monsanto 03-21-07
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monsanto 03-21-07

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    monsanto 03-21-07 monsanto 03-21-07 Presentation Transcript

    • Joint R&D and Commercialization Collaboration for Future Growth March 21, 2007 MARCH 21, 2007
    • Forward-Looking Information As It Pertains to BASF: As It Pertains to Monsanto: Certain statements contained in this presentation are quot;forward- This presentation contains forward-looking statements under the looking statements,quot; such as statements concerning the company's U.S. Private Securities Litigation Reform Act of 1995. These future product performance, regulatory approvals, business and statements are based on current expectations, estimates and financial plans and other non-historical facts. These statements are projections of BASF management and currently available based on current expectations and currently available information. information. They are not guarantees of future performance, involve However, since these statements are based on factors that involve certain risks and uncertainties that are difficult to predict and are risks and uncertainties, the company's actual performance and based upon assumptions as to future events that may not prove to results may differ materially from those described or implied by be accurate. such forward-looking statements. Factors that could cause or Many factors could cause the actual results, performance or contribute to such differences include, among others: the success achievements of BASF to be materially different from those that of the companies’ research and development activities; the costs of may be expressed or implied by such statements. Such factors and the companies’ abilities to access and enforce intellectual include those discussed in BASF’s Form 20-F filed with the property needed for the collaboration; the costs and requirements Securities and Exchange Commission. We do not assume any of regulatory compliance and the speed with which approvals are obligation to update the forward-looking statements contained in received; public acceptance of biotechnology products; and other this presentation. risks and factors detailed in the company's most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results. 2
    • Joint R&D Collaboration Conference Call Agenda Ms. Scarlett Foster 1 Introduction and Overview Vice President, Investor Relations Monsanto Mr. Hugh Grant 2 Monsanto Overview Chairman, President and CEO Monsanto Dr. Jürgen Hambrecht 3 BASF Overview Chairman of the Board of Executive Directors BASF Mr. Peter Oakley 4 Deal Structure Member of the Board of Executive Directors BASF Dr. Robb Fraley 5 R&D and Commercial Opportunity Chief Technology Officer Monsanto 6 Q&A Period 3
    • Technology Collaboration Creates Joint Pipeline Focused on Yield and Stress FOCUS Establishment of a joint technology and commercialization collaboration that combines the expertise of both companies to create extraordinary R&D pipeline for yield and stress traits DISCOVERY Each company maintains independent discovery programs, which will generate leads to be nominated into development in joint R&D pipeline DEVELOPMENT Nominated projects are jointly funded at 50-50 cost sharing through each phase of development COMMERCIALIZATION Emerging products are commercialized by Monsanto under a broad-licensing approach to seed companies across Monsanto’s existing three commercial channels. Value from commercialization is shared at 60% for Monsanto and 40% for BASF 4
    • For Monsanto, Collaboration Offers Opportunity to Increase Commercial Certainty for Most-Valuable Traits KEY MOTIVATION WHY WORK Market demand has BASF has technology and FOR WITH BASF? evolved – with farmers discovery capability that has COLLABORATION interested in tools that the potential to transform, not boost yield and there is a just replicate, what has central belief that already been commercialized Monsanto can create more Collaboration is consistent value for farmers with Monsanto’s R&D Monsanto is oriented philosophy – bringing in a around innovation and range of technology and broad licensing to market; making it broadly available to Opportunity to bring more the market traits to more farmers more BASF is well positioned to quickly design products as a steady stream of upgrades that In pursuing the opportunity emerge more rapidly from to boost yield, the broadest development and increase R&D program will have the the probability of commercial best probability of success commercial success BASF brings an attractive and complementary intellectual- property portfolio 5
