Managing the First Genetically Engineered Events to Go Off Patent

Panel

Jarrett Abramson Senior Intellectual Property Counsel at International Maize and Wheat Improvement Center (CIMMYT) CGIAR Consortium Jim Schweigert President Gro Alliance

Stacey Stater Associate General Counsel, Regulatory Law & Policy Monsanto Company Shane Anderson – Co-moderator Partner Faegre Baker Daniels Craig Komanecki – Co-moderator Partner Faegre Baker Daniels

Jim Schweigert President Gro Alliance

The Market for Post-Patent Traits

Is it Real or is it Hype?

Basic Trait Licensing Model

Cost Ratio Outline Item Weight Genetic Royalty 1 Seed Production Costs 1-2 Sales, Admin, Distribution, etc 1-3 Trait Royalty 1-7

Monthly Dec CBOT 2004-2016

Major Corn and Soybean Production Areas

The Market Could be Huge Then, Right?

Well…Maybe, but Challenges Still Exist

• Intergressing traits into genetics is difficult and expensive

• Not all inbreds perform well with certain traits • Yield Drag / Poor Pollinator, etc. • Change in Maturity

• Not all hybrid combinations work well with certain traits • Same challenges as above Plus Issues with Expression in Final

Product (hybrids) • Even an issue for commercialization for major companies and

has been an issue with trait launches from multiple trait providers (both inbred and hybrid performance)

Seed Production In One Slide

Challenges…(Cont.)

• The Trait May be Off Patent, but the Genetics May Still be Protected

• Cost advantage would exist (no trait royalty) • Company may still need to license in genetics, but may not

have the rights to conduct breeding (many genetic licenses limited crossing ability)

• Genetics That are No Longer Protected are Not New • By the time protection has expired, genetics are not usually

competitive • If the Genetics and Traits are Not Protected, Farmers

May Save the Seed • (primarily a self-pollinated crop concern)

Current Marketing of Post-Patent Traits

• Activity in the following areas - soybeans • North Dakota • Nebraska • Missouri • Arkansas • others?

• Who Might Sell Them • Interest ranges from Universities, to Independent

Companies, to Mulit-Nationals

What’s the Future Hold?

• Post-Patent Traits will enter the US market in areas of lower productivity

• Will primarily be introduced in two ways • Small companies and universities in small

amounts • As an element of a stacked product by

multi-nationals

• Market share of these products will be small as stand alone products, but could be larger as part of a stacked strategy

Stacey Stater Associate General Counsel, Regulatory Law & Policy Monsanto Company

15

GMOs: The most thoroughly reviewed food product in the world United States: Gold Standard

Monsanto: Safety = #1 Priority

Globally: > 30 government bodies’ globally review and approve GMOs. GMOs have been grown or imported by >70 countries since 1996

Published May 2016: National Academy of Sciences Report on GE

Crops “No substantiated evidence of a difference in risks to human health between current commercially available genetically engineered (GE) crops and conventionally bred crops, nor did it find conclusive cause-and-effect evidence of environmental problems from the GE crops.”

2015 ISAAA Report 20th Anniversary of the Commercialization of Biotech Crops

The International Service for the Acquisition of Agri-biotech Applications (ISAAA) published its annual report on the Global Status of Commercialized Biotech/GM Crops. The report documents key milestones in the worldwide adoption of GM crops and the benefits documented by both developing and industrialized countries.

Ag Biotech Driven by Lengthy Product Development Cycle and Large Investment Process

Year -2 -1 0 2 4 6 7 1 3 5 8 Discovery

Gene/Trait Identification Phase I

Proof of Concept

Phase II Early Development

Phase IV Regulatory Submission

• High throughput screening

• Model crop testing

• Gene optimization

• Crop transformation

• Trait development

• Pre-regulatory data

• Large scale transformation

• Trait integration • Field testing • Regulatory data

generation

• Regulatory submission • Seed bulk-up • Pre-marketing*

$2-5M (5%)

$5-10M (25%)

$10-15M (50%)

$15-30M (75%)

$20-40M (90%)

On Average: Time to market: 10-12 years Total expense: >$100M

Spen

ding

(P

roba

bilit

y of

Suc

cess

in %

)

•Numbers (time duration, spending, and probability of success) are all estimates. The actual for individual projects could vary.

