Calgene Inc. and Monsanto Co. cleared a path to market onFriday by executing a broad cross-licensing agreement, butsome potential pitfalls loom ahead in the form of conflictingpatent positions with other companies.
"I think this is the largest cross-licensing agreement everbetween any two biotech companies, ag or otherwise," RogerSalquist, Calgene's chief executive officer, told BioWorld. "We'rethe two leaders in the area, with more to show. I think it oughtto be taken damn seriously by the rest of the companies."
Jim Altemus, Monsanto's agriculture biotechnology spokesman,said the essence of the agreement is that the two companieshave "announced a resolution of differences of opinion thatobviously makes us feel comfortable that we can go ahead anddo our research without being encumbered with theuncertainties of the past."
Calgene (NASDAQ:CGNE) of Davis, Calif., gained licenses toMonsanto patents and pending patents in plant transformationand selectable markers, as well as the right to obtain licenses toMonsanto's Bacillus thuringiensis insect resistance technologyfor use in cotton.
Monsanto received licenses to Calgene's patents and pendingpatents in plant transformation, rapeseed plants geneticallyengineered for agronomic improvements (but not for oilproduction) and antisense RNA technology.
Calgene and Monsanto agreed to cross-license patents filed onrepression of the ripening hormone ethylene. Calgene andMonsanto, a conglomerate based in St. Louis, Mo., also settled apatent interference on CaMV promoters that are used to controlgene expression in genetically engineered plants. Salquist saidhe expects a patent in that area to issue soon to Monsanto.
Calgene received a patent last year for antisense technology toturn off any plant gene in any plant species, but is embroiled inpatent litigation with Enzo Biochem Inc. of New York, whichholds rights to antisense work done at the State University ofNew York in bacteria.
The antisense method of blocking gene expression has beenused in Calgene's Flavr Savr tomato to extend its shelf life byslowing softening. The tomato, which Calgene expects to launchthis fall, also contains a kanamycin resistance marker thatCalgene has asked the FDA to regulate as a food additive toenhance consumer acceptance.
DNA Plant Technology Corp. (NASDAQ:DNAP) of Cinnaminson,N.J., uses a "transwitch" gene suppression method instead ofantisense to keep its VineSweet tomatoes fresh longer.Monsanto is also developing its own transgenic tomato.
"It was clearly smart for Calgene to find a way to get access tokanamycin resistance if they're going to be taking their tomatoto market," said John Bedbrook, DNAP's vice president anddirector of science.
He said Monsanto has filed a U.S. patent for planttransformation based on using an agrobacterium plantpathogen, which is subject to an unresolved interferenceinvolving other inventors.
Salquist, however, said he did not "believe we will require anyother patents to practice agrobacterium transformations."
Calgene has already created herbicide-resistant cotton, due outnext year. The option of using Monsanto's insect resistance incotton will save some research time, Salquist said.
The next Calgene product in the pipeline is rapeseed oilengineered to fill various food and industrial applications. Thefirst engineered oils should be sold by 1995.
Monsanto "hasn't produced any products," said Jim McCamant,publisher of the AgBiotech Stock Letter. Altemus said bothcompanies have good research, but that it is too early to sayhow Monsanto will use Calgene's technology.
"They both really needed each other," McCamant said. "NowCalgene doesn't have to worry about releasing their productsand having somebody going into court and suing them."
Bedbrook, whose company licenses patent-cloudedagrobacterium technology from the Max Planck Institute,agreed, saying, "We believe a great solution to interferences istechnology exchange, because at the end of the day most of usbelieve in freedom to operate rather than making a livingthrough winning patent suits."
Calgene's stock closed at $11.63 a share on Friday, down 38cents.
-- Nancy Garcia Associate Editor
(c) 1997 American Health Consultants. All rights reserved.