Minutes 2007

CANADA YEW ASSOCIATION
Fredericton NB, April 24, 2007, 10AM

Meeting Notes

Ken Farr's powerpoint presentation

Compiled by Stewart Cameron, CFS-AFC

Participants
Stewart Cameron, CFS-AFC, NB
Bill Hamilton, NB Dept. of Natural Resources
Rick Kowalski, NRC-IRAP, NB
John Letourneau, CFS-AFC, NB
Sharon Pond, CFS-AFC, NB
Kerry Scott, Active Botanicals Co. Ltd., PEI
Eric Smith Chatham Biotec Ltd., NB
Ron Smith, VarFor Ltd., NB

1. Welcome and Introduction:
Ron Smith welcomed those attending. Round table introductions were made.

2. Approval of the Agenda
The agenda was approved as submitted.

3. Member Updates
E. Smith provided a summary of Chatham Biotec Ltd. activities and concerns. CBL are using mechanized harvesting, and have plantations. Their manufacturing operation has produced 5 kg. of paclitaxel, and they are working on increasing efficiencies. They expect prices to eventually decrease to $50K per kg.

• Paclitaxel prices currently are dropping. With the Phytogen operation purchase by NPI, the price declined from $160K to $130K per kg, and is expected to continue.
• In general, there is additional downward pressure on prices due to mechanical harvesting in Europe, and plantations (yew nurseries) in China with a reported paclitaxel production of 35 kg last year and 70 kg this year. The Aventis patent will expire in 12 months, allowing Asian manufacturers to use the technology.
• Canada yew may yet show up in China: Weyerhauser currently has plants for sale.
• They are still cutting 6-8” lengths, but it remains difficult to do so: others are using a 12” cut in the Gaspé and paying $0.59/lb, whereas CBL pays $0.85/lb to the harvester, plus $0.10 to each of the landowners, the buying station managers, and the marketing boards. Some local cuts rejected at CBL buying stations were averaging at 22”.

4. General Overview of the Industry
A description on whole plant harvesting was also presented [E. Smith]. PQ companies are using feller-bunchers for mechanical harvesting, with a large grapple to allow the whole plants to be chipped into a bin. Areas being cut with this method are not sustainable, but are a liquidation harvest of blocks to be clearcut, with the Taxus being removed in order to do replanting.

• [Kowalski] Was the liquidation observed? Is there any marketing board regulation? [E. Smith] Yes, in Morrisey where the clearcut preparation was being done. With wood prices down, it is jobs that are a [board] priority.
•  [Hamilton] Can the CYA endorse this? Will the Taxus be wiped out? [R. Smith] If there is a management plan in place for a large block it can be endorsed, but it is not sustainable. The abundance of yew will definitely be reduced.
• [Hamilton] If a block of land is to be site prepped and planted, is that sufficient rationale for a liquidation harvest of the site? [R. Smith] There is no formal policy for the liquidation of Taxus, but the priority is that the land is being harvested first and foremost for timber. [E. Smith] The timber resource prevails.
• [Scott] The point is that the resource is being sold. Import to China now requires extensive documentation, which is looked after by the CITES importation office in China, and the imports are being handled effectively. Letters to China may come from either the seller or the province specifying that sustainability is being maintained. China is a good example of self-policing, as a result of losing the capability to sell their own biomass.
• [E. Smith] There is a need to have the provinces on side with the CYA. [R. Smith]. As an association, we have never been able to take the further step to write letters. That was part of the idea of having formal membership and a Terms of Reference. [Scott] One advantage of having a smaller group now is that fewer accommodations are needed to make sure all members are included.
• [Hamilton] How difficult is it for harvesting 3 years of growth to compete with mechanical harvesting? (Two companies are reported to be cutting 14-16 inch material.) [Scott] Biomass prices have decreased somewhat but the market is still reasonably strong, though smaller.
• [Kowalski] Is quality preferred over quantity? [Scott] Yes, there are requirements for biomass with 250 ppm minimum and 300 ppm average.
• [Hamilton] On Crown land in NB, DNR wishes to use the CYA guidelines. However, if others are using different guidelines (i.e., mechanical harvesting) is this generating unfair competition elsewhere? Would jobs in NB be at stake?

