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A
little background on this company from the former CEO who did leave the
company when the problems began: The following is a transcript of Dr.
Marrone's presentation at Biology Career Day 1997:
Pamela G. Marrone
President
and CEO, AgraQuest,
Inc.
B.S. in Entomology, North Carolina State University
Ph.D. in
Entomology, Cornell University
From 1983 to 1990, Pam was
in charge of the Insect Control group at Monsanto
Agricultural Company.
Her group was instrumental in pioneering projects in genetically
engineered microbial pesticides and transgenic crops for insect
control. After Monsanto, Pam was founding president of Entotech, Inc.
Under her tenure as president of Entotech, the company discovered,
developed, and marketed microbial pesticides. Later, Pam left to start
up a new company called AgraQuest, Inc.,
which discovers, develops, and
markets safe, environmentally friendly, and effective natural products
for farm, home, and public health pest management. AgraQuest, which
started operations in 1995, is
launching its first product for mosquito
larvae applications. Pam has published over thirty journal articles and
book chapters on biopesticides, biotechnology applications to insect
control, and other entomology topics. She is frequently quoted in the
media. She serves on the board of Sutter Davis Hospital
and is a former
board member of Explorit Science Center and
the Davis Chamber of
Commerce.
I've had an interest in entomology since I was eight years
old. So I was sort of singularly focused on a career in entomology. I
got a bachelor's degree in it at Cornell University, and a Ph.D. in it
from North Carolina State University. From NC State, I was hired by
Monsanto Agricultural Company to head up their new insect biotechnology
program. They were putting genes into plants for insect control. I was
head of that entomology program, which was about twelve to fifteen
research people, for seven years. Then I was hired by a Danish company
called Novo Nordisk, which produces
insulin and enzymes. They were
starting a new program in biological pesticides. They asked me to start
up a new company in Davis, California, doing biological pesticide work.
So I moved from St. Louis to Davis and started up the
company. We named it Entotech. Entotech was operational for about five
years, but three years into it, I knew that Novo was not going to stay
in it. Novo Nordisk - agriculture was not their forte, and so I had
inklings that they were going to sell us. So I wrote a business plan on
nights and weekends for a new company. I couldn't leave the company
because I didn't have the financial resources to do so. I downsized our
personal spending - my husband is a social worker so he doesn't make
that much money. We saved up a lot of money while I was still working
in the company, anticipating that I would leave and not be making much
money.
I left in January of 1995 and incorporated
the new company, which we named AgraQuest, took some employees from the
old company, started up with some of our own money, but most of the
money we raised from people we knew. We raised about $500,000 to start
up the company. We sold stock in a private placement, $5,000 blocks of
stock each, and that's how we raised the money to start up.
That
got
the company up to the point where it was more attractive to big
investors. In order to continue to fund the company, we needed millions
of dollars. I just finished raising 3.2 million dollars in
extra
capital. That money is going to launch our first product, which is a
fungus for controlling mosquito larvae in water. Our second and third
products are bacteria for controlling plant diseases in agricultural
crops. Then we have some other discoveries.
So
the money will be used to hire people to move all these projects
forward. We have twelve people - we have a management team of myself, a
vice president of product development who has a bachelor's degree in
entomology, then a chief financial officer, a person who has a
bachelor's degree in chemistry, and then he has a J.D. - he was a
patent attorney. He's our marketing and business development V.P. Then
the rest is scientific staff. We have two microbiologists, two natural
product chemists, a formulation chemist, a fermentation engineer, more
product development, plant pathologist - and they all have varying
degrees of bachelor's, master's, and Ph.D.
Questions and Answers
Can
you guys each tell about how you came to your position? Were you
recruited, did you apply through resumes, along that line?
I was recruited by Monsanto. They had an on-campus recruiter at NC
State. So they interviewed several of us and decided which of us they
would bring to Monsanto. I had to give a presentation and go through a
whole day interview. I got the job that way. For Novo Nordisk, they
were trying to find somebody to head up this new company in Davis. I
ran across the Novo people because I had created a working group, an
industry consortium looking at a particular problem - insects
developing resistance to genetically engineered plants. And I began
that work when I was at Monsanto. So I was in a leadership position in
the industry. And Novo was a member of that consortium. Because of
that, they plucked me out and recruited me from Monsanto.
What
ever became of Entotech?
We sold to
Abbott Laboratories. They closed down the Davis operation. Most of the
people didn't want to move from California to North Chicago. So they
didn't take many employees. About three of my employees went to Abbott
- most of the others went into other companies. I took three. Abbott
owns all the patents and products and such that we had been working on.
How
do you spend most of your time?
I
spend most of my time focused on raising money. So it's probably
visiting people. Lately I haven't been in the office very much. When I
was heavily involved in raising money, before we raised the 3.2
million, I spent most of my time talking to investors, either on the
phone or in person, and selling them on the company - telling them why
they should invest. Now I'm over that phase. So I'm spending a lot of
time creating partnerships with larger companies. Some of our products
we might not want to develop ourselves. So I've been talking to people
at other companies, visiting them, getting out. Now we're looking for
money to expand our mosquito product in Asia - so we're looking for
Asian investors. So I guess most of my day is spent talking to people,
selling one thing or another about the company.
Have
you acquired your business skills through classes (formal education),
or just out there in the real world? Are
you involved in research as well? Could you also comment on the stability and
the differences between non-profit and private industry? I really don't
know the difference.
Yeah, that's a good question. I
worked at Monsanto for seven years, and they had a lot of resources, a
lot of courses you could take both internally and externally in the
business area if you were so inclined. You didn't have to, but I did. I
took about three courses a year. Then at Novo Nordisk, they didn't have
much in-house, but they allowed you to take a certain
number of courses every
year. I took courses at Columbia Graduate School of
Management and
other graduate schools, and took marketing - a lot of marketing
courses. So that gave me the background.
I think
the Ph.D. is a noose around my neck. I usually drop it off my name when
I'm doing correspondence because most money people will think that, if
you have a Ph.D., you're too technically oriented to know business
stuff. So I just don't even bother to put it on my name. I have to
really watch what I say in order not to get too technical, so they
don't think I'm too technical and don't know the business side.
No,
I don't do any research. But the way we're structured is that everybody
works in teams. We have a team leader for each product. They run the
research and development. I check in to make sure they're keeping to
the benchmarks that we set. Investors want to see that we're keeping to
our plan. So that's what I worry about. But the scientists run the R
and D show.
That's a really
interesting question. When I started AgraQuest, I thought it would be
really difficult to recruit people because we're small and start-up and
real risky. And we get over a hundred to two hundred resumes for every
job as well. The climate today is such that it's volatile in any
industry - there's downsizing, mergers, acquisitions, so you don't
know. We felt like we'd be less attractive as a big company, but we
found we're actually very attractive to people because we offer stock
options and the ability for a scientist to own part of the company.
Let's say we give stock options at 35 cents a share, and we go public
on the stock market at $10 a share. A bachelor's level scientist could
haul in $300,000, and they'll never have an opportunity to do that
again. So it surprised me - maybe I shouldn't have been surprised -
that that's very attractive to many scientists. It's just volatile
anywhere, and there is not as much stability as there used to be. I
think you have to remain flexible and open.