*Today's Special: Cloneburgers , Clone Milkshakes & GM Fries
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Added: Mar 28th, 2007 9:04 AM

by: Catherine Larkin

Mark Walton, head of the world's largest animal cloning company, sees
his biotechnology lab in Austin, Texas, as the next frontier in food
production.

Nine months ago, scientists at Walton's closely held ViaGen Inc.
extracted genetic information from customers' prized cattle and
transferred the DNA into bovine eggs to make embryos. Now, 75 miles away
at the 300-acre Hillman Ranch in the town of Cameron, surrogate mother
cows, carrying the embryos, are giving birth to calves that are clones
of the clients' finest cattle.

This generation of test-tube bulls and cows may be the first whose elite
genes end up in America's meat and milk. U.S. regulators are set to
approve the cloning of animals for the food supply as early as this
year. This action will open the way for food producers to use copies of
genetically superior animals to make bigger, stronger herds and,
perhaps, tastier products.

``ViaGen has this huge potential to be a really significant company in
animal agriculture on a global basis,' Walton says, sitting in an
office, decorated with collages of cow photos, down the hall from the
lab. He says the market for cloning in the U.S. alone could be at least
$500 million a year.

Wary consumers and organic food suppliers have indicated they may spurn
products from cloned animals no matter what regulators decide. ViaGen
and competitors such as Cyagra Inc. of Elizabethtown, Pennsylvania, are
working to gain public support.

Dean, Kraft Foods

Dean Foods Co. of Dallas, the biggest U.S. dairy distributor, has said
the company won't use milk from cloned cows even if the technology is
approved because of concerns of consumer backlash. Other major food
companies, including Kraft Foods Inc. of Northfield, Illinois, say they
will decide after regulators act.

``We'll evaluate the consumer benefits and acceptance in considering
whether or not to use ingredients from cloned animals,' said Claire
Regan, a spokeswoman for Kraft, the world's second-largest food company,
after Nestle SA.

The public attaches ``horrific connotations' to cloning even though
``it's just fine-tuning what people have done for thousands of years in
breeding livestock,' said Gregory Pence, a professor who teaches medical
ethics at the University of Alabama at Birmingham. Artificial
insemination is already used routinely on ranches, he said.

An eager proselytizer for cloning, Walton, a 53-year-old scientist with
a background in plant genetics, says he has become used to the initial
reaction he gets when people imagine cloned sirloin on their dinner
plate: ``Oh, gross.'

Curly Tails

A tan-and-white three-week-old longhorn calf -- a cloned offspring --
gamboling around the Cameron ranch, brings a smile to Brian Bruner,
ViaGen's director of animal operations. The calf and all 12 of its
identical ``sisters' share an uncommon trait: their tails curl when they
run or become excited, Bruner says.

ViaGen's several hundred clients count on consistency, and they pay top
dollar for it. One cattle clone costs $15,000, about 10 times the price
of a typical two-year-old cow. ViaGen lowers the price by more than half
for bulk orders.

The Hillman Ranch is one of four that ViaGen leases in Texas. This year,
the company expects to clone almost a thousand cows, pigs and horses, up
from 62 last year.

About 80 percent of the animals will go into the entertainment business
as rodeo horses, bucking bulls and show cows. Cloning allows ranchers to
replicate a prize-winning animal or replace one that is injured or aging.

Some of the livestock will go to ranchers betting that the U.S. Food and
Drug Administration will soon lift a five-year voluntary moratorium on
the sale of food from clones and their offspring.

Regulators' Plans

The FDA announced Dec. 28 that a four-year review of data showed milk
and meat from cloned cows, pigs and goats posed no increased safety
risks. Regulators have said they may make a decision to approve sales of
cloned food later this year after reviewing public comments submitted by
an April 2 deadline.

Members of the U.S. House and Senate and a state legislator in
California have introduced bills to require special labeling on food
from clones or their offspring. The FDA says that isn't necessary and
would be difficult to enforce. The products are the same biologically as
those from other livestock, agency scientists say.

Surveys show that many American consumers are reluctant to eat animals
derived from biotechnology. A third of adults said they would never buy
milk or meat from cloned animals even if the FDA determined it was safe,
according to a poll released Dec. 14 by the Center for Food, Nutrition
and Agriculture Policy at the University of Maryland in College Park.

`No Need'

``We just don't understand why we would want to take the risk here that
this kind of technology represents,' says George Siemon, chief executive
officer of the LaFarge, Wisconsin-based Organic Valley cooperative,
which includes more than 940 farms in 27 states.

Conventionally bred cows produce top-grade products so ``there's no need
for cloning,' he said.
More than 3,000 people have written to the FDA on the issue, with some
saying that cloning is ``messing with God's hands' and forcing animals
to ``live painful, short lives.'

The Center for Food Safety, a consumer advocacy group in Washington,
submitted a 32-page critique of the FDA's report that said the agency
relied on incomplete evidence and misrepresented its findings.

Carbon-Copy Creatures

Cows groan and shuffle for position as a worker at Hillman Ranch offers
protein pellets from a yellow bucket. A chocolate brown Beefmaster calf
chases after its amber-colored, mixed-breed mother. The cattle are an
array of breeds and colors because ViaGen transfers its cloned embryos
into surrogates chosen solely by size and how much milk they can produce
for their calves.

