Monsanto Acquires Parts of Agradis, Partners with Synthetic Genomics

1/31/13Follow @bvbigelow

Just over 15 months ago, the genomics pioneer J. Craig Venter told me he had decided to spin out some plant breeding and genomics technologies from San Diego’s Synthetic Genomics to form a new agricultural biotech called Agradis.

Now the big multinational agricultural giant Monsanto (NYSE: MON) says it has purchased certain technology assets from Agradis—including the Agradis name, its library of beneficial plant microorganisms, and the company’s R&D site in the coastal community of La Jolla. Financial terms were not disclosed. But it’s worth noting that Agradis began with a $20 million commitment in Series A financing from Plenus, the investment arm of Mexican businessman Alfonso Romo, along with the venture capital firm Draper Fisher Jurvetson, and other investors.

Monsanto also said it has made a separate, undisclosed investment in Synthetic Genomics, and has signed a five-year, R&D collaboration agreement focused on agricultural microorganisms, an underappreciated class of microbes that interact with plants and help them thrive. According to Monsanto’s statement yesterday, the partnership is focused on analyzing “microbe-plant communities and screening for beneficial microorganisms that could be used to develop additional biological products to improve agricultural productivity.”

From out here in the field, the deal looks like another shrewd industry partnership for Synthetic Genomics, the startup founded in 2005 by Venter, who serves as chairman and CEO, Nobel Laureate Hamilton Smith, the scientific director, and former General Counsel David Kiernan. Synthetic Genomics also has a partnership agreement with Exxon Mobile to make an algae-based substitute for petroleum-based crude oil, a partnership with BP in the area of industrial biotechnology, and a partnership with Novartis and others to develop innovative ways to mass-produce new vaccines.

In the statement announcing the deal, Venter says, “SGI and Plenus formed Agradis with the belief that our extensive expertise in microbial genomics could accelerate advances in agriculture. We are pleased that Monsanto realizes the potential of the Agradis science and technology as evidenced by their acquisition of some key assets of the company. We look forward to working with Monsanto to continue to generate innovation in agribusiness.”

Monsanto, based in Creve Coeur, MO, has become interested in scientific advances that enhance plant microbes—and in turn help to make crops more drought tolerant and more resistant to disease and pests, Synthetic Genomics’ CFO Joseph Mahler told me by phone. And that is the focus of Monsanto’s Agradis acquisition.

Several parts of the Agradis business that were not acquired by Monsanto will be advanced into a new company called AgraCast, according to Heather Kowalski, a spokeswoman for Synthetic Genomics. These assets include a plant breeding business focused on improving the productivity and “harvestability,” of castor and sweet sorghum crops, and a unit that has developed a natural, anti-fungal product that can be used to treat fruit and vegetables after harvest to make them resistant to mold.

Synthetic Genomics and Plenus, the Mexican investment firm, are AgraCast’s majority shareholders.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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