annual progress report 2016–17 - dairybio.com.au · the forages developed with this technology...

Annual progress report2016–17

Published by DairyBio.

Whilst all reasonable efforts have been taken to ensure the accuracy of the DairyBio Annual Progress Report 2016–2017 use of the information contained herein is at one’s own risk. To the fullest extent permitted by Australian law, DairyBio disclaims all liability for any losses, costs, damages and the like sustained or incurred as a result of the use of or reliance upon the information contained herein, including, without limitation, liability stemming from reliance upon any part which may contain inadvertent errors, whether typographical or otherwise, or omissions of any kind.

© DairyBio 2018. All rights reserved.

ISSN 2209-1424

Contents

Chair’s review 2

Co-directors’ review 3

2016–17 overview 4

DairyBio investors 2016–17 6

SWOT analysis 7

Project snapshots 8

Education and engagement 22 program

2016–17 financial position 25

Commercialisation report 26

The first year of operations has been a time of setting strong foundations. A new Board was appointed, management roles confirmed, and legal frameworks put in place. These structures can now endure and provide confidence to stakeholders in the proficiency of DairyBio.

One of the most significant activities in this year has been the negotiation of both project terms and commercial arrangements for twelve new projects. This means all investors can be clear about their roles and rights, including in complex cases where end products contain multiple innovations.

The large-scale field activities, such as the 270,000 plant field trial in Hamilton, Victoria, help to demonstrate that new technologies are real, they can be applied at commercial scale, and that there is a direct link between the experimental work and new pasture cultivars.

The major challenge for Board and management is to ensure that projects with strong performance can be well funded in future years. Projects have deliberately been started that require additional investment in future years, and new investment partnerships are actively being sought.

On behalf of the Board, I would like to acknowledge the commercial partners across both the forage and animal programs. All projects are much stronger for your partnership and the time and commitment you provide. I would also like to acknowledge the commitment of DairyNZ to pasture breeding that will bring large productivity gains to both Australia and New Zealand. It is also important to record the appreciation of the Board and management for the many years of contribution from Mr Murray Willocks, Managing Director of NZ Agriseeds and we wish Murray well in his retirement.

The smooth formation of the joint venture and establishment of new governance and management arrangements is testament to a well-functioning Board. Thank you to all my fellow Board members and to the Co-directors for your efforts. Thank you also to all the farmers who have taken an active interest in DairyBio; we understand your excitement and impatience and are committed to delivering innovations that will create far-reaching changes to your businesses.

Peter Reading Chairman

Chair’s review

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DairyBio is based on audacious goals for the dairy industry – to improve pasture productivity by $ 800 per hectare per year and animal productivity by $ 350 per cow per year. These improvements are based on improving the yield, quality and persistence of temperate pastures and improving production, fertility and health of dairy herds.

Twelve projects commenced in 2016–17: seven forage improvement projects and five animal improvement projects. DairyBio expended $ 10.8 million in project activities and involved 43.6 full-time equivalent staff.

All projects achieved excellent levels of performance against milestones, with 51 of 52 milestones completed on time in 2016–17. Profiles of each project and detailed assessment of each milestone is provided later in the report.

There are critical activities planned for the next twelve months, including preparation of the first 50 lines of plants that are ready for commercial breeding of hybrid varieties, establishment of trials for high energy ryegrass, first results from studying gene expression for milk production traits, and evaluating the value to the dairy industry of sharing cow reference populations with New Zealand.

We would like to recognise the role of Prof. German Spangenberg as Chair of the DairyBio Management Committee and DairyBio Co-director for the first seven months of operations and the efforts of a transition committee to oversee management activities in the initial months of DairyBio.

It has been a fast-paced 12 months for a new Board to govern the start-up of DairyBio as a new joint venture and we would like to thank the Board members for their support and dedication. Thanks also go to the project leaders who have developed project teams and science capability to generate the momentum required to not only achieve high levels of performance in this first year but also set up DairyBio for sustained success.

Finally, successful industry engagement and communication has provided a positive profile for DairyBio stemming from a well guided and effective partnership.

