December 14, 1995
SAN DIEGO, Calif. -- Mycogen Corporation (Nasdaq: MYCO) and Pioneer Hi-Bred International Inc. (NYSE: PHB) have finalized a major collaboration to develop technology for transgenic crops with built-in pest resistance.
The companies plan to transform corn, soybean, sunflower, canola, sorghum and other crops with genes from a microorganism, Bacillus thuringiensis (Bt), which cause plants to produce natural proteins that protect them from pest damage. Bt-based insect resistance reduces or eliminates the need for chemical insecticides.
Pioneer will pay Mycogen $51 million -- $21 million in research and development funding and $30 million to purchase 3 million shares of Mycogen common stock. Pioneer also will devote extensive research and development staff and resources to the joint development programs. Pioneer will receive non-exclusive rights to all Bt crop protection technology and associated technologies owned or developed by Mycogen during the next 10 years.
Each company will market its own seed products resulting from the collaboration, royalty-free, in North America. Pioneer will pay a royalty to Mycogen for jointly developed products that it markets outside North America. Mycogen will have exclusive rights to license jointly developed Bt resistance traits to third parties. No proprietary seed lines will be shared.
�This collaboration will allow us to develop several new, pest-resistant seed products simultaneously,� said Jerry Caulder, Mycogen�s chairman and CEO. �By the turn of the century, we expect to be able to offer farmers a number of unique new seed products that will increase their productivity and profits and reduce the chemical load on the environment.�
Mycogen holds a U.S. patent covering methods of modifying Bt gene sequences to optimize plants� production of Bt proteins. The company has received a Notice of Allowance from the European Patent Office for claims covering a similar method. Mycogen�s Bt gene estate is the world�s largest, with issued or pending U.S. and foreign patents covering more than 30 Bt gene sequences with toxicity against a variety of pests.
Mycogen�s first seed product using that technology, a corn hybrid with Bt-based resistance to European corn borers, is now being introduced for commercial planting. The company also is field-testing cotton and alfalfa plants with Bt-based pest-resistance.
Carl Eibl, Mycogen�s president and chief operating officer, said the company will use cash from the deal to build its seed and crop protection businesses.
�The value-added products we�re now introducing and new ones that will come from this collaboration will make Mycogen a significant force in the industry,� Eibl said. �We�re already working to strengthen and expand our existing operations, and we�re evaluating potential strategic transactions that would help us to grow even more rapidly .�
Mycogen is a diversified agricultural biotechnology company that develops and markets technology-based products and provides crop protection services to control agricultural pests and improve food and fiber production. Mycogen�s seed division develops and markets planting seeds for improved crop varieties with genetically enhanced pest-resistance and other value-added characteristics. Mycogen Crop Protection develops and markets environmentally compatible biopesticides and provides crop protection services to growers of high value crops in California and Arizona.
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