Your SlideShare is downloading. ×
0
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
monsanto 12-04-06
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

monsanto 12-04-06

387

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
387
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. TED CROSBIE BREEDING LEAD CITIGROUP PRE-CONFERENCE TEACH-IN December 4, 2006 1
  • 2. Forward-Looking Statements Certain statements contained in this presentation are quot;forward-looking statements,quot; such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful completion and operation of recent and proposed acquisitions, including Delta and Pine Land Company; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's filings with 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. Trademarks Trademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. Mavera is a trademark of Renessen, LLC. © 2006 Monsanto Company 2
  • 3. OVERVIEW Breeding and Biotech Provide Parallel R&D Paths to Commercial Products BREEDING and BIOTECHNOLOGY form two R&D pathways Separate, but parallel, the BREEDING and BIOTECHNOLOGY pathways are linked by shared tools. DISCOVERY PHASE I PHASE II R&D PHASE: PHASE III PHASE IV LAUNCH BREEDING COMMERCIAL IT PLATFORM GERMPLASM G ANALYTICS MARKERS GENOMICS SEED ELITE Germplasm SOLD TO FARMERS R BIOTECHNOLOGY 3
  • 4. BREEDING Germplasm Is Building Block for Better Seed; Germplasm Library Is Building Block for Better Breeding CORN SEED GERMPLASM LIBRARY GERMPLASM ASSEMBLED GEOGRAPHIC POOLS OVERVIEW: Germplasm is like breeding in thoroughbred race horses – just as breeders select for the fastest race horses, seed breeders look to pair the best pool of genes for the strongest TEMPERATE yielding seed SUB-TROPICAL APPLICATION: Germplasm pools allow breeders to target key TROPICAL physiological traits: SUB-TROPICAL • Increased Yield • Disease Resistance TEMPERATE • Stress Tolerance Monsanto’s corn germplasm library is assembled from • Grain Quality / Added Value 36 breeding programs in 12 different countries Annually, breeders exchange more than a million different “packages” of germplasm material >50% of Monsanto’s corn hybrids result from intra- company crosses 4
  • 5. BREEDING Markers Allow Breeders to Get Best Combinations of Germplasm Faster With Greater Predictability TRACKING CHARACTERISTICS FOR YIELD MARKERS YIELD-RELATED AREAS ON CORN CHROMOSOMES OVERVIEW: A corn plant has 40,000 genes spanning 10 chromosomes. Characteristics – or traits – are 9 10 1 2 3 4 56 7 8 built from different pieces on different chromosomes. Markers are DNA ‘flags’ that indicate where particular genes are located APPLICATION: Using markers to make better selections, breeders can improve the probability of success: Probability of finding 1 trait that is controlled by 20 genes “Random” crosses: 1 per trillion After application of markers and Regions associated with breeding yield coming from Parent 1 technology Regions associated with yield coming from Parent 2 1 in 5 5
  • 6. BREEDING Products of Molecular Breeding Only Beginning to Enter the Commercial Portfolio 20% 2006 BRANDED U.S. 12% MARKET SHARE: 19% IN COMMERCIAL CORN PORTFOLIO PERCENT OF BRANDED UNITS SOLD 10% 15% U.S. MARKET SHARE 8% DEKALB AND ASGROW 10% U.S. BRAND MARKET 6% SHARE 4% 5% 2% 0% 0% 2001 2002 2003 2004 2005 2006 2007F 2008F 2009F 2010F CYCLE 1: CYCLE 2: CYCLE 3: PROGRESSION INTEGRATION OF APPLICATION OF MOLECULAR SELECTION POWER OF OF BREEDING GLOBAL GERMPLASM BREEDING TO SELECTION MOLECULAR BREEDING TECHNOLOGY IN THE • MOLECULAR BREEDING • PREDICTIVE COMBINATIONS • ASSEMBLED 36 MAJOR CORN COMMERCIAL IMPROVES GENETIC POTENTIAL ALLOW MORE EFFICIENT BREEDING PROGRAMS IN 12 PORTFOLIO BY 2X VERSUS CONVENTIONAL BREEDING COUNTRIES BREEDING • MOLECULAR BREEDING • FIRST INTRA-COMPANY • IN 2006, FIRST MOLECULAR ACCELERATES TRAIT CROSSES; BY CYCLE 3, >50% BREEDING HYBRIDS ENTERED INTEGRATION BY OF HYBRIDS IN THE U.S. COMMERCIAL PORTFOLIO SHORTENING ‘BACKCROSSING’ PORTFOLIO MADE THROUGH CYCLES INTRA-COMPANY CROSSES 6
