Monsanto and BASF sign R&D agreement

By Lorraine Heller

- Last updated on GMT

Related tags Monsanto Vice president

Monsanto and BASF have entered into an R&D agreement that aims
to pool the companies' resources.

Announced today, the collaboration will focus on the development of high yielding crops and crops that are more tolerant to adverse environmental conditions such as drought.

The two companies said they will dedicate a joint budget of potentially $1.5bn (€1.2bn) to fund a 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 collaboration, which is effective immediately, will be jointly and equally funded.

However, Monsanto will market products developed from the collaboration, and will receive 60 percent of net profits, while BASF will receive 40 percent.

The first product developed as a result of the R&D agreement is expected to be commercialised in the first half of the next decade.

According to Monsanto, the collaboration will "enhance (its) ability to identify and commercialise new traits".

"By broadening the pipeline of potential traits, exchanging technology and sharing risk, this collaboration can accelerate the discovery of next-generation technologies for the farm and effectively double the risk-adjusted net present value of Monsanto's yield and stress trait technology pipeline," said Robb Fraley, chief technology officer and executive vice president of Monsanto.

And according to BASF, Monsanto is "a strong partner with outstanding capabilities".

The new agreement, it said, will help the industry to meet the increasing demand in the food and renewable resources segments.

Each company will continue to maintain independent trait discovery programmes, out of which the most promising candidate genes identified will be advanced for accelerated joint development and for commercialization in the Monsanto pipeline.

The two companies said the agreement will allow them to generate a greater number of viable research projects than they could have done on their own.

In addition to today's 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.

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