The BioAg Alliance. The BioAg Alliance: Microbial Solutions in Agriculture

Transcription

1 The BioAg Alliance: Unleashing the Potential of Microbial Solutions in Agriculture Novozymes & Monsanto JOINT ANNOUNCEMENT DECEMBER 10, 2013

2 Forward-Looking Statements As It Pertains to Novozymes: This presentation and its related comments contain forward-looking statements, including financial expectations. Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations. The uncertainties may include unexpected developments in the international currency exchange and securities markets, market-driven price decreases for Novozymes products and the introduction of competing products in Novozymes core areas Novozymes As It Pertains to Monsanto: Certain statements contained in this presentation are "forward-looking statements", such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits and the previously announced SEC investigation; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its shortterm financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results Monsanto Company 2

3 7 Q&A Period 3 The BioAg Alliance BioAg Alliance Conference Call Agenda 1 Introduction and Overview Mr. Bryan Hurley Investor Relations Lead Monsanto 2 Opportunity: Monsanto Perspective 3 Opportunity: Novozymes Perspective 4 Biologicals: Market, Technology & R&D Proces Mr. Hugh Grant Chairman and CEO Monsanto Mr. Peder Holk Nielsen President and CEO Novozymes Dr. Robb Fraley Chief Technology Officer Monsanto Alliance Operations & Next Steps Mr. Thomas Videbæk 5 Executive Vice President, Business Development 6 Novozymes Summary Mr. Hugh Grant Chairman and CEO Monsanto

4 The BioAg Alliance: A Transformational Alliance Between World Leaders in Agricultural Innovation and Microbiology FOCUS DISCOVERY DEVELOPMENT MANUFACTURING COMMERCIALIZATION Microbial solutions leap forward as one of important beyond-the-seed technologies, providing more tools for farmers globally to drive yield and sustainability in agriculture Establishment of a joint technology and commercialization alliance that combines the expertise of both companies to create Industry-First Microbial Platform Each company maintains independent discovery programs to generate leads for joint R&D pipeline Projects are jointly funded at cost sharing through each phase of development Joint R&D application development Monsanto serves as lead for field testing, registration and commercial-track development Novozymes serves as lead for fermentation, up-scaling and manufacturing Current and emerging products are commercialized globally by Monsanto through global commercial channels. Value from commercialization is shared at Novozymes commercial organization and marketing responsibility for Novozymes current product portfolio in agricultural biologicals will be transferred to Monsanto Monsanto will pay Novozymes an aggregate upfront cash payment of $300 million net in recognition of their ongoing business and capabilities in microbials, and for Novozymes to supply alliance products. 4

5 Ag Biologicals: Microbials Help Meet Challenge of Producing More in Sustainable Way INTEGRATED SYSTEM Multiple components converging to drive yield and productivity with more platforms coming together in more ways than ever Biologicals offers farmers another tool that further complements integrated systems approach to improving yield EMERGING TRENDS Reducing agricultural inputs with sustainable, cost-effective solutions that can increase yield using less input Increasing pressure to bring market solutions with faster development cycles compared to other Ag innovations BREEDING BIOTECHNOLOGY BIOLOGICALS CHEMISTRY AGRONOMICS Highest yielding genetics for target environment Complementary agronomic and yield enhancing traits Plant Health & Bio-Nutrients Extended Disease Protection In-Season Insect Control Improved Bio-Fertility Traits & Germplasm provide platform for Ag Chemistry Products Farm management practices and optimizing genetic placement on the farm 5

6 Combined Leadership: Combination of Novozymes and Monsanto Establishes Industry's Most Advanced Microbials Platform ESTABLISHED MICROBIAL LEADERSHIP World leader in microbial technology; discovery, development and production Existing microbial business including standalone pipeline, extensive microbial libraries and intellectual property Current commercial portfolio including products and infrastructure + INDUSTRY-LEADING R&D CAPABILITY AND COMMERCIAL FOOTPRINT Industry-leading R&D network that allows for scaled testing and development Complementary microbial assets including extensive microbial libraries and intellectual property p Global commercial reach across crops, brands and geographies to drive commercial opportunity The BioAg Alli ELEVATES MICROBIALS AS NEXT MAJOR BEYOND-THE-SEED OPPORTUNITY TO DRIVE YIELD AND SUSTAINABILITY Industry s only integrated platform with established capability in discovery, development and commercialization of microbial solutions PLATFORM Alliance PRODUCTS Current commercial product portfolio that generated ~$120M in 2012 revenue PIPELINE Complementary organizations to co-fund significant R&D effort and leverage existing microbials from both companies for industry s most advanced microbials pipeline 6

