ATI is now in a position to form partnerships with innovative seed companies, such as you did in 2018 with Benson Hill Biosystems. Can you explain your end goal, and the benefits of partnership?

The importance of extending shelf life is clearly understood by our innovative seed company partners, and presumably also by consumers who will ultimately decide on the “public license” for genome editing. We founded the company in 2015 based on the two assumptions that:

a.) non-transgenic genome editing (e.g., small deletions or point mutations caused by CRISPR with no foreign DNA added) was going to be a big thing in advanced plant breeding and would be lightly regulated by governmental regulatory authorities, thus the resulting products would reach the market relatively quickly at low cost; and

b.) that mutations caused by CRISPR reducing the activity of DHS making a normal amount of a “messed up protein” would closely mimic the 3 beneficial sets of traits caused by reduced expression of a normal DHS protein in the earlier transgenic plants.

We have already completed nine partnership deals, acquiring more than $250,000 in revenue. Some of our partners are JR Simplot, Tropic Biosciences, Sustainable Oils, Starke Ayres, and Intrexon, and for products, we’re working on potatoes, coffee, camelina, tomato, lettuce, sweet corn, and soy. We’ve done a lot of research and are trying to develop a partnership with an alfalfa seed company.

We are very interested in working with indoor ag companies as we have proven our methods work with lettuce, and already made one non-exclusive deal there. There’s a potential merger of fields, introducing genetics and crop improvement through conventional breeding and our genome editing approach, which I believe would make a huge difference in the indoor ag industry. But we need to have that first partner step up and be the first adopter. We are seeking a similar partnership with hemp/cannabis companies.

The Benson Hill partnership came about after I heard Matt Crisp [Benson Hill CEO] give a webinar and he mentioned that they had discovered a novel CRISPR nuclease that was different than cas9, but with similar utility. We finalized a licensing deal with them several months later. This means that seed companies can come to ATI and we can give them a direct license to our two target (DHS and eIF-5A) and a sublicense to Benson Hill’s CRISPR 3.0 technology. Essentially, we are one-stop shopping for seed companies, licensing them all the way through to commercialization.

3.) How was the first round of $1.5 million funding utilized by ATI, and what are the expectations for the next $2 million? What can investors expect for ROI?

Our first round had a broad investor base: 3 VCs – The Yield Lab, Plug & Play, and Lateral Ventures, two family offices, a strategic partner, an alfalfa seed company, nine angels, and myself – I put in $100,000. We still have quite a bit of that money left as we operate very lean. We also are excellent budgeters and have a very detailed Use of Proceeds document. And we have an excellent and passionate team –business development VP, corporate and patent counsel, an acting CFO, and a superb Advisory Board – giving us the team, technology, and traction to move in the marketplace. Most importantly, we demonstrated a huge potential to impact food security and agricultural sustainability/resilience across many crops.

We will use the new money, which we launched in May as a $2 million Series Seed Preferred round bridging to a Series A, to prove out a third business model. Our first two models – licensing and co-development – are well underway. But the third we’d like to add is a Trait Introgression model. Instead of individually genome editing each elite variety, we can do marker-assisted breeding to rapidly and conventionally breed our long shelf-life trait into customer seed companies’ elite varieties or hybrids, which will be about one-third of the cost of genome editing. Investors want to know how we will scale – this is it. So the new funding will expand our business model, help build a small lab with rented greenhouse space, and be used to maintain patents and file new IP.

We have a proforma revenue forecast which runs a little longer than many because this is agriculture and plants simply need time to grow, so we need patient investors. We have just closed a $1.5 million Seed Note round and now have an ongoing $2 million Series Seed Preferred round, and expect to launch a $5 million Series A in another year and a half or so. With all this, it’s not unreasonable to think we could have a $200 million exit. If that is the case, it would be an overall 24x cash-on-cash return, which should hit a professional investor’s threshold.

About Jerry Feitelson


Feitelson headshotJerry Feitelson, Ph.D., is co-founder/CEO of Agribody Technologies, Inc. Previously he held the positions of: CSO of Global Clean Energy Holdings & Sustainable Oils; manager of business development, IP & Alliances at Beckman Coulter; VP of Technology and Business Development at GenWay Biotech; and research director at
Akkadix. At Mycogen, his group discovered and patented most of the B.t. toxin genes. He was a senior research microbiologist at American Cyanamid and adjunct professor at Rutgers University. Feitelson is an inventor on 15 U.S. patents and author of 40 publications. His educational background includes a B.S. in Life Sciences from MIT, a Ph.D. in Genetics with Joshua Lederberg at Stanford University School of Medicine, and an NIH postdoctoral research fellowship at the John Innes Institute, Norwich, UK in Streptomyces molecular genetics, where he cloned the first gene involved in antibiotic biosynthesis with a known biochemical role.

 

-Michelle Pelletier Marshall is managing editor for Global AgInvesting’s quarterly GAI Gazette magazine and a regular contributor to GAI News. She can be reached at mmarshall@globalaginvesting.com.

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