Kerry Scott (Active Botanicals Co. Ltd) described some of the current market factors affecting the biomass market. With current semi-synthetic product from 10-DAB III out of Europe, it has become more difficult to compete. Surprisingly, there is still a market for biomass, and this year is likely to be a reasonable year for sales. However, the market remains volatile. BMS is enforcing their patents in China as well, requiring those companies infringing on them to cease and desist.

• [Kowalski] Can you explain further about BMS and China? [Scott] BMS bought patents from U. Florida and have been enforcing them to maintain corporate value in their product. Prices of $50-80KUS [per kg] for sales have been recorded – well below the market price for FDA approved product – so BMS has incentive to enforce their patents, plus semi-synthesis from other compounds (9-DHB III, cephalomannine) is also an option. BMS is reportedly enforcing their IP rights, even for the Chinese domestic market.
• [E. Smith] Taxolog is alleged to have a new method that does not conflict with BMS. Taxolog is Robert Holton’s Florida State University company. However, the problem remains that the Aventis patent expires in 1-2 years, at which point it will be freely available to all. Aventis is also suing companies in China, but they are reportedly still making 40-60 kg of docetaxel.

5. Update on R&D
[Cameron] The website is up and running at www.canyew.org. It is hosted on an independent server (Blacksun), and currently the annual hosting fees ($150/yr) are paid for by CFS through Cameron’s account. The website contains a brief history of the association, the P,C & I approved by the open membership in 2005, the sustainable harvesting guidelines of 2002, and minutes of all meetings. Some initial comments on a proposed method for auditing, plus a suggested set of rules for membership are also included.
[Cameron] The Taxus domestication project is continuing, though now supported through CFS funding only. There are five separate but inter-related parts to the project:

• Provenance testing of 1200 clones: PEI and NS sites have both been harvested and their taxane content and growth are being measured.
• Field testing of the effects of cultural practices (fertility, organic amendments, spacing) on growth: years 1 and 2 of the four year trial at two sites (NB and PEI) have been harvested and analyzed. A preliminary report was presented at the Plant Growth Regulator Society of America meeting in 2006. A second set of experiments to determine whether shade influences taxane concentrations is planned for harvest during the fall of 2007.
• Vegetative propagation: an M.Sc.F. thesis on the rooting of Taxus cuttings was completed (by L.Holloway, UNB) and a poster was presented at the 2006 PGRSA meeting. The somatic embryogenesis component of the propagation work has been suspended for now.
• Elicitation of taxane production: focus has shifted from chemical to abiotic elicitation; but trials are also suspended temporarily.
• Taxane analysis methods: a rapid and relatively low cost analytical method has been developed and is being tested for application in the provenance trial material.
• A manuscript on the seasonal changes in taxane production on woodland sites has been submitted for review to Pharmaceutical Biology.

Comments on R&D:

• [Scott] Is the second cut [of the re-harvest of a site] being analyzed anywhere for its paclitaxel content? In reharvested sites, the taxane content may be going lower. [Cameron] This kind of information wold be useful in determining whether to crop for hedged plants or seedlings. [R. Smith] Biologically speaking, rapidly regrowing plants may have a lower taxane content.
• [Kowalski] What is the CBL experience? [E. Smith] The content seems to be decreasing – there are fewer places where the minimum taxane specification can be met. [Cameron] A wide yearly variation was also seen in the seasonal change study.
• [E. Smith] According to Jeff Melschau, the T. canadensis plantations (70,000 plants) look excellent. In his opinion Canada yew can grow just as well as T. hicksii or brevifolia. He noted that Weyerhauser is looking at alternative plantings for their woodlands and other NTFP’s as well.
• [E. Smith] With regard to semi-synthesis, CBL spent over $900K in 2006. They now have 5.5 kg of semi-synthetic paclitaxel from 9-DHB III and have applied for a DMF. There may also be other taxanes in Canada yew of use as well, and they are looking to get an additional 3-4 times the amount of native paclitaxel from the biomass.
• [E. Smith] CBL have produced a number of hand-held mechanical harvesting units for evaluation and have selected two, which are currently be tested and modified. This technology is needed to be Able to harvest at the current price of $2.80/lb for biomass. Basically the machines can harvest and collect. Manually it is only possible to collect 30 lbs/hr/person sustainably, and a rate of 100 lb/hr/person is required to be competitive with T. baccata.

