Genomics Beefing up Cattle Ranching

Deoxi Biotecnologia: Already the world’s largest exporter of beef according to the USDA, Brazil is preparing a hi-tech leap into the future of ranching through the introduction of genetically modified livestock that build extra muscle fibre.

For almost a century Brazilian ranchers have been crossing European strains of beef cattle with Nelore stock from India, to generate a hardy animal that thrives on tough tropical grasses and tropical forage in adverse terrain. Already, Brazil has an estimated 200 million cattle – over twice as many as in the US.

Now scientists have successfully deployed genetic engineering to create the Nelore Myo, a “double muscled” steer yielding larger amounts of lean meat thanks to the suppression of proteins that inhibit muscle growth. By engineering a mutation in the gene that creates the myostatin protein, scientists found embryos began generating more bulk. By crossing the Nelore Myo with Belgian Blue, farmers now have a veritable heavyweight for beef ranching, without any change to feeding patterns.

The new development promises to yield a second fortune to the scientist-entrepreneur who created the Nelore Myo super-steer. Already, Brazilian biologists had sold a company they developed for DNA testing to genomics market leader Neogen, a Nasdaq-listed US multinational.

However, the intellectual property surrounding the Nelore Myo was  excluded from the deal. This will now form the basis of a new company working specifically with genetic improvement and will be a customer of Neogen. The first M&A deal already validated the value-creating strategy behind the provision of public funds for early stage development of high tech companies in Brazil.

And for the future, there’s the promise of a second valuable company generated out of the  same incubation process. So the multiplier effect of startup funding for high-tech companies creates a self-sustaining ecosystem of  high-quality economic  development. As another recent SFB article about the sale of Brazilian cattle breeding tech company InVitro Brasil shows, Brazil’s world-leading technology is attractive to  foreign multinationals.  In this specialist field, M&A inward investments  substantially outstrip the public sector seed funding needed to  incubate these young companies.

The low-cholesterol alternative: Beef  cattel fed on  Selenium additive

From test-tube to dinner plate, the genetically enhanced Nelore is a winner for scientists, farmers – and diners.

The new ‘super race’ beef animal was developed by Deoxi Biotecnologia, a genomics laboratory founded by researcher Rodrigo Vitorio Alonso in Araçatuba, São Paulo State. Deoxi calculates that genetically enhanced animals produce extra meat worth R$240 or US$127 per carcass to farmers. According to Alonso, “Carcass yield is 53%-55% for a regular Nelore and 60% for a Nelore Myo. “He estimates a rise of up to 15% in carcass yield on average (about an extra 45 kg).

The science of the successful genetic crossing was achieved by taking the mysostatin-suppressed gene from the Belgian Blue, and blending this with otherwise 99% Nelore-derived embryos.

The Nelore Myo project was supported by FAPESP’s Innovative Research in Small Business Program (PIPE) and the Corporate Research Support Program run by the Brazilian Innovation Agency (FINEP), part of the Ministry of Science & Technology, under a cooperation agreement between the two institutions.

Project Nelore Myo has now completed Stage 3 or “go to market” phase of its PIPE programme (see this article explaining PIPE). This was conducted simultaneously with Stage 2, in December 2016. The result was an animal with a genome that was more than 99% Nelore, inheriting only the myostatin gene mutation from Belgian Blue. The additional muscle growth leads to a better yield thanks to the greater proportion of lean edible meat from the animal.

The genesis of the enhanced steers – and Deoxi itself – dates back to 2000 when Alonso, then a student of veterinary medicine at São Paulo State University (UNESP) in Araçatuba, undertook his first scientific initiation project with a scholarship from FAPESP.

“FAPESP has supported me since I was an undergraduate,” he says. This first project, which was supervised by Professor Wilson Machado de Souza, was a study in anatomy. “I realized what I wanted to do wasn’t basic science, but the knowledge I acquired was fundamental for the ensuing research projects,” he recalls.

In 2001, while still a student, Alonso studied animal reproduction biotechnology and techniques under the guidance of biochemist José Fernando Garcia. This led to the creation in 2004 of a DNA-based embryo sexing company called Transfix. “At that time, cattle breeders didn’t know if the embryos they produced were male or female until the 60th day of gestation,” Alonso recalls.

Then, development of a DNA test for high-fertility bulls was the project was the point of departure for Deoxi, the company Alonso founded in 2008 in partnership with biologist Francine Campagnari Guilhem. “Deoxi was also strongly supported by FAPESP,” he says. “We took part in several calls for proposals and succeeded in winning some R$4 million in grants, all told, for different projects.”

Alonso, a vet by training with a doctorate from the University of São Paulo’s faculty of veterinary medicine (FMVZ) was also a leading light in the industry group SBTE (Sociedade Brasileira de Tecnologia de Embriões) for which he was technical director during the years 2008-2013.

Better beef: responsible ranching practices on the rise. Photo  Wikimedia

Promise of a second fortune for Nelore Myo’s genetic architects. Photo Wikimedia

In April 2016 Deoxi was sold to Neogen, a company with US$321 million in annual sales — half of that from international operations. Neogen Latinoamerica recorded a revenue increase of 44% in fiscal 2016, which reduced to 20% when converted to dollar the renamed Neogen Latinoamerica business recorded a revenue increase of 44% in fiscal 2016, which reduced to 20% when converted to dollars.

Neogen won’t disclose the value of its Deoxi acquisition, but there’s little doubt that Alonso — who became the general manager for Neogen’s Brazilian operation – did well from the deal.

And could do even better in future: During the 2016 Neogen deal negotiations, in 2016, the Nelore Myo project was still under way with FAPESP’s support. Alonso, made a point of excluding his new project from the agreement to acquire Deoxi, so the intellectual property was not sold to Neogen. “I’m building a new company, which will be called Nelore Myo. It will work specifically with genetic improvement and will be a customer of Neogen in the area of genomic analysis,” he says.

You can read a detailed article about this project by Brazilian journalist Suzel Tunes by clicking here.

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