AU2006233180B2 - Endophyte enhanced seedlings with increased pest tolerance and methods - Google Patents

Abstract

The invention provides methods for preparing a conifer seedling with increased tolerance to a pest. A conifer seedling is inoculated with an isolated endophyte when the conifer seedling is susceptible to colonization by the endophyte.

Description

P/00/0 11 Regulation 3.2 AUSTRALIA Patents Act 1990 COMPLETE SPECIFICATION STANDARD PATENT Invention Title: Endophyte enhanced seedlings with increased pest tolerance and methods The following statement is a full description of this invention, including the best method of performing it known to us: -wA Title: ENDOPHYTE ENHANCED SEEDLINGS WITH INCREASED PEST TOLERANCE AND METHODS Field of the invention The invention relates to ecologically sensitive approaches to pest management. It provides a method for producing endophyte-enhanced conifer seedlings with increased tolerance to herbivorous insects by inoculating 5 greenhouse-produced seedlings with toxigenic endophyte fungi. The invention also provides a conifer seedling or adult conifer infected with a toxigenic endophyte fungus using a method of the invention. Background of the invention The leaves of various plants including macroalgae, grasses, and sedges are 10 known to have symptomless infections. The fungi involved are commonly referred to as endophytes. (Carroll, 1988; Clay, 1988). An endophyte is "an organism inhabiting plant organs that at some time in its life, can colonize internal plant tissue without causing apparent harm to the host" (Petrini 1991). Fungal endophytes are believed to be host specific such that they infect one 15 or a small subset of plant species. It is well understood that toxic metabolites produced by grass endophytes greatly reduce populations of herbivorous insects attacking the plant. This has a large affect on plant fitness (Clay, 1988; Clay & Holah, 1999). Grass seed of cultivars that contain fungal leaf endophytes has, for 10 years, been the 20 dominant technology used for lawns and golf courses in parts of the US and Canada. These fungi produce very potent toxins inside the grass leaves that kill insects. This vastly reduces the amount of hard chemical pesticide used on the resulting lawns. Such lawns have increased drought tolerance and have increased tolerance to fungal diseases. 25 Conifer needles are also infected by systemic fungal endophytes that may fulfill several ecological roles (Carroll 1988; Ganley et al. 2004). Carroll & Carroll (1978) first proposed that fungal endophytes recovered from coniferous needles might be mutualistic symbionts. They suggested decreased palatability for grazing insects and antagonism towards needle -2 pathogens as possible benefits for the host trees. In subsequent work, this group studied the association between Douglas-fir (Pseudotsuga menziesii) and the needle endophyte Rhabdocline parkeri (Sherwood-Pike et al., 1986; Todd, 1988). An extract of R. parkeri was cytotoxic to HeLa cells and resulted 5 in reduced growth rates and mortalities when incorporated into synthetic diets of Choristoneura fumiferana (spruce budworm) at 10 pg g- (Miller, 1986). Conifers, like other plant species, are vulnerable to pest damage. For example, the eastern spruce budworm is an economically-damaging insect pest. The last time there was an epidemic in Eastern Canada, large scale 10 spraying of a hard chemical pesticide was undertaken. Where this was not done, the forests were devastated. For the year 1977 alone, the cost of the spraying program was approximately $47 million in constant dollars. Over the intervening two decades, during a low period of the budworm cycle, the hard chemical pesticides used in the 1970's were de-registered in favour of more 15 expensive and less effective biopesticides. Regardless, it is less likely now that the social consensus would exist for the widespread use of chemical insecticides when the spruce budworm population returns to epidemic proportions. New methods of controlling spruce budworm and other insect pests are needed. 20 Royama (1984) published a comprehensive analysis of the population dynamics of the spruce budworm focusing on the period 1945 to 1983 in New Brunswick (NB), Canada. One feature of this analysis is that he proposed a "fifth agent" referring to an unknown factor that was required to build models that best fit observed population changes. The central characteristic of this 25 fifth agent was that it in some way changed the response of the insect populations to known factors such as weather, predation and disease. From 1984-1994 isolations were made of endophytes present in needles in various species of conifers across NB. As found by workers worldwide, the needles of all mature conifers examined were colonized by several species of 30 endophytes (Johnson & Whitney, 1989; Wilson, 1994). From collections from across NB comprising 3500 strains, a low percentage from Abies balsamea -3 (balsam fir), Picea rubens (red spruce), Picea glauca (white spruce) and Picea mariana (black spruce) were found to produce anti-insectan toxins (Calhoun et al., 1992; Clark et al., 1989 Findlay, 1996; Findlay et al., 1995a; Findlay et al., 1995b). One of the toxins, rugulosin, was obtained from cultures 5 of Homonema dermatioides, derived from red spruce needles (Calhoun et al., 1992). In nature, tree seedlings may acquire needle endophytes from the trees surrounding the growing tree. However, most of these strains are not able to produce anti-insectan compounds. Commercially produced seedlings leaving 10 production facilities are not colonized by needle endophytes (Miller 2002). There remains a need for a conifers inoculated with endophytes to increase pest tolerance would be highly desirable considering the hundreds of millions of seedlings produced in North America annually. There are difficulties in colonizing conifers with endophytes, such as 15 cumbersome methods requiring plant wounding, low percentages of successful inoculation and lack of longevity infection potential and viability of the inoculum. The primary obstacle includes the fact that the natural mode of transmission from cast needles to developing seedlings is achieved by spores that are not easily produced in quantity in the laboratory. Additionally, 20 inoculum is present at the base of a seedling for a period of time difficult to reproduce in the greenhouse. However, economically viable large-scale inoculation of conifers with desirable strains of endophytes requires a method with increased colonization efficiency and ease of inoculation. Summary of the invention 25 The invention provides novel isolated toxigenic endophyte strains and provides methods for inoculating a conifer seedling with an inoculum composition. The inventors have found that conifer seedlings can be colonized with a toxigenic endophyte using a method that does not require wounding. The inoculum can be applied in one embodiment, by spraying. In 30 addition the inventors have found that inoculation efficiency is highest during a time period referred to herein as the "susceptible time window" or "receptive" -4 time period. The invention thereby provides methods that permit increased colonization efficiency and are amenable to large-scale inoculations. The invention also includes seedlings, trees, and tree-parts (such as needles) produced according to methods of the invention. 5 Accordingly, the invention provides a method of inoculating a conifer seedling to provide increased tolerance to a pest, comprising inoculating the conifer seedling with an isolated endophte when the conifer seedling is susceptible to colonization by the endophyte. In another embodiment the invention provides a conifer colonized by an 10 isolated endophyte that produces a toxin that retards pest growth. In another embodiment the invention provides an isolated endophyte selected from the group consisting of 05-37A, 06-486D, 06-485A. In another embodiment the invention provides an inoculum composition for inoculating conifers to provide increased tolerance to a pest, comprising a 15 diluent and an isolated endophyte that produces a compound toxic to the pest. In another embodiment the invention provides an antibody directed against an endophyte selected from the group consisting of 5WS22E1, 5WS1 111, 05 37A, 06-486D and 06-485A. 20 In another embodiment the invention provides a method of detecting the presence of a target isolated endophyte in a conifer sample, comprising: a) contacting the conifer sample with an antibody directed against the endophyte; b) detecting the presence of bound antibody in the sample, wherein 25 the presence of the bound antibody is indicative of the presence of the endophyte. Other features and advantages of the present invention will become apparent from the following detailed description. It should be understood, however, that the detailed description and the specific examples while indicating preferred 30 embodiments of the invention are given by way of illustration only, since 1000391682 -5 various changes and modifications within the spirit and scope of the invention will become apparent to those skilled in the art from this detailed description. Brief description of the drawings 5 Embodiments of the invention will be described in relation to the drawings in which: Figure 1 shows the response of serial dilutions of polyclonal antibody to target endophyte 5WS22E1 [best fit curve using LOWESS procedure] together with comparisons at 60 ng/well of cells of some white spruce endophytes 10 (WS331L1, WS1111), some fungi common on the outside of the seedlings (A. altemata; A. fumigatus, C. cladosporioides, Phoma species, as well as control powdered freeze-dried white spruce needles. Figure 2 shows the response of a polyclonal antibody to 30, 60, 120 and 240 ng 5WS22E1 cells and to the same amounts added to 500 ng powdered white 15 spruce cells [mean plus standard error]. Figure 3 shows the distribution of rugulosin concentrations in needles from 113 seedlings, assuming half the detection limit for the non-detects [with normal smoother]. Figure 4 is a plot of the linearity and avidity of a polyclonal antibody for 20 endophyte 5WS1111. Figure 5 shows the application of a polyclonal antibody used to detect endophyte 5WS1111 in planta. Figure 6 plots an example of a susceptible time window of seedlings to colonization by toxigenic endophytes. 25 Figure 7 shows an HPLC trace for rugulosin. Figure 8 plots the average weight of spruce budworm grown on diet with increasing rugulosin concentration.

-6 Detailed description of the invention The inventors have identified methods of inoculating conifer seedlings with toxigenic strains of fungal endophytes and producing toxigenic endophyte infected conifer seedlings that are more resistant to pest damage. 5 Some strains of endophytes that naturally colonize conifer needles produce compounds or toxins that affect the survival of pests. The needles of seedlings thus colonized contain toxins and the growth rate of the pest and susceptibility to parasites and natural bacterial pathogens are both reduced. The inventors have isolated multiple strains of toxigenic endophytes and have 10 devised methods to propagate these strains. In addition the inventors have demonstrated that conifer seedlings can be inoculated with these toxin producing endophyte strains during a susceptible time window. Inoculation during the susceptible time period improves colonization of the toxigenic endophyte. The inventors have shown that toxigenic endophyte colonization 15 persists and spreads to non-inoculated new growth branches. Further these methods are, as shown by the inventors, amenable to large-scale production in a commercial setting. The inventors have also isolated several new endophyte strains and have identified the major toxin produced for several of these endophyte strains. 20 Methods for inoculating conifer seedlings, for detecting successfully inoculated plants, for preparing an effective inoculum composition, as well as methods of producing toxigenic endophyte colonized conifer plants that are resistant to pests such as spruce budworm are provided. The invention also provides novel toxigenic endophyte strains, inoculum compositions and 25 toxigenic, endophyte-colonized conifer plants. Accordingly, in one embodiment, the invention provides a method of inoculating a conifer seedling, the method comprising: a) inoculating the conifer seedling with an effective amount of an inoculum composition comprising an isolated toxigenic endophyte 30 during a susceptible time window, wherein the susceptible time -7 window is a period of time during which the conifer seedling is susceptible to colonization by the toxigenic endophyte. The term "seedling" as used herein means a young plant grown in a nursery production facility prior to final planting and comprises the period of seedling 5 development from seed to 16 weeks post-germination. The term "colonization" as used herein means the persistence of an inoculated endophyte in a symbiotic relationship with a conifer plant wherein the conifer hosts the endophyte and the endophyte persists in sufficient quantity to be detected in an assay, for example, in an antibody detection 10 assay using an antibody directed against the endophyte. Optionally, the offspring of the colonized plant are also colonized. Toxigenic Endophytes The term "isolated toxigenic endophyte" as used herein means an isolated endophyte strain that produces a toxin. An isolated toxigenic endophyte is 15 able to colonize a conifer seedling and produce a toxin in the colonized plant. The toxin produced by the toxigenic endophyte confers increased pest tolerance by controling, reducing, mitigating, preventing or repelling a pest and/or pest growth and/or pest damage in the endophyte-colonized plant compared to a non-colonized plant. 20 In one embodiment, the toxigenic endophyte of the invention includes the strains described in Table 1 and strains listed elsewhere herein. Other toxigenic endophytes are readily used in the methods of the invention. The inventors have shown that various endophytes isolated from white spruce are toxigenic to conifer tree pests. These comprise rugulosin producing 25 endophytes, vermiculin and 5-methoxy-carbonylmellein producing endophytes. These metabolites are the major components of the mixture of different anti-insectan metabolites produced by each strain and comprises derivatives, plant modified forms and metabolites thereof that are toxic. The major metabolites may be used as a proxy for toxicity. The fungi produce 30 mixtures of metabolites and the toxicity of the mixture may be greater than the -8 dominant compound used as a proxy. This may contribute to a toxigenic endophyte's ability to confer durable tolerance. The term 5-methoxy carbonylmellein as used herein optionally comprises derivatives, plant modified forms and metabolites thereof that are toxic to a pest. 5 In one embodiment, the isolated toxigenic endophyte present in the inoculum composition is a rugulosin producing endophyte. In a more specific embodiment, the rugulosin producing endophyte is isolated endophyte 5WS22E1 comprising SEQ ID NO: 1. In another embodiment the isolated toxigenic endophyte is a vermiculin producing endophyte. In a more specific 10 embodiment, the vermiculin producing endophyte is isolated endophyte 5WS1111 comprising SEQ ID NO: 2. In another embodiment, the isolated toxigenic endophyte is a 5-methoxy-carbonylmellein producing endophyte. In a more specific embodiment, the 5-methoxy-carbonylmellein producing endophyte is the isolated 05-37A strain comprising SEQ ID NO: 3. 15 Isolated strains of toxigenic endophytes are readily identified, for example, the inventors have sequenced regions of the internal transcribed spacer (ITS) regions of ribosomal DNA (rDNA). Sequence analysis revealed that strains 5WS22E1 and 5WS1111 are Phialocephala species. Accordingly in another embodiment, the toxigenic endophyte strain used in methods of the invention 20 is a toxigenic strain of the Phialocephala species. In addition, the inventors have isolated several novel toxigenic endophytes from white spruce needles, including strains referred to as 05-37A, 06-486D and 06-485A. Sequence data indicates that endophyte strain 05-037A [SEQ ID NO: 4] is related to Nemania serpens and that strains 06-486D is related to 25 Genbank accession AY971727 and 06-485A is related to Genbank accession AY971740, both isolated from spruce in Quebec. Accordingly, the invention further provides an isolated toxigenic endophyte comprising the sequence in SEQ ID NO:4 (05-37A). In another embodiment, the invention provides an isolated toxigenic endophyte comprising the 30 sequence in SEQ ID NO: 5 (06-486D). In another embodiment, the invention -9 provides an isolated toxigenic endophyte comprising the sequence in SEQ ID NO: 6 (06-485A). Further the inventors have isolated multiple toxigenic endophyte strains from red spruce needles. The inventors have similarly sequenced the ITS regions 5 of each strain (see Table 2). Toxigenic endophytes from balsam fir have also been isolated 7BF 36H1 (Novel Diterpenoid Insect Toxins from a Conifer Endophyte JA Findlay, G Li, PE Penner, JD Miller - Journal of Natural Products, 1995 58: 197-200). In one embodiment, the toxigenic endophyte comprises all or part of one of 10 SEQ ID NOS: 1-5, and preferably at least: 25-50 or 50-100 consecutive nucleotides of one of SEQ ID NO: 1-5. In another embodiment, the toxigenic endophyte comprises all or part of one of SEQ ID NOS: 6-41, and preferably at least: one of 25-50 or 50-100 consecutive nucleotides of SEQ ID NO: 6-41. Several toxigenic endophyte strains to be used with the methods of the 15 invention have been deposited with the Centraalbureau voor Schimmelcultures (CBS) international depository agency in the Netherlands (Accession nos. in Table 1). In addition two of the strains have been deposited with the National Mycological Herbarium/Herbier National de Mycologie recognized under the acronym DAOM as indicated in Table 1. 20 DAOM stands for Department of Agriculture, Ottawa, Mycology. Table 1. Endophyte strains and their principal toxins Strain DAOM Accession Numbers Principal Toxin 5WS22E1 229536 CBS 120377 rugulosina 5WS1111 229535 CBS 120378 vermiculin"'' 05-037A CBS 120381 5-methoxy carbonylmelleind 06-486D CBS 120379 06-485A CBS 120380 B. Calhoun, Findlay, Miller, Whitney. Mycological Research 1992, 96:281-280. Bouhet, Van Chong, Toma, Kirszenbum, Fromageot. J Agric Food Chem 25 1976, 24:964- 972. discovered in 1939 and published in 1955 b Findlay, Li, Miller, Womiloju. Can J Chem, 2003, 81:284-292.