  • 7. BREEDING Core Research Methods Have Applicability Across Crop Platforms, Magnifying Investment and Productivity SHARED TECHNOLOGY AND METHODS CROP IT MARKER-TRAIT MARKER MARKER PLATRFORMS SYSTEMS ASSOCIATIONS DETECTION DISCOVERY Focused on methods Focused on state-of- Focused on creating Focused on the best for discovering new the-art platforms to unified decision- application of markers, moving to a detect markers that making systems to marker-trait “SNP” (single maximize efficiency better enable associations to CORN nucleotide and minimize cost breeding efficiency select for most polymorphism) commercially- platform for all crops relevant traits APPLICATION TODAY: APPLICATION TODAY: APPLICATION TODAY: APPLICATION TODAY: Thousands of SNP Proprietary Proprietary Associations used SOYBEANS markers already automated systems interconnected IT for complex traits – identified and in use in place for corn, systems in place for like yield – in corn for corn soybeans and cotton corn, soybeans and and soybeans, and and soybeans cotton simpler traits in OPPORTUNITY: vegetables Leverage existing OPPORTUNITY: OPPORTUNITY: COTTON Development of SNP platforms for Utilize existing OPPORTUNITY: markers for 9 additional species systems to provide Marker-trait different row crop and upgrading comparable associations will and vegetable systems for all crops capabilities for allow for predictive species vegetables breeding for key traits in all relevant crops VEGETABLES 7
  • 8. BREEDING + BIOTECHNOLOGY Delivering Yield Favors Companies That Can Provide Both Breeding and Biotechnology Improvements in Concert FOCUS: YIELD WHAT MATTERS TO FARMERS IS THE YIELD AT HARVEST, WHICH IS A FUNCTION OF HOW MUCH POTENTIAL A SEED HAS AND HOW IT’S GENETIC POTENTIAL (FUTURE) PROTECTED: GENETIC POTENTIAL NET REALIZED YIELD WITH PERCENT OF GENETIC GAIN FUTURE PROTECTION X PRESERVED OPPORTUNITIES PROTECTION AND ENHANCEMENT IMPROVED NITROGEN ADVANCES BREEDING UTILIZATION NET REALIZED YIELD DROUGHT TOLERANCE SECOND-GENERATION INSECT CONTROL GENETIC POTENTIAL (CURRENT) INSECT PRESSURE NET REALIZED YIELD WITH CURRENT WEED PRESSURE PROTECTION NATURAL YIELD NUTRIENT DEFICIENCY SUPPRESSION BELOW-GROUND CURRENT YIELD WATER DEFICIENCY INSECT CONTROL PROTECTION GENETIC POTENTIAL ABOVE-GROUND PRESERVED INSECT CONTROL THROUGH BIOTECH TRAITS AND PRODUCTION WEED-CONTROL ADVANCES TRAITS SEED NET REALIZED YIELD MANUFACTURING WITH NO PROTECTION 8
  • 9. BIOTECHNOLOGY Early Pipeline Work Focuses On Identifying Best Genes and Introducing Leads Into Plants for Development AGROBACTERIUM BIOTECH DISCOVERY Agrobacterium tumefaciens GENE SOURCES: DNA naturally inserts DNA Hundreds of thousands of genes are screened to find segments into plant cells – candidates for biotech traits this is used to transfer AGROBACTERIUM GENE TRANSFER TUMEFACIENS identified genes • Genes come from plant PLASMID sources, including bacteria, fungi, microorganisms (like baker’s yeast) and native GENE genes in plants TRANSFORMED INSERTION PLANT CELL NUCLEUS WITH GENE • Genes used in insect- CHROMOSOME protected crops to date are from “bacillus thuringiensis,” or “Bt,” a class of naturally PARTICLE ACCELERATION – GENE GUN occurring soil bacteria with thousands of different strains DNA-COATED that target specific insects Gene guns use “biolistics,” PELLETS DNA using particles coated in DNA GENE INSERTION: that are introduced into plant There are two key methods cells used to insert genes into PARTICLE ACCELERATION plants: • Agrobacterium • Particle acceleration (gene GENE gun) INSERTION TRANSFORMED NUCLEUS PLANT CELL CHROMOSOME WITH GENE 9