7 Microbials at Novozymes: Leveraging Industry ss Most Advanced Microbials Capability and First Mover Advantage NOVOZYMES BIOAG S COMPETITIVE ADVANTAGES # 1 FIRST MOVER ADVANTAGE Market leading position built via numerous acquisitions over the last 7 years, acting as early consolidator of industry Integrated commercial business with leading expertise and know-how in field research of microbial technologies First to market position in phosphate solubilization & signal molecules and market-leading brands and partnerships within soybean and canola WORLD LEADER IN MICROBIAL TECHNOLOGIES Global leader in innovation/ microbial R&D with a strong IP base and commitment to sound scientific principles Proven track record in discovering new microbes and enzymes for industrial applications Long track-record of developing novel application areas where industrial microbes and industrial enzymes help produce more with less World-leader in up-scaling and fermentation of microbes 7

8 Power of Microbial Technology: Novozymes Proven Microbials Product Pipeline Gives The BioAg Alliance a solid starting point CURRENT PRODUCT PORTFOLIO CASE: JUMPSTART 1 Biofertility products 2 Bioyield enhancers 3 Biocontrol products 1. Microorganism applied to to the the seed before planting 2. The The active ingredient, a a soil soil fungus, grows on on the the roots and and solubilizes the the residual soil soil phosphate, unavailable for for plant use use Phosphate solubilization Nitrogen fixation Plant growth & health Biofungicides Bioinsecticides 3. Yield increases due due to to superior nutrient uptake in in plant s early life life stage JumpStart TagTeam, Cell-Tech, Optimize Torque, Proventus, Taegro, Actinovate MET52 Ratchet, QuickRoots A phosphate Nitrogen-fixating Unique LCO molecule Slows down the Wide mode of action inoculant that grows inoculants enhances nutritional resistance of current to help break along the roots, capabilities, driving spray chemicals, resistance in current making more soil and Combined products natural growth thereby extending the chemical products fertilizer phosphate utilize a combination processes, which life of those within high-value available to the plant of traditional nitrogen enhances plant health chemicals, within fruits and vegetables inoculant with LCO and crop performance high-value fruits and as well as turf and (lipochitooligo- vegetables ornamentals saccharide) & Microbial seed JumpStart inoculant for increased yield Bacterial-based biofungicide for disease control 8

9 Biologicals Market: Novozymes Developed a Significant Business in Fast Growth Multi-Billion Dollar Market Opportunity AG BIOLOGICALS MARKET 1 Market Segmented by Product Class Microbial Pesticides Microbial Innoculants Beneficial Insects Biochemical Other 2/3rd Microbials MARKET ECONOMICS: IN NDEXED REVEN NUE NOVOZYMES BIOAG s SALES DEVELOPMENT HISTORICAL RESULTS: 2003 = NOVOZYMES BIOAG SALES GROWTH: 400 Fast growth through key investments and core competencies in Microbials Estimated Sales $ $2.3B Annual Growth Mid-Teens CAGR Industry growth driven by increasing demand for green ag chemical options FACTORS: Novozymes BioAg 2012 annual revenue of approximately $120 million North America accounts for roughly 2/3 of sales Innoculants for nitrogen fixation for soy and other pulse crops account for the single biggest application 1. Monsanto estimates of Ag Biologicals industry based on a combination of research data from DunhamTrimmer, Agrow, MarketsandMarkets, Frost & Sullivan, Boston Consulting Group, BCC Research 2. Novozymes Internal analysis. Combined sales development from the combined business of EMD/Merck Crop Bioscience, Philom Bios, EBS and Turfal. Does not include Natural Industries and TJ Technology 9

10 Microbials at Monsanto: Leveraging Monsanto s s Biologicals Platform and Genomics-Based Pipeline MONSANTO AG BIOLOGICALS PLATFORM MONSANTO AG BIOLOGICALS TECHNOLOGY PLATFORMS STATUS PHASE 1 (BioDirect Lead) Initial Biodirect technology concepts providing positive results for controlling weeds, insects and viruses BIOLOGICALS RELATED DEALS: ESTABLISHED MICROBIAL LEADERSHIP Weed WEED CONTROL Control + Microbials WEED CONTROL Yield Focus Divergence Beeologics Marina Biotech Agradis Synthetic Genomics FACTORS: Ag Biologicals is a growing industry which complements Monsanto s focus on yield Leverages Monsanto s R&D and genomics capabilities as well as crop testing facilities Potential manufacturing and commercial synergies for cost effective farmer solutions Market fit across regions and across crops Established regulatory process Disease WEED CONTROL Control Insect WEED CONTROL Control WEED Bee CONTROL Health Disease WEED CONTROL Control With the Agradis Deal Monsanto Recently Added Microbials to Its Ag Biologicals Research with Discovery Concepts in Yield and Disease Focus SYNERGY: PRECISION AGRICULTURE PLATFORM Able to isolate microbial performance for different agronomic environments Using tools like those from Integrated Farming Systems and The Climate Corporation, expect to precisely place microbials to maximize effectiveness 10

