By DAVID RANII, Staff Writer RESEARCH TRIANGLE PARK – April 10, 2003 –

Syngenta Biotechnology's Triangle operations have proven to be a fertile breeding ground for budding entrepreneurs. Scientists and others who have honed their skills at Syngenta and its predecessors -- Novartis and Ciba-Geigy -- have founded and are running a new crop of young agbio companies such as Athenix, Cropsolution and Paradigm Genetics.

Former Syngenta executives say the mergers that created the company have triggered structural overhauls -- and resulting layoffs -- that might have persuaded some of the company's entrepreneurial types to strike out on their own. "When two big partners collide, a lot of little particles get thrown off," said Eric Ward, chief executive of Cropsolution. In addition, Syngenta's deep roots in the Triangle -- Ciba-Geigy set up shop locally in 1983, the first agribusiness to do so -- also has provided ample opportunities for branching out. Plus, the company is known for encouraging its scientists to learn business and financial skills: sponsoring in-house classes, for instance.

"I think this location, regardless of whether it was Ciba-Geigy or Novartis or Syngenta, has always had an entrepreneurial culture," said Roger Kemble, the current head of Syngenta's biotech research facility in Research Triangle Park. "I'm not surprised that people brought up in the culture want to ... start out on their own." In addition to providing much-needed jobs, the startups enhance the Triangle's reputation as an agribusiness center.

In addition to Syngenta, the Triangle boasts two other agribusiness industry giants. Bayer CropScience has its North American business headquarters in RTP. BASF, meanwhile, employs 425 workers at the North American headquarters of its BASF Agricultural Products unit in RTP, in addition to the 125 workers at BASF Plant Sciences. Moreover, although funding for agbio startups is scarce these days because the agribusiness industry is in a down cycle, the Triangle could enjoy a resurgence in new companies being formed -- most likely led by Syngenta alumni, if history is any guide -- when the industry rebounds.

The Syngenta name isn't well known outside the agribusiness industry, partly because it's so new. It was formed in 2000 when subsidiaries of drugmakers Novartis and AstraZeneca merged. But Syngenta's effect on agribusiness startups is reminiscent of the numerous pharmaceutical and biotechnology startups formed by alumni of drug giant GlaxoSmithKline -- which has helped make the region an industry hot spot -- but on a smaller scale. London-based GSK, which has one of its U.S. headquarters in RTP, has more than 5,000 workers in the Triangle. Today Syngenta Biotechnology has 229 workers in RTP. They conduct genetics and genomics research to engineer improvements to plants, such as being more resistant to insects or a more efficient animal feed. The reach of Syngenta's alumni isn't restricted to the younger crop of agribusiness companies, some of which develop and sell herbicides and other agricultural chemicals. Others are involved with genetically modified plants and seeds.

Today, the head of BASF Plant Science in RTP is Stephen Evola, former president of Syngenta Biotechnology. BASF Plant Science is focused on plant biotechnology research, such as developing crops that can better withstand drought and cold. Paradigm Genetics, although struggling at the moment, was for several years the success story that agbio entrepreneurs wanted to emulate. Formed in 1997 by a team of former Novartis executives led by John Ryals, the company had 275 employees at its peak -- one-third more than today -- and had a market value of $178 million when it went public in 2000.

Today the company is moving beyond its agbio roots. When Paradigm Genetics recruited a new chief executive to replace Ryals last year, it turned to Heinrich Gugger, a former president of Syngenta Crop Protection in Greensboro. Syngenta Crop Protection and Syngenta Biotechnology are units of Switzerland's Syngenta AG, the world's No. 1 producer of crop chemicals.

Meanwhile, Ryals is heading a new startup: Metabolon Pharmaceuticals, which is focused on discovering new drugs for people rather than agricultural products. Tough times Ryals and other local executives say there probably would be even more agbio startups in the Triangle if the current environment for agribusinesses weren't scaring away venture capitalists. "You have had the biggest trough [in crop prices] in the past seven years that ever happened in the history of agriculture," Ryals said. "Hopefully, we are coming out of it."

In the late 1990s, genomics companies with an agricultural bent -- such as Paradigm Genetics -- were hot stuff, said Doug Gooding, a venture capitalist with The Aurora Funds in Durham and a former executive at Paradigm. But as the agribusiness giants have struggled, the universe of potential corporate partners and potential acquirers has gotten smaller. "You aren't seeing a lot of new companies getting funded within the agbio or ag-chemical industries," Gooding said. Still, he said Aurora is taking a serious look at investing in a startup involving a former Syngenta executive, although he declined to divulge details.

BASF's Evola said he knows of one former colleague at Syngenta who recently explored starting an agbio company -- but has given up for now because of funding. "He is just waiting for the right time," Evola said. 'Culture of innovation' Evola noted that, a few years ago, Syngenta brought in members of the business faculty at the University of North Carolina at Chapel Hill to teach its scientists about business and financial issues. "We wanted to build on the culture of innovation," he said. Startups by alumni of Syngenta's Triangle operations have also shown up elsewhere. Ryals pointed out that alumni of Syngenta's RTP operations were behind ventures formed in recent years in New Jersey and the United Kingdom. Cropsolution's three founders -- Eric Ward, chief executive; Scott Uknes, president; and Michelle Hunt, director of strategic marketing -- all are former "Novartians." So are nine of the company's 17 employees. Cropsolution is using its "evolutionary chemistry" technology to discover new agrochemicals.

Along the same lines, three of the four founders of Raleigh's Athenix -- and at least seven of its 30 employees -- boast Syngenta pedigrees, said Chief Executive Mike Koziel. He led the Ciba-Geigy team in RTP that produced the world's first genetically modified corn in 1995. Many of the Syngenta/Novartis/Ciba-Geigy alumni know each other, and keep in touch -- both personally and professionally, Koziel said. He noted that Ryals, for example, is on his company's board of directors. "He is helping us in the business development area," Koziel said. "He has contacts."

Back to Portfolio News