The ranch isn't an assembly line of carbon-copy creatures. At most,
ViaGen has created 18 identical copies from one cow, not hundreds or
thousands, says Bruner, a 38-year-old who grew up on a ranch.

ViaGen's work is so controversial that the company considered using some
word other than ``clones' to describe its animals until it found that
hiding the term only sparked more suspicion among consumers, Walton
said. The company decided to concentrate on educating the public,
largely on the Internet.

One such lesson: Most milk or meat sold to the public would come from
the conventionally bred offspring of clones because the costly
replicated animals would be used mostly for breeding, Walton said.

``If you choose to believe that this is not a good technology for
anybody to be using, that's great, that's your choice,' Walton said. ``I
just want you to be able to make that based on fact and science, not on
science fiction.'

Dolly the Sheep

Cloning has been a matter of public fascination and ethical debate since
Scottish scientists announced in 1997 that they had cloned a sheep named
Dolly. Concerns about the safety of eating cloned animal products arose
in part after Dolly was euthanized at an early age, suffering from an
incurable lung disease.

The first start-ups attempting to make a business out of the technology
went bankrupt or were bought out by competitors. ViaGen was founded in
2002. The next year, its parent company, closely held Exeter Life
Sciences of Phoenix, bought the patents used to produce Dolly.

Exeter is a holding company created by billionaire John Sperling, best
known as founder of the Phoenix-based Apollo Group Inc., which runs the
University of Phoenix and other for-profit education programs. Sperling
also started Genetic Savings & Clone, a company based in Sausalito,
California, that helped make the world's first cloned domestic cats
before going out of business last year for lack of demand.

No Profit

ViaGen has yet to make a profit, though Exeter is confident that will
change once the FDA approves cloned food, says Exeter Chief Executive
Officer Jonathan Thatcher. The cloning company may eventually be
acquired by a larger biotech company, he says.

Walton joined ViaGen as president in July 2005 after more than two
decades working with biotechnology in plants and farm crops. He says
some scientists he talks with are surprised that the technology, long
used to genetically modify rice, corn and soybeans, is being applied to
animal cloning for food.

Cloning begins in ViaGen's Austin lab, typically when a client sends in
a swatch of skin the size of a pencil eraser from the animal that is to
be replicated. The process requires living cells. ViaGen has made clones
from animal carcasses that were less than five days old and kept
refrigerated.
Inserting DNA

Scientists grow copies of the cells in a lab dish, and then extract
genetic material under a microscope with the help of digital cameras and
fluorescent imaging. The DNA from the animal to be cloned is inserted
into an egg whose nucleus has been removed.

The embryo that results is packed in a culture medium with a portable
incubator to keep warm and is mailed overnight to the ranch, where it's
implanted in its new mother.

There is a waiting list of clients seeking clones, Bruner says. ViaGen
plans to triple its staff to 125 employees, expand its ranches and buy
more surrogate mother cows to meet demand. The company also wants to get
into the market for semen sales by breeding copies of its own favorite
cattle and selling their genes to producers.

For a $1,500 fee, ViaGen says on its Web site that it will preserve the
genes of pets in liquid nitrogen for future use, though the company has
no plans to clone cats or dogs commercially.

Walton won't reveal ViaGen's revenue, although he predicts sales will
grow 10-fold within five years. Its competitor, Cyagra, produces 60 to
70 cloned cows a year, according to spokesman Steve Mower, who declined
to discuss his company's finances.

Robert, Randolph, Samson

ViaGen calves are identified by numbered tags pinned to their ears to
indicate their cell lines. By the time they leave the Hillman Ranch,
after one to seven months depending on the client's contract, ranch
workers have usually picked more- affectionate names.

The young show cow tagged #182 is known as Allie. The trio of #206
Beefmaster ``brothers' are Robert, Randolph and Samson.

Clients sometimes keep these names, which makes it easier for the ViaGen
staff to check up on them after they are shipped to the company's customers.

Cloning could capture 10 percent of the U.S. dairy and beef markets and
50 percent of the pork market, Walton says. The pork market is less
fragmented than the cattle business, Walton said, and ViaGen already has
an agreement for ``genetic research' with Smithfield Foods Inc. of
Smithfield, Virginia, the world's largest pork processor.

Global Pressure

ViaGen also is anticipating international demand, Walton said, although
the U.S. would be the first nation to approve cloned food. In December,
the company opened its first office outside the U.S. in Querétaro, Mexico.

``Over the next 10 years, you'll see continued pressure globally for
improvements and increases in productivity, and technology like cloning
can have a significant role to play in solving those bigger problems,'
Walton says.

Cloning is unlikely to have such a dramatic effect on cattle producers
because most of them already have isolated preferred genetic traits
through breeding, says Morgan Paisley, an analyst at Alaron Trading
Corp. in Chicago.

``It would complement what we've been doing, but we're pretty good at it
already,' Paisley says. ``It would be a nice finishing touch, but I
don't think it's something that would revolutionize anything.'