    • BASF’s Focus on Growth Clusters Business Product Process model innovation innovation Plant Biology Biotechnology White Biotechnology (e.g. industrial biotechnology for enzyme catalysis, fermentation) Raw Chemistry Material Change Energy Management Nano- technology Physics 6
    • For BASF, Collaboration Links Exceptional Discovery Capabilities to a Significant Commercial Opportunity KEY MOTIVATION WHY WORK BASF has in place a Monsanto has an established FOR WITH promising early discovery development pipeline and COLLABORATION MONSANTO? platform – employing experience with regulatory novel “metabolic process and commercial profiling” approach – with channels significant opportunity in Monsanto is a strong partner, the yield and stress arena committed to the Ag industry, BASF was interested in a and focused on bringing strong partner with a solutions to farmers through clear vision and strategy innovation and collaboration; to deliver novel Monsanto is the most discoveries to farmers successful company in the industry delivering traits Collaboration creates new broadly to commercial markets market opportunities by Combining BASF’s discovery accelerating market technologies with Monsanto’s access for BASF’s seed distribution network established platform in allows both companies to plant sciences serve farmers with innovative Collaboration creates agricultural products more greater certainty in rapidly delivering commercially viable products 7
    • Discovery at BASF Look at yield Look inside Look at plant + + 0 6.00 10.00 14.00 18.00 22.00 8.00 12.00 16.00 20.00 24.00 BASF Plant Science Metanomics Crop Design Gene selection Information + Metanomics Promising platform for gene function identification combining high throughput phenotypic plant screening, metabolic profiling and field testing 8
    • Discovery at BASF Key Features Benefits Fast growing genetic library – over 1.5 Intimately understand the function of million metabolic profiles for more than genes and gene networks 35,000 genes Sophisticated and integrated IT System Allows instant access to known properties to allow rapid data mining and functions in order to focus efforts on candidates with highest potential for success Fully automated high throughput quot;livequot; Validate leads on 24/7 basis, before field crop screening trials • Quick and thorough IP generation • Focus resources on development of highest potentials early • Accelerated introduction of new products to the market 9
    • Focus on Yield and Stress Represents Single Most Promising Opportunity in Agriculture Over Next Decade TRENDS DRIVING MARKET POTENTIAL AGRICULTURAL RESEARCH Given the trends driving Yield international agriculture over the Per-acre productivity is paramount to next decade, a targeted R&D farmers approach to driving yield and Biofuels stress is ideally situated to deliver U.S. will need 25M+ acres of corn and practical solutions to farmers to 10M+ acres of soybeans to supply address these trends biofuel needs by 2010 EU has established biofuel target of Key targets of the collaboration >5% of total transportation fuel by 2010 include: Water Boosting the inherent yield potential Agriculture consumes 75% of the of seed world’s freshwater Helping to minimize the uncertainty in farming by buffering against the Nitrogen Use effects of environmental stress Elevated petroleum prices have Helping key crops better utilize the spotlighted the costs of nitrogen-based moisture and nutrients available in fertilizers the soil 10
    • Collaboration Creates Unified Focus on Yield That Extends From Discovery Through Commercialization INTENSIFIED YIELD LICENSEES & STRESS MONSANTO PIPELINE DISOVERY Collaboration creates REGIONAL BRANDS PROGRAM a new joint pipeline focused on stepping up the volume of leads BASF and certainty of DISCOVERY NATIONAL BRANDS commercial success PROGRAM in the emerging category of “yield” traits for corn, soybeans, cotton and canola DISCOVERY DEVELOPMENT COMMERCIALIZATION • Each company maintains • Jointly funded at 50% - • Products commercialized independent discovery 50% level through each by Monsanto across its programs stage of development three commercial channels • Projects nominated for • Potential $1.5/€1.2 billion • Value shared 60% to development to jointly devoted to discovery and Monsanto, 40% to BASF STRUCTURE managed board development over the life of the collaboration • Harnesses Monsanto’s existing development and regulatory infrastructure 11