David Nation and Ben Cocks Co-directors

Co-directors’ review3

2016–17 overview

The first year of operations

DairyBio has now completed its first twelve months and in that time set up governance and management arrangements, confirmed and implemented project plans, and agreed on principles for commercialising each innovation.

Project teams were established before the official commencement on 1 July 2016 and there was a smooth transition from the end of Dairy Futures CRC into the start of DairyBio. Project committees have been formed for ten of the twelve projects during this first year, and each committee has confirmed the excellent progress made in each project and actively managed both current and future milestones.

The inaugural Board

Three independent Directors were appointed to the Board in 2016–17. Peter Reading was appointed as the Chair, and Mary Corbett and Steve Coats appointed as independent Directors. Representative Directors were also appointed. Ian Halliday was appointed as the representative director of Dairy Australia. Emily Phillips represented Agriculture Victoria for the first meeting. A subsequent re-organisation of Agriculture Victoria led to the appointment of German Spangenberg as the representative Director for Agriculture Victoria. The Board met three times in 2016–17: November, February and May.

New management arrangements

A management committee was formed in October, initially with German Spangenberg and David Nation as Co-directors. Ben Cocks replaced German Spangenberg as Co-director in February. Management committee meetings regularly included project leaders and contributions from David Liesegang (AVS) with regard to commercialisation and Belinda Griffiths for engagement and education items.

Appointment of project leaders

Project leaders were appointed for each of the twelve projects. Each project leader has then constructed teams that span across a range of sciences and locations. Project leaders appointed are:

Forage Project 1Noel Cogan

Forage Project 2Kathryn Guthridge



Forage Project 5Matt Hayden

Forage Project 6Tim Sawbridge

Forage Project 7Noel Cogan and Pieter Badenhorst

Animal Project 1Hans Daetwyler

Animal Projects 2–5Jennie Pryce

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Project highlights

› Full operation of the 270,000 plant field trial at Hamilton, Victoria, the world’s largest ryegrass field trial. The trial is part of assessing and developing breeding technologies including DNA based selection and breeding utilising hybrid vigour and using new large-scale observation of plant performance (phenomics).

› New capability for genome editing ryegrass and its endophyte that has led to the production of first experimental lines. The forages developed with this technology will be higher yielding, have improved nutritive quality and be longer lasting.

› Demonstration of the capacity to select for drought tolerance in ryegrass, including the transfer of the first lines of drought-tolerant ryegrass to a commercial partner.

› The 1000 Bull Genomes project now contains whole genome sequences of over 2,700 animals. The highly successful access to whole-genome sequences from partners has increased the power of imputation and downstream analyses. Having 3x more animals than originally planned has provided millions of variants that are being used to underpin development of existing as well as new breeding values.

› A significant output with new industry usage has been the design and development of a low cost XT SNP chip in collaboration with industry partners. The XT chip improves the accessibility and performance of genomics technology.

› New methods are under investigation for genomic selection of cattle on an across-breed basis. In addition, efficiency and speed of Bayesian selection algorithms has been improved.

› Analysis of farm financial data that clearly demonstrates the value of genetic improvement and herd testing.

New projects and new opportunities

Two new projects commenced in January. The first project (Forage Project 5) is a study of doubled haploid plants in ryegrass and expands the existing work with doubled haploid plants in tall fescue. It is a project partnership with Heritage Seeds and Barenbrug, who have experience working with doubled haploid plants. Doubled haploid breeding methods are a novel approach for pasture breeding that could be used to accelerate progress in breeding for desirable traits. This approach is also compatible with all other breeding methods, including hybrid breeding methods and the use of new breeding technologies.

The second new project (Forage Project 6) is the study of the microbiome of ryegrasses. This project is a partnership with Agrinos, a global leader in the development of products from plant microbiomes. A systematic search for beneficial microbial species aims to develop new topical applications that improve plant performance.

Further information

DairyBio regularly publishes new articles online that are available at dairybio.com.au.

http://www.dairybio.com.au

Introduction

Joint venture partners Project partners

DairyBio investors 2016–17

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An analysis of strengths, weaknesses, opportunities and threats (SWOT) provides a profile of high-level risks and prospects for DairyBio. This analysis complements an ongoing assessment of risk by the Board.