•* Pre-Marketing includes education and technical communications on products

Phase III Advanced Development

Commercial Sales/Planting

9 10

18

Current U.S. Regulatory Context The Coordinated Framework

Shipping Field testing Plant Inc. Protectants (PIPs) - Permits - Field Testing - Notifications - Food Safety Tolerances

PIP Registrations Determination of Food and Feed Herbicide non-regulated status safety consultation Registrations

Three regulatory agencies have oversight for plant biotechnology products under existing legislation

USDA FDA EPA

All Plants Food, Feed, Pharma ‘Pesticidal’ substances

Plant Protection Act Food Drug Cosmetic Act

National Environmental Policy

Act (NEPA)

FIFRA Food Drug Cosmetic Act

precommercial commercial

Sources: ISAAA, Biotechnology Industry Organization, USDA Foreign Agriculture Service, Africa Biosafety Network of Expertise (ABNE).

Product Life Cycle Stewardship

Stewardship for the product life cycle focuses on:

The commitment to food, feed and environmental safety Full compliance with applicable regulatory

requirements Continual active engagement with the

stakeholders to evaluate and promote appropriate stewardship approaches Maximizing access to the technology and its

benefits

Stewardship Activities are Organized in Categories by Phase of Life Cycle

Chemistry Activities Diagnostic Methods Incident Management Launch Preparation Commercial

Sustainability Product

Discontinuation

Discovery/Early

Development Confined Field Activities Regulatory Activities External Contracts Seed Management Communication

Management

Excellence Through Stewardship Mission

ETS promotes the responsible management of plant biotechnology by developing and encouraging implementation of product stewardship practices which: support compliance with regulatory requirements achieve and maintain plant product integrity assist in preventing of trade disruptions promote shared experience and best practices that

foster knowledge transfer across the industry and value chain

drive continuous improvement of stewardship practices as technologies and products advance

excellencethroughstewardship.org

Seed Innovation & Intellectual Property Rights

Genetics Breeding Technologies Biotech Traits Seed Treatments Brands

Post Patent Access to Traits in the US The AgAccord

Applies to the event (trait) after patent expires. > US cultivation and export market import authorizations only

Need for continued regulatory support and stewardship of events. Trade must be maintained. > Proprietary Regulatory Property (PRP)

AgAccord is private contractual solution; provides transparency and predictable framework to access Generic Events. Ability to share costs associated with maintaining global authorizations.

Two agreements: > Generic Event Marketability and Access Agreement (GEMAA) > Data Use and Compensation Agreement (DUCA) > www.agaccord.org

Jarrett Abramson Senior Intellectual Property Counsel at International Maize and Wheat Improvement Center (CIMMYT) CGIAR Consortium

2016 Food & Agriculture National Conference

Managing the First Genetically Engineered Events to Go Off Patent

A Look Outside the United States

by

Jarett Abramson Senior Counsel

Centro Internacional de Mejoramiento de Maiz y Trigo

Global GM crops grown by country Country Area (Millions of

Hectares) % of global GM hectares

Crops

1 United States 73.10 40.3% Maize, Soy, Cotton, Canola, Sugar Beet, Alfalfa, Papaya, Squash, Potato

2 Brazil 42.20 23.3% Maize, Soy, Cotton

3 Argentina 24.30 13.4% Maize, Soy, Cotton

4 Canada 11.60 6.4% Maize, Soy, Canola, SB

5 India 11.60 6.4% Cotton

6 China 3.90 2.1% Cotton, Papaya

7 Paraguay 3.90 2.1% Maize, Soy, Cotton

8 Pakistan 2.85 1.6% Cotton

9 South Africa 2.70 1.5% Maize, Soy, Cotton

10 Uruguay 1.64 0.9% Maize, Soy

GM traits as percent of total GM area

• 57% of the world’s GM crops are herbicide-tolerant • 15% of the world’s GM crops are for insect

resistance • 28% are stacked with both herbicide tolerance and

insect resistance • Remainder is virus tolerance, drought tolerance,

disease resistance

Differing Views of Crops

The Real Challenge for Public, Open Source GMOs

• The greatest impediment to saving seeds once the patent on the trait expires is not the technology developers, it is the regulatory systems in other countries.

• Many of the key US ag export markets approve a trait for a limited number of years. Once that approval expires, the trait developer must go through the regulatory approval process all over again – which means spending money to do more research and submit data to the regulators.

Off-patent GMO: What happens now?

