Overview of TERMILONE^®

TERMILONE^® is the registered Trade Mark for the natural oil that is extracted from an Australian native tree called Eremophila mitchellii (also known as False Sandalwood or Budda).

Chemical analysis of the raw oil reveals that up to 80% of its total volume is made up of compounds based on a chemical called Eremophilone. It is the mixture and bioactive synergy of the 4 main Eremophilone compounds that causes the actual toxicological effect on the termites. The individual Eremophilone compounds have been further fractioned and tested for termite efficacy with positive results; however it is the combination of the Eremophilone fractions in a natural state that provides the best results.

It is from this discovery that BioProspect has built and implemented a development program for the TERMILONE^® product.

Research and development activities performed by BioProspect and its science contractors have concluded that the compound has definite activity for the control and treatment of termites.

TERMILONE^® has the following characteristics:

• Natural product derived from an endemic Australian tree species
• Significant activity for the control and treatment of termites
• Very low toxicity
• Multiple modes of activity – this determines what market segment the product can be used in.
• Chemical structures have been isolated and determined
• PCT Patent application to protect IP

The development project is guided by the type of regulatory route the company is taking.

TERMILONE^® - Background to Discovery

Observations made on several fence-posts belonging to an old fence in southwest Queensland suggested that the timber from which the posts were hewn from were termite resistant. This conclusion was made because the fence line was reputedly over 100 years old, located in an active termite area and other posts belonging to the same fence had been attacked by termites.

Initial termite efficacy evaluations on the oil extracted from the fence posts was conducted by BioProspect and The Centre of Phytochemistry and Pharmacology at Southern Cross University. The studies investigated direct toxicity, barrier and choice tests against subterranean termites. The results concluded that TERMILONE^® oil had termiticidal activity that was suitable for further evaluation.

Fence line

BioProspect conducted further research on TERMILONE^® through a Biotechnology Innovation Fund (BIF) grant to further assess the viability of TERMILONE^® as a termiticide. An overview of BioProspect research is below.

Termites

Termites are a global problem. Economically, termites are considered the most destructive wood and cellulose-consuming insect in the world. Subterranean termite species live underground and are the most economically important species that affect houses, buildings and cellulose based products. In Australia, there are approximately 25 species of the 350 known termite species that are of economic importance to timber-in-service buildings. Of the ‘25’ economically targeted species, Australian researchers consider that there are only 5 types that account for the majority of the damage. Most termites actually provide assistance to the environment in terms of nutrient recycling and soil aeration.

Termites ARE NOT ants. They are more closely related to cockroaches! The name ‘white ant’ is an Australian colloquialism and should only be treated as such.

Termite infestation destroys a telephone pole

Nasutitermes exitiosus is a subterranean species that occurs throughout southern Australia from southern Queensland to south-western Australia. N. exitiosus attacks wood in the ground and also in-service timber and prefers the sapwood of hardwood timbers.

Coptotermes frenchi is a subterranean species that occurs in northern Queensland, the majority of New South Wales and parts of Victoria and South Australia. C. frenchi is a forest pest species that attacks living trees and causes extensive damage to buildings particularly in Canberra.

Coptotermes acinaciformis is the most destructive subterranean termite species in Australia and is distributed over the entire mainland of Australia. C. acinaciformis attacks all in-service timber, forest, ornamental and fruit trees.

Mastotermes darwinensis is the largest subterranean termite found in Australia and accounts for significant damage in the tropical areas of Queensland and Northern Territory.

A Coptotermes Soldier Termite

Australia is considered the third largest market for termite management systems behind the US and Japan. Termites cause damage of an estimated $780 million per year to Australian homes and CSIRO data indicate that termites attack one in three homes at some stage of the home's life. Termite control in the USA is estimated to exceed $US1.0 billion per annum and replacement of termite damaged timber to exceed $US3.0-4.0billion per annum internationally.

Research & Development with TERMILONE^®

Research was conducted on TERMILONE^® and it has revealed that the deterrent and contact efficacy characteristics would be the most suitable forms of market fit.

The oil revealed the following key characteristics:

• TERMILONE^® kills termites at low concentrations with a direct contact application.
• TERMILONE^® is an effective barrier where termites will avoid any area or surface that is treated.
• TERMILONE^® demonstrates longevity in a range of conditions.
• TERMILONE^® can be used to impregnate timber and other building materials.
• TERMILONE^® has very low toxicity

Direct toxicity
The aim of these studies was to determine direct toxicity of various TERMILONE^® concentrations against several species of subterranean termites.