-10 e among others; a new compound trihydroxy-4-1'- hydroxyethyl) isocoumarin also toxic to spruce budworm cells (Can J Chem 81:284) d Anderson, Edwards, Whalley. J Chem Soc Perkin Trans 1 1983, (2)185 255; Wang, Zhang, Huang, Su, Yang , Zhaob, Ng. Acta Cryst 2003, 5 E59:o1233-1234 Table2. Isolated Red Spruce Fungal Endophytes SEQ ID NO. SEQUENCE NAME 6 1_06-023AITSIF 7 2-08-011D-ITSIF 8 4-09-009D-ITSIF 9 5-04-012A-ITSIF 10 3-03-001D-ITSIF 11 6-06-255C-ITSIF 12 16-06-264A-ITSIF 13 11-04-002G-ITSIF 14 12-08-018A_ITS1F 15 14-06-003A-ITSIF 16 20-06-065C_ITS1F 17 22-02-008A-ITSIF 18 23-06-254B-ITSIF 19 24-06-321A-ITSIF 20 25-06-188A-ITSIF 21 26-06-332A-ITSIF 22 27-03-032A-ITSIF 23 28-02-002C-ITSIF_1 24 30-01-017AITS1F 25 39-06-094D-ITSIF 26 41-03-047A-ITSIF 27 42-06-130D-ITSIF 28 45-06-271A-ITSIF 29 49-01-002AITS1F 30 46-06-255BITS1F 31 48-06-052C-ITSIF 32 52-06-265B-ITSIF 33 53-05-065E-ITSIF 34 56-03-020B-ITSIF 35 64-06-073CITS1F 36 3665_4A-06-097DITSIF 37 B-06-083B-ITSIF 38 D-03-007A-ITSIF 39 F-06-255A-ITSIF - 11 40 I I-06-268A-ITSIF 41 J-06-317A-ITSIF One skilled in the art will understand that other isolated toxigenic endophyte strains can be used with the methods and compositions of the invention. 5 Other toxigenic endophyte strains can be isolated using the methods of screening for a toxigenic endophyte provided herein. Endophyte Toxins Toxigenic endophytes produce toxins that provide increased pest tolerance. The term "toxin" as used herein refers to a substance or substances that 10 confers increased pest tolerance by controlling, reducing, mitigating, preventing or repelling pests and/or pest growth and/or pest damage. Toxins of several toxigenic endophyte strains have been identified and are described in Table 1. A particular toxigenic endophyte may produce more than one toxin. The toxins identified in Table 1 are the dominant toxins produced by the 15 listed strains. The referenced studies to Table 1 illustrate that multiple toxins may be produced by each strain. Illustrative is strain 5WS1111 which produces among others vermiculin, trihydroxy-4-1'-hydroxyethyl and isocoumarin. The ability of a toxin to control, reduce, mitigate, prevent or repel pests and/or 20 pest growth and/or pest damage can be assessed in vitro in a pest toxicity assay. For example, the inventors provide a method of assessing the toxicity of a putative toxin using a method that assesses insect larvae growth, such as a spruce budworm larvae assay that measures effects on growth. The term "toxicity" as used herein with respect to the spruce budworm larvae 25 assay means toxins or endophyte strains that exhibit statistically different parameters from controls, either for weight reduction, head capsule width or both. Toxic endophytes cause spruce budworm larvae to have lower weight and/or smaller head capsule, and the aforementioned parameters are statistically reduced compared to control.

- 12 The method compares spruce budworm performance on foliage of different ages and tree species. The system optionally comprises a tapered container comprising a septum that permits an individual needle to be held vertically and exposed to a single spruce budworm with the base of the needle in 5 contact with moisture. The needle is inserted in the septum before the budworm is added. The septum permits uneaten portions of the needle to be collected. Spruce budworm larvae are typically grown with artificial diet (McMorran, 1965) until they reach a stage at which they will consume succulent needles. 10 A single budworm is placed in each vial. Needles of similar size and weight collected around the inoculation point of the toxigenic endophyte inoculated seedling (test seedling) plus control needles are tested. Pest growth data which optionally includes the amount of unconsumed needle, head capsule width and larval weights are measured. Budworm and residual needle weights 15 and budworm head capsule widths are determined for test and control samples and compared. Other insects and larvae may be readily tested with similar assays, for example, hemlock looper, and spruce budmoth. The toxicity of an endophyte toxin on a pest such as hemlock looper is optionally tested according to the following method. The toxin to be tested is 20 incorporated into an artificial diet suitable for pest growth. 15 ml of artificial diet is prepared in individual cups, containing toxin concentrations of 5 micromolar, 10 micromolar, 25 micromolar, 50 micromolar and 100 micromolar. One 3 rd instar insect is added to each of 75 cups per dilution and incubated in a growth chamber at 22 C, 55% relative humidity with 16 h 25 light/day. After 4 days, the insects are frozen, weighed and their head capsules measured. A reduction in head capsule size (eg. width) or weight compared to a control sample is indicative of the presence of a toxin. One skilled in the art would understand that this method can be modified to test different concentrations of toxin and that the conditions can be modified to test 30 a variety of different pests.

-13 The amount of endophyte adequate to reduce growth a conifer plant is the amount that shows a statistically-significant reduction of growth rate, and/or instar development or weight gain reduction compared to uninoculated but otherwise equivalent control seedlings. 5 In one embodiment, the assay used to evaluate pest toxicity is an in vitro assay and comprises the isolation of a conifer needle in a suitable container to ensure that the needle remains hydrated and the container, collect and evaluate the weight and head capsule width of a suitable test insect meaning an insect that normally consumes needles during its growth and development 10 as well as collect any residual needle for to assess percentage needle consumption. In another embodiment, the pest toxicity assay is an in vivo assay and comprises placing an appropriate insect species on branches of endophyte colonized plants and/or trees contained in bags and/or other containers at a 15 density of optionally not greater than 10 insects/m 2 of branch area, leaving the insects in place for an appropriate time period, collecting the insects followed by determinations of weight and head capsule width. Optionally other parameters may be assayed. The appropriate time period for leaving a pest in contact with the branches of an endophyte colonized plant, will vary with 20 factors such as larval stage of development, weather conditions, conifer species and insect species. In one embodiment, the time period is optionally between 1-14 days, for example, 3-7 days. In another embodiment, the toxicity of an endophyte is assessed by subjecting the colonized conifer plant to at least one characteristic test 25 selected from the group consisting of pest toxicity assay, toxin presence assay. Accordingly the invention provides a method of assessing the pest toxicity of a toxigenic endophyte toxin using a pest toxicity assay. 30 - 14 Susceptible Time Window The term "susceptible time window" as used herein means a period of time during which a conifer seedling is susceptible or receptive to colonization upon inoculation with an inoculum composition comprising a toxigenic 5 endophyte. "Susceptible" is used interchangeably with "receptive" herein. The inventors have established that efficient inoculation of conifer seedlings with toxigenic endophytes occurs during a susceptible time window. The susceptible time window optionally comprises the stage of seed stratification and/or the post-germination period of sustained elongation of the shoot apex 10 wherein the cuticle is not fully formed. Wax development occurs within the cuticle and may be referred to as cuticular wax as well as on the surface of the cuticle which may be referred to as epicuticular wax. Cuticular wax may function to provide a waterproof quality from the needle surface. 15 Without wishing to be bound by theory, it is believed that the upper time limit of the period during which the post-germination seedlings may be non invasively inoculated corresponds to the formation of wax on and/or in the seedling that impairs inoculation. The term "seed stratification" as used herein means a process of artificially or 20 naturally interrupting a seed's embryonic dormancy so that the seed can germinate and embryonic dormancy typically comprises the period of time from taking seed to sowing seed. "Embryonic seed dormancy" is optionally interrupted for white spruce by soaking the seed in water overnight and exposing the drained seed to temperatures of approximately 3-6 C for 25 approximately 2 weeks. The term "germination" as used herein means the resumption of growth by a seed. The inventors have found that seeds can be inoculated during seed stratification. In one embodiment, the method comprises soaking a conifer seed in water containing inoculum during seed stratification. In another 30 embodiment a white spruce conifer seed is soaked in water containing -15 inoculum overnight, drained and the still wet seed is refrigerated at 2-6 C for approximately two weeks. The inventors have also found that the susceptible time window comprises the period of time of sustained elongation of the shoot apex prior to formation of 5 the needle cuticle. The susceptible time window will vary in terms of seedling height and age post germination with conifer species, but comprises the period of statistically significant maximum susceptibility, which using white spruce as a model, begins during the period of sustained elongation of the shoot apex (>10 mm < 100mm). The minimum is biologically determined by 10 the period after the germination processes are largely completed. These include the time after the seed coat cracks and the radicle emerges. The radicle and hypocotyl and cotylyedons elongate rapidly to the point when the base of the cotyledon begins to elongate. During the period circumscribed by seedling heights >10 but >40 mm, the shoot apex, needle primordial and 15 subtending internodes are initiated, expand and develop rapidly. The rudimentary needles and internodes become completely differentiated including formation of the cuticle and mesophyll. The critical period of successful inoculation is related to the percentage needles of intermediate differentiation to complete differentiation in which the cuticle is fully formed. 20 In one embodiment a seedling is inoculated before the needle cutilcle is fully formed. In another embodiment, the seedling is inoculated during the period of sustained elongation of the shoot apex. In another embodiment, the seedling is inoculated wherein the percentage of needles wherein the cuticle is intermediately differentiation is greater than the number of needles wherein 25 the cuticle is fully formed. In white spruce the inventors have determined that the susceptible time window comprises until seedlings reach 16 weeks post germination. In a preferred embodiment, seedlings are inoculated between 2-12 weeks, 6-10 weeks or 7-9 weeks post germination. In another embodiment seedlings are 30 inoculated at 2-3 weeks, 3-4 weeks, 4-5 weeks, 5-6 weeks, 6-7 weeks, 7-8 weeks, 8-9 weeks, 9-10 weeks post-germination. It has been determined that - 16 particularly successful inoculation of white spruce seedlings is obtained in an embodiment when seedlings are inoculated at about 8 weeks post germination (eg. 7-9 weeks post-germination). In terms of seedling height, the period of susceptibility of white spruce 5 comprises the germination stage up until seedlings are approximately 10 cm tall. In another embodiment the seedlings are inoculated when 1-2 cm tall, 2-3 cm tall, 3-4 cm tall, 4-5 cm tall, 5-6 cm tall, 6-7 cm tall, 7-8 cm tall, 8-9 cm tall, 9-10 cm tall. In has been determined that particularly successful inoculation is obtained in an embodiment when seedlings are inoculated at about 3 cm tall 10 (eg 2-4 cm tall). Methods of Inoculation Various methods can be used to inoculate a conifer seedling. In embodiments of the method, inoculation of a conifer seedling comprises contacting an inoculum composition with a seedling, such as an intact seedling. An "intact 15 seedling" as used herein refers to a seedling wherein the seedling remains unwounded prior to, or during, contact with the inoculum composition. More specifically, the stem of an intact seedling is not pierced or wounded prior to, or during, contact with the inoculum composition. An inoculum composition is optionally applied to an intact seedling by spraying the intact seedling with the 20 inoculum composition. The use of intact seedlings is very advantageous because it eliminates the plant wounding step and facilitates rapid inoculation, providing very important time savings in a high-throughput conifer nursery setting. In another embodiment the inoculation method comprises contacting an inoculum composition with a surface area of a conifer seedling. An 25 inoculum composition is optionally applied to a conifer seedling by spraying a surface area of a conifer seedling with the inoculum composition. The term "contacting" is used interchangeably with "applying". Spraying as used herein comprises any method of delivering liquid particles of the inoculum composition to a plant surface and includes misting, ground 30 spraying, airblast spraying, and fan spray techniques. Spraying is optionally accomplished using a spray bottle or a boom sprayer. In one embodiment the - 17 inoculum composition is delivered using a boom sprayer and an injector pump to inject the inoculum composition into an irrigation line. Inoculation is readily applied during a time when the seedling would remain moist for the longest period of time and optionally comprises repeated application on the same or 5 different days. In other embodiments, the inoculum composition optionally comprises additives that improve and/or increase uptake of a toxigenic endophyte. A number of chemicals and or preparations are known in the art that would facilitate inoculum uptake. For example additives may reduce the drying time after spraying. In one embodiment the additive is a carbohydrate. 10 In another embodiment the carbohydrate is selected from the group comprising sugars. In another embodiment the carbohydrate is a carbohydrate like CMC. Further fluorescent tracers may be added to the inoculum composition to determine the amount of spray deposited. In another embodiment, the inoculation method comprises a below ground 15 application of an inoculum composition. Inoculation of a conifer seedling, in another embodiment, comprises cutting, piercing or otherwise penetrating a seedling and delivering an inoculum composition. In one embodiment, the site of the penetration is the unlignified tissue of the seedling stem. In another embodiment, the stem is penetrated 5 20 15 mm from the terminal shoot. The term "terminal shoot" as used herein means the shoot distal to the lowest leaf remaining on the main stem. Delivery of an inoculum composition may be performed by various methods including spraying. Optionally the inoculum composition may be delivered by repeated spraying. In another embodiment the method of inoculation 25 comprises a wound inoculation. 'Wound inoculation" as used herein refers to a method wherein the inoculum composition is introduced into a conifer seedling by a method involving wounding the seedling. The inoculum may be introduced by a needle injection method. In another embodiment, conifer seedlings are inoculated by placing a carrier comprising toxigenic endophytes 30 in contact with the seedling growing medium. In one embodiment the carrier comprises irradiated conifer needles. In another embodiment, the seedling is -18 planted in a growing medium, and irradiated conifer needles colonized by toxigenic endophytes or other conifer plant parts colonized by toxigenic endophytes are added to the growing medium. In another embodiment the growing medium, comprises potting mix surrounding or supporting the conifer 5 seedling to be inoculated. In another embodiment the growing medium comprises soil. In addition, a conifer seedling may be inoculated by soaking a conifer seeds with an inoculum comprising a toxigenic endophyte. In another embodiment, the inoculation method comprises putting irradiated 10 conifer needles infested with a toxigenic endophyte in contact with a conifer seedling. The needles and endophyte may be directly contacted or indirectly contacted with the conifer seedling. For examples, needles may be placed in direct physical contact with the seedling or may be placed in indirect contact with the seedling by contacting needles with the potting mix supporting 15 seedling growth. In one embodiment the potting mix comprises soil. The quantity of toxigenic endophyte inoculated is preferably in one embodiment approximately 10 propagules. A "propagule" as referred herein means an infective fungal cell. A person skilled in the art will recognize that the quantity of toxigenic endophyte inoculated may vary with environmental 20 and other factors. For example, if inoculation of conifer seedlings is performed during environmental conditions such as low temperature, that are not favourable to endophyte inoculation, the quantity of toxigenic endophyte is optionally increased. Similarly, repeated inoculations are optionally used if seedlings are exposed to various environmental conditions, such as heavy 25 rainfall where the inoculum composition is diluted or washed away. The methods of inoculation described above can be combined and or repeated. In one embodiment the methods of inoculation combined and/or repeated comprise the same method of inoculation. In another embodiment, the methods combined and/or repeated are different methods of inoculation. 30 For example in one embodiment, a seedling is first inoculated during seed -19 stratification and then inoculated during the period of sustained elongation of the shoot apex. Inoculum Composition The term an "inoculum composition comprising a toxigenic endophyte" as 5 used herein means a composition for inoculation wherein the toxigenic endophyte is present in an effective amount to colonize conifer seedlings conferring increased pest tolerance by controlling, reducing, mitigating, preventing or repelling pests and/or pest damage and/or pest growth. The inoculum composition is effective if the level of toxin produced is sufficient to 10 control, reduce, mitigate, prevent or repel pests and/or pest growth and and/or pest damage. Examples of suitable compositions are described in this application and are optionally readily identified using assays, such as spruce budworm larvae assay, described herein. The inventors have identified novel methods to produce an inoculum of the 15 invention. The filaments of the toxigenic endophyte are optionally sheared by a shearing means which reduces the number of dead endophytes produced compared to other maceration methods, thereby increasing the number of live toxigenic endophytes per volume inoculum and facilitating the colonization of inoculated conifer seedlings. 20 In one embodiment, the endophyte is grown in a stirred jar fermentation unit such that the cells are present in not larger than 5 mm clusters of mycelium or spores, are greater than 80% and preferably greater than 95% viable and greater than 80% and preferably greater than 95% infective in receptive tissue in liquid substantially free of bacteria and material concentrations of residual 25 nutrients. In another embodiment the invention provides, an inoculum composition is optionally prepared by a method for growing the isolated endophyte comprising: a) providing a slant culture of the endophyte (eg. agar slant culture); 30 b) inoculating a first liquid culture with the culture; - 20 c) subjecting the first liquid culture to a shear force that shears the endophyte hypha; d) inoculating a second liquid culture with the first liquid culture; e) subjecting of the second liquid culture to a second shear force to 5 shear the endophyte hypha. In another embodiment, the method comprises: a) growing an initial culture of the endophyte (eg. agar slant culture); b) inoculating a first liquid culture with a suspension comprising the agar slant culture wherein the first liquid culture is grown for 10 approximately 2 weeks ; c) maceration of the first liquid culture d) inoculation of a second liquid culture with the macerated first liquid culture under conditions of shear force sufficient to shear the endophyte hypha wherein the second culture is grown in a large 15 vessel, and is aerated. In one embodiment the inoculum is optionally harvested from the large vessel which includes a fermentor, centrifuged and resuspended in a diluent. In one embodiment the diluent is sterile water. In one embodiment the agar slant is a malt agar slant. In another embodiment 20 the first liquid culture is 2% malt extract and the suspension is added at 5% v/v. The shear force in one embodiment comprises shaking or rotation at 200 310 RPM. In another optional embodiment the shaking or rotation is at 220 RPM. In one embodiment, the first liquid culture is preferably incubated at 25C. In one embodiment the first liquid culture comprises a malt extract. In 25 another embodiment the macerated liquid culture is added to a 1-3% malt extract broth. In an embodiment the malt extract concentration is approximately 1%. In another embodiment the macerated liquid culture and malt extract broth are stirred at 200-310 RPM, for example stirring at 280 RPM. In another embodiment the temperature in the large vessel which may -21 optionally be a stirred fermentor, is 20-22C and is optionally 21C. In another embodiment, the aeration is 0.05- 0.15 v/v per minute and is optionally 0.1 v/v per minute. In another embodiment, the macerated liquid culture and malt extract are incubated for 6-10 days and preferably 7 days. A person skilled in 5 the art would understand what routine adaptations would be required to grow the new toxigenic endophyte strains identified. In addition a person skilled in the art would understand that changes to sugar concentration, temperature and oxygen tension may require compensating changes in other variables. A person skilled in the art would also understand the routine experiments to 10 further scale up the production of inoculum. The inoculum may be diluted or concentrated. In one embodiment the inoculum is diluted with water before inoculation. The inventors have shown that the concentration of rugulosin in needles infected rugulosin producing strains that reduced pest growth averaged 8 15 micrograms/gram of needle weight. A concentration that affected pest growth is optionally as low as 0.15 micrograms/gram of needle weight. The conifer sample comprises a conifer tissue of a plant previously inoculated with an effective inoculum concentration comprising a toxigenic endophyte. Accordingly in one embodiment, the effective inoculum composition is a 20 composition that produces a rugulosin toxin concentration of at approximately 10 micromolar in a successfully colonized conifer seedling. In another embodiment the toxin concentration achieved is optionally 10-25 micromolar, or optionally 25-50 micromolar. The effectiveness of the inoculum varies with the length of time the inoculum 25 has been stored. Preferably, the inoculum is prepared the same day as the inoculation. In another embodiment, the invention provides an inoculum composition comprising a toxigenic endophyte, which can be used with the methods of the invention to produce a conifer seedling infected with a toxigenic endophyte 30 fungus.