  • 10. BIOTECHNOLOGY Biotech Pipeline Follows Pharmaceutical-Like Development PHASE II PHASE III DISCOVERY PHASE I PHASE IV Early Development Advanced Proof Of Concept Pre-launch Gene/Trait Development Identification AVERAGE 24 to 48 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 36 MONTHS DURATION1 ION AT GR E INT IT RA T G STIN D TE FIEL MONSANTO DISCOVERY + REGULATORY DATA GENERATION COLLABORATIVE REG U LATO PARTNERS RY S UBM IS SION KEY INFLECTION POINT: SE ED BU AFTER PHASE II COMMERCIAL LK UP SUCCESS GOES TO >50% WITH LEADS ON COMMERCIAL TRACK GENES IN TENS OF THOUSANDS THOUSANDS 10s <5 1 TESTING 1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the time estimated here. 10
  • 11. BIOTECHNOLOGY Stage-Gate Model Provides Systematic Evaluation and Built-In Cost Prioritization DISCOVERY PHASE III PHASE I PHASE IV PHASE II Advanced Gene/Trait Early Development Proof Of Concept Pre-launch Development Identification AVERAGE 24 to 48 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 36 MONTHS DURATION1 • High- • Optimizing gene • Commercial • Extensive field • Completion of throughput in greenhouse transformations testing to regulatory gene screening and fields to of genes into generate submissions KEY establish proof crop plants regulatory data ACTIVITY • Model crop • Commercial of concept and for testing seed bulk up • Scale up events agronomic for large-scale testing field testing RELEVANT REGULATORY “BEST” GENES TRIGGER TO LEAD EVENTS GENE LEADS REGULATORY PACKAGES IDENTIFIED ADVANCE TO SELECTED IDENTIFIED REVIEWS SUBMITTED NEXT PHASE COMPLETED AVERAGE 5% 25% 50% 75% 90% PROBABILITY OF SUCCESS2 RELATIVE R&D COST PER PROJECT3 COST-INFLECTION POINT: PER-PROJECT COSTS ONLY MOVE UP ONCE COMMERCIAL TRANSFORMATIONS ARE MADE, AND THE PROBABILITY OF SUCCESS ALSO INCREASES 1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the time estimated here. 2. This is the estimated average probability that the traits will ultimately become commercial products, based on our experience. These probabilities may change over time. 3. Relative cost reflects an estimate of cumulative costs for a composite project. Actual spending will vary for any individual project. 11
  • 12. BIOTECHNOLOGY Over the Last Decade, First-Generation Biotech Traits Have Revolutionized Farmers’ Approaches to Weeds and Bugs BIOTECHNOLOGY FIRST-GENERATION TRAITS GLOBAL IMPACT: FIRST DECADE CORN SOYBEANS COTTON PRODUCTIVITY: Yield of key crops like corn, soybeans and cotton increased by 6.8B lbs in the U.S. in 2004 WEED ECONOMIC RETURN: CONTROL $6.5B increase in farm income in 2004 R&D PLATFORMS Cumulative increase in farm ROUNDUP READY ROUNDUP READY income of $27B from 1996- ROUNDUP READY CORN (1998) SOYBEANS (1996) COTTON (1997) 2004 PESTICIDE REDUCTION: 379M lbs, 6% reduction ENVIRONMENTAL BENEFIT: Reduced >10B kg carbon YIELDGARD CORN dioxide emission, equal to BORER (1997) INSECT removing 5 M cars from the CONTROL road for a year Source: Graham Brooks, 2005, www.agbioforum.org; NCFAP report, BOLLGARD YIELDGARD COTTON (1996) 2005; Ford Runge & Barry Ryan 2004 ROOTWORM (2003) 12