In summary, the results indicated that the speed of mortality from TERMILONE^® make it suitable for use as a termiticide. In Nasutitermes exitiosus, concentrations of 0.20% w/v (weight per volume) gave 100% mortality in 3 hours. Coptotermes frenchi had a similar high susceptibility and TERMILONE^® was efficacious against Coptotermes acinaciformis at 0.25% and 0.5% concentration, although this species tolerated TERMILONE^® better than the other termite species as indicated by the longer mortality times.

Barrier evaluations
The aim of these studies was to determine the effect of a range of concentrations of TERMILONE^® in barrier evaluations against two species of termites.

In summary, the results show that eight-month old sand initially treated with 20,000ppm TERMILONE^® remained an effective barrier, and prevented penetration by C. acinaciformis for a challenge period of 21 days indicating TERMILONE^® displays significant longevity.

TERMILONE^® is an effective barrier against termites. The oil kills termites in barrier applications and as the barriers age repellency continues.

Termite barrier trials - top AP778, bottom control

In the termite barrier trials image above, the top 8 test tubes are treated with TERMILONE^®; the bottom 8 test tubes are the untreated control. Notice definite termite tunneling through all layers in the untreated control (bottom) compared to the test tubes that contain TERMILONE^®.

The company is expected to start large-scale barrier trials in early 2008.

Longevity The aim of these studies was to determine the longevity of a range of concentrations of TERMILONE^® in barriers and impregnated paper against subterranean termites.

In summary, the results show that filter papers treated with 0.2% TERMILONE^® remained highly efficacious for four months, and continued to show activity for 6 months. A 2cm sand barrier treated with TERMILONE^® at 20,000ppm and stored for eight months remained an effective barrier against C. acinaciformis. These results match competitor product claims.

Timber impregnation Uniform radiata pine (Pinus radiata) stakes were obtained from the NSW State Forests research station for impregnation with TERMILONE^® to investigate its ability as a timber treatment product. Twenty stakes were randomly selected into treatment batches and impregnated at concentrations of 10%, 7%, 5%, 3%, and 1% in a formulation using NSW State Forests timber vacuum/high pressure impregnation unit specifically designed for CCA timber impregnation.

The analysis of sections through the stakes treated at the extremes of concentration confirmed that full penetration was achieved at both treatment levels. The results tend to suggest that the pine wood is nearing its absorption capacity around 1% and this is consistent with the level of the oil that occurs naturally in the heartwood of the tree. To confirm the impregnation method, a preliminary non-replicated arena trial was conducted in the laboratory to observe termite response to mountain ash stakes (Eucalyptus regnans – a hardwood species) treated with TERMILONE^® oil. The treatments were control (untreated) 1%, 5%, and 10% oil. These stakes were impregnated at the same time as the radiata pine stakes and the preliminary trial indicated that termites avoided timber stakes treated with greater than 5% TERMILONE^® oil for a period of greater than 3 months and is ongoing.

Based on these findings, field trials where established in Narrandera, New South Wales in 2004. Two years later, the site was assessed and the results indicated that the treated stakes with highest concentration of oil using a basic formulation withheld attack from termites for up to 18 months.

The formulations used in the trials did not include a commercially available fungicide and because of this, fungal attack may have led to the reduction in efficacy of the natural oil, which in turn led to termite activity. Further testing with a commercially available fungicide will be assessed in 2008 following formulation testing and bioassay assessments with the CSIRO.

Mode of activity The aim of these studies was to determine how TERMILONE^® could be used against termites and focused on the toxicity, longevity, and repellency properties of TERMILONE^® using barrier evaluations, choice-tests and timber impregnation.

Conclusions were made that TERMILONE^® affects the nervous system of termites, although this requires further studies for confirmation. Once exposed to TERMILONE^®, termites stop functioning and soon die as indicated by choice tests and direct exposure. In barrier tests, the termite species are repelled by the product and would rather starve than penetrate the treated barriers to the food source.

In the no choice-test investigations, TERMILONE^® showed similar repellency effects against C. frenchi and N. exitiosus. Tests also conclude that the whole oil is stable and the product can be impregnated into timber and the treated timber deters termites in laboratory trials.

Field Trials

Encouraged by the successful impregnation of timber stakes, and the positive preliminary laboratory results of these stakes against termites, BioProspect implemented field trials to access the repellency and longevity of the impregnated stakes using laboratory formulated solutions of the natural oil.

The testing site is located in Narrandera, New South Wales. The site is a New South Wales Forestry site specifically used for termite testing which is recognised by the APVMA.

Two types of field trials were constructed, these being an in-ground trial and a termite hutch.