-22 In one embodiment, the method of inoculating conifer seedlings further comprises detecting if the seedling is colonized by the toxigenic endophyte. Method of Detecting Toxigenic Endophyte Various methods can be employed to detect the presence of toxigenic 5 endophytes. Assays using antibody-based methods for the detection of grass endophytes have been developed for several endophyte species both using microplate assays and tissue immunoblot methods (Gwinn et al. 1991; Johnson et al. 1982; Reddick & Collins 1998). Compared to competing methods such as PCR, these have a greater potential for field use based on 10 simple protocols. The inventors have developed an assay using a detection agent for assaying target endophytes. In one embodiment the assay targets endophytes, such as 5WS22E1 using a detection agent that was an antibody that was of comparable sensitivity to antibody assays for grass endophytes (Gwinn et al. 15 1991; Johnson et al. 1982; Reddick & Collins 1998). This was achieved despite the greater difficulties of the conifer needle matrix compared to grass leaves. Accordingly the inventors provide an assay using a detection agent that binds a toxin or recognizes a toxigenic strain of endophyte for detecting the 20 presence of target endophytes in a conifer sample, the assay comprising: a) contacting a conifer sample with an agent which recognizes a toxigenic strain of endophyte; b) detecting the presence of bound agent in the conifer sample, wherein the presence of bound agent is indicative of the presence 25 of the toxigenic strain of endophyte recognized by the antibody. In one embodiment the agent that binds a toxin or recognizes a toxigenic strain of endophyte is an antibody. In another embodiment the antibody assay is an ELISA assay. In another embodiment the antibody assay is a hand-held immunoblot based assay. In -23 another embodiment the antibody assay is contained in a kit comprising an antibody which recognizes a toxigenic strain of endophyte and a detection means to detect the presence of a strain recognized by the antibody. The inventors have shown that the presence of a toxigenic strain of 5 endophyte may not be detectable in successfully colonized seedlings until the seedling has grown for a period of time. Hence in one embodiment the conifer sample is obtained when the plant is greater than 3 months, greater than 4 months, greater than 5 months, greater than 6 months, greater than 7 months, greater than 8 months, greater than 9 months, greater than 10 months, or 10 greater than 11 months post germination. In another embodiment, the conifer sample is obtained when the plant is greater than 1 year post germination. In another embodiment, the conifer sample is obtained when the plant is 12-18 months post germination. In another embodiment, the conifer sample is obtained when the plant age is greater than 18 months post germination. 15 The conifer sample optionally comprises conifer tissues including needles. The conifer sample is typically ground to a powder prior to contact with the toxigenic endophyte recognizing antibody and/or suspended in an appropriate buffer such as Tris buffered saline (TBS). In addition, the presence of a toxigenic endophyte may be detected by detecting the endophyte toxin. The 20 inventors provide an analytical method of detecting a major toxin associated with a toxigenic strain of endophyte. The analytical method comprises preparing a putatively toxigenic endophyte toxin containing conifer sample, for processing by separation, such as HPLC (high performance liquid chromatography), the method of preparing the conifer sample optionally 25 comprising: a) a first extraction using petroleum ether under low light conditions; b) a second extraction with chloroform; c) washing the extract with NaHCO3; d) acidifying the extract; 30 e) a third extraction with chloroform; drying the extract; - 24 f) and dissolving the dried extract in acetonitrile. The resulting sample is optionally assayed by an HPLC apparatus and the spectrum produced analysed for toxin presence. In one embodiment, the 5 sample to be prepared for HPLC analysis comprises a rugulosin producing toxigenic endophyte. Accordingly the invention provides a method of detecting a toxin associated with a toxigenic strain of endophyte, comprising, preparing a conifer sample for HPLC analysis separating an endophyte extract by high pressure liquid 10 chromatography which produces a spectrum output, detecting the presence or absence of a toxin value in the spectrum output, wherein the presence of a toxin value is indicative of the presence of a toxin. In another embodiment the method comprises: a) separating an endophyte extract by high pressure liquid 15 chromatography which produces a spectrum output, b) detecting the presence or absence of a toxin value in the spectrum output, wherein the presence of a toxin value is indicative of the presence of a toxin. The toxin is also optionally detected using other assays including NMR, 20 preparatory thin layer chromatography, preparatory HPLC, HPLC Mass Spectroscopy and column chromatography. Methods for use of these techniques are known in the art. Conifer Tree Species and Genotypes Susceptible to Colonization with Toxigenic Endophytes 25 The invention is practiced with conifer plants and seedlings. A "conifer" as used herein refers to a variety of needle-leaved trees or shrubs and includes all Spruce species (Picea species), pine (Pinus species) and balsam fir trees (Abies balsamea) and plant as used herein comprises a seedling or tree and includes tree hedged for the production of rooted cuttings or a shrub. In -25 certain embodiments, the conifer seedling inoculated is a white spruce (Picea glauca) seedling. In other embodiments, the conifer seedling inoculated is a red spruce (Picea rubens) seedling. In further embodiments, the conifer seedling inoculated is a balsam fir seedling. In yet another embodiment, the 5 conifer seedling inoculated is a pine seedling for example white pine (Pinus strobes). Accordingly in one embodiment of the invention the conifer seedling inoculated is a white spruce seedling. In another embodiment, the white spruce seedling is inoculated with an inoculum composition comprising 10 toxigenic endophyte 5WS22E1. In another embodiment, the white spruce seedling is inoculated with an inoculum composition comprising toxigenic endophyte 5WS1111. In another embodiment, the white spruce seedling is inoculated with an inoculum composition comprising toxigenic endophyte 05 037A (SEQ ID NO: 3). In another embodiment, the white spruce seedling is 15 inoculated with a inoculum composition comprising toxigenic endophyte 06 486D (SEQ ID NO: 4). In another embodiment, the white spruce seedling is inoculated with an inoculum composition comprising toxigenic endophyte 06 485A (SEQ ID NO:5). The inventors found that inoculation of seedlings from a breeding population 20 of white spruce with an inoculum composition of the invention was successful across a range of genotypes. Of the 25 white spruce families tested, six had individuals that tested positive for infestation with one of the strains of endophytes tested. Of these six families, 11 of the 31 parents were represented and these 11 parents covered the same range that the larger 25 sample encompassed. This provided a good indication that a broad range of genotypes will be susceptible to infection by the endophytes tested. Endophyte Enhanced Conifer Plant A conifer plant colonized with a toxigenic endophyte strain is also provided by 30 the invention. In one embodiment the conifer plant is a white spruce plant with - 26 toxigenic endophyte 05-037A (SEQ ID NO: 3). In another embodiment the conifer plant is a white spruce plant colonized with toxigenic endophyte 06 486D (SEQ ID NO: 4). In another embodiment the conifer plant is a white spruce plant colonized with toxigenic endophyte 06-485A (SEQ ID NO: 5). 5 In another embodiment, the conifer plant is a red spruce plant colonized with a toxigenic endophyte selected from the group SEQ ID NO: 6-42. Pests Susceptible to Toxigenic Endophyte Toxins The term "pest" as used herein means any organism that may cause injury to a conifer plant and comprises insects, insect larvae, and fungi. Insect pests 10 include insects that consume needles such as spruce budworm hemlock loopers, saw flies, and jack pine budworm. Fungal pests include white pine blister rust and fusarium species. All the toxins or cultures have been tested with Spruce budworm (Choristoneura fumiferana) larvae. For the 22E1 toxin rugulosin, Spruce 15 budworm (Figure 8) and Hemlock loopers (Lambdina fiscellaria) were affected at dietary rugulosin concentrations between 25 and 50 pM. The tests with wild collected spruce budmoth (Zeiraphera canadensis) indicated that this species was also affected by rugulosin in the same order of magnitude. Tests of fruit flies (Drosophila melanogaster also place the dietary toxicity of rugulosin in 20 the 50 pM range (Dobias et al. 1980). This compound is also toxic to cultured cells of several insect cell lines including fall army worm (Spodoptera frugiperda) and mosquito larvae (Aedes albopictus; Watts et al. 2003). When tested under the conditions described above, the semi- purified extracts of the remaining listed endophytes resulted in statistically significant 25 reductions in spruce budworm growth rate, and or maximum instar reached within the operating parameters of the tests. Endophyte Screening Methods The inventors have identified multiple strains of toxigenic endophytes that can be inoculated in conifer seedlings to reduce pest damage in colonized hosts. 30 In identifying the toxigenic endophytes of the invention, the inventors took -27 fungal strains material from the existing literature from public collections and tested additional collections of over 1000 endophyte strains. The endophytic strains were cultured from the needles of randomly selected spruce trees and an antibody was developed to permit detection. The antibody assay permitted 5 detection of successful inoculations. One aspect of the invention provides a method of identifying novel toxigenic endophytes that can be used with the methods and compositions of the invention. The screening method for isolating a toxigenic endophyte from a donating plant comprises: 10 a) isolating a slow growing candidate endophyte from the conifer needles of a donating plant (eg. a donating conifer); b) assaying the toxicity of the candidate endophyte to a pest in a pest growth toxicity assay to determine whether the candidate endophyte is a toxigenic endophyte. 15 Wherein if the if the candidate endophyte is a toxigenic endophyte, the method optionally further comprises inoculating a conifer seedling; a) inoculating a recipient conifer seedling with the candidate endophyte strains determined to be a toxigenic endophyte; b) providing a sample of the inoculated seedling and detecting the 20 presence of the target endophyte (ie. endophyte colonization) and/or endophyte toxin. The following non-limiting examples are illustrative of the present invention: EXAMPLES 25 Example I The needles colonized by a rugulosin-producing endophyte were found to contain rugulosin in concentrations that are effective in vitro at retarding the -28 growth of spruce budworm larvae. Larvae presented with endophyte infected needles containing rugulosin did not gain as much weight as those eating uncolonized needles. The impact on the budworm was much greater than anticipated. One strain 5WS22E1, was the most successful antagonist of 5 larval growth. Needles of 17 of 22 seedlings colonized by rugulosin -producing strains were toxic to the insects. Needles infected by a different family of strains producing vermiculin were also toxic to the insects. Rugulosin was unambiguously present in needles infected by rugulosin producing strains and not found in either control or in the seedlings colonized 10 by the vermiculin-producing endophyte. In needles that significantly affected budworm weights, rugulosin concentrations averaged 8 pig/g. This was >15 times the mean concentration found in needles that did not affect budworm growth. In vitro, rugulosin at 1 pg/g affected budworm growth and development, a value rather close to the 8 ptg/g found in needles. 15 Example 2 Antibody Assay for Detecting Endophyte The following describes (1) the development of a polycolonal antibody for the rugulosin-producing endophyte 5WS22E1; (2) the inoculation of 1235 20 seedlings and subsequent growth outdoors under commercial nursery conditions (3) analysis of these needle samples using the culture method previously employed and the antibody method and (4) HPLC analysis for the presence of rugulosin in -10% of the positive samples. MATERIALS AND METHODS 25 Inoculation The strain employed, 5WS22E1 (DAOM 229536; rugulosin producer) was described in Miller et al. (2002). Control-pollinated full-sib families of white spruce were produced for inoculation. The families used were chosen to provide a diverse set of genotypes. Nine families originating from unrelated 30 white spruce parents were used. The parents were selected from the J.D.