  • 13. BIOTECHNOLOGY Second Year of Drought Pressure in Central Corn Belt Demonstrates Performance Value of YieldGard Rootworm KEY MARKET ACRES U.S. BRAZIL ARGENTINA YieldGard Rootworm AVAILABLE MARKET 25-30M 5M 1M Corn PERCENT PENETRATED 40% 0% 0% SOIL PROBE ANALYSIS OF WATER USE COMPARISONS OF SIMILAR GENETICS IN COLORADO Commercial Portfolio LOCATION: YieldGard Rootworm Ogallala Aquifer, SITUATION: Colorado ACTIVITY: • YieldGard Rootworm First year of delivers effective and moisture probe consistent in-plant studies comparing protection against western, water use northern and Mexican corn rootworms OBSERVATIONS: One of the benefits VALUE CONSIDERATIONS: of better-protected, Soil Insecticide YieldGard Rootworm stronger roots is RETAIL $17-$19/acre DKC 61-72 with Force® VALUE/ACRE: DKC 61-68 (YieldGard Plus) that corn plants can better use the TOTAL ACRE 25-30M (U.S.) OPPORTUNITY: Water Use Key available water – making YieldGard LOW WATER ABSORPTION Rootworm an effective “drought” MODERATE WATER ABSORPTION trait HIGH WATER ABSORPTION 13
  • 14. BIOTECHNOLOGY Continued R&D Innovation Expands Breadth and Depth From First-Generation Platform R&D PIPELINE ADVANCEMENTS FIRST-GENERATION TRAITS SELECTED UPGRADES AND NEW TARGET CONCEPTS CORN SOYBEANS COTTON CORN SOYBEANS COTTON • Roundup • Roundup • Roundup • Roundup • Roundup WEED • Roundup Ready corn Ready Ready RReady2Yield Ready Flex CONTROL Ready Corn 2 soybeans cotton soybeans cotton • YieldGard • Bollgard • YieldGard VT Corn Borer cotton Rootworm/RR2 • Bollgard II (2ND GEN • Insect- • YieldGard INSECT cotton ROOTWORM) protected CONTROL Rootworm • Bollgard III • YieldGard VT soybeans cotton PRO (2ND GEN CORN BORER) • Higher- NEW R&D PLATFORMS • Drought- yielding YIELD & • Drought- tolerant corn soybeans STRESS tolerant TOLERANCE • Nitrogen- • Drought- cotton utilization corn tolerant soybeans • Mavera™ high- • Mavera ™ FEED value corn with high-value PROCESSING lysine soybeans • Vistive brand HEALTHIER soybeans FOODS • Omega-3 soybeans Green text = Commercialized Black text = Currently in development or pending commercialization 14
  • 15. BIOTECHNOLOGY Second-Generation Roundup RReady2Yield Soybeans Offer Yield Improvement Over First-Generation KEY MARKET ACRES U.S. BRAZIL ARGENTINA Roundup RReady2Yield AVAILABLE MARKET 70M 50M 35M Soybeans PERCENT PENETRATED 0% 0% 0% P R O JE CT ROUNDUP RREADY2YIELD IN THE FIELD FIELD TRIAL PHOTOS FROM 2006 R&D Pipeline Roundup Ready2Yield soybeans LOCATION: SITUATION: Stonington, Illinois On Track 2006 STATUS: ACTIVITY: Monsanto • Yield data from 45 trials will be researchers check shared in January performance indicators in the VALUE CONSIDERATIONS: fields such as plant height, and pod size • Value is additive, with target of and number up to 5 bushel-per-acre yield OBSERVATIONS: improvement over comparable 25 locations across Roundup Ready soybeans the U.S. tested RETAIL $10 - $30/acre VALUE/ACRE: 11,000 lines tested in 45 trials TOTAL ACRE 155M acres OPPORTUNITY: 15
  • 16. BIOTECHNOLOGY Drought-Tolerant Corn Targets Issue of Water-Use Efficiency in Agriculture KEY MARKET ACRES U.S. BRAZIL EUROPE Drought-tolerant AVAILABLE MARKET 80M 30M 24M corn PERCENT PENETRATED 0% 0% 0% P R O JE CT DROUGHT TOLERANT CORN IN THE FIELD R&D Pipeline FIELD TRIAL PHOTOS FROM 2006 Drought-tolerant corn SITUATION: On Track 2006 STATUS: LOCATION: • Continued expansion of testing in lead Vacaville, California genes and events in moisture-stressed ACTIVITY: and broad acre environments Monsanto • Currently testing hundreds of genes researcher checks performance across several generations of drought indicators in the traits field such as • Results will be shared in January chlorophyl content, ear size, and plant VALUE CONSIDERATIONS: height • Value of trait reflects better yields OBSERVATIONS: under moisture-stressed conditions Confirming third • Value will be specific to variable costs year of field trial of water use by farmers, rather than data in U.S. fixed costs of irrigation RETAIL $10 - $30/acre VALUE/ACRE: TOTAL ACRE 164M acres OPPORTUNITY: 16
