Over the past six years, Monsanto and biotech research company Icoria have partnered together to develop transgenic traits for agriculture. Today, Icoria announced it would be exiting the agricultural research side and Monsanto would acquire selected agricultural assets of Icoria for $6.75 million.
The transaction closed yesterday, with the transition to be fully implemented by May 9, 2005.
Under a $55-million agreement signed in 1999 between the two companies, Icoria analyzed genes in its Arabidopsis thaliana GeneFunction Factory platform. Icoria met virtually all of the financial milestones under this agreement, and many genes have moved into Monsanto's corn and soybean research-and-development (R&D) testing pipeline. Such genes may affect valuable agronomic traits, such as increased growth rates and stress resistance.
By acquiring those assets of Icoria that are focused on agriculture-related functional genomics and transgenic applications, Monsanto gains exclusive access to Icoria's advanced discovery platform. In addition, Monsanto will assume occupancy and lease obligations for a building in Icoria's research facility in Research Triangle Park, N.C., in which Icoria has conducted its GeneFunction Factory research.
"Over the past five years, Icoria's contributions in functional genomics have been an important part of Monsanto's industry-leading R&D program," says Stephen Padgette, Ph.D., vice president of biotechnology for Monsanto. "Today's announced transaction allows us to bring Icoria's valuable capabilities in-house, contributing to Monsanto's ability to identify and develop new genes for crop products in areas like agronomic traits, enhanced nutritional content and improved yield properties."
Icoria will use proceeds from the sale to accelerate development of its health care business and to fund an internal drug and diagnostics discovery program focused on diabetes, obesity and other metabolic disorders.
"The sale of these assets, the reduction of our headcount by more than a third and the assignment of our remaining five-year lease on our agricultural research facility reduces our expenses dramatically without significantly reducing Icoria's ability to generate revenue," says Heinrich Gugger, Ph.D., president and CEO of Icoria. "It also allows Icoria to aggressively pursue its health care strategy."