    • As Market Needs Evolve, R&D Collaboration Ideally Positioned to Serve Growing Opportunity to Drive Yield SECOND DECADE: YIELD FIRST DECADE: WEEDS AND BUGS In the second decade, we jointly focus on First decade of biotech characterized by a series of solutions to more complex singular solutions to singular problems, problems. These are best accomplished by one company at a time. through a partnership. 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015 2008 REGULATORY AND COMMERCIAL TRACK FOR YIELD-ORIENTED TRAITS 1996 2006 2005 2003 Introduction of first large-scale Third year of One billionth First-ever second- 2007 biotech trait by Monsanto: successful cumulative acre generation trait Establishment of joint R&D Roundup Ready soybeans and field testing of biotech traits commercialized by collaboration between BASF and Bollgard cotton of first- planted Monsanto: Bollgard Monsanto accelerates focus on yield- generation II cotton related traits 1997 biotech First widespread First biotech trait in corn drought planting of triple- introduced by Monsanto: tolerant trait stacked traits in YieldGard Corn Borer by Monsanto corn 12
    • Built on Backbone of Existing Platforms, Joint Pipeline Poised for Advancement DISCOVERY PHASE I PHASE II PHASE III PHASE IV Gene/Trait Identification Proof of Concept Early Development Advanced Development Pre-Launch 24 TO 48 MONTHS 12 TO 24 MONTHS 12 TO 24 MONTHS 12 TO 24 MONTHS 12 TO 36 MONTHS INDEPENDENT DISCOVERY JOINT-FUNDED DEVELOPMENT 2nd- Generation Monsanto Independent Discovery Drought-tolerant Program Drought-tolerant corn corn Grain yield Higher-yielding Water-use canola Environmental stress efficiency tolerance Higher-yielding soybeans soybeans BASF Independent Discovery Drought-tolerant Higher-yielding Program cotton corn Yield increase Nitrogen- Environmental stress utilization corn tolerance In addition to 8 projects already contributed to the newly created pipeline, the combined discovery efforts would create new products and upgrades, which could add six or more new product opportunities over the lifetime of the collaboration 13
    • By Generating More Leads, Joint Pipeline Increases Probability of Success for Yield and Stress Traits INTENSIFIED YIELD LICENSEES & STRESS PIPELINE MONSANTO DISOVERY Collaboration creates PROGRAM REGIONAL BRANDS a new joint pipeline focused on stepping up the volume of leads BASF and certainty of DISCOVERY NATIONAL BRANDS commercial success in PROGRAM DEVELOPMENT OF the emerging category SUCCESSIVE UPGRADES of “yield” traits for TO CREATE A “FAMILY” OF PRODUCTS corn, soybeans, cotton and canola DISCOVERY DEVELOPMENT COMMERCIALIZATION • Pairs two separate, but • Greater volume of leads • Broad-licensing approach complementary discovery and cost sharing reduce allows for products to engines risk of failure, increasing reach broadest market probability of commercial possible, allowing farmers • Increased rate of discovery, success to choose traits in the seed unlocking more sources of KEY brands they prefer for the genes than ever before • Successive upgrades greatest performance emerge sooner, creating ADVANTAGES • With combined effort, steady stream of traits in a products should advance at “product family” in each faster-than-average crop development timelines, esp. in early-phase research 14
    • By Unlocking Yield Opportunity, Collaboration Creates New Value for Farmers ADVANTAGE OF BASF-MONSANTO VALUE PROPOSITION FOR FARMERS COLLABORATION Combining complementary discovery 1. Transformational New Tools programs creates an advanced pipeline focused on yield and stress Larger pool of gene candidates is expected to generate products that hit 2. Better-Performing Products yield targets in earlier generations than would have previously been possible Enhanced discovery engine accelerates creation of a steady stream of product 3. More Rapid Innovation upgrades in a “product family” in each crop and successive upgrades emerge sooner Distribution is built on Monsanto’s 4. Availability of Traits in the Seed of historical broad-license approach, making the newest, best traits available in Choice the seed brands farmers choose to use 15