Potato the medical factory of tomorrow

By SIMON COLLINS science reporter

Potatoes are being transformed into high-value medical protein factories in a new joint venture between Singapore Polytechnic and New Zealand's Crop and Food Research.

The 50-50 "biopharming" venture, Spanz (Singapore and NZ) Biotech, will use potatoes to make proteins that will help the body repair itself after heart or circulatory system surgery or nervous diseases.

Each gram of the protein, extracted from about seven potato plants, is worth more than $1 million.

The new company is just one of 10 joint ventures Crop and Food is using to shift New Zealand's primary sector into higher-valued products. Another initiative involves extracting a substance from barley to produce fat-free ice cream.

Other ventures are taking more traditional farm products to new markets - including exporting a new variety of potato back to the country that was once synonymous with spuds, Ireland.

"We see this organisation more than doubling in size in the next 10 to 15 years," says chief executive Paul Tocker, who was the Dairy Board's technical manager in Singapore and then ran milk plants at Waitoa and Nelson before joining Crop and Food as research manager in 1998. He has been chief executive since January 2001.

The institute's state funding has shrunk in real terms, growing only 8 per cent in total dollars over the decade from 1992, when the institute evolved from the Department of Scientific and Industrial Research. Last year, Government contracts increased by 0.2 per cent to $20.8 million.

But commercial revenue surged by 63 per cent in the decade, growing by 9.5 per cent last year to $11.5 million, including $2 million from overseas.

Tocker expects Crown funding to stay static, but sees "modest growth" in consultancy in Australia and New Zealand and "major growth" in joint public/private sector research, subsidiaries and associates.

"In New Zealand, Fonterra, meat companies and agricultural companies are interested, but internationally there is no shortage of client organisations," he said.

"We have 10 subsidiaries and associate companies and are looking at three or four new ones a year. We believe we can do that out of our current science base, almost without exception with global companies."

The Singapore potato venture has its origins in the early 1990s, when Singaporean student Oi Wah Liew did her doctorate at Lincoln University with Dr Tony Conner, a Crop and Food scientist who is also a part-time Lincoln professor.

After returning to lecture at Singapore Polytechnic, Liew continued to collaborate with Conner on the potato project, spending part of each year at Crop and Food's Lincoln headquarters.

In 1999 she told a German news agency that she was using the potatoes to produce a hormone called atrial natriuretic factor, made naturally in the hearts of humans and other mammals.

"Researchers take a gene from a rat, the rodent from which it was first isolated, and insert it into the potatoes, which will enable the hormone to be produced on a large scale," the agency reported.

Conner said last week that the work was all done in containment in much the same way as the genetically modified bacteria which are used to make insulin for diabetics.

"We are using very complex proteins which could not be inserted in such primitive systems as bacteria. You probably need a plant or organism to make them," he said.

"They could be synthesised artificially, but at huge cost."

After a decade of collaboration, Conner and Liew have finally succeeded in getting potatoes to produce the protein and are submitting it for tests at the Christchurch Hospital laboratory in the next month.

"At this point we are not happy with the level of accumulation," Conner said.

"At the moment we are extracting enough protein to ask the question, 'does the protein we make in the plants retain its full function'?"

In contrast, the barley project has already completed two clinical trials in Auckland and Christchurch of a new product called glucagel, a barley extract that acts like a fat but without the cholesterol in real fat. Further trials are due to start in the United States with a US partner shortly.

Crop and Food communications manager Howard Bezar said the product could replace fat in food dressings, sauces and other products with an eventual market of $50 million a year.

Research showed it could be used in ice-cream and added to bread to reduce blood cholesterol.

The project, a joint venture with Industrial Research Ltd, is called Gracelinc, after the two research centres at Gracefield and Lincoln. Manufacturing is due to start in the 2003-2004 financial year.

Three other patented products out of cereal grain extracts are at earlier stages of development - an emulsifier called Emul-8, a new technology for starch extraction and a new product from grain seeds that may replace some dairy products.

One of these may be the basis of a new business with a venture capital company which has been set up to create a new cream or gel out of a cereal product. An inaugural board meeting was held last week.

Tocker was cagey about details, but said the combined investment in the company was $2.5 million. Crop and Food's $1 million contribution is mainly in intellectual property.

"I'm optimistic to have revenue within two years in that company, and maybe earlier," he said.

Two other joint ventures, both already earning revenue, have been built on seafood research at Mt Albert and Nelson.

Aqui-S, a 50-50 venture with Lower Hutt-based Fish Transport Ltd, makes a tranquilliser which allows live fish to be harvested and transported without getting agitated. It is used for salmon, lobsters, eels and other fish, and is now profitable.

Cfine, an unincorporated partnership with Sealord, uses an extract from fish to remove unwanted particles from wine and beer. The product was released last April.

Crop and Food has two staff in Australia. A grain research programme is under way there and a $20 million transtasman research project on the health benefits of vegetables is due to be announced in the next month.

The institute also sells its potato varieties such as Red Rascal and Golden Delight through a three-way venture called Trimark with New South Wales potato growers Rennie Family Potatoes and a Sydney marketing company, Moraitis Fresh.

Through this company, Crop and Food potatoes are about to be tested for seed production in Northern Ireland and then for marketing in Europe, North Africa and the Mediterranean through Potato Breeders Northern Ireland.

"They were in Australia and liked what they were seeing, and for some commercial reason the Irish had been shut out of Dutch varieties," Bezar said.

"So they were looking for an alternative place to get exclusive licences for new varieties and stumbled across us through this Australian partner."

Crop and Food Research

Glucagel