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Saturday, May 18, 2024
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Monsanto Makes DealsWith Synthetic Genomics

Monsanto Corp. has acquired a portion of San Diego’s hallowed Synthetic Genomics Inc. — marking the agribusiness giant’s second recent investment in the San Diego area.

Synthetic Genomics, a privately held biotechnology company, was founded in 2005 by genomics pioneer J. Craig Venter and Nobel Laureate Hamilton Smith to advance genetics research as it impacts energy and the environment. It employs 120 in La Jolla.

St. Louis-based Monsanto has purchased several assets from Synthetic Genomics, including an array of microbes related to crop protection and productivity from Agradis Inc., Synthetic Genomics’ agricultural spin out. It has also acquired the Agradis name and its R&D site in La Jolla.

“Agradis’ collection of plant associated microbes will support Monsanto’s efforts to provide farmers with sustainable biological products to improve crop health and productivity,” said Steve Padgette, Monsanto R&D investment strategy lead.

Monsanto, a global provider of engineered agricultural products such as seeds and pesticides, has a market capitalization of $54 billion.

Monsanto has a growing interest in the field of plant microbes, according to Joseph Mahler, chief financial officer of Synthetic Genomics.

Pest Practices

“The microbial approach is trying to use natural means to increase a plant’s pest resistance or use of nutrients, by finding complementary microorganisms that can help a plant grow most efficiently,” Mahler said. “Old solutions like pesticides just don’t work — so this whole microbiological theory is very interesting, and it’s telling that large companies like Monsanto are focused on this now.”

Agricultural biologicals — often referred to as biopesticides — are used to complement or replace chemical pesticides and represent a growing market segment of roughly $1.7 billion in annual sales, according to Monsanto. They’re typically topical or seed treatment products that are manufactured from, or contain natural materials.

Financial Details Not Disclosed

Financial details of Monsanto’s Synthetic Genomics deal were not disclosed, but in 2011 Agradis received $20 million in Series A funding from Plenus, a Mexico-based investing and management company run by agribusiness financier Alfonso Romo. Synthetic Genomics currently owns about 44 percent of Agradis, Mahler said.

Synthetic Genomics has recently built partnerships with other global companies, Mahler said. It’s developing an algae-based substitute for petroleum with Exxon Mobil Corp. Synthetic Genomics is working with Novartis to find a more effective flu vaccine that can be rapidly manufactured.

Monsanto’s Share

Monsanto has invested an undisclosed sum in Synthetic Genomics, and has entered a multiyear collaborative research agreement. Monsanto will not have a majority share in the company, Mahler said. As a part of this recent deal, Monsanto will directly employ seven Agradis employees in the acquired La Jolla R&D site.

The portions of Agradis that weren’t acquired by Monsanto will be incorporated into a new company called AgraCast, Mahler said. The company will focus on advancing the breeding of sweet sorgum and castor, as well as an anti-fungal product for fruits and vegetables. Plenus and Synthetic Genomics are the majority investors in AgraCast.

This is not the first time that Monsanto has invested in a San Diego company. Monsanto made an equity investment in San Diego’s Sapphire Energy Inc. in March 2011, and entered a multiyear research collaboration. The two companies are teaming up to discover new genes in algae that can be applied to agriculture — particularly those that would allow plants to grow in difficult environments, like saltwater.

Sapphire employs about 170, and 10 employees are working directly with Monsanto.

Tim Zenk, vice president of corporate affairs for Sapphire, said that the Monsanto collaboration has fit in nicely with Sapphire’s own agenda to develop an algae-based energy source.

“There’s a real symbiotic relationship between the ability to impart and develop a gene library for Monsanto, but also improve the traits that we need improvement on to commercialize algae into an energy product,” Zenk said.

Prior to Sapphire, the last time Monsanto demonstrated interest in San Diego was in 1995 when it purchased Kelco for $1.1 billion. But it sold the company, which develops algae-based food stabilizers, for $685 million in 2000, in preparation for a merger with Pharmacia & Upjohn Inc.

“Monsanto is always exploring additional ways we can bring value to growers and we also recognize we are not the only company working to discover ways to improve crops,” said Sara Miller, a spokeswoman for Monsanto. “We currently have thousands of active technology-related agreements with both private and public institutions around the world, including with California-based technology companies like SGI and Sapphire Energy.”

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