Ruedi Stalder

John E. Thompson

Eric Lam

Phillip Escaravage

Corrections or additions?

Author: Barbara Figge Fox. Published in U.S. 1 Newspaper on

January 19, 2000. All rights reserved.

Making Hay with a Botanical Fountain of Youth

In 1997 three Princeton undergraduates stumbled on

a great idea — the botanical equivalent to a Fountain of Youth.

The idea, the gene-based theory of a Canadian scientist, promised

to change the way fruits and flowers are grown and distributed.

Bananas

could last as long as apples. Fresh tomatoes could be frozen like

corn. Carnations could stay fresh for weeks instead of days. The

undergraduates

saw a better world — and a business opportunity.

As the story goes, Phillip O. Escaravage (a Princeton University

economics

major in the Class of 1997) brought Sascha Fedyszyn (an ecology and

evolutionary biology major) and Christian Ahrens (a world-class

oarsman

and history major) to visit Escaravage’s brother, then doing

post-graduate

work at the University of Waterloo in Ontario. They were introduced

to John E. Thompson, dean of science, at the moment that he was

celebrating

his success in identifying the gene that controls the mechanics of

plant life and death.

Thompson needed initial monies of $100,000 to develop his idea. The

three Princeton students were so enthusiastic that, even before they

graduated, they founded a company, and Thompson got the money he

needed.

Meanwhile, during spring break, Escaravage married his classmate,

Charlotte Forbes, the daughter of Christopher "Kip" Forbes,

vice chairman of Forbes Inc. And after graduation he and his cohorts

set up shop in the Sword building on Chambers Street. The company,

Senesco, officially began in July, 1998. Already the founders have

had to swallow the bitter pill that eventually comes to many

entrepreneurs

— they have stepped aside to bring in "old guys,"

experienced

executives who can take the company to the next level.

For Senesco, money and its accouterments — power and know how

— are not in short supply. But the company still faces

considerable

challenges. It needs to raise $1.2 million in the near term and plans

to be at least a $25 million company in five years

(http://www.senesco.com).

Top Of Page
Ruedi Stalder

So this young company no longer has youth at the top. Ruedi Stalder,

59, is now the chairman and CEO; he is the former CEO of the Credit

Suisse Private Bank’s Americas Region. Steven Katz, co-founder of

S.K.Y. Polymers at 5 Crescent Avenue, Rocky Hill, is president, COO,

and treasurer. One Princeton alumnus, Ahrens, has left the firm.

Escaravage

remains as a board member and vice chairman, and Fedyszyn also keeps

his job of vice president.

The other board members are Christopher Forbes and Thomas C. Quick,

president and COO of the discount brokerage firm Quick & Reilly/Fleet

Securities.

"With the technology developed and the concept proven, we will

be negotiating licenses with major companies. But we want Phillip

and Sascha to continue to be involved in the company, hopefully

strengthening

the team without losing any of the initiative and spirit that created

the company in the first place," says Stalder. He had been

introduced

to Escaravage by the Forbes family, and he is the godfather of

Escaravage’s

second child.

Escaravage professes that this change was part of Senesco’s long term

strategy. "I am still going to be involved, but not with the banks

and the public," he says. "Reudi has the skill to do that.

This is a definitely not a young business. I expected it would have

to evolve from being just me to having people with the skill sets

to take a $30 million company to $100 million."

The founder lays out the market opportunity: If farmers, distributors,

and retailers had had Senesco-designed fruits and vegetables this

year, they would have saved $18 billion. "We are really trying

to build the company. This technology is unbelievably great and

viable,

and it will kick us off into being a strong agro player."

In October, 1998, the company obtained various bridge loans, and in

January, 1999, the company went public by means of a reverse merger

with a shell company, Nava Leisure USA. It began trading as SENO on

the NASD OTC (over the counter) bulletin board. Christopher Forbes

has been buying lots of shares.

Top Of Page
John E. Thompson

Thompson is also a big stockholder. Thompson claims to have identified

not one, but two genes that — if silenced — could delay the

plant aging (senescence) process. Lipase was the first gene, and last

November he announced his conclusions regarding the second gene,

deoxyhypusine

synthase (DHS): "The DHS regulates the timeframe within which

plant tissue ages or spoils, while the lipase executes the physical

changes involved in senescence."

Thompson is focusing on four groups of consumer products — fruits,

vegetables, flowers, and agronomic crops — and is trying to

isolate

and characterize the lipase gene in examples from each category. To

show that the concept works he is working to create a transgenic model

from each category: bananas, tomatoes, carnations, and Arabidopsis

plants (a standard crop used for research). He then plans to work

on such other crops as corn, lettuce, and strawberries.

Thompson declines to disclose exactly which gene he is studying, but

those in the business believe that he is using antisense technology

to suppress the genes. An antisense lipase gene could sabotage the

normal production of the lipase protein by inhibiting a gene that

triggers senescence.

