The New cross-licensing agreement between Dow AgroSciences and Monsanto marks a new chapter in biotech trait licensing.

Under the terms of their agreement, the companies will create corn hybrids that combine eight different herbicide-tolerant and insect-protection genes. The traits include Dow AgroSciences' Herculex I and Herculex RW technologies; Monsanto's YieldGard VT Rootworm/Roundup Ready 2 and YieldGard VT PRO technologies; and Roundup Ready 2 and Liberty Link tolerance.

“This an exciting time for both companies, for agriculture and for farmers,” says Ernesto Fajardo, head of U.S. crop production for Monsanto. “By bringing together the two companies that have commercialized the trait technologies most widely used in agriculture today, we can more quickly provide farmers an all-in-one answer to their demand for a comprehensive yield protection from weeds and bugs.”

The companies anticipate that the technology, called SmartStax, will be available by the end of the decade. Many of the traits have previously been approved or are in advanced regulatory review by appropriate agencies.

Terms of agreement

Company officials would not indicate how long discussions had been in the works to form the agreement. “These are complicated agreements, but both parties were so excited at bringing a revolutionary solution to the corn farmer that at no point did anyone doubt the need to do this agreement,” says Jerome Peribere, president and CEO of Dow AgroSciences.

The agreement also puts Monsanto as the representative for third-party licensing of SmartStax to independent seed companies through Holden's/Corn States. Both Dow and Monsanto will retain the right to independently stack additional trait technologies and combinations with SmartStax.

Also under the agreement, Dow's Mycogen corn seed brands, Monsanto's national corn seed brand (Dekalb) and regional seed brands sold by American Seeds Inc. will cross-license germplasm to each other's seed brands for a 10-year period, opening the doors for each company to use additional genetic sources to develop new hybrids.

Future collaboration

Don't be surprised if licensing agreements continue among the players in the biotech arena. “As we have the technology that we think will benefit from further collaboration, you can be sure we will do this kind of thing,” Peribere says.

Monsanto's Fajardo concurs. “Monsanto is always open to collaboration and partnerships that will bring value to our customers and is a win-win for both parties,” he says.

Syngenta says collaboration in the marketplace among competitors is nothing new, noting its partnership with Pioneer to out-license corn and soybean genetics under Greenleaf Genetics. “Syngenta has a high-quality pipeline of products with comparable or better benefits,” says Tom Gahm, spokesperson for Syngenta. “The bottom line is that corn producers will have a lot of choices in the coming years.”

Dean Oestreich, president of Pioneer, says the Dow-Monsanto announcement indicates that Monsanto “needs to get on board with the better Bt, Herculex.” Herculex was developed by both Pioneer and Dow AgroSciences.

“We are developing technologies that we are actively out-licensing to others in the industry. I see that going forward,” Oestreich says. Pioneer will continue to develop products with stacked-trait technologies, including YieldGard, Herculex and Pioneer's new Optimum GAT technology.

The agreement may put to rest, at least for now, the “we're better” marketing battle between Dow and Monsanto, in which each company debated the merits of each other's corn rootworm technology. Peribere says the ultimate decision on what is best lies with the producer. “As far as I'm concerned, the farmer will choose what is best for him,” he says.