BASF and Monsanto to Collaborate on Plant Biotechnology R&D and Commercialization
21 March 2007
BASF and Monsanto Company announced a long-term joint research and development (R&D) and commercialization collaboration in plant biotechnology that will focus on the development of high yielding crops and crops that are more tolerant to adverse environmental conditions such as drought. The collaboration is effective immediately.
Over the life of the collaboration, the two companies will dedicate a joint budget of potentially US$1.5 billion (€1.21 billion) to fund a dedicated pipeline of yield and stress tolerance traits for corn, soybeans, cotton and canola.
The joint pipeline will include the companies’ existing and planned yield and stress tolerance programs and be comprised of projects generated by independent plant biotechnology discovery and research from each company. The first product developed as part of this collaboration is expected to be commercialized in the first half of the next decade.
Current trends driving agricultural research are per-acre productivity, water use and nitrogen use in the context of rapidly increasing demands to supply biofuel requirements, a growing concern over water supply (agriculture consumes 75% of the world’s fresh water) and the rising costs of nitrogen-based fertilizers.
Or, as the companies put it during the presentation of their alliance, while the first decade of agricultural biotech focused on weeds and bugs, the coming decade will be focused on yield.
Under this collaboration:
The companies will establish and collaboratively manage a dedicated pipeline that will focus on the development of crops with higher yields and crops that lead to consistent yields under adverse environmental conditions, such as drought.
Each company will additionally maintain independent trait discovery programs.
From the various programs, each company will nominate specific candidate genes and the most promising candidates will be advanced for accelerated joint development and for commercialization in the Monsanto pipeline.
The two companies expect to generate a greater number of viable research projects than they could have done on their own, accelerate the development of new products, and bring a greater number of traits to the market at a faster speed.
The nominated projects will be jointly funded at a 50-50 cost sharing through each phase of development as the candidate gene works its way toward commercial status.
Products that emerge from the joint development will be commercialized by Monsanto. The companies have agreed to share profits associated with commercialized products, with Monsanto receiving 60% of net profits and BASF receiving 40% of net profits.
Monsanto decided to collaborate with BASF because the company is well positioned to provide traits as a series of successive upgrades within a particular crop. For BASF, Monsanto’s track record of commercializing traits and breeding desirable germplasm ensures that BASF’s innovations quickly reach the widest base of farmers.
In addition to the new collaboration, the companies also announced that they have entered into a separate development and commercialization collaboration to research methods to control the soybean cyst nematode, a parasitic worm that can limit and destroy yields for soybean farmers.
Both collaborations will be performed by Monsanto and BASF Plant Science, the plant biotechnology company of BASF.
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