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Federal government deregulates biotech tomato

DAVIS, Calif. -- Federal regulators said Friday they have deregulated restrictions on the genetically engineered tomato made by Calgene Inc., clearing a hurdle for the tomato to hit stores next year.

The news pushed up the price of Calgene stock and it closed up $1 at $13.125 a share in over-the-counter trading.

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Calgene is still awaiting marketing approval for the U.S. Food and Drug Administration for the Flavr Savr tomato.

Ann Veneman, deputy secretary of the U.S. Department of Agriculture, made the announcement during a visit to Calgene's headquarters in Davis, Calif., that the USDA has ruled that it will no longer regulate the Flavr Savr.

Calgene said the ruling means that the tomatoes, which are designed to taste better and last longer than conventionally grown tomatoes, can be grown and shipped anywhere in the United States without further permits or approvals.

'This is a positive and significant step forward in the commercialization of agricultural biotechnology,' said Roger Salquist, chairman and chief executive officer of Calgene.

The company had asked the USDA to determine that the biotech tomato does not present a plant pest risk, is nototherwise harmful to the environment and does not need to be regulated.

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Calgene decided earlier this year that it would move from producing genetically engineered seeds and form a subsidiary -- Calgene Fresh -- to grow, pack, distribute and sell fresh produce in order to maximize the returns on its research and development investment.

Tom Churchwell, chief executive officer of Calgene Fresh, said Friday, 'This USDA action will enable Calgene to commence scale-up of the field production of Flavr Savr tomatoes over the next nine months, preparatory to the expected launch of the product in the late summer of 1993.'

Calgene paid Campbell Soup Co. $2 million last year as an initial payment for exclusive North American fresh-market tomato rights to the Flavr Savr gene. Analysts say Calgene appears to be several years ahead of rivals in getting a genetically engineered tomato to market.

Salquist noted that Calgene was the first to obtain a field-trial permit for a genetically modified plant in 1987, and also is the first to have one deregulated. Test marketing of the Flav Savr is likely will begin in the spring after the U.S. Food and Drug Administration approves the tomato, Salquist said.

Meanwhile, Calgene is supplying information to FDA policy-makers 'to convince them that genetically engineered food is like any other food,' he said. Salquist expects FDA approval 'sometime after the first of the year.'

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Calgene announced last month that it would be exclusive supplier of vegetable oil-based lubricants for Mobil Oil Co.'s line of Environmental Awareness lubricants.

It recently posted a $19.9 million loss on sales of $24.2 million in its fiscal year ended June 30.

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