Newly-listed ag-tech company Bio-Gene Technology (ASX: BGT), focusing on the next generation of insecticides says that it is progressing toward development of a range of products based on a new discovery.
The company says its patented beta-triketone-based insecticides could achieve better outcomes for end-users such as farmers, but without becoming susceptible to growing natural resistance against existing products that rely on “incumbent chemistry”, that may now have a natural successor.
In an exclusive interview with Small Caps, CEO Richard Jagger from Bio-Gene Technology, a Melbourne-based ASX-listed company said that the company would “provide the next generation of effective insecticides” and a “safer way of mitigating the effects of insects and pests on crops.”
Mr Jagger told Small Caps that if Bio-Gene can successfully develop products that can withstand the growing resistance towards existing insecticides, this would create a superb commercial opportunity for the company to streamline current farming methods and help restore dwindling crop yields suffering from pests and insects.
If successfully developed, Bio-Gene’s products are likely to target large agri-businesses, commercial farmers, but also, individual consumers through the sale of sprays and repellents utilising both natural and synthetic beta-triketones.
According to Mr Jagger, one of the more intriguing opportunities lies in helping large distributors of raw materials such as storage centres maintaining inventories of durable commodities like grains and wheat. “Commodity market companies such as producers, distributors and buyers rely on dependable storage of their commodities throughout the year which can be compromised by insects and reducing the value of the commodity.”
The global agribusiness industry is a colossus with a huge influence on several sectors and industries. According to research conducted by McKinsey & Company, a US-based market research company, agribusiness has become a US$5 trillion industry accounting for 10% of global consumer spending, 40% of all employment, and 30% of all greenhouse-gas emissions.
The reason for such an impressionable market footprint is multifaceted, but is largely to do with demographic and socio-political factors that are becoming increasingly more pronounced on the global political stage and world markets respectively.
The growth of the world’s population from around 6 billion at the turn of the century to around 7.6 billion today and to rise as high as 10 billion by 2050 according to BDO Australia, a top 5 global accountancy firm.
The steepening growth scale suggests that population growth is rapidly accelerating (as opposed to flattening or falling) and thereby putting increasingly more pressure on farmers to provide greater crop yields despite the amount of arable land falling on the back of rapid urbanisation and shifting consumption patterns.
The Bio-Gene solution
Bio-Gene has developed two distinct solutions catering for five separate market niches in terms of insecticide application. However, their prime specialisation has not yet been determined with several applications still vying for flagship status amongst Bio-Gene’s capability range.
Mr Jagger says that “several applications for our beta-triketone-based insecticides, Qcide and Flavocide, have been identified with a wide spectrum of industries including public health and raw commodity storage, as just two examples.”
Mr Jagger said that the foundation for its novel method of creating insecticides was first discovered following a botanical screening program looking to identify natural product-based insecticides in Australian flora.
Having stumbled upon the discovery that this “family of chemistry” had on insect populations, Bio-Gene immediately began developing both natural and synthetic variants in order to capitalise on its early-market advantage and to capture as much of the addressable market as possible.
“Synthetic insecticides can be produced in large scales far more easily than natural alternatives, although they do involve more sophistication and processing steps,” said Mr Jagger.
By developing Qcide, a natural insecticide extracted from the leaves of a rare sub-set of Eucalyptus trees, and Flavocide, a synthetic chemical, Bio-Gene hopes to develop products for several acutely-affected markets such as public health programmes, animal health treatments, farming crops, grain storage and consumer products such as sprays and repellents.
According to Mr Jagger, Bio-Gene’s avant-garde product suite powered by patented beta-triketones “can control insecticide-resistant pests with no visible growth of resistance,” which the company thinks could potentially serve as a strong product differentiator over time.
ASX listing and intellectual property
Since making its debut on the ASX late last year and raising over A$7.1 million, Bio-Gene is now pushing forward with necessary efficacy work in Australia and overseas with a view of obtaining regulatory approval as soon as possible.
According to Mr Jagger, the company expects to publish results later this year showing more comprehensive details regarding the efficacy of Qcide and Flavocide.
“The potential applications of both our natural and synthetic insecticides are huge, especially with Qcide in the public health sector showing particular promise. Helping to move the incumbent chemistry underpinning current insecticides over to a natural non-toxic eucalyptus-derived insecticide based on beta-triketones is a bold step in the right direction for the industry,” said Jagger.
“Developing a natural alternative to synthetics also helps the marketability of Qcide amongst a more nature-conscious modern society, and possibly best of all, our initial studies show that Qcide is effective without insects and pests developing a natural resistance to the insecticide – a feat our current chemistry paradigm is struggling to achieve,” Mr Jagger added.