Since securing a $40 million capital investment last spring, Vestaron Corp. has been assembling commercial and operating teams as it prepares for the broad launch of a brand of eco-friendly pesticides in 2020.
Anna Rath, CEO, Vestaron Corp. COURTESY PHOTO
Top executive: Anna Rath, CEO
Annual sales: Did not disclose
Full-time employees in West Michigan: 15-20
Brief description: Producer of bio-based, eco-friendly pesticides for commercial use
Advisers: Honigman Miller Schwartz and Cohn LLP (legal)
Rooted in Kalamazoo, Vestaron closed in June on an investment led by Novo A/S, a Denmark-based holding company of pharmaceutical giant Novo Nordisk A/S.
Vestaron is using the capital to expand commercialization and accelerate the development of an additional line of eco-friendly insecticides as it builds operationally, said CEO Anna Rath.
“On the heels of getting our financing under control, we have really started building out the team,” Rath said.
Vestaron’s capital raise won the life sciences category in the 2019 MiBiz M&A Deals of the Year Awards.
Other investors in the deal include Boston-based Anterra Capital; Syngenta Ventures, the corporate venture capital arm of Swiss agricultural chemicals company Syngenta AG; New York City-based ag-focused private equity firm Continental Grain Co.; Chicago-based Cultivian Sandbox Ventures; Effingham, Ill.-based Open Prairie Ventures; and Vancouver, British Columbia-based Pangaea Ventures Ltd.
Early financial backers of the company included Grand Angels and Michigan Accelerator Fund I, both based in Grand Rapids.
Vestaron developed a new biopesticide that’s based on spider venom and holds promise to create an entirely new field in the $18 billion global insecticide market. The effect could be similar to what the development and emergence of biologic drugs have done for the pharmaceutical industry.
Throughout 2019, Vestaron prepared to launch its first commercial products for indoor growers and farm fields by assembling data from field studies.
“That’s going to set us up for, we think, a tremendous commercial year in 2020,” Rath said. “We feel good about everything having come together as it needed to.”
Rath has described the science and technology behind Vestaron’s new Spear-branded products as “our own little revolution” in agricultural chemistry where “great safety and environmental attributes will play a major role.”
Vestaron’s role in that potential industry transformation drew the interest of investors with the ability to support larger capital needs. The deal was the first time Novo, a major life sciences investor in pharmaceuticals, invested in a company involved in agricultural technology.
“We take great pride in the fact that while they had been interested in making an ag-related investment for some time, we were the first one that gave them the right set of factors that caused them to take the leap,” Rath said.
Vestaron began moving toward the marketplace following a strategic decision by company directors at the end of 2017 to commercialize the products on its own. Directors also determined that the company “should be more than a platform company, that it should be a company that’s capable of manufacturing and commercializing its own products,” Rath said.
That required additional capital with new and larger investors who “really shared and could support the more commercially-oriented vision of the company going forward,” she said. Vestaron first connected with lead investor Novo after an introduction from Anterra Capital, a prior investor in the company.
In seeking a larger capital investment, Vestaron sought to connect with investors well-versed in the ag-tech industry.
“One of the things that I really wanted to do was make sure that we were not only attracting capital, but attracting high-quality capital, and that meant investors who would continue to be able to support the company through its development going forward and also folks who had some angle from which they would be able to be helpful to the company as more than just capital,” Rath said. “I am very happy with not just the amount of the round, but the quality of syndicate and what that will mean both for the ability of the company to reach its potential, but also the prospect for the help those investors can provide in enabling us to reach that potential.”
As it progressed this summer toward the marketplace, Vestaron opened new corporate offices in North Carolina that will house administrative staff in marketing, finance, accounting, product development, and other areas. R&D operations will remain in Kalamazoo, where the company began in 2005.
Setting up corporate offices in North Carolina’s Research Triangle positions Vestaron to take advantage of the “really strong agricultural ecosystem (with) both large and small agriculture-focused companies” in the region, while maintaining R&D in Michigan that employs 15 to 20 people.
“We love Michigan. We think it’s a wonderful place to have an R&D team, and obviously the company has benefitted from some tremendous support in the state over time,” Rath said of the Kalamazoo R&D operations. “It just seemed like this was the right decision for where the company was at right now as we are developing an increasingly national presence and taking on that next phase of our life.”
FINALIST: Trident Labs acquires TOMA Biosciences
Holland-based Trident Labs LLC expanded into precision medicine with the January 2019 acquisition of TOMA Biosciences, a Forest City, Calif.-based company that was started in 2013 using technology developed at Stanford University.
The company developed a next-generation process for DNA sequencing on tumors, enabling oncologists to match stage-three and stage-four cancer patients with the right drugs that work best on their tumors.
“What used to be kind of a thought is now reality in the fact that we look at a tumor and we determine its genetic makeup and determine what specific type of cancer it is,” CEO Dan Kelsey said. “We determine exactly what the origin of the cancer is and then we basically pair it up with the latest FDA-approved medication.”
The acquisition was named a finalist in the life sciences category in the 2019 MiBiz M&A Deals of the Year Awards.
All of the assets and personnel at TOMA relocated to Holland after the acquisition. Trident Labs, with a workforce of 25 people, also tests water samples for PFAS, as well as performs toxicology tests on urine and saliva samples for hospitals and physician offices.
In acquiring TOMA, Trident can market a “very strong proprietary product” to hospitals and oncology practices through its well-established national sales force, Kelsey said.
“Trident also needed some diversification and that definitely diversified us,” he said. “That’s really what we were after, and it brings great technology to West Michigan that wouldn’t necessarily be here.”
Trident is in the process of bringing aboard what Kelsey describes as “medium-sized” oncology practices and hospitals. The company presently works with 11 practices and hospitals in Michigan, Oklahoma, Kansas, Pennsylvania and California.