Exceptional, January 2014

Bio Innovations

The natural way

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Biopesticide pioneer Pam Marrone is hoping to change the face of agriculture – and to help feed 9 billion people.

Pam Marrone chose her career at age 10, which may not seem all that unusual — except that the career she chose was integrated pest management. “I always sang to my own tune,” says Marrone, who, nearly five decades later, is CEO of Marrone Bio Innovations (MBI), which promotes plant health and pest management using bio-based products.

Marrone has been single-minded in the pursuit of her dream — a dream fostered during her childhood on a 40-acre mini-farm in Killingworth, Connecticut. Raised by an energy-efficiency expert father and an organic gardener mother, young Marrone wanted nothing more than to be an entomologist.

One day, a wave of gypsy moth caterpillars threatened the family’s beloved dogwood tree. Afraid the tree was about to die, her father did the unthinkable: he brought home a chemical pesticide.

“My mother called me out and said, ‘Come look at this!’” remembers Marrone. “The bees and lady beetles, as well as the caterpillars, were dead under the tree. It completely wiped out everything. My mother shook her finger at my father and said, ‘You will never use chemicals again.’”

Next time he went to the store, he brought home another product called Bacillus thuringiensis (Bt), the first biological pesticide. He had no idea if it would work, but it was, he said, better for the environment.

Passionate from an early age

Marrone decided the world needed more (and more effective) green pest-control products such as Bt. At age 10, she wrote to the U.S. Department of Agriculture and discovered the science of integrated pest management (managing pest damage by the most economical and least hazardous means), which was still in its infancy.

Today, with two degrees in entomology and three agricultural technology start-ups under her belt, Marrone is playing a key role in changing perceptions in an industry long dominated by chemical pesticides. After leading Monsanto’s insect biology group, she founded Entotech Inc. (a subsidiary of the Danish company Novo Nordisk), which was sold to Abbott in 1995 shortly after Marrone left to form a new business.

Her second company, AgraQuest, was sold to Bayer CropScience in 2012 for close to US$500m. In 2006, she founded MBI in Davis, California, and in 2013, she took the company through an initial public offering (IPO).

It already has three commercial products (Regalia, Grandevo and Zequanox), with two more awaiting approval by the Environmental Protection Agency. “When you’re an entrepreneur, if you thought of the things that could go wrong, you would never do it,” she explains.

“Most human drugs come from natural sources. It’s just that nobody’s looked long and hard enough, in a sustained way. If somebody was really putting their mind to it, screening and discovering as many plant extracts as they did in the drug world, there should be an unlimited number of discoveries.”

Her scientific background gives Marrone the credibility to speak to growers, but it is her business know-how that has won over investors. “Most people don’t realize I haven’t been in the lab since 1985,” she says, laughing, “but I do stay very involved in the science because I have to guide the products.

“The combination of science and business has served me very well. I look at all the companies in the past that have started up in biopesticides and why they’ve failed,” she continues.

“There have been a lot of bodies along the way, and it is because they didn’t have the blend of science and business. You have to understand both.”

When you’re an entrepreneur, if you thought of the things that could go wrong, you’d never do anything.

At AgraQuest, which she started in 1995, she took impressive data gathered from a product tested on bunch rot and powdery mildew at Gallo vineyards in Northern California, and convinced friends and family — and then major investors such as Rockefeller & Co. — her idea was commercially viable.

She was right. That product, Serenade, is now Bayer’s leading biological product. Investors at the time were looking for new possibilities, and her ideas were convincing.

Unfortunately, following an attempt to go public that was cut short by 9/11, Marrone lost control of the company. She held on long enough to ensure AgraQuest could stand on its own.

“I knew I wanted to do another startup,” she explains, “and if it had looked like AgraQuest was not successful, I would not have been able to attract investment. People saw that I had put my heart, soul and lifeblood into that company to get it to that stage — so I got credit for that, allowing me to be able to raise money for the new one.”

