Peptide-based Biopesticides – the Future of Sustainable & Efficient Crop Protection Starts Today

Andy Renz, VP BD, Vestaron Corporation

1 Chemical Insecticides – A Failed Concept?

Development costs Difficult to find new rising molecules

Cost of product Number of molecules in R&D development USD M

49 256

105 14

1996 2010 1996 2010

1 new major mode-of- Heading towards action discovered per USD 400M by 2020 decade 2 Chemical Insecticides – A Failed Concept?

Major insecticides taken from the market

• 2015: Dow’s EPA-approved Sulfoxaflor (sulfoximine) was withdrawn by federal appeals court due to bee toxicity and environmental risks

• 2016: EPA cancels registration of Bayer’s Flubendiamide due to environmental risks

• 4/2018: EU bans three neonicotinoid products

• Development costs >USD300M each

3 Biological Insecticides – The Future?

Global biopesticide market forecasted to grow from $2.8B in 2017 to $6B in 2023 (CAGR 14%) Major segments: Bioinsecticides in NA / Microorganisms / Bt’s

Today biopesticides are only 5% of total crop protection market, but around 2050 expected to be equal to synthetics and then surpass them.

4 The Challenges for Biological Pesticides

• Efficacy/pest control: As efficient as synthetics? • Stability in the field: Up to 10 days? • Production: low COGS? Scalable? Universal? • Product stability/shelf life: more than one year? • Application: With standard equipment?

5 Synthetics vs. Microbials

Synthetics Microbials

Cost to develop >$300M $10M

Time to market 10 years 3-5 years

Safety profile problematic excellent

Insect control 95% 60-80%

often often Stability in the field 7-10 days 3-4 days very low cost Production cost variable at large scale standard chemical different from Production system plant product to product Product stability excellent variable

6 Synthetics vs. Peptides vs. Microbials

Synthetics Microbials

Cost to develop >$300M $10M $10M

Time to market 10 years 3-5 years 3-5 years

Safety profile problematic excellent excellent

Insect control 95% 95% 60-80%

often often Stability in the field 7-10 days 7-10 days 3-4 days very low cost scalable, Production cost variable at large scale low cost standard chemical universal different from Production system plant fermentation product to product Product stability excellent very good variable

7 Vestaron at a Glance

• Leader in peptide-based biological pesticides • 1st product launched early this month • 2nd product launch scheduled for Q1/2019 • Rich pipeline of differentiating, new AIs • Multiple products – one proprietary, scalable, yeast- based production system • Advanced GM trait program for insect-resistant crops • Proof-of-concept as Bt-rescue trait • EPA endorsed regulatory path

8 Rich Pipeline of New, Differentiating AIs Today: based on insecticidal venom peptides

Generation Exploratory Development Pre-Commercial Stage 1 2 3 4 5 6 7 8 9 10

VST-06340 (SPEAR®)

VST-67XX Successful 750 liter fermentation; tox studies VST-61XX

VST-65XX

VST-72XX

VST-70XX

73XX

Tomorrow: Expand product pipeline beyond insecticidal peptides

9 Our 1st Product Family:

The power of synthetics, the safety of biologicals • Natural ICK-type peptide, 40 amino acid, new mode-of-action • Broad pest killing spectrum (curative, not preventive) • Safe for humans, mammals, birds, fish, honeybees & beneficials • Certified sustainable • 0 days Pre-harvest interval, 4 hours re-entry interval • No phytotoxicity, no toxic residues (MRL)

Greenhouse version SPEAR®-T launched last week Field version available in Q1/2019

10 The Performance Challenge: Bioavailability

Two routes of entry • Contact – for existing insects at the time of spray (through spiracles/surface to volume ratio); Used for the greenhouse product.

• Oral ingestion – for insects that appear post-spray (synergistically enhanced by Bt); Used for the field product.

11 SPEAR®-T: Full Control of All Major Greenhouse Pests

Western Flower Thrips on Ornamentals Two Spotted Spider Mites on Greenhouse Celery Kalamazoo Glasshouse North Range VST6330 and Pedastel + Avid vs. Western Flower Thrips 2nd Spray Application September 2014 40

35

30

25

20 Spear-T

15 Pedestal + Avid

10

5 Total Number of WFTper 4 Cards 0 UT 2DAT 3DAT Days After Treatment

Grower Trial, Kalamazoo greenhouse; 2 spray applications,

Similar control levels against whiteflies and aphids 12 -Bt Combination Product in the Field

Peptide + Bt 100

80

Mortality Peptide Levels Decreasing Bt

Bt Levels Decreasing

7-10 days

- Allows full control of Lepidoptera (Btk) and Coleoptera (Btt) - Reduces usage rates of SPEAR® 20-fold (!) - Synergy with Bt proven in the field 13 14 SPEAR®-Btk: Arizona Grower Trial

Marketable Celery Heads 100 A B B B B 90

80

70

60

50

40

30

20 % Marketable Heads Marketable % 10

0 UTC Spear-C Coragen Radiant Proclaim Ryanodine Spinetoram Avermectin Three consecutive sprays with Spear-Btk or industry standards at label rates followed by harvest and evaluation of marketable heads. Misc. Lepidopteran infestation 50 gallons/acre 14 SPEAR® + Bt Control Bt-Resistant Insect Pests

P. xylostella (Diamondback moth) HD-1 is

800x resistant UTC Btk 0.5ppt Spear 1ppt Spear 2ppt Spear 0.5ppt Spear 1ppt Spear 2ppt Spear against Bt + Btk +Btk +Btk Proprietary, Versatile Manufacturing Process

• Peptide production through fermentation of a modified, proprietary strain of a food-grade yeast • Robust, scalable production process; few post-fermentation steps • 2 EPA-registered SPEAR® formulations: WG & LC

Formulation & spray drying

Fermentation Filtration & concentration Add preservative, bottling/packaging

• Successful 25,000-liter fermentations • Next generation production strains with enhanced growth rates & even higher peptide yields in development • New AIs will be produced in the same expression system 16 Summary

• Peptide-based biopesticides combine the power of synthetics with the safety & sustainability of biologicals. • Vestaron solved the key challenges for novel biopesticides: performance, production & deployment. • The SPEAR® greenhouse product controls all 4 major greenhouse pests and is available now. • The SPEAR® field product (available in Q1/2019) is a combination with Btk. Synergistic effects between both AIs allow full control of Lepidoptera, even Bt-resistant strains, allowing a rescue of the Bt franchise. • Vestaron’s pipeline of peptide-based biopesticides has the potential to revolutionize the pesticide industry 17 Many thanks!

The Power of Synthetics, The Safety and Sustainability of Biologicals.

Harnessing the Power of Peptides

Andy Renz, VP BD, Vestaron Corporation [email protected] +1-919-649-4916 18