PlantPharma

The following is testimony given by Scott Deeter, CEO and President of Ventria, for the Subcommittee on Rural Enterprises, Agriculture, and Technology on June 29, 2005 for the Different Applications for Genetically Modified Crops hearing.

Good afternoon Chairman Graves (R-MO), Members of the Committee, Ladies and Gentlemen. My name is Scott Deeter and I am President & CEO of Ventria Bioscience. I appreciate the opportunity to address the Committee on behalf of Ventria Bioscience. I will briefly describe the company, our technology and our products and would be happy to answer any questions.

First, let me provide an introduction to Ventria Bioscience. Ventria Bioscience is a plant-made pharmaceutical company that utilizes rice and barley as a factory to produce biologic products. Ventria’s initial products provide human health benefits, however the Company’s technology has the potential to address many challenges faced by other sectors of the economy including animal health, energy and industrial processing.

Ventria was founded with the support and guidance of several leaders in biotechnology and agribusiness who form the Company’s Board of Directors. Ventria’s Chairman is Thomas N. Urban, Jr. former Chairman and CEO of Pioneer Hi-Bred International. Other Board members include William J. Rutter, Ph.D. and Pablo Valenzuela, Ph.D., who were Co-Founders of Chiron; William H. Rutter, an attorney by training and an entrepreneur; William W. Crouse, a limited partner of Healthcare Ventures; Dean Hubbard, Ph.D. President of Northwest Missouri State University and Melvin D. Booth, former President of MedImmune, Inc. and Human Genome Sciences, Inc. These industry leaders have committed their resources, their time and their talents to realize the vision of improving healthcare on a global basis utilizing the tools of modern biotechnology combined with the industrial might of American agriculture.

The company’s core technology is a highly efficient and unsurpassed method of producing biological products in the seed of self-pollinating rice and barley. This technology was discovered in collaboration with University of California as well as other leading research institutions in the United States.

Ventria believes this technology will lead to more affordable medicines for a much broader patient population than what is possible with conventional biopharmaceutical production technology today. Ventria’s technological innovation results in a substantial improvement in the economics of biopharmaceutical production. For instance, the capital investment required for Ventria to produce 500 kilograms is estimated to be $4 million. As a comparison, to produce the same amount using conventional technology, such as mammalian cell culture, would require capital investment exceeding $125 million, a more than 30 fold increase. In addition, the operating costs of Ventria’s technology are less than 10% of the conventional technology.

There are several reasons for this economic advantage. First, Ventria has been able to achieve extraordinarily high yields of the product in the seed of rice and barley. Second, barley and rice are self-pollinating crops that can easily achieve the necessary geographic isolation from their food crop counterparts to eliminate concerns of cross contamination with the food supply. Third, because these crops can be stored in ambient conditions for up to two years without degradation, they allow for continuous operation of a processing facility, thereby increasing capacity utilization and reducing cost. Fourth, because rice and barley are safe for human consumption, they are ideal for products that can be delivered orally, thereby eliminating the need for expensive separation technology that is required by conventional systems to remove infectious or toxic contaminants. These advantages pave the way for a paradigm shift in biopharmaceutical production for the benefit of patients worldwide.

As an illustration of the strength of Ventria’s technology, I would like to describe some of the human health products in development. Ventria’s first two human health products are proteins called Lactiva™ and Lysomin™. These two proteins are found naturally in mother’s milk, saliva and tears and they have been suggested to contribute to the improved health status that has been widely reported for breast fed children when compared to their bottle fed counterparts. These proteins are part of the reason why breast feeding is the best form of nutrition for infants and is highly recommended by most pediatricians.

Ventria currently produces Lactiva™ and Lysomin™ in the seed of rice through contract relationships with selected and well trained growers. Ventria’s field production is regulated under a permit that is issued by the United States Department of Agriculture’s Animal and Plant Health Inspection Service (“APHIS”). In fact, last year alone, Ventria’s field location was inspected eight times by APHIS inspectors. Once harvested the seed is pulverized into a powder and transported to the processing facility where the final product is isolated into either a concentrate or isolate.