- 29 Irving Limited genetic improvement program and originated within a range of 45 N to 47.5 N Latitude and 65 W to 70 W Longitude in New Brunswick and Maine. The minimum distance between trees selected in the forest was 200m. Seeds were taken from frozen storage at -5 C, planted in plastic 5 seedling containers in a media containing 3:1 peat moss/ vermiculite and placed in a greenhouse. Fertilization via irrigation water started one month after sowing (10-52-10 for two weeks followed by 8-20-30 for one week followed by 20-8-20 at 100 pg/L and increasing to a maximum of 125 pg/L). 5WS22E1 (DAOM 229536) cultures were grown on 9 cm plates containing 10 2% malt extract agar (Difco) at 25 C for 8 weeks. Following the incubation period, 5 mL sterile water was poured on agar surface which was then rubbed gently with a sterile bent glass rod. The resulting suspension was taken up with a sterile pipette, macerated and diluted with sterile water to deliver an average of 3 fungal hyphal fragments per drop (6 pL) from a sterile 1 mL 15 syringe with a 0.45 mm needle (B-D #309597) as determined by counting with a hemocytometer. Wound inoculation of 1235 seedlings was performed in a laminar flow hood by injecting 6 pL into the un-lignified tissue of the stem typically 10 mm away from the terminal shoot (Miller et al. 2002). This was done at the Sussex Tree Nursery on April 16, 2001. This is located at 450 43' 20 N, 650 31' W; elevation 21.30 m. Mean annual temperature is 5.8 C (January 8.5, July 19.0 C) with average precipitation of 245 cm snow and 915 mm rain. The trees were allowed to grow in trays for 6 months in a greenhouse, at which point they were planted into pots and left in a shaded area with irrigation until sampling in mid September 2002. 25 ELISA Development Cells of 5WS22E1 were grown on two types of liquid media and on irradiated, young uninoculated white spruce needles. The needles were irradiated with 25kGy (MDS Nordion, Montreal, PQ) and 200 mg was placed in a sterile glass Petri dish containing a filter paper followed by the addition of 1 mL sterile 30 water. After 24 h, the culture was inoculated with a small piece of culture taken from the leading edge of a 2% malt extract agar plate. The first liquid - 30 medium used was a glucose/sucrose mineral salts medium (1g/L KH 2

PO

4 , 1g/L KNO 3 , 0.5 g/L MgSO 4 - 7H 2 0, 0.5 g/L KCI, 0.2 g/L glucose, 0.2g/L sucrose) and the second, 2% malt extract. An aliquot (50 mL) of each medium was dispensed into 250 mL Erlenmeyer flasks, respectively and autoclaved. 5 An agar culture was macerated in 100 mL sterile water under aseptic conditions. An aliquot (2.5 mL) was used to inoculate the flasks. All cultures were incubated at 18 C for ca. three months. At the end of the incubation period, the cells growing on the needles were carefully scraped off with a scalpel and freeze dried. Cells from the liquid cultures were filtered and 10 washed several times with sterile distilled water and freeze dried. Polyclonal antibody production was performed in goats at Cedarlane@ Laboratories Limited Hornby, Ontario. Freeze-dried cells from each medium were ground up and each diluted in sterile PBS to a concentration of 20 mg/mL for the antigen solution. 0.5 mL of this solution was emulsified with 0.5 15 mL of complete Freund's adjuvant (Brenntag Biosector, Denmark) for the primary immunization. 0.5 mL of incomplete adjuvant was used for the subsequent boosts. A pre-immune sample was obtained from the jugular vein of each goat using a needle and vacutainer before the primary immunization. Each goat was then injected using a 21 gauge needle intramuscularly in the 20 hind quarter at 4 different sites with 0.25mL of the emulsified antigen solution per injection site. After 28 days the goat received its first boost as described above, its second boost at day 53 and a test bleed was taken at day 66. The antibodies produced from the 3 different goats were tested to determine their avidity and cross reactivity with powdered, freeze-dried young 25 uninoculated spruce needle cells, as well as cells of the most common needle phylloplane fungi isolated from these needles (Alternaria altemata, Phoma herbarum, Cladosporium cladosporioides and Aspergillus fumigatus; Miller et al. 2002; Miller et al. 1985), and other white spruce conifer endophytes: 5WS1111 (DAOM 229535; vermiculin producer) and 5WS331L1 (a rugulosin 30 producer). In addition, a number of balsam fir endophytes were tested. One isolated endophyte from balsam fir is BF 36H1 (Novel Diterpenoid Insect - 31 Toxins from a Conifer Endophyte JA Findlay, G Li, PE Penner, JD Miller Journal of Natural Products, 1995 58: 197-200). In the case of the needle endophytes, cells were produced on irradiated needles as above. The phylloplane species tested were grown in shake 5 culture using a maltose, yeast extract, peptone medium (Miller & Mackenzie 2000), filtered, washed and freeze dried as above. This method was shown to be suitable for antigen production by such fungi in unrelated studies. Cells were ground to a fine powder in small mortar and carefully weighed. Suspensions of known concentration were made in TBS (0.8 g/L NaCl, 0.2 g/L 10 KCI, 1.89 g/L Tris-HCI, and 1.57 g/L Tris base) in vials and vortexed. Avidity and cross reactivity experiments were conducted on sera from the goats treated with the various immunogens in a similar fashion, first optimizing cell additions/serum dilutions, and then conducting cross-reactivity experiments. As needed, aliquots of cells were diluted in 0.1 M carbonate 15 buffer pH 9.6 (Sigma) coating buffer to defined concentrations and pipetted into 96 well Nunc brand microplates. The plate was covered with an acetate sealing sheet and placed on a rotary shaker for 4 h at room temperature. The plate was removed, turned upside down and shaken to remove all of the coating solution in the sink. 200 pL of Blotto (10 g of non-fat dry milk per L of 20 TBS) was then added to each well, covered and placed in a refrigerator at 5 C overnight. The plate was then removed and washed using a Molecular Devices Skan Washer 400 to remove all of the Blotto solution. The washing solution used was TTBS (0.5 ml of tween-20 /L of TBS) with a washing program of 3 cycles of soaking, washing, and rinsing. Various dilutions of goat 25 serum in Blotto were made from which 100pl was added to the microplate wells. The plate was covered and placed on a rotary shaker for 1 hour at room temperature, it was removed and washed using TTBS as described above. 100 pL of anti-goat IgG-horse radish peroxidase conjugate (Sigma) diluted 5000 times in Blotto was then added to each microplate well. The plate 30 was covered and incubated at room temperature for 1 hour. The plate was washed for the final time and the substrate was added. 100 pL of TMB (Tetra- - 32 methly benzidine, Sigma) was added to each well. The plate was covered and incubated at room temperature for 30 minutes. The reaction was stopped using 50 pL of 0.5 M sulfuric acid. The plate was immediately read at 450 nm with subtraction of 630 nm on a Molecular Devices Spectra Max 340PC 5 reader. The polyclonal antibody produced with 5WS22E1 cells grown on the defined medium had low avidity and was not studied further. The antibody from the 2% MEA medium had acceptable avidity but unacceptable cross-reactivity. The polyclonal antibody to the cells cultured on irradiated needles was used in 10 all further studies. A 4000 fold dilution from the latter serum with a 5000 dilution of the secondary antibody was determined to be optimal for tests with 5WS22E1 cells, allowing a preliminary estimate of the sensitivity of the assay to be made. Tests with this and the other conifer endophytes were done using cell weights from 15 to 240 ng over a 5 fold range in antibody concentration. 15 Using a serum dilution of 4000, response to 15, 30, 60, 120 and 240 ng cells of the phyloplane species and 60, 100 and 500 ng freeze dried white spruce needles was determined. Powdered freeze-dried white spruce needles (500 ng/well) were then spiked with additions of 5WS22E1 cells over the above range. 20 Needle analyses for 5WS22E1 Plating method At the time of sampling, average tree height was 12.9 cm. Needles from each tree were carefully removed radiating out from the inoculation point, placed in sterile plastic bags and immediately frozen for transport to the laboratory. 25 Each bag was taken from the freezer and approximately 20 needles removed. Each needle was surfaced-disinfested by dipping in 70% ethanol for 1 min, rinsing in sterile distilled water for 1 min, and blotted dry on sterile tissue. This was placed in a sterile Petri dish and cut into 2 segments and the needle half that was attached to the stem plated on 2% malt extract agar. Plates were 30 incubated at 18 *C for 6 weeks and were inspected regularly by microscopy for 5WS22E1 growth (Miller et al. 2002).

