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Monsanto bows out of Pharming??

Monsanto Overhauling Businesses

October 16, 2003
By ANDREW POLLACK

Monsanto, the world's leading agricultural biotechnology company, says it is abandoning efforts to produce pharmaceuticals in genetically engineered crops to focus on businesses that could pay off sooner.

The company, based in St. Louis, said that its decision was
not related to the controversy that has surrounded such efforts. Rather, it said, the move was part of a broader overhaul announced yesterday that would result in layoffs of 7 to 9 percent of its work force, or as many as 1,200 people.

Scientists are experimenting with putting genes into plants that cause the plants to produce proteins for use as drugs, like growth hormone or various monoclonal antibodies. This approach, called pharming or biopharming, is not done commercially yet but may prove to be cheaper than the current method of producing such drugs in genetically modified animal cells grown in vats.

Pharming has attracted opposition not only from the environmental groups that usually oppose genetically modified foods, but from food companies, which worry that pharmaceutical-containing corn might wind up in corn flakes, forcing product recalls and undermining public confidence in the safety of the food supply.

Such concerns were stoked by a couple of incidents last
year in which pharmaceutical-containing corn developed by ProdiGene, a small biotech company, intermingled with food crops, though the problem was discovered before any of the food was eaten. Regulations have since been tightened in a way that could make it more difficult to grow pharmaceutical-containing corn - the crop Monsanto was concentrating on - in the Corn Belt.

In a conference call with analysts yesterday, Hugh Grant,
the chief executive, said that the decision was based on
the "uncertainty of the longer-term reward from a highly capital-intensive business." He said the company was trimming research and development spending and focusing on projects that had a nearer-term payoff.

Bryan W. Hurley, a spokesman for Monsanto, said in a
subsequent interview that the move was "purely a business decision" unrelated to the controversy. The company's plant-based pharmaceutical division, known as Monsanto Protein Technologies, employed about 70 people.

Monsanto remains committed to genetically modified crops,
he said. The company is suffering from generic competition
to its Roundup herbicide and is focusing more than ever on seeds and biotechnology.

The company said yesterday that it would trim its work
force, largely in the agricultural chemical business. It
also said that it would exit the European breeding and seed business for wheat and barley, though it will continue to develop genetically engineered wheat resistant to its Roundup herbicide.

It announced a loss for its fourth quarter of $188 million,
or 72 cents a share, largely because of a settlement of a lawsuit tied to decades-old pollution in Alabama. Revenue rose 10 percent, to $1.31 billion.

http://www.nytimes.com/2003/10/16/business/16seed.html?ex=1067324644&ei=1&en
=ccec864c99dd06b3

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