Evogene Ltd. (TASE:EVGN) will collaborate with Monsanto Company (NYSE:MON) to improve nitrogen use efficiency in corn, soybeans, canola and cotton. The deal comes one day after the company reported a collaboration with Ormat Industries Ltd. (TASE: ORMT) subsidiary Orfuel Inc. to develop oil-rich plants for the production of biodiesel. Evogene rose another 11.5% in morning trading today.
Monsanto received the exclusive right to a number of genes discovered by Evogene that help plants maintain yield with lower applications of nitrogen. Monsanto will examine the effect of the genes on the improved absorption of nitrogen in the seeds. The genes have potential features that complement Monsanto’s R&D programs for improving nitrogen absorption and could be an opportunity for improving products in this field.
Evogene will receive a one-time payment when the contract is signed, and can receive additional payments subject to meeting milestones, and if Monsanto finds that the genes have commercial potential beyond the potential in other genes that it has selected for its own R&D program. Evogene will also be eligible for royalties if Monsanto commercializes a product using Evogene’s technology.
Evogene president and CEO Ofer Haviv said, "Monsanto is acknowledged worldwide for its excellent capabilities in delivering innovative technology to farmers. Therefore we are obviously delighted Monsanto has chosen our computational gene discovery technology for the development of its next generation of improved crop traits.”
The companies note that nitrogen fertilizer represents one of the largest input costs in agriculture; it accounts for approximately one-fifth of the operating costs for a corn producer. In the US alone, farmers spend more than $3 billion annually on nitrogen fertilizer application of corn fields, with plants typically absorbing less than half of the nitrogen fertilizer applied.
Published by Globes [online], Israel business news - www.globes.co.il - on September 25, 2007
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