01/10/2008

Fonterra's China Losses a Warning for AgResearch Partnerships

 

Fonterra’s reported $139 million loss arising from the contaminated milk incident in China is a warning to AgResearch that New Zealand cannot afford to damage our international reputation. But AgResearch’s plans for producing pharmaceuticals in partnership with US biotechnology company GTC Bioetherapeutics and Pharming NV puts New Zealand’s reputation at risk, and presents significant financial risks to the economy.

GTC Biotherapeutics made a total net loss of $10.4 million for the first six months of 2008. The company's proposals for commercial production using genetically engineered animals is highly speculative, and with only one product close to FDA approval could easily be a bubble that may burst.

But the risks New Zealand is being exposed to by the speculative ventures of AgResearch and its partners are not open to scrutiny in the applications made to ERMA.

AgResearch’s partnership puts New Zealand at the bleeding edge, not the cutting edge of genetic engineering.The lesson from Fonterra’s recent experience is that New Zealand as a whole, not just individual companies can be damaged.

“The damage to our reputation, let alone costs of compensation and clean-up following an incident related to ‘bio-pharming’ animals could be much greater than $139 million,” says Jon Carapiet from GE free NZ in food and environment.

There is little information in the AgReseaerch applications to ERMA about the economic risk but it could be much larger that Fonterra’s recent losses. If GTC Biotherapeutics or other partners collapsed it could leave the public to face enormous costs of clean-up and compensation. New Zealand has already had the blight of the disastrous trial of 3000 GE sheep developed by PPL.

“Fonterra itself should speak out against AgResearch’s plans as a threat to its brand image as well as to New Zealand as a whole," says Jon Carapiet.

One economic analysis by University of Lincoln shows that ‘bio-pharming’ has the potential to cost over $500m to New Zealand’s economy. Writing off the $15 - 30 million spent to date on AgResearch’s GE animal research may be the most cost-effective way to prevent such damage and allow investment in other ethical research to the benefit of farmers, exporters and our clean, green, natural image.

ENDS. Jon Carapiet 0210507681

References:

http://www.gtc-bio.com/pressreleases/pr080708.html

GTC BIOTHERAPEUTICS REPORTS SECOND QUARTER 2008 FINANCIAL RESULTS

FRAMINGHAM, MA – August 7, 2008 -- GTC Biotherapeutics, Inc.’s ("GTC", Nasdaq: GTCB) total net loss for the second quarter ended June 29, 2008, was $2.2 million, or $0.02 per share, compared with a net loss of $10.6 million, or $0.14 per share, for the second quarter of 2007. The total net loss for the first six months of 2008 was $10.4 million, or $0.11 per share, compared to $18.1 million, or $0.23 per share, for the first six months of 2007.

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