In-ground The in-ground trial has stakes that are in direct contact with the soil and therefore subterranean termites. Images 1, 2 and 3 below show the site and the construction of the in-ground trial.

The trenches are dug (image 1) and ply is laid down the side of the trenches to encourage termite activity and to connect all stakes in the trial. The ply was then marked with a string line, the trenches filled and stakes laid out (image 2). A feeder stake (untreated pine) was placed between each impregnated stake to maintain termite activity and all stakes were knocked into the ground, (image 3) with the treated stakes being set at a specific depth.

1. Site set-up for treated stakes	2. Stakes marked out
3. Stakes being hammered into ground	4. Preparation of termite hutch
5. Lay-out of impregnated stakes in hutch	6. Hutch covered with soil

Termite Hutch The termite hutch tests the treated stakes against subterranean termites. It is different from the in-ground trial as the stakes are not in direct contact with the soil which excludes the possibility of wood rot from soil fungi. Images 4, 5 and 6 show the termite hutch being constructed.

Image 4 shows the hutch being prepared. A pine frame is placed into a pit and a metal frame with notches for the treated pine is laid on top level with the ground. The pit containing the pine frame is then filled with soil to attract termites. The treated stakes and controls are laid onto the metal frame (image 5) and covered with a metal frame (background right of image). The hutch is then covered with soil (image 6) which provides an environment similar to that of a termite colony.

Results from the Narrandera trial
The soil and hutch areas were uncovered in September 2006 therefore allowing approximately 2 years of exposure with no protection. The stakes from both treatments where assessed for termite damage and residual oil level analysis.

Untreated timber vs Termilone^® treated timber on the right.

Summary:

• Low concentrations of eremophilone resisted for 12 months
• High concentrations of eremophilone lasted 18 months before termite activity was observed
• Eremophilone oil in a basic formulation does not possess any fungicidal activity
• A loading of 1% eremophilone oil was able to be impregnated into standard Pinus radiata wood blocks using conventional vacuum-pressure methods

Note: Fungal decay was evident in both treatments which led to the possible break down of the natural oil, which in turn allowed some termite activity on timber that had a fungal attack. No fungicides were added to the basic formulations, however it was surprising to see that the treatment lasted for that period of time.

Conclusion and actions

• Commercial formulations need development for future timber treatments
• A suitable fungicide will need to be assessed for a timber treatment Hazard Classes above H3
• Eremophilone oil can be successfully impregnated into commercial timber samples using existing treatment technology
• Higher impregnation volumes are required (>1%)
• Complete oil impregnation through the entire sample profile is required
• Specific bioassays are required to test a range of formulations and impregnation volumes
• Design formulations for application into 3 separate market segments
  1. Timber Treatment
  2. Contact Sprays
  3. Barrier Treatment

Toxicology (mammalian) BioProspect Limited contracted an Australian accredited toxicology laboratory to perform toxicology studies for TERMILONE^® whole oil. These studies investigated genetic mutation studies, acute oral toxicity, acute dermal toxicity, and acute skin irritation.

The results indicate that the product has very low toxicity. The compound was determined to be a non-mutagenic and a non-skin irritant and the acute oral and dermal toxicity for TERMILONE^® is greater than 2000mg/kg.

Work will now progress to specific longer term studies and the results should be available in early-mid 2008.

Toxicology (environmental) The environmental studies started in late July 2007. Over the next 6-12 months, the company and its environmental toxicity collaborator, The School of Environmental Science and Management, Southern Cross University, are conducting environmental toxicity studies.

Environmental toxicity testing is required to be conducted on the raw oil to see if there is any detrimental effect on the environment. Studies involve assessment on soil microbial populations, invertebrates and earthworms. Based on the preliminary testing, the work will then progress to larger species like warm and cold-water fish species.

There is no requirement to assess populations of birds and larger mammalian species at this stage.

The Future

The expected development program over the next year is as follows:

September 2007 – December 2008

• Bioassays on TERMILONE^® TT (Timber Treatment).
• Bioassays on TERMILONE^® CS (Contact Spray)
• Environmental Toxicity assessment of soil microbes and micro-crustaceans
• Mammalian Toxicity assessing 28-day short term dermal screening studies
• Formulation development for TERMILONE^® BT (Barrier Treatment)
• Screening study for TERMILONE^® BT to choose a suitable formulation
• Early-stage commercial trials for TERMILONE^® BT
• Mode of Action studies on the eremophilone oil
• Assessment of an alternative timber impregnation system
• Analysis of the August 2007 winter geographic survey
• Conduct a February 2008 summer survey
• Manufacturing study to assess product base costs
• Establishment of field scale trials to test all TERMILONE^® formulations