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BUSINESS & SEEDS: Monsanto, BASF collaboration looks good




                                  PART 1


------------------------------- GENET-news -------------------------------

TITLE:  MONSANTO, BASF COLLABORATION LOOKS GOOD

SOURCE: St. Louis Post-Dispatch, USA

AUTHOR: Rachel Melcer

URL:    http://www.stltoday.com/stltoday/business/stories.nsf/0/142D12C06F315FD78625731800025C7A?OpenDocument

DATE:   15.07.2007

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MONSANTO, BASF COLLABORATION LOOKS GOOD

Monsanto Co. and BASF AG, authors of agricultural biotechnology, are peering for the first time into one another’s crop genetics library — and finding only a few volumes in common.

That discovery is crucial to the success of the companies’ $1.5 billion research and development collaboration, which began in March. Together, Creve Coeur-based Monsanto and German chemical giant BASF hope to develop corn, soybean, cotton and canola plants with top yields, even under drought or other environmental stress.

”We’re really pleased with the start of the collaboration,” said Steve Padgette, Monsanto’s vice president of biotechnology. ”It’s really important for our customers in the future (and) it’s a real competitive advantage for the team.”

When the deal was struck, each company had scoured the other’s published research and patents. They suspected their work would be complementary, rather than overlapping, but until the genes from BASF’s sites in Germany began arriving in Creve Coeur for sequencing in early May, they didn’t know.

The first batches of promising BASF candidates for each of the four row crops show less than 10 percent overlap with genes already discovered by Monsanto, Padgette said.

”I don’t need to worry at all about not having enough genes” to feed into the product development pipeline, he said.

The companies are sharing equally the cost of research and development. Monsanto, which is handling the regulatory and commercialization process, will get 60 percent of sales once resulting seeds reach farmers, which is estimated to occur between 2010 and 2015.

Financial analysts applaud the collaboration.

Frank Mitsch, with BB&T Capital Markets, last month toured Monsanto’s research operation and said in a report that the companies’ jointly developed high-yield and stress-tolerant products should reach farmers in good time.

”Monsanto management has (resolve) in not only winning the competitive battles in the near and midterm, but also in the long-term. The venture with BASF … was about combining resources to win in future generation technologies,” he wrote.

 

An R&D first

Monsanto has teamed thousands of times with academic institutions and small, innovative firms. It commonly cross-licenses technology with major competitors. But this is its first foray into research and development of potentially ground-breaking and highly lucrative products with a big industrial partner.

”One of the absolute keys to success is to continue to ask what’s going on outside” your company’s walls, said Robb Fraley, Monsanto’s chief technology officer. ”You can’t become too infatuated with your own success and your own capabilities.”

And Monsanto has been successful: It is the industry leader, producing 18 commercial biotech crop products over 11 years. Its hybrid and biotech seeds and trait licensing business produced $4.2 billion of the company’s $7 billion in sales for the first nine months of this year.

BASF, meanwhile, added a focus on plant biotechnology to a vast chemical portfolio that produces about $70 billion in annual sales. It has identified and patented genes that could add valuable traits to crops. But, unlike Monsanto, it doesn’t own seeds into which to put those traits.

BASF also lacks experience with regulators and in taking biotech crops to market.

”We see (agricultural) biotechnology as one of the key technologies for the 21st century,” said Hans Kast, president and chief executive of BASF Plant Science. And the collaboration with Monsanto is a significant part of the company’s effort.

”Yield increase and yield stability with environmental stress is key to each farmer … and will be key to each market,” he said. ”This is a significant project that also has significant risk. If our two companies work together, we can reduce that risk” and get to market faster.

 

Fingerprint check

Speed is the focus in Monsanto’s genomics lab, the first stop for BASF’s genes. Nine ”workhorse” machines — similar to those used to sequence the human genome — are deployed to analyze the DNA of the genes, in essence confirming their identity with a genetic fingerprint.

At that stage, they can be compared with genes in Monsanto’s pipeline to check for overlaps.

In January, the lab obtained a $600,000 machine that has the computing ability to sequence the entire human genome in a couple of years. It will be used for high-priority projects within the joint BASF pipeline or in other areas of Monsanto’s research.

