By Mary Welch

In a deal worth $55 million in committed payments, Paradigm Genetics Inc. will develop functional genomics data for Monsanto Co. to use as a product discovery platform for commercialization.

"It's our biggest deal so far and we're very excited about it," said Linda Marchant, Paradigm's director of marketing."

Under the terms of the agreement, Paradigm will receive $55 million in committed funding, which includes an up-front cash payment and royalty and milestone payments from St. Louis-based Monsanto. "No equity is involved and the royalty and milestone payments will be easily met. There is room for additional money in the contract," she said.

Paradigm, based in Research Triangle Park, N.C., will develop functional genomics data by analyzing the product of Monsanto's gene sequencing, bioinformatics and functional genomics research. "Together we will create a product discovery platform that Monsanto will use for commercialization purposes," Marchant said. "We don't really know what their intentions are or what they will be using the information for."

Founded in September 1997 by executives from Research Triangle Park-based Novartis Crop Protection, a subsidiary of Novartis AG, of Basel, Switzerland, the company determines gene function in four major market areas: crop protection, human health, nutrition and industrial products. Gene function rather than gene sequencing will ultimately create a new paradigm in industrializing functional genomics, the company said.

A private company, Paradigm brings to the collaboration its expertise in gene function analysis and bioinformatics. It discovered a proprietary high-throughput plant functional genomics system, AgDB, that integrates gene discovery, gene function determination and gene use identification. The company combines systematic, high-throughput gene function analysis with its understanding of plant and fungal responses and bioinformatics.

"Monsanto is a leader in the commercialization of novel agricultural products and has one of the largest gene sequencing and bioinformatics operations in the world," Marchant said. "It'll be a good match."

In late 1998, Paradigm signed a deal worth at least $40 million with Bayer AG, of Leverkusen, Germany, to find screening targets leading to new herbicides. Paradigm is analyzing the function of every gene in rice and a plant called arabidopsis, and using computer sciences to determine the function of those genes and which may make good targets. (See BioWorld Today, Nov. 3, 1998, p. 1.)