monsanto R_DPipelineReview

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monsanto R_DPipelineReview

  1. 1. ANNUAL R&D PIPELINE REVIEW ROBB FRALEY, PH.D. CHIEF TECHNOLOGY OFFICER FIRST-QUARTER 2007 Jan. 4, 2007 7
  2. 2. OVERVIEW Annual Pipeline Update Signals Pipeline Momentum Is Accelerating ANNUAL R&D CYCLE: SEEDS & TRAITS FULL-YEAR PIPELINE UPDATE BIOTECH TRAIT PIPELINE PIPELINE PROGRESS 7 projects either advanced from one phase to another or were added to the pipeline, representing positive movement in >20% of the active R&D pipeline PIPELINE ADDITION 2 projects were added to Phase I or later as a result of Q1 Q4 discovery work or collaborative partnerships PIPELINE PROGRESS IN PHASE All projects that have not advanced phases passed Q2 Q3 key milestones within phase, maintaining momentum BREEDING PIPELINE CORN BREEDING More than 49,000 trials establish the yield advantage in our national brands, and we increased our overall advantage in the widely planted 110-day corn to a record 11.7 bushels per acre SOYBEAN BREEDING JULY-AUGUST Break-out strategy in soybeans works to continue MID-YEAR PIPELINE UPDATE advanced screening capabilities and molecular- Project reviews, including data reviews breeding-based selection and updates from field research both inside and outside the U.S. 8
  3. 3. OVERVIEW Two-Year View Demonstrates Increased Breadth and Depth of Monsanto’s Pipeline R&D PIPELINE: JANUARY 2007 PHASE PHASE PHASE PHASE PHASE PHASE PHASE PHASE D D 1 2 3 4 1 2 3 4 PROCESSOR BENEFITS FARMER BENEFITS MAVERA™ HIGH-VALUE CORN ROUNDUP READY FLEX COTTON WITH LYSINE1 ROUNDUP RREADY2YIELD SOYBEANS MAVERA™ I HIGH-VALUE SOYBEANS1 ROUNDUP RREADY2YIELD CANOLA MAVERA™ II HIGH-VALUE SOYBEANS1 DICAMBA-TOLERANT SOYBEANS 2nd-GEN HIGH-VALUE CORN WITH LYSINE1 DICAMBA-TOLERANT COTTON FEED CORN WITH BALANCED PROTEINS1 YIELDGARD VT ROOTWORM/RR2 2ND-GEN YIELDGARD ROOTWORM HIGH OIL SOYBEANS FOR PROCESSING1 YIELDGARD VT PRO 2ND-GEN YIELDGARD CORN BORER CONSUMER BENEFITS INSECT-PROTECTED SOYBEANS YIELDGARD ROOTWORM II IMPROVED-PROTEIN SOYBEANS SOYBEAN NEMATODE-RESISTANCE VISTIVE II SOYBEANS BOLLGARD III VISTIVE III SOYBEANS COTTON LYGUS CONTROL OMEGA-3 SOYBEANS HYBRIDIZATION SYSTEM FOR CORN DROUGHT-TOLERANT CORN 2ND-GEN DROUGHT-TOLERANT CORN High Impact Technologies (HIT) project HIGHER-YIELDING CANOLA Jan. 4, 2007 Advancements/Additions WATER-USE EFFICIENCY SOYBEANS Jan. 4, 2006 Advancements/Additions DROUGHT-TOLERANT COTTON 1. These product candidates are in the Renessen pipeline. Renessen is a HIGHER-YIELDING CORN Monsanto/Cargill joint venture. NITROGEN UTILIZATION CORN 2. The colored bar associated with each project indicates which phase that project is HIGHER-YIELDING SOYBEANS in. It is not intended to represent the relative status of the project within a particular stage. 9
  4. 4. PIPELINE UPDATE Roundup RReady2Yield Soybeans Advance to Phase 4, Beginning Pre-Launch Activities KEY MARKET ACRES U.S. BRAZIL ARGENTINA Roundup RReady2Yield AVAILABLE MARKET 70M 60M 35M Soybeans PERCENT PENETRATED 0% 0% 0% P R O JE CT 2006 TESTING: RELATIVE PERFORMANCE OF ROUNDUP READY AND R&D Pipeline ROUNDUP RREADY2YIELD EXPERIMENTAL LINES Roundup RReady2Yield Soybeans PROJECT CONCEPT: PERCENT OF POPULATION 50 Second-generation of Monsanto’s popular ROUNDUP READY ROUNDUP herbicide-tolerant platform in soybeans EXPERIMENTAL RREADY2YIELD LINES 40 that will provide farmers with soybeans that EXPERIMENTAL LINES have enhanced yield, with a target of up to 30 5 bushel-per-acre yield increase over comparable Roundup Ready soybeans KEY RESULTS 20 2006 PERFORMANCE UPDATE: Phase 4 10 2006 STATUS: • Performance indicates that the enhanced yields associated with -10 -5 0 5 10 15 Roundup RReady2Yield are YIELD DIFFERENCE (BU/AC) consistent across multiple years and diverse germplasm 2006 breeding trials compared Roundup RReady2Yield backgrounds experimental lines with Roundup Ready experimental lines that were in the same stage of development. The Roundup VALUE CATEGORIES: RReady2Yield lines averaged 3 to 5 bushels per acre higher than RETAIL Roundup Ready experimental lines – shifting the entire yield $10 - $30/acre VALUE/ACRE: curve positively and providing further validation for the product TOTAL ACRE concept target of up to a 5 bushel-per-acre yield increase >20M acres OPPORTUNITY: 10
