Australia's first locally-owned plant gene company, Hexima Limited, was launched last week at the University of Melbourne, by Victorian Agriculture Minister Mr Pat McNamara.

Hexima will commercialise a novel gene which acts as a natural insecticide in plants, potentially saving farmers worldwide hundreds of millions of dollars.

The company is a joint venture between the University of Melbourne, key members of the research team and Australia's largest farmer-owned company, Pivot Limited.

The gene, identified by researchers in the University of Melbourne's Plant Cell Biology Research Centre, will be used first to develop insect-resistant varieties of cotton.

Pivot has invested $1.3 million in Hexima over three years to support development of the gene, which has been patented in Australia and New Zealand and has patents pending in the USA and Europe.

Director of the Plant Cell Biology Research Centre, Professor Adrienne Clarke, speaking at the launch, said the technology was based on a gene which encodes a proteinase inhibitor that works in an insect's gut to prevent digestion.

"The insect cannot digest what it has eaten, it can't grow, and it becomes too weak to fly. Insect larvae similarly become so weak they can't wriggle out of their skins to mature into adults. When the plant they are on waves in the breeze they just fall off," she said.

She said the gene was an accidental discovery of Plant Cell Biology Research Centre scientists who were working to clone a gene which controls sexual mating in plants.

"Dr Marilyn Anderson, who was then working in our laboratory (and is now at La Trobe University) discovered that the gene encoded a series of proteinase inhibitors and saw its potential power against insects.

"She discovered that, in fact, it has six individual units of proteinase inhibitor, hence Hexima. Each of these could potentially inhibit a different enzyme in the insect gut."

Professor Clarke said the researchers saw the gene as so important - although the way forward was not yet clear Ð that they patented it.

"They subsequently discovered that the natural role of the gene in plants was as a deterrent to keep insects from feeding on the plant's female reproductive parts.

"The researchers reasoned that if the gene worked in one part of a plant it might work elsewhere, for instance, in the leaves where it could offer further protection against insect damage.

"Tests using tobacco plants as a model showed the gene was a very effective insecticide.

Professor Clarke said the next step was to decide whether to licence the technology to a multinational, as has happened in the past, or to try to keep it in Australia.

"We saw that the technology in general - not necessarily this particular gene - would be the critical element. If we had no control and no ownership of any of these genes in Australia we would be forever at the mercy of multinationals. Farmers would have their margins set for them. They could well become tenant farmers in their own country.

"Marilyn and I presented our findings to the board of Pivot Limited and explained why this technology was going to be a defining advance in the future of agriculture - and the outcome is Hexima Limited."

"We now have the first agriculturally important gene owned by an Australian-held company. This is not only an important symbolic step - we also now have a vehicle in Australia that other inventors can use for developing and inventing their agriculturally valuable genes," she said.