- 33 ELISA The remaining needles were freeze-dried. Approximately 20 needles from each frozen needle sample were removed, ground to a fine powder in a vial using a Spex-Certiprep grinder-mixer (model 5100) and 10 mg weighted out. 5 One mL of TBS (0.8 g/L NaCl, 0.2 g/L KCI, 1.89 g/L Tris-HCI, and 1.57 g/L Tris base) was added to each vial and placed on the vortex until completely mixed (approx. 1 min). The samples were assigned codes unrelated to the tree codes and randomized to ensure that samples from individual trees were analyzed across many plates. All were diluted in 0.1 M carbonate buffer pH 10 9.6 (Sigma) coating buffer to concentrations of 100 and 500 ng of needles per 100 pL well, and pipetted in duplicate onto 96 well microplate. The remaining steps in the analysis were as described above. In each trial, 60 ng of 5WS22E1 cells were used as a positive control to assess the performance of the assay; relative standard deviation of the net value of 25 representative 15 experiments was 8.7 %. Unless an acceptable positive control result was obtained, the results from individual plates were re-done. Samples with high absorbance values in both 100ng and 500ng tests were rejected as indicating dilution problems. Results were scored as positive when absorbance of the 500 ng sample was greater than the lowest absorbance value above one 20 (1.000) plus the mean absorbance value of 30 ng of the target endophyte on that plate. Chemical analyses Rugulosin of purity > 95% was used for standards. The presence of rugulosin 25 was then to be determined in a sub-sample of 113 randomly-selected trees of the 330 trees determined to be endophyte positive by antibody. A 100 mg sample of freeze-dried needles was ground to a fine power as describe above and extracted with 10 mL of ice cold petroleum ether by stirring for 45 min under conditions of low light. The flask was kept on ice during the extracting 30 and was cover with aluminium foil to prevent degradation by light. The suspension was filtered by suction and discarded. The needles were returned - 34 to the flask and extracted with 10 mL of chloroform for 45 min as above for petroleum ether. The new suspension was then filtered by suction and retained while the needles were discarded. The chloroform extract was washed with 10 mL of 5 % NaHCO 3 in a separatory funnel. This first 5 chloroform layer was then discarded, the pH was acidified to pH 3 using 1 N HCl, and a new 10 mL of chloroform was added to the separatory funnel and extracted. The chloroform was removed and dried in an amber vial under a gentle stream of nitrogen. The dried extracts were re-dissolved in 50 pL of acetonitrile, 10 pL was 10 removed and injected into an 1100 series Agilent Technologies HPLC-DAD, using a Synergi Max RP 80A, 250 x 4.6 column (Phenomonex) and a gradient method adapted from Frisvad (1987). The gradient started at 90% water with 0.05% TFA and 10% acetonitrile and changed to 10% water with 0.05% TFA and 90% acetonitrile over the 20 min run. Samples were analysed at 389 nm, 15 the maximum UVNIS absorption for rugulosin and peak identity was confirmed by full spectrum data from the diode array detector. The limit of quantification was 150 ng/g freeze dried powdered material; recoveries from spiked needles averaged 75%. Statistical analyses were done using SYSTAT v. 10.2 (Point Richmond, CA). 20 RESULTS Inoculation and ELISA Development Under the conditions described, the limit of quantification for the target endophyte 5WS22E1 was between 30 and 60 ng cells per well; the limit of 25 detection was 30 ng. Over a concentration range of one log, the antibody demonstrated a linear response to 60 ng of target endophyte (Fig. 1; results of triplicate experiments presented). Relative cross-reactivity to 15, 30, 60, 120 and 240 ng cells of the phyloplane species was moderate (8%). Over the same range, there was slightly greater cross-reactivity to the cells of the two 30 white spruce endophytes tested (-15%), one of which produced rugulosin.

- 35 Even at 240 ng cells, the response was below the 1 absorbance unit threshold used. The response of the polyclonal to the above range of the non-target fungal cells was not linear across a range of antibody concentrations. The response to 60, 100 and 500 ng of white spruce cells again across a range of 5 antibody concentrations was moderate (-6%) and also non-linear. A comparison of the response to 60 ng of non-target cells to the target endophyte is given in Fig. 1; average relative standard deviation of replicates included in these data was 6.3%. Quantification of the target endophyte was not affected by the presence of 10 larger amounts of powdered freeze dried needles (-2-18 x). By ANOVA with Fishers LSD test, the response for 500 ng needle material plus 30 ng target endophyte was significantly greater than that for the 15ng combination (p = 0.008). The value for 30 and 60 ng were not significantly different (p = 0.312) indicating that the limit of quantification was between these values in the 15 presence of needle material. All remaining p values between endophyte needle cell additions were > 0.003. Absorbance values for 30, 60, 120 and 240 ng target endophyte plus needle material and the fungus alone were highly correlated r = 0.951 (p > 0.000) indicating that the presence of the needle did not affect the linearity of the assay (Fig. 2; results of triplicate 20 experiments presented). Needle and chemical analyses Of the 1235 trees tested, only 40 were clearly positive for 5WS22E1 by plating analysis, i.e. the fungus grew from the cut end of >15/20 of the needles. The 25 majority of the ca. 25, 000 surface-disinfested needle segments exhibited the growth of non-endophyte fungi comprising those previously observed (Miller et al. 2002). As before, the colonies of these taxa typically arose from the sides of the needles rather than the cut ends. When the same samples were analyzed by the antibody method, 330 or 27% 30 were positive. All of the samples where the fungus was seen in culture were - 36 positive by the antibody assay. Of the 113 samples tested for rugulosin by HPLC from the 330 antibody positive needles, 101 (90%) were positive at the limit of quantification. The range of concentrations found was 0.15 to 24.8 pg/g needle. The distribution of values (assuming half the detection limit for 5 the non-detects) is shown on Fig. 3). The Geometric Mean needle rugulosin concentration was 1.02 pg/g. Mean frozen weight of 100 representative needles was 2.6 mg/needle. The freeze-dried weight was 1.08 mg/needle. The polyclonal assay developed for the target endophyte 5WS22E1 was of 10 comparable sensitivity to similar assays for grass endophytes (Gwinn et al. 1991; Johnson et al. 1982; Reddick & Collins 1998). This was achieved despite the greater difficulties of the conifer needle matrix compared to grass leaves. Cuttings of the latter can be placed directly in microplates whereas the tough, hydrophobic conifer needles must be ground to expose the fungal cells 15 to the antibody. Cross-reactivity to the potentially competing fungi was acceptable (Fig. 1). Epiphytic biomass is typically low in young needles (Carroll 1979) and is comprised mostly of fungi (Swisher & Carroll 1980). Based on an extrapolation of our data on their data (Swisher & Carroll 1980; their Table 2), the fungal epiphytic biomass on these 19 month old needles 20 would have <3 pg/g. This means the presence of such fungi in our needle samples had no effect on the antibody response in these assays. Additionally, relatively large amounts of powdered white spruce needles compared to fungal cells did not affect the reliable detection of 30-60 ng cells of target endophyte (Fig. 2). 25 Most (90%) of the needles shown to be endophyte positive by the antibody method contained rugulosin concentrations above the detection limit. This provides additional evidence of the reliability of the antibody method. The mean (1 pg/g), range and distribution of rugulosin concentrations in these needles (Fig. 3) were similar to that found in growth chamber-grown seedlings 30 (Miller et al. 2002). The analytical method used in the present study included examination of the full scan UV spectrum of the rugulosin peak. This provides - 37 additional confirmation of the presence of this compound compared to the previous HPLC UV and TLC analyses (Miller et al. 2002). The analyses were done using replicate 500 ng sub-samples obtained from a 20 needle sample. The conservative assumption used in the scoring of the 5 330 positive seedlings was that they contained the limit of quantification. Using this conservative assumption, each needle would contain 60 pg endophyte biomass per g needle or -6%. For comparison, Swisher and Carroll (1980) report that 1-4 year old Douglas fir needles have -10 pg epiphyte biomass per g needle. This was mainly comprised of fungi but 10 including algae and bacteria in older needles. This measurement enables another comparison to be made: the amount of rugulosin per weight of fungal cells. Several studies have been made of the production of mycotoxins in living plants using culture and ergosterol to assess fungal biomass. A 15 representative example is a study of deoxynivalenol in experimentally inoculated corn pre-harvest with corresponding measurements of ergosterol and viable fungi among other data (Miller et al. 1983). Using the ergosterol fungal biomass conversion discussed in Gessner & Newell (2002), it is possible to estimate that in planta dexoynivalenol concentration corresponded 20 to - 3% of the fungal biomass. Using the mean rugulosin concentration, the ratio in this case was -2%. In summary, the polyclonal assay developed for the target endophyte 5WS22E1 reliably detected the fungus in 500 ng sub-samples of colonized needles. Nineteen months post-inoculation, rates of colonization detected 25 were high. Analysis showed most colonized needles (90%) contained detectable concentrations of the 5WS22E1 anti-insectan compound rugulosin. Example 3 Fungal Collections From ca. 12 sites in New Brunswick, Nova Scotia, Quebec and Maine, 30 branches were collected from superior trees of white spruce, red spruce and - 38 balsam fir in various stands, primarily in relatively undisturbed natural forest stands but also in 20-30 year old plantations. This was done from 1985-2005. Branches were collected either directly in the field or from branches of trees which had been grafted from field selections and grown in a clone bank 5 plantation in Sussex, New Brunswick. From the branches, needles were surface sterilized and plated to general procedures developed by Carroll and colleagues (e.g. Can J Bot 56:3034). Briefly, typically 20 healthy needles were harvested from each branch. These were surface sterilized by immersion in 70% ethanol, followed by 6% sodium hypochlorite for 10 min followed by 10 rinsing in sterile de-ionized water, blotted dry on sterile tissue and plated on 2% malt extract agar. Plates were incubated at 18 *C for -6 weeks. The purpose of this surface disinfection was to eliminate phylloplane fungi that obscure the slow-growing needle endophytes (Can. J Bot 56:3034; Mycological Research 93:508). All needle segments were inspected with a 15 stereo microscope. Colonies not obviously Cladosporium or Altemaria were examined under high power for endophyte diagnosis. Slow growing cultures were transferred to 2% malt agar slants or culture bottles, incubated at 16-18* C, sealed, inventoried for culture appearance and collection details and stored at 50 C. The several thousand strains that were 20 collected, were sorted by location, site and colony morphology and a random selection taken out for further study. Screening fungal collection for anti-insectan toxins Selected isolates were grown either in Glaxo bottles or other vessels that 25 allow cultures with a large surface area to volume ratio with lower oxygen tension. The medium used was 2% malt extract in de-ionized water. Cultures were inoculated by macerating the 2% malt extract agar slant in sterile de ionized water under asceptic conditions and adding the resulting suspension 5 % v/v either directly for smaller culture vessels (Mycological Research 93:508) 30 or into 250 mL Erlemeyer flasks containing 2% malt in de-ionized water for 2 - 39 weeks at 250 C. This in turn was macerated and inoculated into Glaxo and Roux bottles and incubated for 6-8 weeks at 16-180 C. The resulting cultures were filtered. The mycelium were frozen and freeze dried. The culture filtrates were extracted with ethyl acetate and examined for 5 evidence of metabolite production by thin layer chromatography, NMR and High Performance Liquid Chromatography with double diode array detector. Based on this evidence, the extracts were screened for dietary toxicity to spruce budworm larvae. The principal anti-insectan toxins were thus isolated and identified using standard methods of organic chemistry including, but not 10 limited to preparative TLC, column chromatography, NMR and high resolution mass spectroscopy. Identification of strains Colony morphological information for 5WS22E1 and SWS1111 the two well 15 studied strains is as follows: Strains were grown on 2% malt agar at 250 C in the dark. 5WS22E1 grew at 0.5 mm day-. The mycelia were mainly submerged, the colony was reddish-brown with a reddish soluble pigment; reverse was brown becoming red-brown in age. The mycelia were dark brown with roughened thick walls 1-2 jpm in diameter, sepate, with occasional 20 branches arising at right angles from the mycelia. 5WS1 111 grew at 0.4 mm day-. The colony and reverse were olive-brown with no soluble pigment and the mycelia were both submerged and aerial. The mycelia were olive brown with roughened walls 1-2 pm in diameter, sepate, with no branching (Mycological Research 106:471). 25 Molecular characterization of the five strains of interest has been done using the primers of Glass & Donaldson (1995) which are the recognized standard approach for filamentous Ascomycetes at present. Cells of the endophytes were grown in liquid culture, filtered and washed and then the DNA was extracted using the Ultraclean microbial DNA isolation kit (Mo Bio 30 Laboratories, #12224-250) and the resulting sequences examined in public - 40 databases for related sequences. At the time of writing, none of the strains have previously been deposited in GenBank@. Based on sequence similarity, strains 5WS22E1 and 5WS1111 are provisionally species of Phialocephala which includes species that are endophytic on spruce. The third candidate 5 white spruce endophyte was most similar to an endophyte isolated from Norway spruce. The remaining strains, 06-486D and 06-485A matched most closely to unnamed fungal species isolated from spruce trees. Identification of effective strains Effective strains are those that (a) produce anti-insectan compounds toxic to 10 the spruce budworms in vitro, (b) colonize white spruce seedlings, (c) produce their toxin(s) in planta (d) insects consuming endophyte-colonized needles show reduced growth rates. a) Insect tests are done by adding pure compound to synthetic diet. Spruce budworm (Choristoneura fumiferana) larvae were obtained from the 15 colony at the Natural Resources Canada, Canadian Forest Service Laboratory in Sault Ste. Marie, Ontario and stored at 5 0 C. For each test, second instar larvae are put in creamer cups containing approximately 15 ml of artificial diet which had been prepared the day before and allowed to set overnight. The diet used is based on McMorran (1965) as modified by 20 Forestry Canada. The cups are placed in a growth chamber at 220 C, 55% RH with 16h light/day until they reach 4-5 instar as estimated by visually assessment. Batches of diet are prepared and suitable portions were measured out for addition of extracts, fractions or pure compounds. After 4 days on the test diet, the budworms were frozen, weighed and measured. The 25 data was analyzed for dry weight reductions in comparison to controls and for changes in the distribution of insects at different instars in comparison to controls. For spruce budworm, a preliminary test indicated that the effective approximate concentration of rugulosin for growth limitation was 10 pM 30 (Calhoun et al. 1992). Additional tests produced a similar value of 25 pM -41 rugulosin with an associated p value of 0.027 pM for weight reduction (see Figure 8). Strains 5WS22E1, 5WS1111, 05-037A, 06-486D, 06-485A are active in similar in vitro tests of extracts. 5 (b) Colonization of white spruce seedlings Colonization of seedlings after experimental inoculation has been done for 5WS22E1 and assessed by presence by colony morphology, a positive antibody test and analysis of toxin in planta (Mycological Research 106:471, Mycologia 97:770). The persistence of colonization producing effective 10 concentrations of rugulosin in the field for 25 years of 5WS22E1 has been demonstrated. ELISA Assays Antibody production was done using cells of 5WS22E1 grown on irradiated, young uninoculated white spruce needles. The needles were irradiated with 15 25kGy (MDS Nordion, Montreal, PQ) and 200 mg was placed in a sterile glass Petri dish containing a filter paper followed by the addition of 1 mL sterile water. After 24 h, the culture was inoculated with a small piece of culture taken from the leading edge of a 2% malt extract agar plate. At the end of the incubation period, the cells growing on the needles were carefully scraped off 20 with a scalpel and freeze dried. Polyclonal antibody production was performed in goats at Cedarlane@ Laboratories Limited, Hornby, Ontario. This laboratory meets the requirements of the Canadian Council on Animal Care. Freeze-dried cells from each medium were ground up and each diluted in sterile PBS to a 25 concentration of 20 mg/mL for the antigen solution. 0.5 mL of this solution was emulsified with 0.5 mL of complete Freund's adjuvant (Brenntag Biosector, Denmark) for the primary immunization. 0.5 mL of incomplete adjuvant was used for the subsequent boosts. A pre-immune sample was obtained from the jugular vein of each goat using a needle and vacutainer before the primary 30 immunization. Each goat was then injected using a 21 gauge needle -42 intramuscularly in the hind quarter at 4 different sites with 0.25mL of the emulsified antigen solution per injection site. After 28 days the goat received its first boost as described above, its second boost at day 53 and a test bleed was taken at day 66. 5 The antibodies produced from the 3 different goats were tested to determine their avidity and cross reactivity with powdered, freeze-dried young uninoculated spruce needle cells, as well as cells of the most common needle phylloplane fungi isolated from these needles (Alternaria altemata, Phoma herbarum, Cladosporium cladosporioides and Aspergillus fumigatus), and 10 other white spruce conifer endophytes: 5WS1111 (DAOM 229535; vermiculin producer) and 5WS331L1 (a rugulosin-producer). In addition, a number of balsam fir endophytes were tested. In the case of the needle endophytes, cells were produced on irradiated needles as above. The phylloplane species tested were grown in shake culture using a maltose, yeast extract, peptone 15 medium, filtered, washed and freeze dried as above. This method was shown to be suitable for antigen production by such fungi in unrelated studies. Cells were ground to a fine powder in small mortar and carefully weighed. Suspensions of known concentration were made in TBS (0.8 g/L NaCl, 0.2 g/L KCI, 1.89 g/L Tris-HCI, and 1.57 g/L Tris base) in vials and vortexed. 20 Avidity and cross reactivity experiments were conducted on sera from the goats treated with the various immunogens in a similar fashion, first optimizing cell additions/serum dilutions, and then conducting cross-reactivity experiments. As needed, aliquots of cells were diluted in 0.1 M carbonate buffer pH 9.6 (Sigma) coating buffer to defined concentrations and pipetted 25 into 96 well Nunc brand microplates. The plate was covered with an acetate sealing sheet and placed on a rotary shaker for 4 h at room temperature. The plate was removed, turned upside down and shaken to remove all of the coating solution in the sink. 200 pL of Blotto (10 g of non-fat dry milk per L of TBS) was then added to each well, covered and placed in a refrigerator at 5 C 30 overnight. The plate was then removed and washed using a Molecular Devices Skan Washer 400 to remove all of the Blotto solution. The washing -43 solution used was TTBS (0.5 ml of tween-20 IL of TBS) with a washing program of 3 cycles of soaking, washing, and rinsing. Various dilutions of goat serum in Blotto were made from which 100pl was added to the microplate wells. The plate was covered and placed on a rotary shaker for 1 hour at 5 room temperature, and then removed and washed using TTBS as described above. 100 pL of anti-goat igG-horse radish peroxidase conjugate (Sigma) diluted 5000 times in Blotto was then added to each microplate well. The plate was covered and incubated at room temperature for 1 hour. The plate was washed for the final time and the substrate was added. 100 pL of TMB (Tetra 10 methyl benzidine, Sigma) was added to each well. The plate was covered and incubated at room temperature for 30 minutes. The reaction was stopped using 50 pL of 0.5 M sulfuric acid. The plate was immediately read at 450 nm with subtraction of 630 nm on a Molecular Devices Spectra Max 340PC reader. 15 The polyclonal antibody produced with 5WS22E1 cells grown on the defined medium had low avidity and was not studied further. The antibody from the 2% MEA medium had acceptable avidity but unacceptable cross-reactivity. The polyclonal antibody to the cells cultured on irradiated needles was used in all further studies. A 4000 fold dilution from the latter serum with a 5000 20 dilution of the secondary antibody was determined to be optimal for tests with 5WS22E1 cells, allowing a preliminary estimate of the sensitivity of the assay to be made. Tests with this and the other conifer endophytes were done using cell weights from 15 to 240 ng over a 5 fold range in antibody concentration. Using a serum dilution of 4000, response to 15, 30, 60, 120 and 240 ng cells 25 of the phyloplane species and 60, 100 and 500 ng freeze dried white spruce needles was determined. Powdered freeze-dried white spruce needles (500 ng/well) were then spiked with additions of 5WS22E1 cells over the above range. (c) Produce their toxin(s) in plants 30 Rugulosin analysis -44 Typically, a 100 mg sample of freeze-dried needles was ground to a fine power as describe above and extracted with 10 mL of ice cold petroleum ether by stirring for 45 min under conditions of low light. The flask was kept on ice during the extracting and was covered with aluminum foil to prevent 5 degradation by light. The suspension was filtered by suction and discarded. The needles were returned to the flask and extracted with 10 mL of chloroform for 45 min as above for petroleum ether. The new suspension was then filtered by suction and retained while the needles were discarded. The chloroform extract was washed with 10 mL of 5 % NaHCO 3 in a separatory 10 funnel. This first chloroform layer was then discarded, the pH was acidified to pH 3 using 1 N HCI, and a new 10 mL dilquot of chloroform was added to the separatory funnel and extracted. The chloroform was removed and dried in an amber vial under a gentle stream of nitrogen. The dried extracts were re-dissolved in 50 pL of acetonitrileand 10 pL was 15 removed and injected into an 1100 series Agilent Technologies HPLC-DAD, using a Synergi Max RP 80A, 250 x 4.6 column (Phenomonex) and a gradient method adapted from Frisvad (1987). The gradient started at 90% water with 0.05% TFA and 10% acetonitrile and changed to 10% water with 0.05% TFA and 90% acetonitrile over the 20 min run. Samples were analysed at 389 nm, 20 the maximum UVNIS absorption for rugulosin and peak identity was confirmed by full spectrum data from the diode array detector (Figure 7). The limit of quantification was 150 ng/g freeze dried powdered material; recoveries from spiked needles averaged 75%. Vermiculin Analysis 25 Colonization by 5WS1 111 after experimental inoculation was demonstrated by colony morphology (Mycological Research 106:471) by a positive antibody test and by the presence of the toxin in planta. Antibody development was done the same way as above. The principal 5WS1111 toxin, vermiculin, was determined as follows. Ten 30 milliliters of ice-cold petroleum ether was added to each sample of ground needles and left to extract for 45mins to an hour on ice while agitated on a -45 magnetic stir plate. The solutions were then filtered with Whatman #1 filter paper and a Buchner funnel. Ten milliliters of ethyl acetate was added to the needles and filter paper. The solutions were left to extract for 45 minutes to an hour while agitated on a magnetic stir plate and again filtered through 5 Whatman #1 filter paper on a Buchner funnel. The filtrate was collected and dried under a gentle stream of nitrogen. Approximately one milliliter of acetonitrile was added to the dried extracts and the subsequent solution was vortexed, filtered through a 0.22pm or 0.45pm Acrodisk filter, redried under nitrogen and redissolved in a small amount (100-300 pl) of acetonitrile. These 10 extracts were then injected on the HPLC. The vermiculin peak was detected in the UV chromatogram at 224nm, its UV max in the full scan spectrum. Tests for the isolated vermiculin producing endophyte were described in Miller JD, Mackenzie S, Foto M, Adams GW, Findlay JA (2002) Needles of white spruce inoculated with rugulosin-producing endophytes contain rugulosin 15 reducing spruce growth rate. Mycological Research 106:471-479. (d) insects consuming endophyte-colonized needles show reduced growth rates The test system used to assess 5WS22E1 and 5WS1111 (Mycological Research 106:471) was adapted from that of Thomas (1983) to compare 20 spruce budworm performance on foliage of different ages and tree species. The system comprised of 4 ml tapered plastic sample cups with caps each drilled through the center with a 0.5 mm hole and a piece of Oasis T M foam cut to the size of the narrow base of the vials (10 mm diameter x 15 mm). Just before use, 0.5 ml sterile water was added. This permitted individual needles 25 to be held vertically and exposed to a single spruce budworm with the base of the needle in contact with moisture. The needle was taken out of the freezer and inserted in the septum just before the budworm was added. The smooth surface of the septum allowed uneaten portions of the needle to be collected. The vials were held upright in groups of 30 in wood holders. 30 Second instar spruce budworm were were placed in vials containing artificial diet (McMorran, 1965). They were held in growth chambers at 22 *C, 55% RH - 46 with 16h light/day for 1-2 days until they reached a head capsule width of 0.4 ±0.1 mm ( 3 rd instar). This is a stage at which they will consume succulent needles. Batches of 60-70 larvae were combined and gently mixed by hand to randomize the animals from their original growth vial. A single budworm was 5 then placed in each vial. From a well mixed pool of frozen needles, 100 of a similar size and weight, collected around the inoculation point of the test seedling plus 100 control needles per genotype were tested. Typically 600 insects were tested at a time. One control plant genotype was tested 4 times. Each vial was labeled so as not to be indicative of the origin of the needle. 10 Vials were placed in a controlled environment chamber (22 *C, 55% RH, 16h day) for 48 h at which time the wood holders were placed in a freezer. The amount of unconsumed needle, head capsule width and larval frozen weights were measured. Budworm and residual needle weights and budworm head capsule widths were determined. 15 Tests have been done for tree endophyte 5WS22E1 in both 2 and 3 year old trees on the growth of diet raised disease-free second instar spruce budworm larvae as follows: A set number of budworm were placed by hand on lateral branches with buds and then covered with a mesh screen on both endophyte positive and negative trees. Temperature recorders were placed in the holding 20 area and the progress monitored until the budworm was not greater than sixth instar. At termination, the insects were collected, frozen for subsequent determinations of head capsule width and frozen weight. Samples were collected for toxin analysis to ensure that there was no misclassification of the trees as to their endophyte status. The weight of the budworm on the infected 25 trees was significantly reduced compared to those on the control trees. Example 4 Detection of endophyte 5WS1111 The polyclonal antibody used for detection of endophyte 5WS1111 was prepared as described above.

