Money doesn’t grow on trees, but there’s certainly money to be made by growing better crops.

Ceres Inc. signed on to apply its genomics technologies in the quest for improved agricultural harvests with Monsanto Co. in a collaboration that could bring Ceres a bounty of $137 million.

“In addition to the obvious benefit [of the funding], we are happy to work with Monsanto because they are a leader in what we call first-generation agbiotech,” said Richard Hamilton, chief financial officer at Ceres. “[Because of Monsanto’s size and experience] it presents us with an opportunity to distribute our technology as broadly as possible.”

St. Louis-based Monsanto will acquire rights to Ceres technologies for certain undisclosed crops and applications. In exchange, Los Angeles-based Ceres will receive payments over “several years,” and could see further payments for meeting specified objectives for related technology development. Monsanto will fund a jointly implemented research program and made an undisclosed but minority equity investment in Ceres. Add all that up but don’t include royalties, which Ceres will earn for any commercialized products, and Ceres would receive $137 million.

Having what Hamilton called “the major share of biotech traits” in its intellectual property portfolio, Monsanto has products with “value at the farm level,” including the Roundup line of herbicides. Although exactly what the companies will focus on was not disclosed, Peter Mascia, director of product development at Ceres, said the companies will aim at “the basic crops and traits that are consistent with Monsanto’s current objectives.”

“It’s a product development collaboration,” Mascia told BioWorld Today. “We have identified a number of areas where we hope to bring a product to the marketplace.”

Ceres became operational in 1997 after being founded by Oxford Bioscience Partners, Walter De Logi and Robert Goldberg. De Logi, now Ceres’ CEO, has previous experience as CEO of Plant Genetic Systems, and Goldberg was a professor of molecular, cellular and developmental biology at UCLA, Hamilton said. Although today Ceres and its 107 employees pursue opportunities in the food, feed and fiber industries, and uses its technology platform in the agrochemical, chemical and pharmaceutical industries, Mascia said Ceres is “a genomics company at heart.”

“[Our] main platform is a high-throughput, full-length cDNA sequence program and the functional annotation of those sequences,” he said. “What we try to do is sequence large numbers of plant genes and assign the functionality of those genes.

“Secondly, we have a system for building prototypes in a model plant, so they can be readily transferred into commercial plants later,” he added.

In a benevolent move, Monsanto and Ceres agreed to make accessible the technologies they develop to farmers in developing countries, including nonprofit humanitarian applications not served by commercial markets or research and development investments.

Privately held Ceres has worked with Genset SA, of Paris; Aurora Biosciences Corp., of San Diego; The Institute for Genomic Research, of Rockville, Md.; and Keygene NV, of Wageningen, the Netherlands, mostly on gene sequencing projects, although the deal with Aurora centered on Aurora’s green fluorescent protein technology for Ceres to use in in vitro and in vivo research and development activities.

Hamilton said Ceres boasts “well over 40,000 cDNA sequences and the corresponding clones, and said this is “an important technical aspect” of the company. Not only are the full-length sequences superior to partial cDNA, he said, but also “having so many full-length cDNAs gives us an open picture of what plant genes are out there.”