FARMING PHARMACEUTICALS: VENTRIA BIOSCIENCE AND THE CONTROVERSY OVER PLANT-MADE MEDICINES Anne T. Lawrence wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2009, Ivey Management Services Version: (A) 2009-01-22 “Ventria is dedicated to leading the development of plant-made pharmaceuticals that promise affordable human health products for the global community.” -Scott Deeter, president and CEO, Ventria Bioscience It was a warm, sunny day in mid-July 2004 — perfect conditions for growing rice in California’s lushly irrigated Sacramento Valley. But their rice was not in the ground, thought Scott Deeter with mounting frustration. Deeter was the president and CEO of Ventria Bioscience, a Sacramento, California-based biotechnology firm. The 20-person startup had developed an innovative process to produce pharmaceutical proteins in the seeds of genetically modified rice. Ventria believed that its first product — a medicine designed to lessen the severity of childhood diarrhea — held great promise for public health, particularly in the developing world. The company had tested its bio-engineered rice in small test plots near its headquarters. That spring, it had sought to plant at least 120 acres to begin commercial-scale production. But, in its effort to obtain the necessary permits, Ventria had been stymied at nearly every turn. Facing vigorous opposition from environmentalists, food safety activists, consumer advocates and rice farmers, the California secretary of agriculture had denied the company’s request to plant rice on a commercial scale. Now, Deeter had to figure out the best way forward for the fledgling, venture capitalbacked firm. VENTRIA BIOSCIENCE Ventria Bioscience (originally called Applied Phytologics) was founded in 1993 by Dr. Raymond Rodriguez, a molecular biologist on the faculty of the University of California, Davis. In the early 1980s, Rodriguez and his graduate students had embarked on an ambitious research program aimed at improving Anne T. Lawrence is a professor of organization and management at the College of Business, San Jose State University. An earlier version of this case was presented at the 2008 annual meeting of the North American Case Research Association (NACRA). The author wishes to thank Dr. Raymond Rodriguez for his assistance in the preparation of this case. The author also gratefully acknowledges research funding provided by the Don and Sally Lucas Foundation. Purchased by: Raul Saldana RAUL.EGADE@GMAIL.COM on February 08, 2014 Page 2 9B09M011 the productivity of rice, a crop he recognized as being of great importance to human nutrition worldwide. With the support of a state government grant to encourage the commercialization of basic scientific research, Rodriguez began to develop techniques to “express” medically useful proteins in rice plants, from which they could be extracted and purified. He explained: We were working on expression technology — taking a gene that encodes for a medical protein and using recombinant DNA technology to produce that protein in the plant. The key technology for Ventria was the ability to express a protein abundantly in a harvestable organ or tissue. That was the breakthrough.
