By Robert Baun
Fort Collins Coloradoan

Tuesday, June 5, 2001

XY Inc., a Fort Collins-based biotechnology company, keeps galloping toward commercial application with its technology to predetermine the sex of horses.

Three years ago, XY bred the first sex-selected horse with the birth of Call Me Madam.

Since then, 18 foals have been using the sex-selection process, in which a stallion's semen is presorted before artificial insemination in a mare.

The latest XY progeny, a 1 month old colt named Star Man, crossed a new scientific threshold for the company. His was the first birth to occur after the semen was "shipped."

In order to mimic the shipping process, XY scientists delayed the artificial insemination until 18 hours after the semen was sorted. The 18-hour period represented a common elapsed time for a domestic shipment, said Mervyn Jacobson, XY's chief executive officer.

Reliability of the semen after shipping reinforces XY's expectations of commercial market, which Jacobson estimates at $300 million in the United States alone. The company's scientists have also proven that semen can be frozen and thawed before successful artificial insemination.

Pre-selection of a horse's sex is important because breeders seek the "correct" sex based on their needs.

According to Equine Athlete magazine, males are preferred for jumping because they possess greater muscle mass. Polo breeders want mares because they are quicker learners and are considered more agile on the field.

Sex-selection can save millions of dollars in stud fees and minimize the cost of breeding unwanted horses. Horse breeders spent $548 million on stud fees and yielded $3 billion in horse sales in 1994, according to Equine Athlete.

Similarly, XY is applying its technology for breeding livestock. The dairy industry, for example wants females for milk production. Dairy farmers exterminate millions of unwanted bull calves each year.

Another application is for supporting endangered species. If more females are born to become mothers, repopulating a species could occur faster.

XY believes the sex-selection process in the horse industry is worth about $5,000 per case, including sorting, insemination, breeding and care of the mare.

XY could start commercial breeding with the sex-selection process as soon as this year at its Moondrift Farm facility in Fort Collins. Star Man was born at Moondrift, which XY purchased in January.

"We've done initial market research that's suggested, in the early days, demand (for the XY process) is going to be greater than supply," Jacobson said.

Potential customers are already "lining up" for the service, he added.

Eventually, XY plans to license its technology to other firms around the world that would pay for the right to conduct the breeding process. The company is in talks with a commercial livery in Argentina for licensing rights, Jacobson said.