  5. 5. PIPELINE UPDATE Vistive III Soybeans Continue To Meet or Exceed Commercial Targets KEY MARKET ACRES U.S. AVAILABLE MARKET 12-15M Vistive III Soybeans PERCENT PENETRATED 0% P R O JE CT 2006 TESTING: LEAD EVENTS WITH TARGET OIL COMPOSITION IDENTIFIED R&D Pipeline OLEIC AND SATURATED FATTY ACIDS Vistive III Soybeans U.S. FIELD DATA 2006 – 6-10 LOCATIONS 80 PROJECT CONCEPT: 70 Combining both breeding and 60 biotechnology, Vistive III is designed to lower linolenic and saturate content while 50 % FATTY ACID boosting oleic content for a profile similar 40 PRODUCT KEY RESULTS to olive oil CONCEPT TARGET RANGES 30 2006 PERFORMANCE UPDATE: 20 Phase 2 2006 STATUS: 10 • Phase 2 testing for oil traits 0 focuses on replicating oil-profile CONTROL EVENT 1 EVENT 2 EVENT 3 targets • 2006 testing allowed for lead OLEIC ACID SATURATES selection with multiple events hitting oil-profile targets In 2006 field testing, multiple events met product concept VALUE CATEGORIES: composition of 55-75% oleic and <7% saturates. Selection of leads is actively under way RETAIL $10 - $30/acre VALUE/ACRE: TOTAL ACRE 5M - 20M acres OPPORTUNITY: 11
  6. 6. PIPELINE UPDATE First of Drought-Tolerant Corn Traits Continues To Deliver Yield Boost in Third-Year Testing KEY MARKET ACRES U.S. BRAZIL ARGENTINA AVAILABLE MARKET 80M 30M 6M Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0% P R O JE CT 2006 TESTING: YIELD IMPROVEMENT OF LEAD EVENT UNDER DROUGHT STRESS R&D Pipeline Percent yield difference vs. control 14 7.3% 10.5% 10.9% 23.2% 9.0% In third year field Drought-Tolerant Corn 12 VS. CONTROL (BU/ACRE) testing in U.S., PROJECT CONCEPT: KEY RESULTS YIELD DIFFERENCE 10 drought-tolerant leads are First-generation drought tolerance is 8 NOT TESTED consistently targeted to minimize uncertainty in farming 6 delivering higher by buffering against the effects of water 4 limitation, primarily in areas of annual water yields compared stress with controls 2 2006 PERFORMANCE UPDATE: under drought- 0 stressed 2004 2005 2006 Phase 2 2006 STATUS: conditions Hybrid 1: 2004, 4 locations; 2005 5 locs; 2006, 1 loc (20 reps) Hybrid 2: 2004, not tested; 2005, 5 locs, 2006, 3 locs • Yield enhancement demonstrated again in 2006 under water-stress SEGMENTED VALUE OPPORTUNITY ACROSS MARKETS conditions in U.S. First leads show KEY OPPORTUINITY • Lead gene chosen primary benefit under IRRIGATED • 2007 trials expected to demonstrate water-stress yield enhancement in multiple conditions WESTERN hybrids under dryland conditions DRYLAND First product VALUE CATEGORIES: targeted at western STABILITY dryland market RETAIL $10 - $30/acre VALUE/ACRE: Low annual High annual TOTAL ACRE >20M acres precipitation precipitation OPPORTUNITY: Source: Spatial Climate Analysis Service, Oregon State University 12
  7. 7. PIPELINE UPDATE Second-Generation Drought-Tolerant Corn Already Populated with Strong Leads KEY MARKET ACRES U.S. BRAZIL ARGENTINA Second-Generation AVAILABLE MARKET 80M 30M 6M Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0% 2006 TESTING: YIELD IMPROVEMENT IDENTIFIED IN SECOND-GENERATION OF GENE CONSTRUCTS R&D Pipeline Second-Generation Drought- 30% Tolerant Corn 25% PROJECT CONCEPT: % YIELD INCREASE Second-generation products aimed at 20% boosting yield stability for broad-acre applications and reducing water input 15% required in water-limited environments KEY RESULTS 10% 2006 PERFORMANCE UPDATE: 5% Phase 1 2006 STATUS: 0% • Phase 1 testing focused on field- level proof of concept to identify 1 2 3 4 5 potential leads for commercial LEAD CONSTRUCTS transformations VALUE CATEGORIES: Different events for each lead RETAIL Field screening is used to identify new gene candidates that $10 - $30/acre VALUE/ACRE: address water use efficiency for areas of water-stress and in TOTAL ACRE broad-acre applications. In 2006, multi-location testing >20M acres OPPORTUNITY: identified both several leads and several events within those leads with significant yield advantages 13