The overall assessment is positive for DairyBio, with an ability to build on strengths, deliver on committed programs, and actively form new collaborations. DairyBio will need to be diligent in attracting new investment and managing expectations of stakeholders.

Strengths Weaknesses

› Stability from committed joint venture partners

› Market readiness from committed project partners

› Clarity of project and commercial arrangements from legal agreements

› Capability of Agriculture Victoria as the research provider

› Thought leadership that drives project creation and expansion

› Dispersed resources and authority, where multiple parties are required to work together for success

› Limited growth capability, where all major project partners are now investing at or near their limits

› Timeframes, where breeding activities take many years to deliver benefits

› Conservativism, where the genetics supply chains are often conservative by nature

Opportunities Threats

› Demonstrate success, early wins will be highly regarded by customers and stakeholders

› Attract new partners, to improve the level of funding of existing work programs

› Expand range of projects, with new partners and new funding sources to take on new opportunities

› Collaborate with related sectors, with an initial focus on the red meat industry

› Influence policy, to achieve non-GMO status for new breeding technologies

› Inability to attract new investment, leading to reduced scope of work

› Restricted markets, leading to slower adoption of new innovations

› Logistical challenges, that dilute the final value of new innovations

› Volatile industry, with large year-on-year changes in the operating environment leading to changes in industry sentiment

› Economic downturn, which would put pressure on budgets of investors

Major supporting partners

SWOT analysis7

2016–17 Overview

StatusOn Track

Expenditure$ 3.4 million

Milestones achieved9 of 9

Project snapshot Forage Project 1

Integrative genomics-assisted F1 hybrid breeding of perennial ryegrass-endophyte symbiota for pasture improvement.

Three new videos explaining innovations in Project 1 are available on Youtube at http://bit.ly/2oRRJUp.

Presents

http://bit.ly/2oRRJUp

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Technology in focus article Precision genome editing for forage improvement

New and innovative forage products are on the horizon from DairyBio building on advances using the EXZACTTM Precision Technology Platform.

EXZACTTM technology is a form of precision genome editing that overcomes some of the limitations of conventional genetic modification. DairyBio has access to the technology through an agreement of Agriculture Victoria with Dow AgroSciences and has already used it to research and develop innovative forage products.

Building on these advances, Agriculture Victoria, working with Dairy Bio commercialisation and IP partner Agriculture Victoria Services (AVS), recently entered into a commercial licence agreement to use EXZACTTM technology to continue the development and commercialisation of new forage grass varieties to benefit farmers in Australia.

The commercial licence agreement focuses on the development of forage grass varieties and associated fungal endophytes using precision genome editing technologies.

‘Our most productive collaboration with Dow AgroSciences has enabled the development of a suite of innovations for crop improvement. It has also provided us with access to the EXZACTTM technology for its application in forage grasses with global reach, to deliver benefits on-farm to dairy, beef and sheep industries,’ said Prof. German Spangenberg, DairyBio Director and Victoria’s Deputy Secretary, Agriculture Research, and a joint appointee of Agriculture Victoria and La Trobe University.

2016–17 Overview

StatusOn Track




Endophyte technologies for pasture improvement.

Colonies established for a range of aphid species.

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New scienceHorizontal gene transfer: a world-first in pasture breeding

Endophyte technologies for pasture improvement. Collaborative and cross-disciplinary work by scientists at AgriBio has resulted in a world-first scientific discovery that could lead to important applications in pasture breeding.

The breakthrough event published in Nature Scientific Reports is the first documented example of a gene being ‘horizontally’ transferred from a fungal endophyte to a flowering plant (in this case, perennial ryegrass).

Horizontal gene transfer means transfer of genetic material from one organism to another, other than by sexual reproduction. Fungal endophytes are organisms that live and grow between living plant cells, and the association between a plant and an endophyte can give the plant better resistance to pests and environmental stresses.

This initial finding was investigated by Dairy Bio Project Leader Dr Tim Sawbridge who was sequencing the genome of perennial ryegrass plants. To prove that this was a true example of gene transfer Dr Hiroshi Shinozuka, working with strategy developed with other DairyBio scientists including Prof John Forster, used advanced genetic mapping techniques, to establish that the complete gene was present in the perennial ryegrass plant’s genome, and its presence could not be explained by contamination.