- 47 Under the analysis conditions described above, the limit of quantification and limit of detection for the target endophyte 5WS1111 were both 30 ng cells per well. Over a concentration range of one log, the antibody demonstrated a linear response to 60 ng of target endophyte (Fig. 1; results of triplicate 5 experiments presented). Relative cross-reactivity to 15, 30, 60, 120 and 240 ng cells of the phyloplane species was moderate (>10%). Over the same range, there was slightly greater cross-reactivity to the cells of the two white spruce endophytes tested (-5%). Even at 240 ng cells, the response was > the 1 absorbance unit threshold used. The response of the polyclonal to the 10 above range of the non-target fungal cells was not linear across a range of antibody concentrations. The response to 60, 100 and 500 ng of white spruce cells again across a range of antibody concentrations was modest (>10%) and also non-linear. A comparison of the response to 60 ng of non-target cells to the target endophyte is given in Fig. 1; average relative standard deviation 15 of replicates included in these data was 6%. Figure 4 shows that quantification of the target endophyte was not affected by the presence of larger amounts of powdered freeze dried needles (-2-18 x). By ANOVA with Fishers LSD test, the response for 500 ng needle material plus 30 ng target endophyte was significantly greater than that for the 15ng 20 combination (p = 0.000) as well as all values above. All remaining p values between endophyte needle cell additions were > 0.003. Absorbance values for 30, 60, 120 and 240 ng target endophyte plus needle material and the fungus alone were highly correlated r = 0.973 (p > 0.000) indicating that the presence of the needle did not affect the linearity of the assay (Fig. 5; results 25 of triplicate experiments presented). Example 5 Producing the endophyte inoculum Cultures are inoculated by macerating the 2% malt extract agar slant in sterile 30 de-ionized water under asceptic conditions and adding the resulting suspension 5 % v/v into 250 mL Erlemeyer flasks containing 2% malt extract in de-ionized water. These are incubated for 2 weeks at 25* C on a shaker - 48 (3.81 cm through, 220 rpm). This in turn is macerated and added to a stirred jar fermentor adapted for growth of filamentous fungi containing 1% malt extract broth aerated at 0.1 v/v per minute at 280 rpm stirring and 210 C for 7 days. The cell counts are designed to ensure that each seedling receives 10 5 propagules as delivered in the greenhouse at the receptive stage of the plant plant applied under environmental conditions that sustain needle wetness. Provided they are applied during the receptive stage of the seedling, such inoculations are effective whether the seedlings are lightly wounded or untouched. 10 For 5WS22E1 and 5WS1111, the addition of small amounts (mg per seedling) of irradiated needles colonized as described above to the soil in the flats used for commercial seedling production is effective at creating indirect contact between the needles and seedlings for inoculating the seedlings, provided the inoculation and seedlings are at the receptive stage. 15 Example 6 Method of Inoculation - Seed Stratification A method of inoculating seedlings comprises adding cells to seeds during the stratification process. This is a process whereby tree seed is soaked in water prior to germination to imbibe water and prepare for seed germination. The 20 method involves adding washed toxigenic endophyte cells produced in fermentation as above i.e. adding fungal cells that have been harvested from the fermentor, centrifunging and resuspending in sterile water followed by immediate addition to the seed stratification bags at the green house. In one embodiment seeds are soaked in water containing inoculum prior to sowing in 25 the greenhouse during seed stratification. Example 7 Inoculating with an endophyte using the limited time window Reproducing infected seedlings -49 Seedlings produced for all the nursery trials were grown using standard containerized seedling production methods. Each solid wall plastic container is 726 cm2 with 67 cavities per container. The individual cavities are 65 cu cm in volume. The trays are filled with a 3:1 mixture of peatmoss and vermiculite 5 and seeds are sown on top of this media. The seeds are covered with a thin layer of dolomitic limestone grit and trays are watered lightly until saturated. The greenhouse is misted with fine nozzles on an irrigation boom to keep the surface of the media moist. Seeds germinate within two weeks. Fertilization with soluble balanced fertilizer begins when side roots begin to form (3 weeks 10 after sowing). Spruce seedlings will typically be 3 cm in height at 8 weeks after sowing (see Figure 6). Experimental inoculation by spraying (for 50 seedling containers) was done by blending 350 ml of fungi cultures with 175 ml of sterile water for 10 seconds. The resulting solution was added to a sterile trigger spray bottle. The entire 15 mixture was sprayed evenly over the 50 containers. Pilot-scale operational application was made using a conventional greenhouse travelling boom sprayer and an injector pump to inject the fungus culture solution into the irrigation line. The boom was 28ft wide and had 22 T Jet 11004VH nozzles. The culture was injected using a Dosatron Injector(Dosatron International Inc. 20 Florida) with an 11 gallon/minute capacity. The injection ratio was 1:64 at 35psi. Application was made in the evening so that the foliage would remain moist for the longest period of time. Applications were made on two consecutive evenings with 3 passes made with the boom over the entire greenhouse each evening. Steps are taken to ensure that needle wetness is 25 sustained 12h post inoculation without washing the inoculum off the needles. A series of medium scale tests have been done since 2000 to determine the optimum time for inoculation. Inoculation has been done using wounded or unwounded seedlings using cultured cells or cells on irradiated needles as above. Pooled data from many trials with 5WS22E1 revealed that there is a 30 period of maximum receptivity regardless of the method of applying the inoculum (Figure 6), whether tested at 3 months post inoculation or in the -50 cases where more data exist, at 6 months when detectable colonization approximately doubles (Mycologia 97:770). Example 8 Mass Scale Inoculation 5 Seedlings on the scale of thousands can be inoculated by hand. Plants on the order of 30 million seedlings per year cannot be easily inoculated by hand. The proven method for infecting the needles with the endophyte, albeit with a low success rate, was by wound inoculation of young seedlings. Grass endophytes, are transmitted by seed such that methods applicable to grasses 10 are not applicable to conifer seedling inoculation. The data were analyzed as follows. From the stored samples of needles from 340 trees positive by culture and ELISA, a random selection of 113 ELISA positive seedlings was analyzed for rugulosin; most (90%) contained detectable concentrations of rugulosin. The range and distribution of the 15 rugulosin concentrations was similar to that found in earlier tests done in growth chambers (Measurement of a rugulosin-producing endophyte in white spruce seedlings. Mycologia 159:571-577). Because a complete analysis of the spread of the endophyte could not be done on the field trees, 10 inoculated seedlings that tested positive in a 2003 20 inoculation trial and 10 inoculated seedlings that were negative by ELISA at 3 months were left in pots at the nursery to grow for an additional year. Each branch was collected separately for analysis by ELISA for rugulosin. There were a variable number of branches (11 to 20) which were carefully labelled according to their position on each of the 20 trees and all were analyzed for 25 rugulosin (-160 samples). All of the inoculated trees that were negative by ELISA were positive after ca. 1 year. This indicates that the true inoculation success is materially underestimated when analyzed at 3 months. Some rate of false negatives from inoculation trials has been noted as an issue since the original inoculation studies in 1999-2002. This data also gives a better sense 30 of the rate of spread and, as observed for the field trees, confirm its - 51 persistence. Endophyte and its toxin were shown to be well distributed between new and old growth branches. The analysis demonstrated the existence of rugulosin as well a rugulosin derivative. This is either a rugulosin-degradation product or a plant modified 5 form of rugulosin. In similar situations, it is known that plants modify fungal metabolites in vivo to protect their own cells from damage without affecting the toxicity of the compound. The 5WS 22E1 trials have been done involved sequential needle inoculations and/or sequential cut and spray inoculations, i.e. from 10 mm, 20 mm, 30 mm, 10 40 mm and 50 mm height or similar germination to several weeks (see Figure 6). In each trial, fresh inoculum was prepared and shipped to Sussex since there was evidence that keeping inoculum after preparation at 50 C resulted in reduced viability with storage time. The needle samples were analyzed (-2500 samples). Analysis of the data confirmed that either inoculations by 15 cut and spray, adding needles colonized by the target fungus to the seedling containers or spray alone produces positive results. The three-month colonization rate is highest in the first two treatments but not much less in the spray alone tests. On balance in the several studies of this matter going back to the 1999-2002 period, the success rate by seedling height declined after a 20 peak between > 3 cm and 4 cm. Since these are measurements of the seedlings with the highest initial infection rather than the total rate, there is little doubt now of that for endophyte 5 WS 22E1. The inoculation trials of the second endophyte strain 5WS1111 were done but just available for analysis in the last quarter of 2004. These involved the cut 25 and spray and colonized needle inoculation methods. These were analyzed (700 samples) and notional colonization success rates were similar to those of 5WS22E1 (the species for which there is > 6 years of experience) i.e. - 1