11 The BioAg Alliance R&D: Alliance Establishes Industry s s First-Ever Discovery-to- Commercialization Platform for Microbials Novozymes Contributes Existing Microbial Products Microbial Discovery & Sourcing Application Development Strain Optimization i Fermentation, Formulation, and Manufacturing Regulatory Intellectual Property Discovery R&D Discovery activities not co-funded May include 3rd-party collaborations to identify and nominate microbes into the alliance IP is owned by inventing party; licensed to Alliance All discovery output is committed to the Alliance NOVOZYMES MONSANTO Microbial Sourcing & Isolation Foliar Applications Characteriza Phase 1 Phase 2 Phase 3 Phase 4 -tion & Selection Field Testing Product & Germplasm Fit Commercial Seed Field Testing Formulations Candidates Treatment Monsanto Contributes Microbial Discovery and Sourcing Field Testing Commercial Organization Enabling Technologies Formulations Regulatory Intellectual Property Co Funded R&D Cost sharing (50:50) 50) for all other R&D (including Regulatory) IP developed under co-funded R&D is owned by the inventing party and licensed exclusively to Alliance in Field. IP is jointly funded and managed. Parties may nominate externally-sourced microbes 11

12 The BioAg Alliance Operations: Alliance Leverages Unique Capabilities of Companies to Define One-of-a-Kind Approach to Microbials THE BIOAG ALLIANCE CAPABILITY INPUT NOVOZYMES TOP MICROBES From discovery yprogram and library MONSANTO TOP MICROBES From discovery yprogram and library INDUSTRY S TOP MICROBES Third-party supplier microbial leads INDEPENDENT DISCOVERY PROGRAMS Each company maintains existing discovery work to feed continued Alliance development JOINT DEVELOPMENT INCL. FIELD TESTING Monsanto uses established field testing network to lead Alliance development testing Leverages platform of Integrated Farming Systems and The Climate Corporation MANUFACTURING Novozymes leads all fermentation up-scaling and manufacturing COMMERCIAL SCALING Novozymes commercial organization and marketing responsibility for current BioAg product portfolio will be transferred to Monsanto Alliance includes Monsanto ss microbial commercial products purchased from other suppliers 50:50 R&D FUNDING Each company splits ongoing R&D expenses equally COMMERCIAL OPPORTUNITY MONSANTO S S GLOBAL COMMERCIAL HUB TECHNOLOGY EXPANSION ACROSS MORE REGIONS AND CROPS INCLUDING FRUITS, VEGETABLES, AND SPECIALTY OUT-LICENSING OPPORTUNITIES 50:50 COMMERCIAL VALUE Each company splits ongoing commercial revenues equally 12

13 BioAg Alliance Roadmap: Opportunity Begins in 2014, With Commercial Products and Expanded R&D BioAg Alliance: Initiation 2014 Establishment of alliance to drive microbials as industry platform for next wave of beyond-the-seed yield and sustainability solutions REACH MARKET PRIORITY AREA: Focus on seed-treatment deployment in core crops: Corn and Soybeans in Americas Cotton, Canola Fruits and Vegetables in key markets PRIORITY AREA: Expand offerings to broader commercial set: Fruits and Vegetables in expanded markets Improved Core Crop Products Wheat, rice and other row crops Expanded geographical reach PRIORITY AREA: Focus on advanced microbial solutions with significant product offerings and applied on-farm synergy with platforms like precision agriculture NEAR-TERM MID-TERM LONG-TERM Leveraging Alliance Capabilities and Establishing Microbial Platform Expanding Market Opportunity Building synergy with Beyond-the-Seed technology like precision agriculture 13

14 Unleashing the Potential: With Unique Approach to Microbials, Alliance Puts Important New Tools in Hands of Farmers 1 VALUE PROPOSITION FOR FARMERS Important New Beyond-the-Seed Tools To Drive Yield and Sustainability UNIQUE ADVANTAGES OF THE BIOAG ALLIANCE Alliance builds on most advanced capabilities for insidethe-seed and beyond-the-seed technology to deliver most complete platform of sustainable yield technology 2 Better-Performing Products Scale and capability of R&D testing and manufacturing elevates early microbial industry work to greater level of reliability and performance 3 More Rapid Innovation Combined and complementary resources allow for rapid discovery, development and commercialization of new technology approaches 4 Immediate Commercial Portfolio Distribution ib ti to be built on Monsanto s broad global l Delivered to Farmers footprint, enabling distribution through multiple brands, multiple channels and multiple geographies to give farmers more choice 14