Top Of Page
Eric Lam

"From what I have heard, the suppression of the lipase gene by

antisense technology apparently worked quite well to delay senescence

in several different plant species," says Eric Lam, an associate

professor at Cook College’s Biotech Center. Lam, who is studying

senescence

and other kinds of cell death in plants, points out that Thompson’s

work has not been published in a peer-reviewed journal but "is

promising as an additional tool to prolong shelf-life of plants."

Lam notes several other genes are also under study for their potential

to delay aging. "One is a gene that can inhibit the sensitivity

of plants to the hormone ethylene, and the other one is a gene that

produces cytokinin in senescing cells. It is not clear at this point

if the lipase-antisense strategy will work better than these other

approaches," he says.

No matter how Thompson’s original hypothesis fares, Senesco needs

to keep coming up with new discoveries. It dug deep into its wallet

to hire Alan B. Bennett, former associate dean of the College of

Agricultural

and Environmental Sciences at the University of California at Davis.

Bennett resigned his administrative duties and divides his time

between

teaching and looking for new research projects for Senesco. Bennett

has been actively working for the company since last summer. As

Escaravage

puts it, "We are not with our pants down."

Also on the scientific advisory board are Carl Leopold, an emeritus

professor at Cornell’s Boyce Thompson Institute for Plant Research,

and William R. Woodson, associate dean of agriculture and director

of agricultural research programs at Purdue.

"Our goal is to implement a technology that effects an 800 percent

increase in the life of a crop. We have the first player

advantage,"

says Escaravage. To keep that advantage he puts ads in trade

publications

and "a national magazine." That magazine is Forbes.

Escaravage pulls no punches about a family connection that can yield

free two-page ads in a major business publication. "Do I have

an advantage? Yes."

"Do I use every advantage for my company? Yes."

Top Of Page
Phillip Escaravage

Escaravage plays his family cards closer to his vest than do his more

flamboyant in-laws — he will say only that his father was an

investor

and his mother an artist — but he has the easy confidence that

is not intimidated by wealth. After the family-only wedding at the

Forbes ranch in Colorado, there was a reception in Far Hills for 500

people and another party in Germany, Charlotte’s mother’s birthplace.

They live at the Far Hills estate of the late Malcolm Forbes

(Charlotte’s

grandfather) and have two preschool children. Escaravage reads

extensively

and refuses to have a television set in his house because "it

ruins the balance of a room."

Escaravage went to boarding school in Nova Scotia, and at some point

determined that despite the encouragement of his mother, he would

never be an artist. "I did enough of it to see how difficult it

is, but I have no ability," says Escaravage. "You know how

some artists claim that God speaks to them and guides their hand.

God spoke to me and said `Don’t paint.’"

"I am probably fairly conservative about things, except for art,

and art itself is a liberal expression," he says. "Art should

move you but constantly being in shock — that is not the only

emotion you want to feel. A painting has to be judged by one, the

skill, and second, the subject."

His artistic tastes are reflected in Senesco’s office in the Sword

building on Chambers Street. It is far from usual. It sports an array

of paintings from his contemporary American collection. Several

mural-sized

paintings have been removed (the Amazon-like school girls battling

clowns were too controversial) but the big yellow duck’s head remains.

Escaravage’s conference table, crafted by Reeve Schley, a cousin of

Governor Christie Whitman, features tree branches sticking up through

the chairs. Everything here exudes energy.

Including Escaravage. In May his firm made a joint venture with an

Israeli company, Rahan Meristem Ltd., to develop genetically altered

banana plants. Also that month it made a private placement of common

stock that netted $2 million. In October it announced that the delayed

senescence technology worked on the Arabidopsis plant. A two for one

stock split became effective on October 25. The DHS gene patent was

announced in November, and the first annual meeting was November 30

at Jasna Polana. All the research is contracted out, most to the

University

of Waterloo. Big companies can be expected to develop the technology

to bring the produce to market. "That’s the beauty of our

company,"

Escaravage says. "We are going to do test plants. It will cost

us $20,000 to transform each plant, but we are not the end person

to sell the seeds. Companies like Novartis will implement the gene

into a whole new line. It may cost them $25 million, but it will be

hugely profitable."

The lipase technology can reap excellent profits for its investors,

says Escaravage. "I think we can get one to five percent royalty

for every crop. Lipase is extraordinarily valuable."

Senesco hopes to avoid the controversy about genetically modified

(g.m.) crops because Thompson is using both conventional breeding

and molecular genetic modification tools. It won’t be under pressure

to "feed the hungry," so to speak, because it is working on

high margin crops, not staples for third world countries. "The

third world will get the seeds somehow. We are selling exclusivity,

not feeding the world," Escaravage says.

"With the genes actually working, we are over a lot of the

risk,"

says Escaravage. "The greater ambition is to turn these two pieces

of technology to become a greater company. That is the greatest

challenge

— we have to keep moving. We know the plant works. Someone will

purchase it. The real question is, what’s next?"

Senesco Technologies (SENO), 34 Chambers Street,

Princeton 08540. Ruedi Stalder, chairman and CEO. 609-252-0680; fax,

609-252-0049. Home page: http://www.senesco.com.


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