Under the deal Oxitec’s stockholders will receive approximately $80 million in Intrexon shares and $80 million in cash.
Oxitec’s transgenic technology involves the production and release into the environment of sterile insects whose offspring do not survive. Unlike conventional approaches to controlling insect populations with insecticides, which also kill non-target species, Oxitec can target specific pests. This reduces the impact on an ecosystem as a whole and also presents a means of dealing with resistance to insecticides.
The insect sterilisation technology was developed by Luke Alphey at Oxford University’s zoology department and spun into Oxitec in 2002, with funding from the university’s Challenge Fund and East Hill Advisors, a US investment company based in Boston, Massachusetts.
While the mass release of sterile insects is an established method for controlling insect pests in the US, the previous approach was to sterilise male insects with radiation before releasing them to prevent the females from reproducing. The problem is that using radiation to sterilise male insects is expensive and can harm them, reducing their chances of mating with females.
The technology developed by Alphey involves creating transgenic strains that cannot produce viable female offspring.
In June 2005, the company completed a second round of fund raising, obtaining further investment from Oxford University and East Hill Advisors and £550,000 from Oxford Capital Partners, a UK investment company.
Intrexon’s Chief Executive Randal Kirk said Oxitec’s technology demonstrates that “engineered biology” can solve pest control problems while showing respect for the environment. “In particular, to be able to induce a population decline in a major disease vector and know your intervention does not propagate in the environment is an historic achievement,” Kirk said.
Hadyn Parry, CEO of Oxitec said, “We look forward to making a difference in people’s lives that much sooner, as part of Intrexon. The partnership will find solutions to some of the world’s most intractable health and agriculture problems and make them available on a global basis,” he said.
According to the World Health Organization, dengue is the world’s fastest growing mosquito-borne disease spread by the Aedes aegypti mosquito. A recent estimate indicates a potential 390 million dengue infections per year, of which 96 million manifest clinically.
Dengue continues to grow in both prevalence and severity because current control methods, which rely mostly on insecticides, have not been adequate to limit the spread of the mosquitoes.
Open field trials with Oxitec’s mosquitoes have taken place in Brazil, Panama, Grand Cayman and Malaysia, with a reduction of over 90 per cent in the Aedes aegypti pest population reported in each trial. Brazil’s National Technical Commission for Biosecurity approved Oxitec’s mosquitoes in 2014, an important step towards full commercialisation of the technology.
In addition to health programmes, Intrexon will work on agricultural applications of Oxitec’s technology. An estimated 20 to 40 percent of food production is lost every year to insect pests, despite use of pesticides.