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Engineering a Market

Biotechnology: Calgene is expected to be the first ag-biotech firm to make a profit on its plants and byproducts. Its marketing plan is a primary reason.

February 26, 1990|DONNA K. H. WALTERS, TIMES STAFF WRITER

DAVIS, Calif. — Zachary S. Wochok's company was gone. Yet there was little time for mourning that summer day last year as he headed to his new job.

The familiarity of the routine may have helped soften the loss: He took his normal route to work, even parked in the same lot. But then, instead of stepping into the offices of Plant Genetics, he walked into the building next door.


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As Wochok made the transition from president of Plant Genetics to president of Calgene, it also may have helped to know that his new company had the best chances of any agricultural biotechnology firm to survive the protracted shakeout that drove Plant Genetics into the merger with its neighbor.

Calgene and Plant Genetics lived side by side here in this city west of Sacramento for eight years, each watching the other to see which would be first to achieve the "critical mass" needed to sustain it during the difficult metamorphosis from a research-oriented, entrepreneurial venture into a mature product-selling company. And Calgene, Wochok explained pragmatically, reached that point first.

In fact, Calgene is expected to be the first ag-biotech company to sell its own genetically engineered plants and byproducts, and the first to become profitable. Its solid position as leader in its field, say those in and outside the company, is due in large measure to its carefully pursued strategy of building a marketing system for its innovative products while it is still developing those products.

Calgene expects to be profitable by 1992, a year before genetically engineered products from Calgene and its competitors begin hitting the market in a steady stream. The company earlier this month reported a $1.7-million loss on revenue of $6.7 million in the quarter ended Dec. 31.

Since May, 1986, Calgene has bought four small businesses that produce, sell or distribute a variety of plant seeds, oils and other byproducts. It formed, on its own and in a joint venture, two other businesses that specialize in rapeseed--a hot agricultural product these days because it can be made into low saturated-fat canola oil and has industrial uses.

These businesses serve a two-fold purpose: They bring in revenue now from traditional agricultural products, which helps support research and development of Calgene's genetically engineered plants, and they will provide the needed venues to sell the new products later.

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