Taking the analysis one step further, Hiroshi examined the genomes of groups of grasses that are closely related to perennial ryegrass to see which of them contained the gene. In this way, he showed that the gene appeared to have been horizontally transferred into a single common ancestor between nine and 13 million years ago.

A new pathway to an improved pasture feedbase?

Speculation has now turned to the function of the gene, which encodes an enzyme that attacks fungal cell walls, and how it could be exploited in pasture breeding to strengthen Victoria’s agricultural industries. It is possible that this gene is an important player in establishing symbiosis and that it might be important in protecting the endophyte-grass combination against other, damaging fungi.

This discovery comes from knowledge rapidly being gained in DairyBio through the significant body of work and trials being conducted with industry for forage improvement through improved genetic selection, hybrid breeding, and improved endophytes and symbiosis.

The potential benefits of improved pastures are large. Victoria has up to 2.5 million hectares of perennial or short-lived ryegrass pastures, depending on the season, and this low-cost source of home-grown feed is one of the major competitive advantages of Australia’s dairy industry. Dairy is a $ 13.7 billion farm, manufacturing and export industry for Australia, with 66 per cent of production taking place in Victoria.

2016–17 Overview

StatusOn Track




Integrative genomics-assisted F1 hybrid breeding of short-term ryegrass (Italian and Westerwold) − for pasture improvement. Figure 3 DM(g)

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Some first-cross lines (F1s) showed higher yields than the market leading cultivar (Cv) by 20% more.

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2016–17 Overview

StatusOn Track



Transcriptome analysis for tall fescue involves sampling 10 tissue samples.


Increased digestibility and productivity through EXZACT genome editing and development of F1 hybrid breeding for tall fescue.


Exploiting the Lolium microbiome to enhance performance of pasture and turf temperate grasses.


Efficient doubled haploid production and targeted gene editing in Lolium and Festuca spp.

2016–17 Overview

StatusOn Track



2016–17 Overview

StatusOn Track*


Milestones achieved3 of 3*

2016–17 Overview

StatusOn Track



(* Milestones were revised in August 2017 to change timing and scope of Task Group 1)


Efficient doubled haploid production and targeted gene editing in Lolium and Festuca spp.

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Project snapshot Animal Project 1

Enabling multiple generations of highly reliable genomic selection to accelerate genetic gain in dairy cattle.

Each successive analysis of global cattle genetics adds more breeds and identifies more genetic variants. Run 6 is the latest annual results for 2016–17, and has seen a large increase in breeds used for comparative purposes and identified millions of new genetic variations that can be used in practical applications of breeding.

2016–17 Overview

Project 1

StatusOn Track



Project 5

StatusOn Track

Expenditureshared with Animal Project 1


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Run 4Run 5 Taurus

Run 5 Taurus + IndicusRun 6 TaurusRun 6 Taurus + Indicus

2016–17 Overview

StatusOn Track



At the cutting edge: world-leading breeding values and genomic services for the Australian dairy industry.

Heat tolerance will be an important trait for Australian herds. These graphs demonstrate the negative trend for heat tolerance in recent years, suggesting that without being aware, trends have been moving towards more heat-susceptible cattle. Introduction of the heat tolerance trait in December 2017 will reverse this trend.

Figure 2 Heat tolerance in recent years

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DairyBio staff at AgriBio and Ellinbank have validated a world-first genetic test to identify heat tolerant cows. The test could lead to herds of cows that are better able to withstand heat stress, which can cause cows to lose up to 12 per cent of their annual production (with a farm gate value of about $ 300 million).

The heat tolerance project team is led by Dr Jennie Pryce, a DairyBio project leader and supported by Dr Thuy Nguyen, a research scientist with DairyBio and Agriculture Victoria. They worked with many other team members to use big data capabilities at AgriBio to overcome a number of new and complex challenges in the project and validate results on farm.

