Photographer: Mario Tama/Getty Images

This Biotech Billionaire Says He Fights Zika Better Than the UN

  • Randal Kirk's Intrexon makes genetically modified mosquitoes
  • Intrexon soars 73% since Jan. 13 as Brazil outbreak widens

Billionaire Randal Kirk says his genetically modified mosquitoes can fight the Zika virus better than the United Nations. Investors seem to think he’s right.

Shares of his biotech company Intrexon Corp. surged 73 percent since Jan. 13, when the U.S. Centers for Disease Control and Prevention suggested a possible link between the mosquito-borne Zika virus and birth defects known as microcephaly in Brazil, the host of this year’s Olympic Games. Two days later, the CDC issued a travel alert for pregnant women traveling to Brazil. Analysts from Wunderlich to Stifel Nicolaus & Co. tied Intrexon’s rise to possibly hundreds of millions of dollars in additional annual sales of its mosquitoes in more than two dozen countries with significant Zika outbreaks.

Randal Kirk
Randal Kirk
Photographer: Michael JN Bowles/Intrexon

There’s more than one way to fight Zika. Intrexon rejiggers male mosquitoes’ DNA so that the bugs die before they can pass along a virus. The UN’s International Atomic Energy Agency in Vienna, by contrast, uses radiation to sterilize male larvae so that when they mate, their progeny never hatch. The IAEA will offer its technology for free. 

Kirk, the chief executive officer and largest shareholder of Intrexon, says the UN method hasn’t field-tested the Aedes aegypti mosquito breed that’s the primary Zika transmitter, and the bugs’ DNA haven’t been sequenced to detect potential mutations. About 70 percent of eggs laid by females were sterilized in a pilot program by Brazilian researchers, meaning the remaining eggs could have mutations, he said.

Genetic Mutations

“When people propose using a completely untested and unproven solution, they are ignoring there is no track record whatsoever of biosafety,” Kirk said in a phone interview. “Radiated mosquitoes create mutants. We’d have millions upon millions of genetic mutations without identifying what the mutations are."

The IAEA denies Kirk’s assertions, saying its technology has been proven over 50 years with other bugs and is ready now to be applied to Aedes aegypti mosquitoes carrying Zika and other pathogens.

“By releasing 100% sterile insects, we ensure that there is no progeny and so no mutations are introduced into the wild,” the IAEA said in an e-mailed reply to questions. “There are no biosafety or human health issues.”

Contract Talks

Kirk, who used to raise falcons on his cattle farm in Virginia before his work at Intrexon began eating into his free time, said the company’s Oxitec subsidiary is in talks in Brazil and other countries for contracts to sell the modified mosquitoes. He said it has taken about six months in past trials to reduce Aedes populations by more than 80 percent, so the company wouldn’t have enough time to control Rio’s mosquito problem ahead of the Olympics in August.

“Olympics are now five months away, so it would be extremely challenging to put a huge dent” in the Aedes aegypti population before then, he said. “We’d have to have regulatory cooperation.”

Oxitec genetically modifies males of the Aedes aegypti species -- responsible for transmitting dengue, chikungunya and yellow fever as well as Zika -- so they and their offspring will die without an antidote needed to stay alive. Oxitec, based in the U.K. in Abingdon, near Oxford, won approval for its mosquito in April 2014 from Brazil’s biosecurity commission. Oxitec is awaiting final clearance from Brazilian health regulators to authorize the sale of the mosquitoes to local authorities and private operators. The company isn’t yet generating revenue from its current Aedes operations.

Oxitec Genetically Modified Mosquitoes
Oxitec Genetically Modified Mosquitoes
Photographer: Paulo Fridman/Bloomberg

U.S. Testing

U.S. regulators said on March 3 they may soon allow the first field trial of Oxitec’s mosquitoes in the continental U.S., despite some public opposition. Critics say more studies are needed to understand how genetically modified mosquitoes could affect animals that eat them.

Thomas Shrader, an analyst at Stifel, says the Oxitec bug could replace pesticide components of anti-mosquito campaigns from Brazil to the Florida Keys to Malaysia, adding as much as $400 million to annual sales for Intrexon. Germantown, Maryland-based Intrexon cited dengue fever as its target when it bought Oxitec last September for $160 million. Zika came into the limelight after the Pan American Health Organization released an alert on the link between Zika and birth defects on Dec. 1.

“This was built as a way to fight dengue and it just happened to be the same mosquito as Zika,” Shrader said. “Perhaps it was a bit of luck.”

Birth Defects

Zika is linked to a jump in birth defects and could potentially infect up to 4 million people across Latin America, according to the World Health Organization. It currently has no cure. The WHO dubbed the Brazilian outbreak of Zika a global emergency, adding to the challenges facing beleaguered President Dilma Rousseff, who’s fighting an impeachment campaign after the economy shrank the most in a quarter-century last year.

Kirk has a history as a serial entrepreneur. In 1983, while practicing as an attorney, he founded a supplier of health-care products with a partner and sold it 15 years later for $65 million. He then started New River Pharmaceuticals, which made improved versions of existing drugs, including an attention deficit disorder medication. He sold the company to Shire Plc for $2.6 billion after the treatment won FDA approval in 2007. He later sold the antidepressant maker Clinical Data Inc. to New York-based Forest Laboratories for about $1 billion.

The executive -- now worth $3.8 billion, according to the Bloomberg Billionaires list -- began investing in Intrexon soon after. Its subsidiaries include producers of genetically engineered salmon, apples that don’t turn brown, and a platform for bioconversion of natural gas to liquids.

Counting Larvae

The lab work at Intrexon can be as torturous as the science is innovative. Inside the Oxitec plant north of Sao Paulo, workers separate male Aedes pupa from females and tally larvae on hand counters, while intermittently zapping the strays with electric racket swats. Males by the bucket load are driven by van to nearby Piracicaba for release. The company frees 300,000 modified mosquitoes per day.

Kirk says the company has the capacity to roll out similar labs in other cities in a matter of months. The logistics of release depend on the environment. The IAEA, for its part, has been working with a German drone manufacturer to deliver thousands of radiation-sterilized males at a time. Kirk said trucks or vans work best in the human-rich urban environments where the Aedes mosquitoes concentrate.

“We are a well-capitalized company and have the means to roll this out very quickly on a large scale,” Kirk said. “Should everybody sit around until the UN tells them what to do? The answer is no.”