Stine Seed purchases biotech company ProdiGene

August 25, 2003

From Iowa Farm Bureau
By Dale Johnson


Iowa may be thrust into the forefront of the bio-pharming industry with the purchase of a leading biotech company by an Iowa-based seed company.

International Oilseed Distributors Inc. of Adel, a subsidiary of Stine Seed Company, has purchased majority ownership in ProdiGene Inc., one of the United States’ leading research companies in the
production of bio-pharmaceutical crops, the Spokesman has learned.

“ProdiGene is a leading-edge research company in the United States in the plant-based production of recombinant products with large potential for applications that benefit human health, animal production
and create new industrial uses,” said John Reiher, who has been named chief executive officer of ProdiGene.

Reiher has global business experience in research, industrial and agriculture markets. He’s worked for Apogent Technologies, a diversified worldwide leader in the design, manufacture and sale of laboratory, life science and diagnostic products used in healthcare, and with Stine Seed Company. He said they will supply working capital, assume select obligations and seek to commercialize ProdiGene’s products.

“We believe the corn plant and ProdiGene’s intellectual portfolio offer real potential to reduce the cost of some important pharmaceutical products,” Reiher said.

“The new investment provides ProdiGene with the resources to complete commercialization of trypsin and other products,” said Reiher. Trypsin is a key industrial enzyme used in pharmaceutical
manufacturing and other applications. The company is also developing aprotinin, a protease inhibitor used in cardiac surgery wound healing, plus other oral vaccines and industrial enzymes.

“The new management team brings the experience of the Stine organization and its entrepreneurial track record to ProdiGene. We look forward to combining our technology portfolio with the innovative
intellectual property controlled by ProdiGene,” Reiher said.

Good for Iowa

The purchase is seen as benefiting Iowa agriculture and creating opportunities for farmers.

Reiher said the combined management teams of ProdiGene and the Stine entity, plus the research and market relationships of both companies, mean that Iowa has taken a step toward becoming a
leader in bio-pharming.

However, no bio-pharmaceutical crops will be grown in Iowa until it is clear that the production can be done while meeting strict scientific protocols established by the federal government, he stated.

ProdiGene plans to maintain research operations in College Station, Texas, where it is located. John Howard, a former Iowan and founder of ProdiGene, will continue as ProdiGene’s chief technology officer. Reiher said some business activities and management staff will be based in Adel.

As part of the purchase agreement, Stine will pay the unpaid portion of a $3 million penalty assessed ProdiGene by the U.S. Department of Agriculture (USDA) from contamination of soybeans in an Aurora, Nebraska elevator and an Iowa field.

Iowa fund

Iowans have a stake in ProdiGene through a prior investment by Iowa Agricultural Finance Corporation’s (IAFC) tecTERRA Fund, a venture capital investment company created by the Iowa Legislature to foster growth-oriented value-added food processing and biotechnology companies. The Iowa Farm Bureau and Farm Bureau Financial Group are also investors in tecTERRA.

tecTERRA remains a significant owner in the newly structured ProdiGene and will also participate in a reformatted board of directors, said Tom Steen, tecTERRA principal with Cybus Capital in Des Moines.

The Stine organization, he added, has the industry credentials and business experience to shepherd ProdiGene in safely developing and commercializing products in an emerging market.

News release
6457

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