MBI is thriving as a result of the lessons its CEO learned. “It’s really important to pick investors who share your vision,” she explains.

“I’ve also learned the amount of time and energy it takes to manage a board of venture capitalists (VCs) is really much more than most entrepreneurs realize.” Since starting MBI, Marrone has been determined to build relationships with her VCs.

She calls each of them every week and also asks for their feedback before board meetings to give them chance to “vent, talk and give suggestions.” For Marrone, it’s important her VCs feel their views are heard and that she has a chair who can support her in this.

Another step she took when establishing MBI was to put her name on the company stationery, drawing on the brand she had created in the industry. A more personal reason for this was that her father was dying.

“There are no male heirs in our family,” she says. “My father was so influential in this career choice. I thought it would be great to have his name in the company name.”

Focusing all her energy on making MBI a success meant beginning preparations for an IPO, and in 2012, she decided the time was right. Bayer had bought AgraQuest, and the press was speculating over how to feed a population of 9 billion sustainably.

Europe had recently banned huge numbers of chemical pesticides, which forced a change in food production globally, and California had enforced stricter rules for worker protection in the fields. “It was pretty obvious that a window was opening, and if we didn’t get in there right away, we were going to miss it.”

Marrone was determined to be the first reputable, science-based, high-growth agricultural biotechnology company on the market — to create the category and pave the way for other companies to follow suit.

“Who knows what outside influence would slam that window shut? I had to go for that IPO like a maniac, and that was certainly the right decision.”

Marrone credits the company’s advisors with accomplishing the Herculean feat. “We’re category creators. People didn’t know about biopesticides, so it was an educational process. We had to have our message points down because we’re not a Facebook or a Twitter,” she says, laughing. “We had to really sell people on what we were doing.”

In addition to raising funds, going public was about credibility for MBI, and the move paid off handsomely. MBI filed the S-1 on 1 July 2013 with great results. “Big global companies wanted to visit and access our pipeline; people we had been courting to come work for us were suddenly more interested,” says Marrone.

“It was amazing how — boom — the credibility changed.” With the IPO behind it, MBI now has to “execute, execute, execute,” doubling revenues and launching one or two products with new active ingredients every year.

“We have to remain the most innovative,” says Marrone,“because we certainly don’t have size on our side.”

A huge head start

Taking on giants such as Monsanto and Bayer may seem daunting, but Marrone believes she has a huge head start. “It’s not easy to develop a biopesticide product, and a lot of people fail. I’ve been able to train a group of young people coming out of UC Davis how to do it, and have them do it again and again. Another company would be starting from scratch, and it would take them a lot longer, so we figure we have a 7- to 10-year lead.

“We have actually launched more products in the past six years than anyone, we have a bigger pipeline than anyone, and we’re solving a broad range of customer needs,” says Marrone. She believes biopesticides, along with chemicals and genetically modified organisms, should be the third leg in the technologies used in crop production and pest management and in answering the question of how to feed the world’s growing population.

“I won’t rest until biologicals are the dominant technology used for crop production.” Marrone is something of a celebrity in her hometown of Davis, where she has launched the region’s first successful IPO in a decade, and is bringing credibility to its bid to become “Agtech Valley,” a center for developing agricultural technology based around UC Davis.

When she visits local farmers markets on Sunday mornings, they regularly thank her for her work, and entrepreneurs with scientific backgrounds often approach her for advice. “I usually say, ‘Go for it!’ If you passionately believe in something, you should follow that and become an entrepreneur in that field. And you can’t just do it part time. You have to dedicate huge long hours, but the thrill will be worth it.”

When she does rest, Marrone likes to garden and escape to bed and breakfasts with her husband and two dogs. “I spent my whole childhood in the woods.  I’ve lived in suburban Davis for 23 years now, but I still go back to my mom’s house and commune with nature.

The dogwood tree is still there. I actually sprayed Regalia [MBI’s own product] on it,” she says, laughing. “It seems to be holding its own now.”