‘The sheer volume of data was one challenge,’ Thuy said. ‘There were no genetic parameters for heat tolerance, so we had to estimate from our own data. Using dairy industry sources, we obtained daily milk production data from hundreds of thousands of cows from across Australia, and combined them with daily temperature and humidity measurements from weather stations closest to tested herds over a 13 year period. We also drew on genotype information for around 20,000 cows and bulls that was available from other projects. The team proposes a heat tolerance genomic breeding value for use by the Australian dairy industry in breeding programs and describes

implementation steps including calculation of heat tolerance phenotypes, calculation of SNP effects and expression in the way that suits the industry preferences. The study also found a decline in heat tolerance in the Australian population of dairy cattle and suggests a way to optimally arrest the decline. Research outputs have been transferred to DataGene for implementation and dairy farmers will soon have access to this world’s first breeding value.

The work is recognised internationally and being published including in Scientific Reports, a Nature publication. Genomic selection improves heat tolerance in cattle, describes work undertaken at AgriBio and at Agriculture Victoria’s Ellinbank facility towards using genomic selection to breed dairy cattle with improved heat tolerance.

Technology transferHeat tolerant dairy cattle

“Shade helps cows manage heat, but selecting for heat tolerance in breeding programs could provide a long-term solution.”

DataGene publishes first ABV releasePartnerships delivering to farmers

DataGene – key utilisation partner for DairyBio and a recent addition to the AgriBio facility – has reached an important milestone with the publication of its first Australian Breeding Value (ABV) release.

Established in July last year, DataGene is an independent, industry-owned organisation that undertakes development and extension activities for herd improvement in Australia, working closely with DairyBio and Agriculture Victoria teams headed by Dr Jennie Pryce. Most of DataGene’s staff are located at AgriBio.

The April 2017 ABV release is the first to be published by DataGene, which has taken on the genetic evaluation roles that have been performed by the Australian Dairy Herd Improvement Scheme (ADHIS) for the last 30 years. The release and future releases incorporate innovation in breeding values developed by DairyBio.

DataGene CEO Dr Matt Shaffer said DataGene’s mandate is to make herd improvement easier, faster, smarter and better, both for farmers and the industry organisations that provide supporting services.

‘AgriBio’s big data capabilities are playing a critical role in a new, collaborative approach to the collection and use of herd improvement data to drive genetic gain,’ he said.

“DataGene’s mandate is to make herd improvement easier, faster, smarter and better, both for farmers and the industry organisations.”

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Accelerating improvement in health and resilience, and reducing the environmental impact of the Australian dairy herd.

This graph demonstrates the potential for directly selecting for mastitis resistance compared with the current method of using somatic cell count (SCC) as a proxy for mastitis. Ultimately, the best outcome is to use both the direct records of mastitis events and SCC to reduce the occurrence of mastitis.


2016–17 Overview

StatusOn Track



Figure 3 Mastitis resistance compared with the current method of using somatic cell count (SCC)

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Recognition of science leadership

Dr Jennie Pryce at AgriBio

J. L. Lush Award in Animal Breeding

DairyBio project leader Dr Jennie Pryce has won a prestigious international award.

The J. L. Lush Award in Animal Breeding is conferred annually by the American Dairy Science Association (ADSA). Established in 1982, it honours the memory of Dr Jay Laurence Lush (1896-1982), a pioneering animal geneticist who made important contributions to livestock breeding. The Award recognises outstanding research in animal breeding and genetics that had, or has, the potential for improvement of dairy cattle.

Jennie is recognised internationally for her work in dairy genetics and has contributed to genetic improvement of functional traits, optimisation of breeding scheme design under genomic selection, and development of dairy selection indices. She serves as a senior editor of the Journal of Dairy Science and is a member of the International Committee on Animal Recording’s Functional Traits Working Group. Jennie leads the animal improvement research component of DairyBio, based at AgriBio.

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2016–17 Overview

StatusOn Track




Oversight of existing projects (ImProving Herds and MIR for Profit) with a focus on planning future activities.

ImProving Herds has developed a simple cost-benefit calculator for genotyping heifers. This demonstrates clearly the value proposition of heifer genotypes for a range of commercial scenarios.

Should I genomic test my heifer calves?The aim of this tool is to help determine the value of genomic testing a group of heifer calves to assist with making decisions about which ones to keep as replacements.