  • 17. BIOTECHNOLOGY Omega-3 Soybeans Offer Plant-Based Source of Heart- Healthy Oils KEY MARKET ACRES U.S. Omega-3 soybeans AVAILABLE MARKET 5M PERCENT PENETRATED 0% R&D Pipeline Omega-3 soybeans OMEGA-3 OIL TASTE RESULTS FROM 2005 SITUATION: On Track STATUS: 10 TASTE RATING • Extensive field testing for 5 lead events in U.S. 0 • Food formulation results will Omega-3 be shared in January Soy Oil SDA Oil Fish Oil VALUE CONSIDERATIONS: • Value created through a Taste Rating 0-15 Scale product with similar profile Score of zero indicates no flavor to soybean oil in taste, shelf- life and oil stability but with In taste-testing, Omega-3 oil containing a superior nutritional and stearidonic acid (SDA) oil compares taste profile to fish oil favorably versus fish oil and commodity RETAIL Salad Dressing soy oil >$30/acre VALUE/ACRE: with SDA Oil Testing also focused on field performance, TOTAL ACRE demonstrating Omega-3 soybean yield on 5M acres OPPORTUNITY: par with commodity soybeans – an important factor to farmers growing specialty crops 17
  • 18. BIOTECHNOLOGY Monsanto Has a Balanced Pipeline With Core Projects for Farmers, Food and Feed Processors, and Consumers DISCOVERY PHASE I PHASE II PHASE III PHASE IV Proof Of Early Advanced Gene/Trait Pre-launch As of Jan. 1, 2006 Concept Development Development Identification R&D Pipeline Roundup Ready Flex cotton SITUATION: Roundup RReady2Yield soybeans Roundup RReady2Yield canola In FY2006: Dicamba-tolerant soybeans • Three products exited the Dicamba-tolerant cotton YieldGard VT Rootworm/RR2 pipeline for commercialization 2nd-Gen YieldGard Corn Borer • There was positive movement Insect-protected soybeans – advancing phases or adding YieldGard Rootworm II to the pipeline – in 50 percent Soybean nematode-resistance Bollgard III of the pipeline projects Drought-tolerant corn • Three projects were 2nd-Gen Drought-tolerant corn designated as “HIT” projects Higher-yielding canola reflecting our confidence in Drought-tolerant soybeans Drought-tolerant cotton their commercial track Higher-yielding corn Nitrogen utilization corn Higher-yielding soybeans Mavera™ High-value corn with lysine1 Mavera™ I High-value soybeans1 Mavera™ II High-value soybeans1 2nd-Gen High-value corn with lysine1 Feed Corn with balanced proteins1 High oil soybeans for processing1 Improved-protein soybeans Vistive II soybeans Vistive III soybeans Omega-3 soybeans 18 1. These product candidates are in the Renessen pipeline. Renessen is a Monsanto/Cargill joint venture
  • 19. SUMMARY Agricultural Research Has Incredible Potential Over the Next Decade TRENDS DRIVING MONSANTO’S R&D OPPORTUNITY AGRICULTURAL RESEARCH Breeding and biotechnology come together to position Monsanto uniquely to target Yield important opportunities and trends in the Per-acre productivity is paramount to farmers agricultural market Biofuels U.S. will need 25M+ acres of corn and 10M+ DISCOVERY PHASE I PHASE II R&D PHASE: PHASE III PHASE IV LAUNCH acres of soybeans to supply biofuel needs by 2010 BREEDING Water COMMERCIAL IT PLATFORM GERMPLASM G ANALYTICS MARKERS GENOMICS SEED ELITE Germplasm Agriculture is responsible for 75% of freshwater SOLD TO FARMERS R withdrawal BIOTECHNOLOGY Nitrogen Use Elevated petroleum prices have spotlighted the costs of nitrogen-based fertilizers Healthier Foods Increasingly health-conscious consumers are demanding healthier food solutions 19

×