May 12, 2012
SAN DIEGO — If Americans ever eat genetically engineered fast-growing salmon, it might be because of a Soviet biologist turned oligarch turned government minister turned fish farming entrepreneur.
That man, Kakha Bendukidze, holds the key to either extinction or survival for AquaBounty Technologies, the American company that is hoping for federal approval of a type of salmon that would be the first genetically engineered animal in the human food supply.
But 20 months since the Food and Drug Administration tentatively concluded that the fish would be safe to eat and for the environment, there has been no approval. And AquaBounty is running out of money.
Mr. Bendukidze, the former economics minister of Georgia and AquaBounty’s largest shareholder, says the company can stay afloat a while longer. But he is skeptical that genetically altered salmon will be approved in the United States in an election year, given the resistance from environmental and consumer groups.
“I understand politically that it’s easier not to approve than to approve,” Mr. Bendukidze said during a recent visit to a newly acquired laboratory in San Diego, where jars of tiny zebra fish for use in genetic engineering experiments are stacked on shelves. While many people would be annoyed by the approval, he said, “There will be no one except some scientists who will be annoyed if it is not approved.”
While opponents would cheer the company’s demise, some scientists and biotechnology executives say that if transgenic animals cannot win approval in the United States, then the nation will lose its lead in animal biotechnology as work moves elsewhere. Scientists in China, in particular, are trying to develop livestock that is resistant to mad cow and foot and mouth diseases, sheep with high yields of wool, and pigs and cows with healthy omega 3 fatty acids in their meat.
“Lack of funding, lack of regulation, you can drag it out only for so long,” said James Murray, a professor of animal science at the University of California, Davis, who has been genetically engineering goats so their milk produces human proteins that could help infants fight infections.
He is now trying to move his herd to Brazil, where he has obtained funding.
The animal biotechnology industry is anemic to begin with. AquaBounty is the only American company seriously trying to win approval for a transgenic animal for the food supply. A project at a Canadian university to develop a pig with less-polluting manure was terminated recently for lack of commercial interest.
AquaBounty’s Atlantic salmon contain a growth hormone gene from the Chinook salmon. They also contain a genetic switch from an eel-like creature known as the ocean pout that keeps the gene on even in cold weather — unlike normal salmon. With the year-round production of growth hormone, the AquaBounty fish grow to market size in 16 to 18 months instead of 30.
Some members of Congress, led by those from salmon-rich Alaska, are promoting legislation that would prohibit or delay approval. They say the AquaBounty fish might be harmful to eat or could damage wild fisheries if they were to escape into the ocean. The giant salmon, for instance, might out-compete wild salmon for food or mates.
“We’re messing with what Mother Nature has done,” Senator Lisa Murkowski, Republican of Alaska said in proposing such a measure last month. A $500,000 research grant awarded AquaBounty by the Agriculture Department last year was rescinded after a furor arose, company executives said.
The F.D.A. said in September 2010 that there was little chance the salmon could mate with wild fish because the salmon would be raised inland and sterilized, though the sterilization would not be foolproof. That same month, a committee of outside advisers, while finding various faults with the F.D.A. analysis, more or less endorsed its conclusion that the fish would be safe for consumers and the environment.
But with no word since and its cash dwindling, the company, which is based in Maynard, Mass., recently trimmed its work force to 12 people from 27, according to its chief executive, Ronald L. Stotish. “We are currently the poster child for a process that we are not sure works,” he said.
Dr. Margaret Hamburg, the commissioner of the Food and Drug Administration, said in a rare comment on a pending application that it was simply taking time for her agency to complete its analysis of the salmon.
“It’s a lengthy process, especially when you are dealing with a first-in-kind product that cuts across many dimensions,” she said in a brief interview. She said that a revised environmental assessment, a step necessary for approval, would be issued “very soon.”
AquaBounty’s precarious condition has made the company dependent on Mr. Bendukidze, who owns nearly a 48 percent stake. Since shareholder approval is required to issue new stock, he can effectively control how much money the company raises.
In March, AquaBounty raised $2 million, enough to keep the company in business only until around the end of the year, according to regulatory filings in London, where the company’s stock is traded. Mr. Bendukidze provided nearly half of that. In return, however, AquaBounty agreed to sell its research and development operations to him — for a mere dollar.
“It was not an appealing deal, but it was the only deal available to us,” Mr. Stotish said.
Mr. Bendukidze was in San Diego in late April to visit his lab. Scientists there are genetically engineering zebra fish, the laboratory mice of the aquatic world, to test modifications that might be used on salmon and other seafood. One goal is to develop fast-growing tilapia, a commonly farmed fish that is growing in popularity in the United States.
Mr. Bendukidze, 56, began his career as a molecular biologist in a research institute outside Moscow, working on genetically engineering viruses for vaccine use. He later started a company selling biology supplies. When parts of the Soviet economy were privatized, he earned a reputation as a corporate raider, building through acquisitions and leading United Heavy Machinery, a large maker of equipment for mining, oil drilling and power generation.
In 2004, Mr. Bendukidze returned to his native Georgia as economics minister under Mikheil Saakashvili, the newly elected president. With a free-market philosophy and a penchant for insulting those who disagreed with him, Mr. Bendukidze earned his share of enemies as he moved to deregulate and privatize the economy.
He still lives in Georgia and now spends his time as chairman of the Free University of Tbilisi, which he founded. He also set up Linnaeus Capital Partners to manage his money. It has increasingly focused on aquaculture, with stakes in companies in Greece, Israel and Britain, in addition to AquaBounty.
“I had no idea of aquaculture,” Mr. Bendukidze said. “I was just looking for some diversified investments.”
Linnaeus has put $8 million into AquaBounty since early 2010. In the March financing, other shareholders also invested, in part to prevent Mr. Bendukidze from gaining majority control of the company.
Mr. Bendukidze said he was not interested in developing a salmon farming business but rather was interested in AquaBounty for its technology, which he said fit in with two trends he saw occurring in aquaculture.
One is that more efforts will be made to genetically improve farmed fish, either through engineering or breeding, much as is now done by breeding livestock.
The other would be a shift from raising fish in ocean pens to inland industrialized facilities, in which conditions can be controlled. The fast-growing salmon can be produced for 20 percent less, he said, making it more feasible to raise them inland.
Having obtained AquaBounty’s laboratory, Mr. Bendukidze stands to benefit even if the salmon are not approved. Still, he said, he was confident the fish would eventually win approval and consumer acceptance because of its lower production costs.
“Salmon is salmon,” he said. “At the end of the day, economics will win.”