Key

select the appropriate answer from the drop down selection

enter the relevant number for your herd

leave to default or change to relevant number for your herd

Breed Holstein

I have ABVs for my heifers Yes/No

Herd size 100

No. of heifers calves I have from

AI mating 23

Natural matings 13

*If uncertain put all calves as AI mating

No. of heifers to keep 25

Genomic Test Cost ($) 50

Life time return on investment

+$1686

Genotyping costs -$1920

Superiority of selected heifers +$3607

Number of years to recoup investments 4 years

(end of second lactation)

New app for farmers

Education and engagement program

2016–17 Overview

StatusOn Track


Milestones achieved6 students graduated

6 students commenced

7 continuing students

100+ dairy industry visitors

3400 students and teachers participated in Get into Genes

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Spotlight on school educationGet into Genes goes to Gippsland

Get into Genes Education Officer Anna-Leisa Vietz recently took Get into Genes to Farmworld 2017 at Lardner Park. More than 120 secondary students and teachers from the Gippsland region visited the Get into Genes workstation (hosted by GippsDairy) to learn about the science behind dairy.

Anna-Leisa said, ‘Get into Genes was contributing to long-term development of the skills needed by regional communities.

‘Students in regional communities often have a good understanding of agriculture but, like their metropolitan counterparts, they are rarely shown the link between school science and the bioscience research that leads to on-farm applications,’ she said.

‘Get into Genes offers fun, hands-on, curriculum-linked activities that encourage students to engage with science and conceptualise the kind of roles that could contribute to local farming communities.’

Get into Genes, led by Education and Engagement Project Leader Belinda Griffiths, is part of an ongoing engagement with schools, with 3,400 students and teachers coming through the program in 2016–17. This complements the postgraduate education and industry engagement program.

Leah Maslan (GippsDairy’s Dairy Workforce Coordinator) and Anna-Leisa Vietz with two students

“Students in regional communities often have a good understanding of agriculture.”

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2016–17 financial position

Cash position

Opening balance, from future-dated investment commitments of Dairy Futures CRC $ 1,426,409

Income received in 2016–17 $ 10,112,364

Expenditure in 2016–17 $ 11,134,935

Closing balance at 30 June 2017 $ 403,838

Expenditure

Forage improvement projects $ 6,235,233

Animal improvement projects $ 4,568,555

Education and engagement activities $ 149,173

Closing balance at 30 June 2017 $ 181,974

Total expenditure $ 11,134,935

Notes on the financial position:

› Financial position is reported on a cash basis.

› Outstanding invoices from project partners have been paid in July/August and will be reported in the 2017–18 cash position.

› A five-year cash position analysis is routinely provided to the Board to ensure that the joint venture remains in a positive cash position.

Commercialisation Report

The major commercialisation activities in 2016–17 were to establish legal frameworks for the operation of the DairyBio joint venture, negotiate project agreement frameworks for commercial rights that form an essential part of each project agreement, and ensure that background IP was properly accounted for in each project and commercialisation agreement.

1. Preparation of agreement templatesGuided by relevant AVS and Dairy Futures CRC agreement templates, a suite of DairyBio agreement templates were developed and approved by the DairyBio Board:

› The DairyBio Project Agreement Template;

› The DairyBio Commercialisation Agreement Template;

› The DairyBio Student Agreement Template.

2. Negotiation of a licence rights framework for Forage Projects 1−4Each DairyBio Forage Project Agreement (FP1−4) includes a comprehensive Licence Rights Framework (LRF) that:

› was devised by the DBMC and AVS and mutually-agreed with the commercial partner for FP1−4 following extensive consultation with Heritage Seeds;

› sets the basis for the preparation of a Commercialisation Plan by AVS and Heritage Seeds, which will be further used to guide and inform the key terms and conditions of a future Licence Agreement for relevant FP1−4 Project IP which will be commercially deployed by Heritage Seeds, NZ Agriseeds and/or the Royal Barenbrug Group.

› aligns with the DairyBio Commercialisation Objectives; and

› was approved by the DairyBio Board on 8 of February, 2017.

3. Completion of Project Agreements for Forage Projects 1−4DairyBio Forage Project Agreements 1−4 were prepared by AVS in consultation with the DBMC and Heritage Seeds, and were based on the Project Plans and Project Agreement templates approved by the DairyBio Board on 8 of February, 2017.

