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Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: M CAHILL who wrote (939)	1/21/1999 7:50:00 AM
From: Anthony Wong	Respond to of 2539

Monsanto will license Roundup rights to Dow Wednesday, January 20, 1999 By Robert Steyer Of The Post-Dispatch In another move to deal with generic competition for its best-selling product, Monsanto Co. said Tuesday it will license some rights for its Roundup herbicide to archrival Dow Chemical Co. Monsanto will start selling glyphosate, the key ingredient in Roundup, to Dow for overseas farm markets this year, and for the U.S. market next year. Terms were not disclosed for the agreement, which excludes lawn and garden uses. This is the fifth Roundup licensing deal with competitors since October. Monsanto will lose U.S. patent protection on glyphosate in September 2000. Foreign patents have expired. "Monsanto has found a very clever strategy to help it participate in the post-patent period for Roundup," said James H. Wilbur, a chemical and agribusiness analyst for the Salomon Smith Barney brokerage in New York. The deal helps both companies: Monsanto gets money from a competitor, and Dow gets a proven supplier of glyphosate. "We were concerned that Dow would go building glyphosate plants and engage in a price war," Wilbur said. "By having Monsanto provide supplies of glyphosate, Dow will have a better cost of production." The companies provided few details on the agreement, saying only that it would run for several years. Similar agreements usually last at least five years. Monsanto's stock fell $1.56 a share Tuesday to close at $37.44. Volume of nearly 16.6 million shares was about five times the recent daily average. Wilbur blamed the decline on Monsanto's announcement Friday that it was halting research on two anti-clotting drugs after more than 10 years of study. The company said the drugs weren't effective enough. Monsanto revealed the news just before stock exchanges closed for a three-day weekend, and the company's stock plunged more than $4 in less than 30 minutes. Monsanto officials said Tuesday that the Dow deal rewards production skills and protects special technologies applied to Roundup. For example, Monsanto, which makes 90 Roundup-related products, won't license the technology in Roundup Ultra, an improved version that now accounts for most of the sales in the Roundup family. "These folks are getting glyphosate but not our superior innovative formulations," said Lisa Drake, a Monsanto spokeswoman. "They recognize that we produce high-quality glyphosate at an efficient price." Dow has been moving to establish itself as a big producer of glyphosate herbicides. In late 1997, Dow bought a South African chemical company, Sentrachem, to help it make the chemical. The Monsanto deal "is an effective way to achieve our goal of being a major player in the world glyphosate market," said Christine Kirby, a Dow spokeswoman. "This arrangement provides us an early entry into the [U.S.] market." Dow can use Monsanto's glyphosate research data to register its herbicides in all countries except Japan. Dow also may use its version of glyphosate on some U.S. crops that contain Monsanto's Roundup Ready technology, which enables crops to tolerate the weedkiller. The agreement doesn't apply to overseas crops. Monsanto had required farmers to use only Monsanto herbicides on the genetically engineered Roundup Ready crops. The Dow deal allows U.S. farmers to use Dow's glyphosate on Roundup Ready cotton and soybeans in 2000 and corn in 2001. Monsanto's glyphosate agreement with other companies set similar restrictions for using their chemicals on Roundup Ready crops, with starting dates ranging from 1999 to 2001. Copyright (c) 1999, St. Louis Post-Dispatch stlnet.com