Friday 16th March 2012
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Forestry biotech company ArborGen, which counts NZX-listed Rubicon as a major shareholder, may be on a quicker route to taking one of its products to market after US officials trimmed the timeline in the approval process of biotechnology products.
The US Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) has outlined new processes to determine whether biotech products should be approved for commercial use, cutting the time to 13 to 16 months from an average three years per petition previously. That means ArborGen could get its cold-tolerant eucalyptus product to market sooner than previously expected, provided it secures all the appropriate approvals.
“These process improvements announced by APHIS represent a significant improvement to the regulatory approval process previously in place, and these changes will be welcomed by the wider biotechnology community,” chief executive Andrew Baum, who was only appointed to lead the company this week, said in a statement. “The new process should achieve faster petition determinations without foregoing any of the rigour of APHIS’s environment assessment process.”
ArborGen wants to bring genetically-modified eucalyptus trees to market to enable production of the hardwood for pulp and biofuel in managed plantations in the south-eastern United States. The company has been selling varietal pine seedlings since 2006.
An early approval would be a fillip to the forestry biotech company, which was forced to shelve plans for an initial public offering last year as US financial markets struggled to revive in the wake of the global financial crisis, several years ago.
ArborGen’s shareholders Rubicon, International Paper and MeadWestvaco will have to source new funding to pursue a float, and may need to stump up more cash, tap private capital or seek new bank finance.
Shares in Rubicon climbed 5.4 percent to 39 cents in trading today.
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