/

3 rd positive. The effect of seedling age (height) was similarly confirmed. Example 9 30 Spread of Inoculated Strains - 52 As a necessary condition to using this technology under field conditions, a test site is needed where the developing inoculated trees can be repeatedly tested over a 5 year period. Questions include the persistence and spread of the established endophyte and its toxins and recruitment of other endophytes. 5 It is thought that these endophytes are transmitted in nature from cast needles from colonized trees. To address this question, young seedlings would be planted around the colonized developing trees. In the spring of 2000, -1200 seedlings were inoculated with 5WS22E1. From all this work, 340 trees were endophyte-colonized. The trees had been 10 inoculated and cultured at the Sussex Nursery under normal conditions. They were repotted and kept in the holding yard. In August of 2003, 300-four year old trees were planted with greater spacing than normal. In July 2004, 5 small seedlings in were planted around 50 5WS22E1 positive trees. Screens were placed around an additional 50 test treesto collect cast needles. 15 Approximately 300 mg (dry weight) of needles were removed from each of the one, two and three year old braches as well as two further branches were tested for the presence of endophyte 5WS22E1 by ELISA and rugulosin by HPLC. These needle samples were analyzed in 2005. All trees were positive for the fungus and the toxin through each of the age classes of needles on the 20 tree. At the respective limits of detection (30 ng for the endophyte; 150 ng/g for the toxin), 63% of the samples of the individual branches were positive for the endophyte by ELISA and 89% were positive for either rugulosin or its degradation product, and only 1 branch was negative for both. The concentration of rugulosin was somewhat higher in the field trees than in 25 previous studies but the trees were older and more established. The average concentration was right at the effect level for spruce budworm and was variable between trees but no biases toward either older or newer branches were found. Cast needles collected in netting around these trees were tested and no toxin was present. 30 -53 Example 10 Inoculation with vermiculin-producing strain 5WS11 11 The vermiculin-producing strain 5WS1 1 I 1 was chosen for the second candidate strain (Mycological Research 106:47). A polyclonal antibody was 5 developed for the determination of the fungus. In the spring of 2004, seedlings were inoculated. The inoculation trials using the vermiculin-producing endophyte had a three month success rate by ELISA of approximately 30% similar to endophyte 5WS 22E1. From experience it is likely that the 6-8 month success rate will be 10 much higher, again because the spread of the endophytes is slow. Because vermiculin has an unremarkable UV spectrum, the quantification of this chemical is more difficult than for rugulosin. During this work, improvements to the analytical method had to be made as naturally contaminated samples became available for the first time (the previous 15 method development experiments were necessarily done with spiked control needles). This means that some sense of the actual concentration of vermiculin in naturally-contaminated material was acquired for the first time. The earlier experiments with spiked needles were necessarily done in concentration ranges that made sense compared to rugulosin which, in the 20 event, were a bit too high. At three months post inoculation, no vermiculin could be detected in ELISA negative samples. From the ELISA-positive seedlings, 30% contained vermiculin, This demonstrates -for the first time- that this toxin is produced in vivo and can be one of the endophytes used for inoculation. 25 Essentially all of the white spruce endophytes isolated in the present project at the Sussex lab were cultured and analyzed by HPLC for metabolite production. From these, 30 had interesting profiles based on diode array detector response (measures UV spectrum of each compound passing through the detector). The extracts with the highest total amount of compound 30 were screened using the Oxford assay for anti-yeast toxicity. Although yeasts - 54 are not insects, Saccharomyces cerevisiae is eukaryotic. From these, five produced reasonably potent compounds. The compounds were demonstrated to be complex by HPLC Mass Spectroscopy and NMR. One of these, 05 037A, was the most potent in the yeast assay and the compounds found were 5 demonstrated to be complex and not related to other endophyte toxins seen so far. It was grown in a large scale fermentation (5L), extracted and the metabolites were isolated using a variety of techniques including; prep thin layer chromatography, prep HPLC and column chromatography. The compounds were all generally small in molecular weight <350 (233, 237, 309, 10 221, 154, 218) and range from moderately polar to non polar. The last step required was further purification to obtain isolated metabolite for complete structure determination. This strain was grown in culture on a sufficient scale to permit the isolation and characterization of its metabolites. Example 11 15 Inoculation Rate and Persistence of Fungal Endophytes Ten inoculated seedlings that tested positive in a 2003 inoculation trial and 10 inoculated seedlings that were negative by ELISA at 3 months were left in pots at the nursery to grow for an additional year. Each branch was collected separately for analysis by ELISA for rugulosin. There were a variable number 20 of branches (11 to 20) which were carefully labelled according to their position on each of the 20 trees and all were analyzed for rugulosin (-160 samples). All of the inoculated trees that were negative by ELISA were positive after ca. 1 year. This indicates the true inoculation success is materially underestimated when analyzed at 3 months. The data also give a better 25 sense of the rate of spread and, as observed for the field trees, confirm its persistence. It was very useful to demonstrate that endophyte and its toxin were shown to be well distributed between new and old growth branches. Example 12 Isolation of Red spruce Toxigenic Endophytes - 55 Many toxigenic endophytes that infect white spruce have been identified and partially sequenced. These include the strains identified in Table 1. In addition other white spruce and some red spruce endophytes that produced anti insectan toxins were identified. The purpose of this goal is to generate a 5 comprehensive collection of red spruce endophytes and screen them for anti insectan metabolites. Approximantely 40 endophytes had been cultured, fractionated and subjected to preliminary metabolite screening. Fractions were prepared for budworm and further chemical assays. Extracts from the 70 red spruce as well as some white spruce endophyte 10 strains which had been qualitatively screened for the production of potentially anti-insectan metabolites AND for which there are DNA sequence data were incorporated into synthetic diet. These were individually poured into small containers (milk cups) and allowed to harden. Second instar spruce budworms were added together with controls and rugulosin was used as a 15 positive control. Tests using the spruce budworm assay found that several isolated endophyte strains were toxic. Isolated endophyte strains that were found toxic using this assay include 06-264A, 06-332A, 08-011D, (06-268A, 07-013D, 01-002A, 06 268A, 03-020B, 04-012A, 06-063D, 06-073C, 02-002C, 06-094E, 06-219A, 20 06-264A and 06-255A. RED SPRUCE Data 25 TEST 1 HC 52 0.000 (06-264A) 60 0.073 (08-011D) 58 0.026 (06-332A) 30 WT 52 0.054 54 0.009 (06-268A) 58 0.057 59 0.008 (07-013D) 62 0.082 ((01-002A) 35 -56 TEST 2 5 HC 14 0.058 (04-002G) 9 0.078 (03-020B) W-T 9 0.070 10 TEST 3 HC 14 0.058 15 WT 17 0.052 (04-012A) 9 0.071 20 TEST 4 HC 27 0.039 (06-063D) WT 27 0.011 25 28 0.008 (06-073C) 5 0.079 (02-002C) TEST 5 30 HC 38 0.015 (06-094E) 45 0.087 43 0.000 (06-219A) 47 0.082 (06-264A) 45 0.005 (06-255A) WT 38 0.034 35 43 0.002 45 0.016 47 0.042 Example 13 40 Isolation of toxigenic endophytes The white spruce endophytes were cultured and analyzed by HPLC for metabolite production. From these, 30 had good profiles based on diode array detector response (measures UV spectrum of each compound passing through the detector). The extracts with the highest total amount of compound - 57 were screened using the Oxford assay for anti-yeast toxicity. Although yeasts are not insects, Saccharomyces cerevisiae is eukaryotic. From these, five produced potent compounds. The compounds were demonstrated to be complex by HPLC Mass Spectroscopy and NMR. One of these, 05-037A, was 5 the most potent in the yeast assay and the compounds found were demonstrated to be complex and not related to other endophyte toxins seen so far. It was grown in a large scale fermentation (5L), extracted and the metabolites were isolated using a variety of techniques including; preparatory thin layer chromatography, preparatory HPLC and column chromatography. 10 The compounds were all generally small in molecular weight <350 (233, 237, 309, 221, 154, 218) and range from moderately polar to non polar. The last step required was further purification to obtain isolated metabolite for complete structure determination. This strain was grown in culture on a sufficient scale to permit the isolation and characterization of its metabolites. 15 A total of 62 extracts were tested in the spruce budworm assay plus a larger number of controls for each set. Of these 11 white spruce extracts were toxic to spruce budworm (i.e. statistically different from controls either for weight reduction (most common), head capsule width or both). For the red spruce extracts, 21 were toxic to spruce budworm. The DNA sequence for isolated 20 red spruce toxigenic isolates is listed in SEQ ID NO: 6-42. Example 14 Isolation and Inoculation of Pine Tree Toxigenic Endophytes Pine needles are collected from pine trees. Slow growing endophytes are cultured from needles and screened for the presence of toxigenic endophytes. 25 Antibodies to candidate toxigenic endophytes are produced. Candidate toxigenic endophytes are tested in vitro for their effect on pests, including disease-causing fungi. An inoculum comprising the toxigenic endophyte is prepared. Pine seedlings are inoculated with the inoculum during a susceptible time window. Colonization is later confirmed using a specific 30 antibody test.

- 58 All publications, patents and patent applications are herein incorporated by reference in their entirety to the same extent as if each individual publication, patent or patent application was specifically and individually indicated to be incorporated by reference in its entirety. 5 Reference to any prior art in the specification is not, and should not be taken as, an acknowledgment, or any form of suggestion, that this prior art forms part of the common general knowledge in Australia or any other jurisdiction or that this prior art could reasonably be expected to be ascertained, understood and regarded as relevant by a person skilled in the art. 10 As used herein, except where the context requires otherwise, the term "comprise" and variations of the term, such as "comprising", "comprises" and "comprised", are not intended to exclude other additives, components, integers or steps. 1000391682 - 59 References Carroll GC, Carroll FE (1978) Studies on the incidence of coniferous needle endophytes in the Pacific Northwest. Can J Botany, 1978, 56:3034-3043. 5 Clark C, Miller JD, Whitney NJ (1989) Toxicity of conifer needle endophytes to spruce budworm. Mycological Research 93: 508-512. Calhoun LA, Findlay JA, Miller JD, Whitney JD (1992) Metabolites toxic to 10 spruce budworm from balsam fir needle endophytes. Mycological Research 96: 281 286. Findlay JA, Li G, Penner PE, Miller JD (1994) Novel diterpenoid insect toxins 15 from a conifer endophyte. J Natural Products 58:197-200. Findlay JA, Buthelezi S, Lavoie R, Pena-Rodrigues L, Miller JD (1995) Bioactive isocoumarins and related metabolites from conifer endophytes. J Natural Products 58:1759-1766. 20 Findlay JA, Butelezi S, Li Q, Seveck M, Miller JD (1997) Insect toxins from an endophytic fungus from Wintergreen. J Natural Products 60:1214-1215. Findlay JA, Li G, Miller JD, Womilouju TO (2003) Insect toxins from spruce endophytes. Can J Chemistry 81:284-292. 25 Findlay JA, Lia G, Miller JD, Womiloju T (2003). Insect toxins from conifer endophytes. In: Yayli N, KOg9k M (eds) Proceedings of the 1 st International Congress on the Chemistry of Natural Products (ICNP-2002) Karadeniz Technical University, Trabzon, Turkey. p.13-16. 30 Glass N L, Donaldson G C (1995). Development of Primer Sets Designed for Use with the PCR To Amplify Conserved Genes from Filamentous Ascomycetes. Applied and Environmental Microbiology6l: 1323-1330. 35 McMorran, A., 1965. A synthetic diet for the spruce budworm, Choristoneura fumiferana (Clem.) (Lepidoptera: Tortricidae). The Canadian Entomologist 97, 58-62. 40 Miller JD, Mackenzie S, Foto M, Adams GW, Findlay JA (2002) Needles of white spruce inoculated with rugulosin-producing endophytes contain rugulosin reducing spruce budworm growth rate. Mycological Research 106:471-479.

