By Kim Coghill

Washington Editor

Monsanto Co. and Rosetta Inpharmatics Inc. entered a three-year collaboration that will apply the latter's informational genomics technologies to the development of better crops.

The agreement is worth $15 million to Rosetta for the delivery of gene expression information. Rosetta, of Kirkland, Wash., also potentially could receive royalties associated with products Monsanto produces as a result of the collaboration.

The two companies entered the agreement following a successful 10-month pilot program in which Monsanto evaluated the use of Rosetta's flex-jet DNA microarray technology design capabilities for the gene expression profiling, said Cathy Corley, Rosetta's director of investor relations.

The collaboration will focus on key cereal products to include corn, wheat and rice. Rosetta will create a large database of gene expression profiles, and will apply existing and newly developed computational tools to data analysis.

"Rosetta has a very large capability in the area of informational genomics and especially gene expression," said Lori Fisher, director of public affairs for St. Louis-based Monsanto. "From a genomics standpoint, our interests are a little more broad as you look for those specific traits that might work well in one plant vs. another."

By combining informatics and genomics, Rosetta has developed a proprietary platform that accelerates the drug discovery process and improves agriculture products, according to a statement released by the company. Rosetta's approach converts the rapidly growing amount of gene expression data, or information about a gene's activity, into organized, statistically driven, information-based results.

"We are especially excited about what Rosetta can bring to the party," Fisher said. "We have a pretty broad genomics network that includes a lot of in-house capabilities, but we also have a number of other genomics collaborations with other companies. We felt that with Rosetta, obviously there were some things that they offered that looked very good to us, basically in the area of gene expression in certain plants."

Monsanto provides solutions and agricultural products designed to improve farm productivity and food quality. On March 31, Monsanto and Peapack, N.J.-based Pharmacia & Upjohn completed a merger to establish a company called Pharmacia Corp.

Rosetta's stock (NASDAQ:RSTA) gained 6.25 cents Wednesday to close at $21.562.