Printer Friendly

MYCOGEN AND LUBRIZOL TO FORM A CROP PROTECTION PARTNERSHIP

 MYCOGEN AND LUBRIZOL TO FORM A CROP PROTECTION PARTNERSHIP
 SAN DIEGO, Calif., April 23 /PRNewswire/ -- Mycogen Corp. (NASDAQ: MYCO) announced today that it has signed a non-binding letter of intent with The Lubrizol Corp. (NYSE: LZ) to form a partnership to acquire Lubrizol's Agrigenetics Co. division. Mycogen will have a 51 percent interest in the partnership and Lubrizol will have a 49 percent interest. The transactions, valued at $135 million, would strengthen Mycogen's technology base and broaden its participation in the emerging biological crop protection industry.
 Mycogen's strategy is to combine the benefits of the proprietary technologies developed by Mycogen and Agrigenetics to generate pest resistant crop varieties that would be commercialized through the established seed business of Agrigenetics and third parties.
 Agrigenetics, the agricultural plant science division of Lubrizol, is the sixth-largest seed company in the United States. It produces and markets seeds for corn, soybean, sunflower, sorghum and cotton crops to farmers principally in the United States and certain other countries. Agrigenetics also conducts advanced biotechnology research at its Madison, Wis., laboratory and carries out ongoing plant breeding programs for its principal crops.
 "Mycogen is committed to being a major force in biological crop protection," said Mycogen Chairman, President and Chief Executive Officer Jerry Caulder. "Pest resistant transgenic plants will have a significant impact on the crop protection industry beginning in the middle of this decade, making plants an important delivery system. This partnership provides Mycogen with strong technology rights and an established commercial base to participate in this crop protection opportunity."
 Agrigenetics has been conducting advanced agricultural biotechnology research since 1981, and was one of the first companies to demonstrate that plants could be genetically engineered to produce protein biotoxins of Bacillus Thuringiensis (B.t.), making the plants resistant to insects. The company has applied for several related patents in the United States and other countries that contain basic claims to this technology. It has 49 issued and allowed U.S. patents in this field, with an additional 44 U.S. patents pending.
 Recently, Agrigenetics has been notified by the European Patent Office of confirmation of patentability of Agrigenetics' T-DNA mediated transformation in plants, a broad patent covering plant gene transfer technology. In addition, the company recently announced that its researchers have identified genes that give corn resistance to a common pest, the European corn borer.
 Mycogen holds 22 of the 39 U.S. patents issued during the last four years for newly identified strains and biotoxins of B.t., the active ingredient upon which most bioinsecticides and insect resistant plant development programs are based. In addition, it holds patents for its proprietary Cellcap(R) encapsulation system, a delivery system for B.t.-based bioinsecticides.
 In June 1991, Mycogen's MVP(R) and M-Trak(TM) bioinsecticides became the first two genetically engineered microbial biopesticides to be registered by the Environmental Protection Agency. Mycogen also has discovered B.t. toxin activity against a variety of non-insect pests such as protozoan pathogens, mites, liver flukes and nematodes.
 "Our Cellcap(R) encapsulation system for bioinsecticides and transgenic plants are complementary delivery systems for the toxins produced by B.t.," said Caulder. "Delivering B.t. toxins in plants enables us to target soilborne pests and cryptic feeders that are difficult to control with conventional spray-on pesticide products."
 When the partnership is formed, Mycogen will be a diversified crop protection company with three operating units: a plant science division consisting of the new Mycogen/Lubrizol partnership, which will market seeds through its operating seed companies and may license seed technology to other companies; Mycogen's existing business, which develops and markets biopesticides for agricultural and specialty markets, and; Soilserv Inc., a provider of customized crop protection services to growers of high value crops.
 "Corn farmers in the U.S. spend over $300 million each year for insecticides to control pests such as corn rootworm and European corn borer," Caulder noted. "Through this partnership, Mycogen will have the technology rights and the commercial base to participate in this major crop protection market. Insect resistant plant technology, like Mycogen's biopesticide products, would provide effective pest control while reducing the chemical pesticide load in the environment."
 Caulder said Agrigenetics President John Studebaker has agreed to continue to manage Agrigenetics.
 Agrigenetics experienced a net loss of $1.6 million on 1991 revenues of $88.6 million. Mycogen recorded a loss of $3.3 million on 1991 revenues of $23.6 million. The company raised $21.6 million through a November 1991 stock offering, and had cash reserves of $75.8 million at year end.
 As part of the transactions, Mycogen will issue to Lubrizol 2.29 million shares of Mycogen common stock and $39.4 million of a new series of Mycogen convertible redeemable preferred stock.
 The transactions are subject to reaching a definitive agreement that must be approved by the boards of directors of both companies as well as Mycogen's stockholders. The transactions also are subject to the completion of due diligence and certain governmental approvals.
 Lubrizol has agreed to provide research funding to the partnership for a minimum of five years to support the development of plant varieties to produce specialty oils. The partnership will produce these planting seeds and sell them to Lubrizol on an exclusive basis. Lubrizol will retain exclusive commercial rights with respect to the resulting specialty oils.
 The convertible redeemable preferred stock of Mycogen to be issued in connection with the transaction will be redeemable in whole or in part by Mycogen at any time, with mandatory redemption after eight years. $10 million of the preferred stock may be subject to mandatory redemption after one year. The preferred stock will bear quarterly dividends, payable in cash or with additional shares of preferred stock, at the rate of 6 percent for the first four years and 8.5 percent for years five through eight. The preferred stock may be converted at any time by Lubrizol into shares of Mycogen common stock at $17.97 per share if converted within the first four years or $18.72 per share if converted in years five through eight.
 After the transactions, Lubrizol will own 24.7 percent of Mycogen. Presuming conversion of the preferred stock, Lubrizol would own approximately 33 percent. Lubrizol has agreed not to acquire additional shares of Mycogen common stock (other than shares issuable in the event of conversion of the preferred stock) without approval of the Mycogen board.
 -0- 4/23/92
 /CONTACT: James R. Glynn, executive VP, or Marie C. Burke, investor relations, of Mycogen, 619-453-8030/
 (MYCO) CO: Mycogen Corp.; Lubrizol Corp.; Agrigenetics Co. ST: California IN: MTC SU: TNM


