Net Gains

The University of Hawaii is a co-founder in a new business to produce virus-resistant shrimp

September, 2003

Hawaii may have the solution to a multibillion-dollar problem plaguing the worldwide shrimp industry. The beauty of it is: This could mean big money down the road for the University of Hawaii, a university research team and a new Hawaii biotech company under the first joint venture of its kind here.

About 10 years ago, Piera Sun, a petite, salt-and-pepper-haired researcher with a sunny smile, who was studying growth hormones in shrimp at the UH, read an article about how viruses had wiped out a number of Kahuku shrimp farms. Sun immediately asked permission to refocus her research on controlling the problem through molecular biology.

Although colleagues thought her proposal was extremely ambitious and high-risk, Sun persisted and succeeded in obtaining $1.3 million in research funding. Last year, the university’s Office of Technology Transfer and Economic Development (OTTED) showcased Sun’s shrimp gene-transfer research for potential commercial partners. Local businessman Randy Havre took the bait and a joint venture was born, between the company Havre co-founded, Genentex, and the University of Hawaii.

According to Havre, the shrimp industry is a $10 billion-plus global market, and the economic losses from viral disease can reach between $2 billion and $5 billion and have closed farms in Asia and the Pacific.

Havre is trying to secure funding for Genentex’s projected $2.5 million budget over the next three years. Genentex has the exclusive license for the gene-transfer technology Sun is developing to create virus-resistant shrimp and is looking to sublicense it for now. Direct customers would be shrimp hatcheries and broodstock providers. Havre says, “We’re going for a liquidity event. We eventually want to do a merger or an acquisition. This is not an IPO kind of thing. Once we get it up and running, it’s a good candidate for somebody larger … the ConAgras of the world, the Monsantos.”

Most of the money will go into research to prove that Sun’s transfection reagent method (utilizing chemicals) of gene-fragment transfer will produce virus-resistant shrimp with little or no damage to the embryos in a commercially viable manner. The university owns the patent on the advancement of the insertion of the DNA. Under its deal with Genentex, the university, Sun and her team collectively hold 20 percent of the founders’ shares of Genentex and will receive royalties from the further licensing of any technologies that Sun’s team develops.

OTTED Director Dick Cox says, “By accepting equity as part of the licensing deal, we’re betting on the success of the technology, we’re betting on the success of the company. We’re betting on the company being successful in taking the technology out to the marketplace. It’s a model that we’ve kind of created as we’ve gone along here and one we hope to replicate again in future licensing opportunities and deals.”

Sun is rather nonplussed by being a business owner (her Genentex title is founder and chief scientist officer), but is jazzed at the increased scientific possibilities. “I want research money,” she says. “Honestly, I’m not in it for other money.”

Cox has a little different take. “We hope that Genentex becomes the Microsoft of aquaculture,” he says with tongue firmly planted in cheek. Seriously, “We would really like to see Genentex expand from being a company that’s built on our technology, grow to the point where it can begin to commercialize and capitalize on other technologies that are presented to it. We’d like for it to become a recognized name in the aquaculture industry and if that happens, the university should benefit handsomely.”

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Kelli Abe Trifonovitch