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Monsanto biotech corn nears a regulatory nod (Thursday, Sept. 5, 2002 -- CropChoice news) --
BYLINE: Rachel Melcer Of The St. Louis Post-Dispatch
Monsanto Co. is in the home stretch of regulatory approval for a new
seed that could handle two pests at once: the corn rootworm and the Wall
Street skeptics who wonder whether the newly independent company's
biotechnology and market reach are beginning to play out.
The seed, which will be called YieldGard Rootworm Corn if it gets the
nod for commercialization, was the subject of a three-day hearing last
week by the Environmental Protection Agency's Scientific Advisory Panel.
If the panel's recommendation -- expected in a few weeks -- is favorable
for Monsanto, the seed will be one last step away from hitting the
shelves. The company hopes final approval will come in time for spring
planting. Monsanto runs this regulatory race each time it develops a new
genetically modified seed or pesticide for U.S. farmers. But this time,
the stakes are higher.
The rootworm corn seed is the first product introduced by the
agricultural biotech industry in three years that attacks a new problem,
rather than simply building on existing products. So, it opens up new
market potential, spokesman Bryan Hurley said. With 90 percent of the
U.S. biotech crop market under its belt and challenges to expansion
abroad, Monsanto needs to create new opportunities to grow. And the
company says it is about two to three years ahead of the competition
with this type of product.
"It establishes that biotech has not plateaued here, that we are
increasing and growing the market for our technology," said Eric Sachs,
Monsanto's director of scientific affairs for North America.
YieldGard Rootworm Corn also is the first Monsanto product to be up for
approval since the company's split Aug. 13 from Pharmacia Corp., which
had owned 84 percent of Monsanto stock. Monsanto has been working hard
to persuade the Pharmacia Corp. shareholders whose interest is in the
pharmaceutical industry to hang on to the Monsanto stock they received
as part of the deal. Failing that, the company needs to attract new
investors to pick up the shares that are being sold.
"In the next six months, (Monsanto) will basically re-emerge and rebuild
their credibility with the investment community," said John Moten,
chemicals analyst and vice president with Deutsche Bank Securities Inc.
in New York. "When I look at the company's leadership position and the
markets that they can penetrate, they are really in a good position ...
and this (corn rootworm) product further strengthens it."
Yet, Moten sees three factors as crucial to Monsanto's success: wider
global acceptance of biotech crops, which largely have been rejected by
the European Union; maintenance of pesticide market share now that its
premier product, Roundup, is no longer patent protected in the United
States; and development of new products such as YieldGard Rootworm Corn.
Monsanto's chief executive, Hendrik Verfaillie, has said launching the
rootworm corn product is among the company's top three priorities this
year. Monsanto is betting big research and development dollars on
biotech crops, which are expected to outpace Roundup sales as a source
of gross profit by 2004.
Farmers, too, are eagerly awaiting an alternative way to attack
rootworm. The pest costs hundreds of millions of dollars each year in
pesticides and lost crops, said Tom Slunecka, director of development
for the St. Louis-based National Corn Growers Association.
"For those producers that have rootworm problems, it's their No. 1 pest
issue," he said.
Last year, 7.8 million pounds of pesticides were applied to 14.2 million
acres of U.S. corn at a cost of $172 million, according to Doane
Marketing Research Inc.
Farmers are concerned with the cost, the environmental damage and the
health hazards of using pesticides, Slunecka said. But the alternative
approach - rotating plantings of corn and soy to interrupt the growth
cycle of the corn-dwelling rootworm - is becoming less effective as the
rootworm adapts with its every-other-year growth pattern.
YieldGard Corn Rootworm is a genetically modified seed that contains a
protein that kills rootworm when ingested. Monsanto has conducted
several studies - presented to the EPA last week - showing that it has
no measurable effect on other organisms.
Monsanto scientists estimate that as rotating crops fails as a solution
and the rootworm spreads geographically across the country, the eventual
market for YieldGard Rootworm Corn will reach 47 million U.S. acres.
Monsanto is prepared to sell enough YieldGard Rootworm Corn to plant 1
million acres in the spring.
"We obviously need to get approval, and it's going to take a little
while for it to ramp up to scale in the marketplace," said Carl Casale,
vice president in charge of North American operations. "But we believe
it w ill be a significant product for us."
NOTES:
Reporter Rachel Melcer: E-mail: rmelcer@post-dispatch.com
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