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Monsanto (MON) Signs Deal with ToolGen for CRISPR Technology

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Monsanto Company recently inked a global licensing agreement with ToolGen, Inc. (ToolGen), for an undisclosed amount. The deal, which is based on ToolGen’s CRISPR technology, is anticipated to help Monsanto innovate state-of-the-art crop-yield enhancing solutions for farmers.

ToolGen is a biotechnology company primarily focused on developing non-imitable genome editing technologies like CRISPR. Cultivators seek diverse seed choices for maximizing their crop yield and minimizing resource utilization. Hence, agricultural solutions, which help farmers deal with the changing climatic conditions, combat pests and plant diseases, as well as provide guidance for optimal resource deployment, have been enjoying high demand, of late. Agricultural researchers develop such solutions with the support of genome-editing technologies.

Per the latest deal, Monsanto will secure the complete set of intellectual property rights against ToolGen’s CRISPR genome-editing technology. The company noted that this move will likely diversify and fortify its presence in the agricultural research segment. It will further enhance Monsanto’s genome-editing tools portfolio which is used to develop sustainable and improved crops.  

Existing Scenario

There is an ongoing trend of consolidation in the contemporary seed, trails and agricultural chemical industry. While E. I. du Pont de Nemours and Company (DD - Free Report) and The Dow Chemical Company (DOW - Free Report) inked a $140-million merger deal (likely to close on Aug 31, 2017), ChemChina successfully acquired Syngenta AG (SYT - Free Report) for $43 billion (closed on Jun 28, 2017). This drift has been making matters worse for Monsanto and increasing competitive pressure for the company. In addition, dismal pricing conditions in the agricultural market and foreign currency translation impact remain major causes of concern.

However, increasing demand for crop-yield enhancing products, strong innovation and the success of Bayer AG’s (BAYRY - Free Report) buyout deal, likely to close by the end of this year, are anticipated to bolster Monsanto’s top- and bottom-line performance in the quarters ahead.

Over the last month, shares of this Zacks Rank #3 (Hold) stock yielded a return of 0.88%, as against 0.05% loss incurred by the industry.

You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.

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