• Regulatory Status in Non-High Income Economies – No AgAccord/Generic Event Marketability and Access

Agreement OUS – Each country sets forth its own equivalent National

Biotechnology Development Policy – Member countries are required to designate competent

authorities and National Focal Points (Liaison officers) to deal with national GMO matters and liaise with the International Secretariat of Convention on Biological Diversity

– Countries follow the Cartagena Protocol on Biosafety

National Biotechnology Development Policy

• Generally the Policy should be thought of as a prohibition of anyone dealing with a GMO (e.g. for research, manufacture, production, commercial release and import) unless licensed by the National Biosafety Authority for contained use or intentional release into the environment

Requirements For Submission of Dossier

• Regulation and Stewardship – Research - contained use, confined use – Introduction into the environment – Placing on the market – Import, transit, export

National Biosafety Authorities • The mandate of NBA is to exercise supervision and control over the

development, transfer, handling and use of genetically modified organisms (GMOs) with a view to ensuring and assuring safety of human and animal health and provision of an adequate level of protection of the environment – NBA provides approval or denial for the development, transfer, handling and

use of genetically modified organisms • Co-ordinate, monitor and assess activities relating to the

development, safe transfer, handling and use of genetically modified organisms in order to ensure that such activities do not have adverse effect on human health and the environment

• Co-ordinate research and surveys in matters relating to the safe development, transfer, handling and use of genetically modified organisms, and to collect, collate and disseminate information about the findings of such research, investigation or survey

• Identify national requirements for manpower development and capacity building in biosafety

CBD and Cartagena Protocol

• The Cartagena Protocol regulates “transboundary movement, transit [movement through countries other than the country of initial export and final import], handling and use of living modified organisms (LMO) that may have adverse effects on the conservation and sustainable use of biological diversity, taking also into account risks to human health.”

• The Protocol addresses two general categories of LMOs: – those intended for release into the environment (e.g., seeds for

cultivation and animals for breeding); and – those intended for use in food or feed, or for processing (e.g.,

bulk commodities, such as corn, cotton, and soy).

Risk Assessment

• Objective: “To identify and evaluate the potential adverse effects of GMO to human health, animal and environment”

• General principles:

– Scientifically sound and transparent manner – Lack of scientific knowledge or consensus does not imply

a particular level of risk – Risk of GMO must be considered in the context of non-

GMO

Case Study - WEMA • Designed to bring drought-tolerant and insect-protected

maize using conventional breeding, marker-assisted breeding, and biotechnology, with a goal to make these varieties available royalty-free to smallholder farmers in Sub-Saharan Africa through African seed companies.

• Donated Traits – Mon810 – Mon87460

WEMA Cont.

• Integrated Pest Management (IPM) practices and to develop and implement Insect Resistance Management (IRM).

• Filed first application form for environmental release for Bt Maize. – General Information – Information on the Genetically Modified Organism – Characteristics of genetic modification – Recipient Organism Or Parental Organisms – Donor organism (s) – Intended Use and Receiving Environment – Environmental Safety Assessment

WEMA Cont.

• Received conditional release of insect resistant Bt maize in Kenya by Kenya’s National Biosafety Authority.

• Future Steps: – Conduct an Environmental Impact Assessment (EIA) prior

to the National Performance Trials (NPTs) and an Environmental Social Impact Assessment (ESIA) of the NPT sites;

– Submission of a product stewardship management plan and a monitoring roadmap; and

– Conduct a compositional analysis of the Bt maize grain, in accordance with CODEX Alimentarius Plant Guideline, during the NPTs.

WEMA cont. • Future Steps for Licensing

– Excellence Through Stewardship Protocols in Place Management accountability Addressing applicable regulatory requirements Ensuring further development and implementation of a product-specific

IRM plan Implementing market deployment and IRM awareness strategy

• Farmers • Retailers • Growers

Implementing compliance programs Implementing resistance monitoring Handling reports of potential resistance Records and documentation

Thank you for your interest!

Panel

Jarrett Abramson Senior Intellectual Property Counsel at International Maize and Wheat Improvement Center (CIMMYT) CGIAR Consortium Jim Schweigert President Gro Alliance

Stacey Stater Associate General Counsel, Regulatory Law & Policy Monsanto Company Shane Anderson – Co-moderator Partner Faegre Baker Daniels Craig Komanecki – Co-moderator Partner Faegre Baker Daniels