Skip to main content
Premium Trial:

Request an Annual Quote

Future of Monsanto s Genomics Collaborations Hazy After Restructuring Claims 700 Jobs

NEW YORK, April 4 - A broad restructuring undertaken at Monsanto today has put a question mark over the future of its many collaborations with genomics and bioinformatics tools and technology companies.

Monsanto said today that its restructuring, which will cost as much as $124 million, would slash about 5 percent of its staff around the world, or between 600 and 700 of its 14,600 employees.

Because the company has not specified what divisions or research facilities will be directly affected by the restructuring, which was approved by the firm's board on Wednesday, it was not clear how the move will impact Monsanto's genomic collaborations.


"I really view this as a fine-tuning more than a restructuring," a Monsanto spokeswoman told GenomeWeb, adding that the company withheld releasing the affected divisions until it has notified its employees first. She did mention, though, that "the majority" of lay offs will occur in New Zealand, southeastern Asia, Australia, and North America.

 

The spokeswoman, Lori Fisher, said also that the restructuring "will not change the company's focus on having genomics and biotechnology being major drivers in our research and development efforts over the next several years."

 

But asked whether employees from any of these geographic areas were directly involved with the myriad genomics partnership that Monsanto had struck over the past few years, Fisher said: "I'm sure that's the case. I am sure that there's people from our genomics area who are assigned, or work closely with some of these collaborations. But it's premature to speak about anyone at this time."

 

She said that details of the lay offs will be released "over the rest of the year."

 

Monsanto has ongoing collaborations with Affymetrix, Bangalore Genomics, Cereon Genomics, Ceres, IBM,   Incyte, Orchid, Mystic Genomics, Paradigm, Rosetta Inpharmatics, Third Wave, and the St. Louis Genomics Center, among others, it said in a conference call this morning. In fact, the firm inked a deal with Ceres just yesterday.

The restructuring, first announced in a statement released ahead of the call, was in response to shrunken earnings-per-share expectations: Monsanto said it plans to grow in the single-digit percentages for the next two years as regulatory approvals for its products make the regulatory rounds. Growth will accelerate after that, the company added.

In the call, Monsanto Chief Financial Officer Terry Crews reiterated the company's projection, initially made in February, that earnings per share will grow between 4 percent and 6 percent in 2002 and between 4 percent and 9 percent in 2003.

Growth is expected to begin accelerating in 2004 as the company receives additional regulatory approvals and expands the use of its currently available products in new markets, Crews added.

A survey of analysts by Thomson Financial/First Call expects Monsanto to earn $2.03 per share in 2002 and $2.25 per share in 2003. The firm reported earnings of $1.80 a share in 2001.

"The strategy we're implementing also prepares us for double-digit earnings growth in the medium to long term as we realize global expansion of current and future products," Hendrik Verfaillie, president and chief executive, said in the statement. "In the interim, the company will fine-tune its organizational structure, including the rationalization of some facilities and a small reduction in staff."

Speaking at the conference call this morning, Hugh Grant, Monsanto's chief operating officer, said the percentage of revenue coming from the company's genomics business will increase. That business, which includes seeds, accounted for nearly on-third of Monsanto's revenue last year but is expected to increase to 55 percent in 2007, he said.

Monsanto spent $560 million on R&D in 2001, Chief Technology Officer Robb Fraley said in the call. Of that spending, 83 percent went to biotech and seeds and 17 percent went to the agricultural/chemical business, he explained.

Monsanto, one of the three largest agbio companies in the world, is 85-percent owned by Pharmacia, which plans to spin off its stake in the fourth quarter.

 

Investors were evidently happy with the restructuring plan, sending Monsanto shares up $1.30, or 4.13 percent, to close at $32.76 on the New York Stock Exchange today.

The Scan

Shape of Them All

According to BBC News, researchers have developed a protein structure database that includes much of the human proteome.

For Flu and More

The Wall Street Journal reports that several vaccine developers are working on mRNA-based vaccines for influenza.

To Boost Women

China's Ministry of Science and Technology aims to boost the number of female researchers through a new policy, reports the South China Morning Post.

Science Papers Describe Approach to Predict Chemotherapeutic Response, Role of Transcriptional Noise

In Science this week: neural network to predict chemotherapeutic response in cancer patients, and more.