September 18, 2008

Plant Health Care signs deal with Bayer Crop Unit

Shares in biotechnology company Plant Health Care PLC rose Wednesday (September 17) after it said it has signed a licensing deal with Bayer Crop Science, a unit of Bayer AG for the use of genes to protect oilseed crops from pests.

London-based Plant Health Care said it has signed a long-term agreement with Bayer, although financial details weren't disclosed.

At 1100 GMT, shares in Plant Health Care were up 26 pence or 11 percent to 255 pence, outperforming a flat Alternative Investment Market.

Plant Health Care said the license covers the use of PHC's harpin genes in Brassica oilseed, which encode proteins that boost plants' defence mechanisms against pests and disease. The harpin proteins are classified as biochemical pesticides.

Nomura Code Securities analyst Chris Redhead told Dow Jones Newswires Bayer's interest is a strong validation of Plant Health Care's technology.

He added though, that the process of using the harbin genes to create genetically-enhanced varieties of oilseed crops is "a fairly long-term undertaking".

Although the companies haven't disclosed what milestone payments will be due to Plant Health Care as development progresses, they are likely to be modest in the short term.

"But it does show there's interest in the potential of harpin," he said.

PHC has a similar deal with agribusiness giant Monsanto Co.