A plant fungus, which on older equipment could have been sequenced in two years, can be genetically fingerprinted in a week.

”We’re going to use this to really push us to the cutting edge and help keep us ahead of the competition,” said genomics lead Pat Ouimet, eyeing the machine like a proud parent.

Once sequenced, BASF’s genes are cloned and added to an agrobacterium that is used to transfer it to a crop plant. The first transfers were complete in less than a month.

”That’s a record. That just goes to show how enthusiastic both of these companies are about this,” Padgette said.

Test seeds then are planted in field plots to check a plant’s performance. A complicated data analysis is used to select the most promising candidates for advancing in the pipeline.

The goal of Monsanto and BASF is to stack multiple genes in a single seed, adding several benefits at once: the ability to kill destructive pests, withstand applications of herbicide, survive in dry or nitrogen-deficient soil, and, most importantly, yield the greatest amount of corn, soybeans, corn or canola per acre.

In the end, analysts expect the best-yielding, stress-performing seeds on the market to be billion-dollar blockbusters.

”Yield and stress are where it’s at in the ag business,” Fraley said. ”The grower wants as much technology as we can put into that seed.”



                                  PART 2

------------------------------- GENET-news -------------------------------

TITLE:  MONSANTO SAYS BASF PARTNERSHIP PROMISING

SOURCE: Forbes, USA

AUTHOR: The Associated Press

URL:    http://www.forbes.com/feeds/ap/2007/07/15/ap3915202.html

DATE:   15.07.2007

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MONSANTO SAYS BASF PARTNERSHIP PROMISING

ST. LOUIS - A new research partnership is letting two of the world’s biggest biotechnology companies peer into each other’s private vault of genetic code. And the companies say the initial results are promising.

Monsanto Co. and Germany-based BASF AG announced the partnership earlier this spring, billing it as a unique venture that would help the companies speed development of the next generation of genetically engineered crops.

The $1.5 billion partnership gives both companies access to decades-worth of research that each had been carrying on in private. The goal was to pool resources to develop new lines to plants that contained multiple engineered genes to let them withstand a variety of challenges like pests and droughts.

The St. Louis Post-Dispatch reported Sunday that the research partnership has begun in earnest. Much of the work is occurring at Monsanto’s research campus in the St. Louis suburb of Creve Coeur.

”We’re really pleased with the start of the collaboration,” said Steve Padgette, Monsanto’s vice president of biotechnology. ”It’s really important for our customers in the future (and) it’s a real competitive advantage for the team.”

Since the deal was struck in March, the companies have been scouring each other’s published research and patents.

In May, the first batch of genes from BASF’s sites in Germany began arriving in Creve Coeur for study. Monsanto scientists say the findings have been positive.

Most important is the discovery that the two firms have discovered different sets of genes to give beneficial characteristics to crops such as corn, soybeans, cotton and canola. For each of the four row crops, Monsanto found that less than 10 percent of BASF’s varieties had genetic overlap with those already discovered by Monsanto, Padgette said.

That boosts the menu of genes from which researchers can choose as they develop new varieties.

”I don’t need to worry at all about not having enough genes” to feed into the product development pipeline, he said.

Even in its early stages, the deal is winning some praise from some Wall Street analysts.

Frank Mitsch, with BB&T Capital Markets, last month toured Monsanto’s research operation and said in a report that some of the companies’ jointly developed crops should reach farmers in good time.

”Monsanto management has (resolve) in not only winning the competitive battles in the near and midterm, but also in the long-term. The venture with BASF was about combining resources to win in future generation technologies,” he wrote.

While it has worked with universities before, this is Monsanto’s first foray into research and development with a big industrial partner.

BASF has a vast portfolio of chemical products that produces about $70 billion in annual sales. Monsanto, on the other hand, focuses on genetically engineered plants, producing 18 commercial biotech crop products over 11 years. Its hybrid and biotech seeds and trait licensing business produced $4.2 billion of the company’s $7 billion in sales for the first nine months of this year.

Monsanto will handle the lengthy and complicated process of getting regulatory approval for whatever plants the companies develop, and will keep 60 percent of revenue from the new products.

The company estimates the first new plants should be on the market some time between 2010 and 2015.


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