-60 Clay K. 1988. Fungal endophytes of grasses: a defensive mutualism between plants and fungi. Ecology 69:10-16. Clay K, Holah J. 1999. Fungal endophyte symbiosis and plant diversity in 5 successional fields. Science 285:1742-1744. Carroll GC. 1979. Needle microepiphytes in a Douglas fir canopy: biomass and distribution patterns. Can J Bot 57:1000-1007. 10 Carroll GC 1988. Fungal endophytes in stems and leaves: from latent pathogen to mutualistic symbiont. Ecology 69:2-9. Findlay JA, Li G, Miller JD, Womilouju TO. 2003. Insect toxins from spruce endophytes. Can J 15 Chemistry 81:284-292. Ganley RJ, Brunsfeld SJ, Newcombe G. 2004. A community of unknown, endophytic fungi in Western White pine. Proceedings of the National Academy of Sciences of the United States of America 101:10107-10112. 20 Gessner MO, Newell SY. 2002. Biomass, growth rate, and production of filamentous fungi in plant litter. Manual of Environmental Microbiology (2nd Edition) p 390-408. 25 Gwinn KD, Collins-Shephard HM, Reddick BB. 1991. Tissue print immunoblot, an accurate method for the dectection of Acremonium coenophialum in tall fescue. Phytopathology 81:747-748. Miller JD, Mackenzie S. 2000. Secondary metabolites of Fusarium venenatum 30 strains with deletions in the Tri5 gene encoding trichodiene synthetase. Mycologia 92:764-771. Miller JD, Mackenzie S, Foto M, Adams GW, Findlay JA. 2002. Needles of white spruce inoculated with rugulosin-producing endophytes contain 35 rugulosin reducing spruce budworm growth rate. Mycological Research 106:471-479. Miller JD, Strongman D, Whitney NJ. 1985. Observations on fungi associated with spruce budworm infested balsam fir needles. Can J Forest Res 15:896 40 901. Miller JD, Young JC, Trenholm HL. 1983. Fusarium toxins in field corn. 1. Parameters associated with fungal growth and production of deoxynivaneol and other mycotoxins. Can J Botany 61:3080-3087. 45 -61 Petrini 0. 1991 Fungal endophytes of tree leaves. In: Andrews JH & Hirano SS (eds) Microbial Ecology of Leaves. Springer Verlag, New York. pp. 179 197. 5 Reddick BB, Collins MH. 1988. An improved method for detectionm of Acremonium coenophialum in tall fescue plants. Phytopathology 78:418-420. Swisher R, Carroll GC. 1990. Fluorescein diacetate hydrolysis as an estimator of microbial biomass on coniferous needle surfaces. Microbial Ecology 6:217 10 226. Turner WB, Aldridge DC. 1983. Fungal Metabolites 11. Academic Press Inc. New York. pp. 152. 15 Thomas AW (1983) Foliage consumed by 6th instar spruce budworm larvae, Choristoneua fumiferana (Clem.), feeding on balsam fir and white spruce. Forest defoliator-host interactions: a comparison between gypsy moth and spruce budworm (ed. Talerico RL). pp. 47-48. United States Department of Agriculture General Technical Report NE-85, New Haven, CT. 20 Wilson R, Wheatcroft R, Miller JD, Whitney NJ. 1994. Genetic diversity among natural populations of endophytic Lophodermium pinastri from Pinus resinosa. Mycol. Res 98(7):740-744.

Claims (49)

1. A method of preparing a toxigenic endophyte colonized conifer seedling with increased tolerance to an insect or fungal pest, comprising: a) inoculating a conifer seedling or a conifer seed during a susceptible time window with an inoculum composition comprising an isolated toxigenic endophyte that can colonize the conifer seedling or the conifer seed, 1) the inoculating the conifer seedling comprising contacting the conifer seedling and/or growth medium supporting the conifer seedling with the inoculum composition, so that at least a portion of the inoculum ) composition contacts the conifer seedling and/or the conifer seedling growth medium in an environment of wetness; 2) the inoculating the conifer seed comprising soaking the conifer seed with the inoculum composition; and b) growing the conifer seedling or the conifer seed to obtain the toxigenic 5 colonized conifer seedling with increased pest tolerance to the insect or fungal pest, wherein the increased tolerance is relative to a conifer seedling grown from a non-inoculated conifer seedling or a non-inoculated conifer seed.

2. The method of claim 1, wherein the susceptible time window for the conifer 0 seedling is post germination during sustained elongation of the shoot apex, when the conifer seedling's percentage of needles of intermediate differentiation is greater than the percentage of needles of complete differentiation in which the cuticle is fully formed and wherein the susceptible time window for the conifer seed is during seed stratification. 5

3. The method of any one of claims 1 or 2, wherein the inoculum composition comprises at least 1-25 toxigenic endophyte hyphal fragments/6 microliter inoculum composition, at least 0.2-4 toxigenic endophyte hyphal fragments/microliter.

4. The method of any one of claims 1 to 3, wherein the environment of wetness is sustained for at least 12 hours. - 63

5. The method of any one of claims 1 to 4, wherein the inoculating step comprises spraying the conifer seedling with the inoculum composition comprising the toxigenic endophyte and a diluent.

6. The method of claim 5, wherein the spraying comprises a spraying method 5 selected from the group of misting, ground spraying, bottle spraying and boom spraying.

7. The method of claim 6, wherein the spraying method comprises boom spraying or bottle spraying, wherein the boom spraying comprises, providing a boom sprayer, an irrigation line connected to the boom sprayer, and an injector pump, the injector pump injecting the isolated endophyte into the irrigation line and the boom sprayer spraying 10 the isolated toxigenic endophyte onto the conifer seedling.

8. The method of any one of claims 1 to 4, wherein inoculating the conifer seedling comprises inoculating the growth medium supporting the conifer seedling, and the method comprises applying the inoculum composition to the conifer seedling at, or below, the surface of the growth medium. 15

9. The method of any one of claims 1 to 4, wherein the inoculating step a) comprises soaking the conifer seed with the inoculum composition comprising the isolated toxigenic endophyte and water and refrigerating the wet seed, optionally wherein the conifer seed is soaked in water comprising inoculum composition overnight, drained and refrigerated at 2-60 C. 20

10. The method of any one of claims 1 to 9, comprising repeating the inoculation step.

11. The method of any one of claims 1 to 10, further comprising determining whether the toxigenic endophyte has colonized the conifer seedling by contacting a sample of the grown toxigenic colonized conifer seedling with a detection agent directed against 25 the toxigenic endophyte or an endophyte toxin produced by the toxigenic endophyte, wherein detection by the detection agent in the sample is indicative of colonization.

12. The method of any one of claims 1 to 11, wherein the toxigenic colonized conifer seedling comprises toxigenic endophyte present in an amount adequate to reduce one or more of pest growth rate, pest development and pest weight gain compared to a non 30 inoculated conifer seedling or non-inoculated conifer seed. - 64

13. The method of any one of claims 1 to 12, wherein toxigenic endophyte produces at least one compound selected from the group consisting of rugulosin, vermiculin or 5 methoxy-carbonylmellein.

14. The method of claim 13, wherein the compound is present in a conifer needle 5 grown from the inoculated conifer seedling or conifer seed in an amount of at least 0.15 pg per gram of needle or at least 10 micromolar.

15. The method of any of claims 1 to 12, wherein the toxigenic endophyte comprises a Phialocephala species.

16. The method of any of claims 1 to 12, wherein the toxigenic endophyte comprises 10 a nucleic acid sequence from the group of SEQ ID NOs: 1-41 or selected from the group of toxigenic endophytes deposited with Centraalbureau voor Schimmelcultures (CBS) international depository agency in the Netherlands, having accession numbers CBS 120377, CBS 120378, CBS 120381, CBS 120379 and CBS 120380.

17. The method of any of claims 1 to 8 and 10 to 16, wherein the conifer seedling 15 comprises a shoot and the shoot length is greater than 1 cm and less than 10 cm.

18. The method of any one of claims 1 to 12, wherein the conifer seedling is a spruce seedling or the conifer seed is a spruce seed.

19. The method of claim 18, wherein the conifer seedling is inoculated when the conifer seedling is at least 1cm high and less than 10 cm high, or at least 3 cm high.

20 20. The method of claim 18 or 19, wherein the conifer seedling is inoculated at from 2 weeks to 16 weeks post germination.

21. The method of any one of claims 1 to 12, wherein the conifer seedling is a fir conifer seedling or the conifer seed is a fir conifer seed.

22. The method of any one of claims 1 to 12, wherein the conifer seedling is a pine 25 seedling or the conifer seed is a pine seed.

23. The method of any one of claims 1 to 22, wherein the pest is selected from the group consisting of spruce budworm, hemlock looper, spruce budmoth, saw flies and jack pine budworm. -65

24. A toxigenic endophyte colonized conifer prepared according to the method of any one of claims 1 to 23 that produces a toxin that retards pest growth.

25. The conifer of claim 24, wherein the conifer comprises a tree, plant, seedling, shrub or hedge. 5

26. The conifer of claims 24 or 25, wherein the toxin comprises rugulosin, vermiculin or 5-methoxy-carbonylmellein.

27. The conifer of any one of claims 24 to 26, wherein the pest is spruce budworm and spruce budworm larvae growth is retarded by at least 5% by the toxin in a spruce budworm larvae assay.

) 28. An inoculum composition comprising an isolated toxigenic endophyte and a diluent for use in a method according to any one of claims 1 to 23, wherein the isolated toxigenic endophyte comprises a sequence selected from the group consisting of SEQ ID NOs: 1-41, or an isolated toxigenic endophyte selected from the group of toxigenic endophytes deposited with Centraalbureau voor Schimmelcultures (CBS) international 5 depository agency in the Netherlands, having accession numbers CBS 120381, CBS 120379 and CBS 120380.

29. The inoculum composition of claim 28, wherein hyphae sheared from the toxigenic endophyte is present in clusters of mycelium or spores and wherein the clusters are less than 5 mm. 0

30. The inoculum composition of claims 28 or 29, wherein the isolated toxigenic endophyte is grown using a culture medium comprising a malt extract.

31. The inoculum composition of claim 29, wherein the hyphae are sheared by rotating the culture medium at a rotation of least 200 rpm to 310 rpm.

32. The inoculum composition of claim 29, wherein the isolated toxigenic endophyte 5 is aerated when the toxigenic endophyte is cultured.

33. The inoculum composition of any one of claims 28 to 32, further comprising a stabilizing agent. - 66

34. The inoculum composition of claim 33, wherein the stabilizing agent comprises a carbohydrate.

35. The inoculum composition of any one of claims 28 to 34, wherein the toxigenic endophyte comprises a Phialocephala species that produces a compound toxic to 5 spruce budworm larvae in a spruce budworm larvae assay.

36. The method of claim 11, wherein the detection agent comprises an antibody and detection of the presence of the antibody bound to the toxigenic endophyte or to the toxigenic endophyte toxin is indicative of the presence of the toxigenic endophyte in the sample. 10

37. The method of claims 23 and 36, wherein the conifer seedling is inoculated in a greenhouse or holding area, indoors or outdoors.

38. The method of any one of claims 12 to 23, wherein the pest weight growth is inhibited by at least 5%, relative to control.

39. The method of any one of claims 12 to 23 and 36 to 38, wherein the pest weight 15 growth is assessed using an in vivo pest toxicity assay.

40. The method of any one of claims 1 to 12, the conifer of any one of claims 24 to 27 or the inoculum composition according to any one of claims 28 to 31, wherein the toxigenic endophyte comprises a nucleic acid sequence selected from SEQ ID NO:12, SEQ ID NO:21, SEQ ID NO:7, SEQ ID NO:40, SEQ ID NO:29, SEQ ID NO:34, SEQ ID 20 NO:9, SEQ ID NO:35, SEQ ID NO:23, SEQ ID NO:24, and SEQ ID NO:39, and/or is selected from the group of toxigenic endophytes deposited with Centraalbureau voor Schimmelcultures (CBS) international depository agency in the Netherlands, having accession numbers CBS 120381, CBS 120379 and CBS 120380.

41. A inoculum composition substantially as hereinbefore described with reference to 25 the accompanying examples for use in a method of any one of claims 1 to 23.

42. The method of any one of claims 1 to 22 or 37, wherein the pest is a disease causing fungal pathogen.

43. The method of claim 18, wherein the conifer seedling is inoculated when the conifer seedling is at least 1 cm high and less than 6 cm high. - 67

44. The method of claim 18, wherein the conifer seedling is inoculated when the conifer seedling is at least 2 cm high and less than 4 cm high.

45. The method of claim 20, wherein the conifer seedling is inoculated at 6 weeks to 10 weeks post germination. 5

46. The method of claim 20, wherein the conifer seedling is inoculated at 7-9 weeks post germination.

47. The method of claim 20, wherein the conifer seedling is inoculated at 8 weeks post germination.

48. The method of claim 38, wherein the pest weight growth is inhibited by 5-30% 10 relative to control.

49. The method of any one of claims 1 to 23, 36 to 39 and 42 to 48, wherein the inoculum composition comprises at least 3 toxigenic endophyte hyphal fragments per 6 microliter inoculum.