6. Status of Criteria and Indicators
[R. Smith] Considerable effort has been put into the P, C&I by the CYA. Would the association like to see this document published? [Cameron] An oral presentation on behalf of the CYA is scheduled for the Natural Health Products Research Society national conference “Tradition to Technology” in mid-May in Saskatoon SK. The paper will emphasize how the guidelines were independently formulated, stakeholder-driven, and have been pilot-tested by NB-DNR.

• [Hamilton] The guidelines have worked as a way – albeit imperfect – to use a structure to control harvesting. They may be worth publishing, but where? [R. Smith] Decent progress was made, and they are perhaps sufficiently unique to publish. There is a new NTFP journal which might be suitable.
• [Hamilton] One-third of the harvesting is done on private land – does this fact alter the value of publishing as it might relate to other NTFP sectors? [Scott] Also, the membership that voted on the P, C&I is informal. Is a formal indication of membership needed? [R. Smith] What form should it take?

Re: the inclusion of mechanical harvesting in the P, C&I, [Scott] the CYA has agreed that the philosophy or underlying intent is sustainable harvesting. However, it would be preferable to see a unit before giving it approval by the CYA.

• [E. Smith] There are fewer harvesters available to hire, probably due to out-migration to the West, and they are older. Only 132 harvesters registered this year, but this may be due to a decline in the biomass market as well (28 containers shipped in 2007 vs, 66 in previous years). Mechanical harvesting is needed to become more competitive.
• The overall length taken in mechanical harvesting varies (e.g., about 2-10 inches), but overall, only about one-half the biomass per plant is taken compared to manual harvesting.

An update on CITES from Ken Farr (CFS-Ottawa) was presented by R. Smith. [The presentation is appended.] The following are from Ken Farr’s notes:

• In 1994 Taxus wallichiana (Himalayan yew) was the first yew species to be CITES listed. However, there was difficulty in telling which species, and from where, was being used for paclitaxel production. This was seen as a failure of CITES to capture a commodity in trade.
• In response, it was decided to include all Taxus species, but T. brevifolia, T. globosa, T. floridana, and T. canadensis were excluded.
• An additional problem is the use of Taxus in horticulture – many yew species are sold in the horticultural trade. An exception for potted stock was proposed, but it was determined that this would not resolve the problem.
• Now, two quite different proposals have been put forward. The US proposal seeks to exempt all parts and derivatives of T. cuspidata and its hybrids. The Swiss proposal limits the exemption to named cultivars and hybrids, and does not include biomass and refined extract.

7. Future of the CYA
[R. Smith] The level of interest is in continuing the CYA is unclear, and what form and structure the organization should take. Should there be a formal sign-on? In the past, organizations could nominally call themselves members but not necessarily agree with, or abide by, the P, C&I.

• [Hamilton] The last statement defining membership was too strongly worded. The organization needs to have a statement that, within their powers and capabilities, members will abide by the P, C&I to the best of their ability. [E. Smith] There has been feedback from provincial governments: management plan policies do not permit their joining the CYA.
• [Cameron] Can an appropriate statement of membership be crafted? Hamilton will consult with others in government in ON, NF, NS and PEI.
• [Scott] two suggestions: that as a member, their activities may be inspected by whatever authority the CYA deems to be appropriate, and second, perhaps there should be different categories of membership – commercial vs. advisor vs. government.
• [E. Smith] Would video conferencing be a better alternative to face-to-face meetings, given the costs of doing so, plus the restrictions on government travel?
• [Hamilton] Looking to sustainability and utilization [as goals], and meeting 1-2 times a year is sufficient rationale to have an organization.
• [E. Smith] Perhaps the CYA could try to meet once a year in person, and at other times by laptop-based communications.
• [Hamilton] How much should a membership be? [E. Smith] Start off with a minimal $50.00 per member or a voluntary greater amount. It was agreed by all those present to do so. A notice will be sent out to those on the current mailing list.
• [Scott] For the time being, whether commercial or advisor members, all should be asked for the same fee. [E. Smith] It should be noted that provincial governments can net $10K per year or more and may be able to afford a greater contribution.
• [Cameron] To get started, all will be asked for the $50.00 contribution to become active CYA supporters without written stipulations. Cameron will look into opening a CYA bank account. For companies, a mail-in form is needed with spaces for listing members to accompany the amount enclosed.