The Sacramento Bee
By Jim Downing

In a little town in Kansas, Sacramento’s Ventria Bioscience is about to turn one of the biotechnology industry’s long-held dreams, and one of its critics’ nightmares, into reality.

For 14 years, Ventria has inched toward its vision of growing fields of genetically modified rice plants that would serve as cheap factories for medicine.

Next year, promises Chief Executive Scott Deeter, Ventria finally will release a mass-market product: an over-the-counter rehydration solution fortified with two anti-bacterial ingredients of human breast milk that grow in the company’s proprietary rice.

The drink is meant to help children recover from diarrhea more quickly. It would be the first genetically engineered “medical food” ever commercialized.

But as the company moves toward the launch, the controversy that has followed it for years is intensifying.

Consumer groups say the product is untested and potentially dangerous. The rice and food processing industries worry Ventria’s medicine-rice will get mixed up in the food supply, leading to costly recalls.

Deeter says he plans to sell the rehydration solution to customers ranging from drugstore shoppers to the U.S. Army to international health groups. But he’s vague on the details, saying everything from the brand name to marketing to a distribution strategy has yet to be determined. Meanwhile, the company has yet to win over the aid organizations it hopes will become buyers.

Still, federal regulators have given Ventria a tacit go-ahead to sell the rice drink, and the company is ramping up production at a newly built facility.

After being essentially chased out of California by rice farmers in 2004 and then stumbling in Missouri the following year, Ventria has found a home in Junction City, Kan. The company planted more than 200 acres of rice near the town in the spring, and in the summer opened a processing plant to make the drink. Its headquarters and laboratory remain in an office park in North Sacramento.

In interviews, Deeter, a tall, solidly built native of Kansas who has led Ventria since 2001, returns often to what he says is the company’s humanitarian purpose: saving the lives of some of the nearly 2 million children, nearly all in poor countries, who die of diarrheal diseases each year.

“If we could make a difference there, that would make it all worthwhile,” he said. “It’d be hard to argue with it.”

Ventria’s critics, though, believe the company’s progress has been reckless.

The rice industry and major food processors say the potential value of Ventria’s product is swamped by the risk that the rice will get mixed up with the general food supply, leading to recalls and lost export sales. They want the U.S. Department of Agriculture to tighten restrictions on plantings of new genetically modified crops.

Since 2006, genetically engineered strains of rice have been found three times in Southern rice stores. The industry says that has cost farmers and processors untold millions in lost export sales. A USDA investigation failed to identify the source of the contamination.

While most corn and soy planted in the United States is genetically engineered, virtually no genetically modified rice is grown for food anywhere in the world because of strong opposition in European and Asian markets.

Junction City, 65 miles west of Topeka, is hundreds of miles from the nearest rice field. But Steve Hensley, director of regulatory affairs for the industry group USA Rice, said a few fertile grains of Ventria’s rice might still be transported to commercial fields via birds, a flood or tornado, or by a mix-up in transportation.

“It’s obvious from immediate past history that the regulatory controls have not worked,” Hensley said. “We feel it’s just too risky to trust the same industry again.”

Consumer groups have another concern: safety. They say the special proteins in Ventria’s rice, lactoferrin and lysozyme, differ in subtle but potentially important ways from the mother’s milk originals. The rice-grown proteins, they argue, haven’t been tested adequately on humans and could prompt dangerous immune reactions.

“In terms of risk assessment, it’s really a very new area,” said Doug Gurian-Sherman, a molecular biologist with the Union of Concerned Scientists. “It’s hard to predict when and where these effects are going to occur.”

The groups want the U.S. Food and Drug Administration to force the company to conduct clinical trials before releasing the proteins to the market.

“They’re drugs. They’re potent. They’re bioactive,” said Bill Freese, senior policy analyst with the Center for Food Safety. “They haven’t been approved by any regulatory authority, so they shouldn’t be out there in an uncontrolled way.”

Deeter says Ventria’s rehydration solution will be as safe as breast milk or rice.

So far, federal regulators haven’t challenged Ventria’s position, backed by an expert panel, that its product is not a pharmaceutical but rather a “food” that meets federal standards exempting it from the clinical testing required for new drugs.

That means Ventria is free, for now, to market its product. It risks a future recall, but Marc Scheineson, a Washington, D.C., food and drug attorney with Alston & Bird LLP, said the odds are probably in Ventria’s favor.

It’s another question whether Ventria will be able to sell its product to the aid organizations that work in the world’s poor countries, and which could be significant customers.

Miriam Aschkenasy, a children’s health expert with Oxfam America, said more testing is needed to evaluate the drink’s effectiveness. While she encourages innovation, Aschkenasy said the scope for saving lives with a new product is limited.

“The problem with current oral rehydration solutions is not effectiveness,” she said. “It is mainly a problem of access” – getting people to health facilities where they can learn about and obtain the solutions.

The promise of Ventria’s technology has attracted some of the biggest names in biotechnology and agribusiness. The company’s board members include Bill Rutter and Pablo Valenzuela, co-founders of Chiron, which developed the first blood tests for hepatitis C, and Tom Urban, who for many years headed seed giant Pioneer Hi-Bred International Inc.

Ventria is privately held; its board has provided more than 85 percent of the company’s financing, Deeter said.

That backing has allowed Ventria to survive a long and rocky gestation marked by several public setbacks.

By the time Deeter took over as chief executive, Ventria was already the target of Greenpeace campaigners. In a theatrical protest in 2004, anti-biotechnology activists drove to Ventria’s headquarters in a moving van to present an “eviction notice,” demanding it leave the state.

Probably more damaging was the opposition from within the rice industry, with Sacramento Valley farmers growing anxious that Ventria’s rice would mingle with theirs and shut down exports to touchy markets in East Asia.

In 2004, Ventria abandoned plans to plant its rice in California. In late 2005, it gave up on Missouri after a subsidy package fell through. Earlier, rice farmers and Anheuser-Busch Co., which uses Missouri rice in its breweries, had protested the company’s planting plans.

Ventria’s odyssey has drawn international media attention. But in Sacramento, the 30-employee company keeps a low profile. It did not allow a Bee photographer into its building and would not supply a photograph of Deeter.

In Junction City, population 16,000, Ventria’s goals, its high-powered board of directors and Deeter himself all inspired confidence in local leaders. Eager to diversify an economy long dependent on nearby Fort Riley, an Army base, Junction City welcomed Ventria with a $5.5 million loan package. The loans will convert to grants if the company meets planting, hiring and growth targets.

Adrian Polansky, Kansas’ secretary of agriculture, said Ventria has promised farmers a premium for growing its rice – a return of $150 an acre on top of what they would have received for their usual corn or soybeans.

“We got convinced by the (Ventria) leadership pretty quick that this would be a good investment,” said Josh McKim, who heads the Junction City-Geary County Economic Development Commission.

Tracy Taylor, president of the Topeka-based Kansas Technology Enterprise Corp., which has invested $500,000 in Ventria, was confident the rice drink ultimately will yield profits.

“It’s a good product. It’s a safe product,” he said. “The world needs it.”

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