September 17, 2007

Dow, Monsanto to collaborate on corn trait modification

Biotech giants Dow Chemical and Monsanto will join forces to modify corn seeds to for expanded resistance to insects and weed killers.

The seeds will undergo eight genetic modifications and will probably be available to growers by the end of the decade according to Midland, Michigan-based Dow in a statement. The companies will pay royalties to one another to cross-license the gene technologies and the germplasm of their respective seed brands, St. Louis-based Monsanto said also in a statement. Financial terms however weren't disclosed.

Monsanto-- the world's biggest seed maker-- will have the first hand in technology in offering eight gene modifications as competitor DuPont Co. increases production of so-called triple stack seeds. Dow Chief Executive Officer Andrew Liveris said the deal will propel the company to the third-biggest US corn seed producer, from fifth.

Only one of the eight gene modifications lacks US regulatory approval, giving the companies confidence that the new seeds will be available to farmers in three years, According to Jerome Peribere, president of Dow AgroSciences, only one of the eight gene modifications still awaits US regulatory approval, which makes the seeds available by three years.

Dow rose 26 cents, or 0.6 percent, to US$42.26 at 10:33 a.m. in New York Stock Exchange composite trading. Monsanto gained US$1.62, or 2.2 percent, to US$73.99 after earlier reaching a record US$74.47.

Dow's Mycogen brand was planted on 3.5 percent of US corn acres this year, Peribere said. The new seeds may allow Dow to surpass No. 4 AgReliant Genetics, based in Westfield, Indiana, and No. 3 Syngenta AG of Basel, Switzerland, he said.

The eight gene modifications in so-called SmartStax corn seeds will include Monsanto's triple stack technology, Liberty Link herbicide resistance and Dow's Herculex insect control. The agreement allows the companies to add additional gene modifications beyond the first eight.

Dow and Monsanto said they will ask the US Environmental Protection Agency to lift a requirement that growers of insect- resistant corn also plant a portion of their land with conventional corn to prevent pests such as the European corn borer from developing resistance to the technology.