AL-JL -- SD001 -- 1648 04/23/92 08:33 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 23, 1992
Words:1108
Previous Article:KRUG INTERNATIONAL CORP. ANNOUNCES FISCAL 1992 FINANCIAL RESULTS
Next Article:OFFERING OF 55 MILLION SHARES OF GENERAL MOTORS $1-2/3 PAR VALUE COMMON STOCK COMMENCES


Related Articles
LUBRIZOL ANNOUNCES PLAN TO RESTRUCTURE ITS AGRIBUSINESS SEGMENT
MYCOGEN ANNOUNCES FIRST QUARTER RESULTS
MYCOGEN AND LUBRIZOL SIGN DEFINITIVE AGREEMENTS TO FORM A CROP PROTECTION PARTNERSHIP
MYCOGEN, LUBRIZOL COMPLETE FORMATION OF PARTNERSHIP TO ACQUIRE LUBRIZOL'S AGRIGENETICS PLANT SCIENCE DIVISION
LUBRIZOL REDUCES OWNERSHIP IN MYCOGEN PARTNERSHIP
MYCOGEN INCREASES OWNERSHIP OF PLANT SCIENCE ENTITY
MYCOGEN, DOWELANCO ANNOUNCE STRATEGIC ALLIANCE
MYCOGEN, DOWELANCO FINALIZE STRATEGIC ALLIANCE
AC HUMKO AND MYCOGEN TO ACQUIRE LUBRIZOL'S SPECIALTY PRODUCTS BUSINESS

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters