Company Renders Genders
Firm Selects Sex for Animals: Filly is Indication of Success

Rocky Mountain News, Aug. 14, 1998

By Jerd Smith, Staff Writer

Though she isn't destined for the Kentucky Derby, a tiny filly born Aug. 6 on a northern Colorado ranch represents the hundred-million- dollar future of a startup company that can dictate an animal's sex prior to conception.

Fort Collins-based XY Inc., formed in 1996, is a joint venture between Cytomation Inc. and Colorado State University Research Foundation.

The company has been using a technique known as sperm sorting to ``pre-sex'' cattle. The filly, named Call Me Madam, represents the first successful attempt in horses.

The landmark effort gives XY Inc. access to the $300 million U.S. horse breeding industry and opens doors to an animal fertility market with an estimated value of $5 billion worldwide, according to XY Chief Executive Officer Mervyn Jacobson.

But Jacobson says he's in no hurry to commercialize the product. ``It's not imperative for us to earn income too quickly,'' he said. ``I want to deliver an honest product and I don't want to undervalue what we have.''

Thanks to a licensing agreement with the U.S. government, which holds the patent on the technique, XY has the exclusive right to use this sperm-sorting procedure to determine the sex of non-human mammals in the United States. It recently acquired a British company that does similar work.

XY's work uses a tool called a flow cytometer, which does the actual sorting, and special insemination procedures developed by CSU researchers.

Jacobson said the company doesn't plan to start selling its services or doing sub-licensing for one to three years. But XY's business plan calls for it to generate about $115 million in revenue within five years of beginning commercial operations.

In the thoroughbred world, says F.A. Heckendorf, artifical insemination is frowned upon and rarely ever used. ``But if I could select the sex I think I would like that,'' says Heckendorf, president of the Colorado Thoroughbred Breeders Association.

CSU reproductive physiologist George Seidel, who developed the insemination procedures, says similar techniques are being used in humans to help stop the spread of genetic diseases associated with a particular gender.

But XY is licensed to work strictly with non-human mammals. ``This is all fairly new technology,'' Seidel says. ``But there is a tremendous amount of interest in it.''

Copyright © 1998, Denver Publishing Co.

Jerd Smith; Rocky Mountain News Staff Writer, COMPANY RENDERS GENDERS FIRM SELECTS SEX FOR ANIMALS; FILLY IS INDICATION OF SUCCESS., 08-14-1998.