Monday, September 1, 2008

Monsanto to invest in Evogene, collaborate on plant research

Monsanto Co., and Israel's Evogene Ltd., which develops improved plants for agriculture and novel feedstocks for biofuels, recently entered into a five-year research and development collaboration focused on identifying key plant genes related to yield, environmental stress and fertilizer utilization.

The collaboration
aims to "discover and deliver novel, yield-enhancing technologies at a time of increasing demand for grain globally," the companies said in a statement.

Under the terms of the collaboration, Evogene will provide Monsanto with candidate genes discovered by Evogene's computational platform and Monsanto will pay Evogene $35 million over the research term of the collaboration. Products that emerge from the gene discovery program will be commercialized by Monsanto, and Monsanto will pay Evogene additional milestone and royalty payments based on sales of any resulting products.

In a separate agreement, Monsanto has purchased an $18 million equity stake in Evogene and has agreed to purchase an additional $12 million in the future, subject to certain Evogene due diligence requirements.

In April, 2008, AquAgro Fund, an Israeli cleantech-focused venture capital fund, agreed to invest $2 million in Evogene at a price of NIS 6.5 per share. Following the Monsanto annoucement, Evogene shares are now trading at NIS 8.78 per share on the Tel Aviv Stock Exchange.

Martin Gerstel, Chairman of Evogene, stated, "Having the world's leading agriculture company as a major collaborator moving forward is clearly a transforming event in the history of our company, and we welcome Monsanto as a shareholder. Furthermore, with its new financial commitment, we are now convinced that Evogene has the resources required to agressively pursue our two primary areas of interest -- improved plants for agriculture and novel feedstocks for biofuels."

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