On 4 April 2017 Dairy Australia, DEDJTR, AVS and Heritage Seeds signed the inaugural DairyBio Project Agreements One (1) to Four (4) for:

› identifying a novel F1 hybrid breeding scheme for perennial ryegrass (FP1);

› developing (using ExZact genome editing technology) elite endophyte strains for pasture production which are stable, broadly compatible, animal safe, pest deterrent and have low to no regulatory burden (FP2);

› developing a novel F1 hybrid breeding scheme for short term ryegrass (Italian and Westerwold ryegrass (FP3); and

› leveraging Project IP created in F1 hybrid breeding and ExZact genome editing (from Forage Projects 1−3) for perennial ryegrass into tall fescue (FP4).

4. Completion of a Commercialisation Agreement for DairyBio Forage Projects 1−4On 4 April, Dairy Australia, DEDJTR and AVS signed the inaugural DairyBio Commercialisation Agreement appointing AVS, as agent for DEDJTR, and Dairy Australia to manage the IP and commercialisation functions for DairyBio Forage Project Agreements (1−4).

This Commercialisation Agreement signed with AVS complies with the template DairyBio Commercialisation Agreement template approved by the DairyBio Board.

Negotiation of Project Terms for DairyBio Forage Project 5

A licence rights framework for Forage Project 5 has been negotiated with Heritage Seeds that is consistent with the approach that had been previously agreed for Forage Projects 1−4.

The project also requires access to a broad set of Background Intellectual Property. A full description that includes all required access to undertake the project has been completed.

5. Preparation of Project Terms for DairyBio Forage Project 6Forage Project 6 (Beneficial microbiomes) involves a new project partner, Agrinos, and requires a tailored approach to the development of commercial rights to the expected Project IP outcomes.

Additional information on Agrinos’ activities, capabilities, route-to-market capacity and financial viability was acquired by AVS that supported the conditional appointment of Agrinos as the commercial co-investor and prospective route-to-impact partner to this DairyBio Project Agreement. The conditional aspect of this support was due to a financial risk identified relating to Agrinos being a loss-making company for the past 3 years.

Bespoke project agreement terms have been devised to address this financial risk and the different commercial rights framework and negotiations have commenced with Agrinos.

6. Material Transfer Agreement for DairyBio Forage Project 7Forage Project 7 includes the conduct of field and animal performance evaluation trials in Argentina of transgenic, high-energy perennial ryegrass (Lolium perenne) events comprising an altered fructan metabolism trait (including null control seeds in several, endophyte-negative genetic backgrounds).

The University of Buenos Aires (FAUBA) is conducting internal, non-commercial, research and evaluation of the high-energy ryegrass (HER) events in Argentina via glasshouse evaluation and animal performance field trials over a three-year period, pursuant to a material transfer agreement with AVS’ 100%-owned subsidiary, Phytogene Pty Ltd, as IP owner of the altered fructan metabolism transgenic trait.

FAUBA will provide DairyBio (via Phytogene) with annual reports comprising evaluation outcome information aligned with Forage Project (7) milestones, including:

› Animal performance trial data relating to the HER material under a dairy grazing regime with dairy cattle and sheep; and

› Multiplication of seed (to kg quantities) of the HER material for establishing larger-scale trials for further animal performance quantification, specifically.

7. Completion of Project Agreement for DairyBio Animal Project 5On 4 April, Dairy Australia, DEDJTR, AVS and CRV BV (The Netherlands) entered into the DairyBio Project Agreement for Animal Project 5.

Three aspects of this agreement were essential for its completion:

› A licence rights framework that sets out the rights for investors in Australia, New Zealand and the rest of the world;

› Share ownership of Project IP relating to genomic selection across breeds and for crossbred cattle;

› Commercial rights associated with Background Intellectual Property that provide access to CRV for technology that is already relevant for their business. AVS is the owner of this Background IP and negotiated this access at arms-length to the preparation of the Project Agreement.

DairyBio ABN 24 141 180 805

AgriBio, Centre for AgriBioscience5 Ring Road, La Trobe UniversityBundoora, VIC 3083w dairybio.com.au

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