  8. 8. PIPELINE UPDATE Drought-Tolerance Is a Cross-Crop Platform, Spanning Corn, Soybeans and Cotton Drought-Tolerant Platform DROUGHT-TOLERANT COTTON R&D Pipeline Drought-Tolerant Platform PROJECT CONCEPT: WITH GENE The platform is targeted to minimize uncertainty in farming by buffering against the effects of water limitation, in environments ranging from consistent water stress to areas that experience sub- optimal rainfall sporadically PLATFORMS: D 1 2 3 4 CORN Drought-Tolerant Corn CONTROL 2nd-Gen Drought-Tolerant Corn SOYBEANS Water-Use Efficiency Soybeans COTTON In second-year field trials, plants with drought-tolerant genes showed better Drought-Tolerant Cotton performance, reflecting a fuller canopy and less wilting than conventional checks 14
  9. 9. PIPELINE UPDATE After Three Years of Solid Field Data, Higher-Yielding Corn Enters Phase 2 Development KEY MARKET ACRES U.S. BRAZIL ARGENTINA AVAILABLE MARKET 80M 30M 6M Higher-Yielding Corn PERCENT PENETRATED 0% 0% 0% 2006 TESTING: 2006 FIELD RESULTS INDICATE INCREASED YIELD VERSUS CONVENTIONAL CHECKS R&D Pipeline 10 PERCENT YIELD INCREASE Higher-Yielding Corn PROJECT CONCEPT: 8 PRODUCT 15.5 OVER CHECK Higher-yielding corn is aimed at boosting CONCEPT BU/AC TARGET the intrinsic yield potential of corn hybrids 13.7 6 RANGE through insertion of key genes BU/AC 12.1 2006 PERFORMANCE UPDATE: BU/AC 4 Phase 2 2006 STATUS: KEY RESULTS 2 • With 3 years of field data proving efficacy, Higher-Yielding Corn 0 emerged from proof-of-concept testing to Phase 2 development HYBRID 1 HYBRID 2 HYBRID 3 • Commercial transformations will be made, with further testing to In 2006 field testing, lead event shows yield efficacy in different select for lead events test hybrids. Three years of data demonstrate yield increases in VALUE CATEGORIES: multi-location trials with multiple hybrid combinations RETAIL $10 - $30/acre VALUE/ACRE: TOTAL ACRE > 20M acres OPPORTUNITY: 15
  10. 10. PIPELINE UPDATE 2006 Testing Confirmed Leads from 2005 and Identified Stable of New Genes for Nitrogen Efficiency KEY MARKET ACRES U.S. BRAZIL EUROPE AVAILABLE MARKET 80M 30M 24M Nitrogen Utilization PERCENT PENETRATED 0% 0% 0% Corn 2006 TESTING: 2006 FIELD RESULTS CONFIRM CONTINUED R&D Pipeline PERFORMANCE OF LEADS IDENTIFIED IN 2005 Nitrogen Utilization Corn LEAD NITROGEN UTILIZATION GENE (ACROSS 3 LOCATIONS: ILLINOIS AND IOWA) PROJECT CONCEPT: 175 Targets ways that corn plants can use nitrogen more efficiently, exploring the 170 potential to boost yield under normal nitrogen conditions or stabilize yield in low 165 EVENT 1 YIELD PER ACRE nitrogen environments EVENT 2 160 2006 PERFORMANCE UPDATE: KEY RESULTS CONTROL 155 Phase 1 2006 STATUS: 150 Reduction in • Second year proof-of-concept Applied Nitrogen 145 testing confirmed 2005 lead genes 140 across multiple locations and 0 40 80 180 nitrogen rates and added new gene candidates for further testing NITROGEN INPUT: LBS/ACRE VALUE CATEGORIES: RETAIL Reading right to left, what scientists will look for to $10 - $30/acre VALUE/ACRE: establish proof of concept is when nitrogen application TOTAL ACRE is decreased, the total yield per acre remains stable. In > 20M acres OPPORTUNITY: 2006 data, the 2 events show no yield drop off as the nitrogen application levels decrease from 180 lbs/ac to 40 lbs/ac 16