The United States Food and Drug Administration (“FDA”) has regulatory authority over Ventria’s products for human health. As part of Ventria’s pre-market activities, we reviewed the safety of Lactiva™ and Lysomin™ with a panel of scientific and medical experts that have unanimously concluded that these products are Generally Recognized as Safe (“GRAS”) for human consumption. The results of the panel review were summarized and submitted to FDA where they are awaiting clearance prior to commercial sales for human health.

There are several products being developed by Ventria that will incorporate Lactiva™ and Lysomin™. One product has been developed for children suffering from acute diarrhea. The World Health Organization estimates that 1.9 million children under the age of 5 die annually due to diarrhea. To address this crisis, Ventria added Lactiva™ and Lysomin™ to an oral rehydration solution, which is a common first line therapy given to children suffering from diarrhea. By adding Lactiva™ and Lysomin™, Ventria believes it can improve the recovery rate and reduce the severity or duration of diarrhea in these children. This hypothesis is the basis of a recently completed study in Peru with 150 children suffering from acute diarrhea. Ventria expects the results of this study to be published shortly. Ventria’s production technology enables the cost effective addition of Lactiva™ and Lysomin™ to oral rehydration solution for the benefit of millions of children globally.

Ventria is also exploring the use of Lactiva™ and Lysomin™ for the prevention of diarrhea in the military. During Operation Iraqi Freedom, 70% of deployed troops suffered a diarrheal attack and 43% reported decreased job performance as a result of this attack. During the Viet Nam War, it has been reported that hospitalizations due to diarrhea were four times more prevalent than malaria. This is a silent enemy attacking American troops. Ventria has set its goal to reduce the diarrheal attack rate by 50% with the preventive administration of Lactiva™ and Lysomin™. If we achieve our objective, it would improve military morale, efficiency, and manpower. In terms of manpower productivity alone, this may pay for itself due to the cost effectiveness of Ventria’s technology. Incidentally, this is a similar problem to that experienced by the millions of Americans who travel overseas.

Another use of Lactiva™ that is being developed is for the management of inflammatory bowel disease, or IBD. IBD afflicts over one million Americans and over four million people worldwide. IBD is an extremely debilitating disease that causes severe abdominal pain, weight loss, poor absorption of nutrients and chronic gastrointestinal ulcers. Ventria is testing the potential for Lactiva™ to improve the quality of life for the millions with this disease.

Ventria is also working with University of Cincinnati to develop a treatment for chronic lung infections caused by Pseudomonas, which is the leading cause of death for patients suffering from Cystic Fibrosis. Ventria and our collaborators have shown successful inhibition of this infection and we are jointly planning a pre-clinical program to further develop this product.

Recently, Ventria was the recipient of an SBIR grant from National Institutes of Health, National Institute on Aging relating to the use of one of Ventria’s products to inhibit biofilms constructed by pathogenic bacteria. These types of infections affect more than 10 million Americans annually. Infections that are protected by biofilms are 100 to 1,000 times more resistant to antibiotics, so it is important to inhibit the formation of these biofilms before they can establish themselves at the wound site. Ventria has worked with scientists from University of Iowa and Howard Hughes Medical Institute to develop a natural human protein that has been shown to inhibit the ability of pathogens to construct these biofilms. Using its plant -made pharmaceutical technology Ventria produced and purified this protein and has shown the effective inhibition of biofilm formation. With the SBIR grant, Ventria will further develop this product with the goal of improving patient recovery by reducing the establishment of biofilms that lead to antibiotic resistant pathogens.

This concludes my testimony on behalf of Ventria Bioscience. I would like to thank Chairman Graves and the Committee members for your kind attention and would be happy to answer any questions you may have.