5/24/ Food & Agriculture National Conference. Jim Schweigert. Managing the First Genetically Engineered. Events to Go Off Patent 1.

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1 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 Events to Go Off Patent 1

2 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 Events to Go Off Patent 2

3 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) Events to Go Off Patent 3

4 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 Events to Go Off Patent 4

5 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 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. 15 Events to Go Off Patent 5

6 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 Spending (Probability of Success in %) On Average: Time to market: years Total expense: >$100M $2-5M (5%) High throughput screening Model crop testing $5-10M (25%) Gene optimization Crop transformation $10-15M (50%) Trait development Pre-regulatory data Large scale transformation $15-30M (75%) Trait integration Field testing Regulatory data generation $20-40M (90%) Regulatory submission Seed bulk-up Pre-marketing* Commercial Sales/Planting Year Discovery Phase I Phase II Phase III Phase IV Gene/Trait Identification Proof of Concept Early Development Advanced Development Regulatory Submission 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 Current U.S. Regulatory Context The Coordinated Framework Three regulatory agencies have oversight for plant biotechnology products under existing legislation USDA FDA EPA Shipping Field testing Plant Inc. Protectants (PIPs) Permits Field Testing Notifications precommercial commercial Food Safety Tolerances PIP Registrations Determination of Food and Feed Herbicide non regulated status safety consultation Registrations All Plants Food, Feed, Pharma Pesticidal substances Plant Protection Act National Environmental Policy Act (NEPA) Food Drug Cosmetic Act FIFRA Food Drug Cosmetic Act 18 Events to Go Off Patent 6

7 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 Discovery/Early Development Confined Field Activities Regulatory Activities External Contracts Seed Management Communication Management Chemistry Activities Diagnostic Methods Incident Management Launch Preparation Commercial Sustainability Product Discontinuation Events to Go Off Patent 7

8 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) > Events to Go Off Patent 8

9 Jarrett Abramson Senior Intellectual Property Counsel at International Maize and Wheat Improvement Center (CIMMYT) CGIAR Consortium 2016 Food & Agriculture National 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 % Maize, Soy, Cotton, Canola, Sugar Beet, Alfalfa, Papaya, Squash, Potato 2 Brazil % Maize, Soy, Cotton 3 Argentina % Maize, Soy, Cotton 4 Canada % Maize, Soy, Canola, SB 5 India % Cotton 6 China % Cotton, Papaya 7 Paraguay % Maize, Soy, Cotton 8 Pakistan % Cotton 9 South Africa % Maize, Soy, Cotton 10 Uruguay % Maize, Soy Events to Go Off Patent 9

10 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. Events to Go Off Patent 10

11 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 Events to Go Off Patent 11

12 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 Events to Go Off Patent 12

13 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. Events to Go Off Patent 13

14 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 Events to Go Off Patent 14