Xylogenics, Inc., a bioengineering company, and Lallemand Ethanol Technology, a global provider of yeast to the fuel ethanol industry, signed an exclusive agreement to

develop and commercialize genetically enhanced ethanol producing yeasts for 1st generation fuel ethanol production.

Xylogenics is using its extensive knowledge of yeast genomics in cooperation with Lallemand to engineer a new class of industrial ethanol yeast strains. These enhanced yeasts will increase fermentation yield, reduce fermentation costs and potentially increase ethanol plant fermentation capacity compared with current commercial strains.

Lallemand will be

responsible for process development, manufacturing and commercialization of the new

yeast. Under the terms of the agreement, Xylogenics will receive patent license fees and

royalty payments.

Xylogenics, Inc is a small company that began in the Indiana University Medical School with research by Dr. Mark Goebl and his assistants on yeast strains with the intent of studying their potential in curing disease. Xylogenics has created a proprietary bioengineered yeast strain that has the ability to breakdown cellulose. Experimentation is ongoing with switchgrass, a native prairie grass that can be gown in most of the United States and Canada.

The advantage of the yeast is that it can produce ethanol using a non-food material and that it can increase current production by 30% or possibly more making it very economical. The strain of yeast can be genetically optimized for specific sources making it possible to use a regional source and produce ethanol where it will be used.