  11. 11. PIPELINE UPDATE Renessen™ High-Oil Soybeans Advance to Phase 3 Testing After Strong 2006 Results KEY MARKET ACRES U.S. BRAZIL ARGENTINA Renessen™ High-Oil AVAILABLE MARKET 15-20M 20-25M 7-10M Soybeans PERCENT PENETRATED 0% 0% 0% 2006 TESTING: MULTI-YEAR TESTING FOR HIGHER OIL CONTENT R&D Pipeline Percent oil difference vs. control 23 1.4% 1.5% 1.7% 1.6% Renessen™ High-Oil Soybeans PROJECT CONCEPT: OIL PERCENTAGE 22 Targeted to improve oil crushing yield 2006 PERFORMANCE UPDATE: 21 Phase 3 2006 STATUS: 20 KEY RESULTS • Phase 2 testing for oil traits focused on replicating oil-profile 19 targets • 2006 testing demonstrated 18 consistent, significant oil U.S. 2004 ARGENTINA U.S. 2005 U.S. 2006 advantage, advancing into Phase 2004 3 for further commercial (6 LOCATIONS) (11 LOCATIONS) (14 LOCATIONS) (19 LOCATIONS) development VALUE CATEGORIES: WITH GENE WITHOUT GENE RETAIL <$10/acre VALUE/ACRE: TOTAL ACRE In four seasons of testing, significant oil yield advantage has been >20M acres OPPORTUNITY: shown with high-oil gene 17
  12. 12. PIPELINE UPDATE Molecular Breeding Increasing Performance Benefit in Soybeans Versus Competitors Soybean Breeding SOYBEAN BREEDING: 2006 U.S. COMPETITIVE SOYBEAN YIELD R&D Pipeline Soybean Breeding 60 PLATFORM CONCEPT: ASGROW / DEKALB 58 Monsanto is using the most COMPETITORS BUSHELS/ACRE 56 advanced tools of genomics, molecular markers and IT resources 54 to more efficiently select for the 52 best base germplasm for soybeans 50 2006 PERFORMANCE UPDATE: 48 • Yield data from 2006 indicates 46 continued yield advantage for 44 national brands versus best-in- 42 class competitors 40 4 5 0 1 2 3 RELATIVE MATURITIES YIELD ADVANTAGE In 2006, Monsanto demonstrated a yield advantage compared with the best-in-class competitors in all of the major U.S. maturity zones 18
  13. 13. PIPELINE UPDATE Best-in-Class Corn Breeding Capability Being Leveraged Across Commercial Channels Corn Breeding CORN BREEDING: 2006 U.S. COMPETITIVE CORN YIELD R&D Pipeline 200 DEKALB Corn Breeding PLATFORM CONCEPT: COMPETITORS 195 Monsanto is using the most BUSHELS/ACRE advanced tools of genomics, 190 molecular markers and IT resources to more efficiently select for the 185 best base germplasm for corn 2006 PERFORMANCE UPDATE: 180 • Yield data from 2006 indicates 175 continued yield advantage for national brands versus best-in- 170 class competitors RELATIVE MATURITIES 115 95 100 105 (DAYS) • 2006 represented the fifth straight 110 year of market share gains in Monsanto’s Asgrow and DEKALB YIELD ADVANTAGE national brands In 2006, across the 110-day maturity zone that covers one-third of U.S. corn production, DEKALB outperformed the competition by 11.7 bushels per acre on average 19
  14. 14. SUMMARY Volume and Velocity Accelerates Across Pipeline, Expanding Monsanto’s Leadership Opportunity ANNUAL R&D CYCLE: SEEDS & TRAITS TWO-YEAR PIPELINE UPDATE BIOTECH TRAIT PIPELINE PIPELINE PROGRESS More than 70% of the projects advanced from one phase to another with the most significant being our Roundup RReady2Yield HIT project PIPELINE ADDITION Almost 30% of the pipeline represents additions to Q1 Q4 Phase I or later as a result of discovery work or collaborative partnerships PIPELINE PROGRESS IN PHASE Q2 Q3 All projects that have not advanced phases passed key milestones within phase, maintaining momentum BREEDING PIPELINE CORN BREEDING Leadership in corn breeding solidified, and we’ve seen yield gains in national brands, American Seeds, Inc. companies, and in the germplasm for Holden’s licensees SOYBEAN BREEDING JULY-AUGUST MID-YEAR PIPELINE UPDATE Break-out strategy in soybeans unveiled combining Project reviews, including data reviews and updates from field research both advanced screening capabilities and molecular- inside and outside the U.S. breeding-based selection 20

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