Cellectis Says Bayer Tie Highlights Biotechnology Thirst

Cellectis (ALCLS), the French protein and stem-cell engineering company set up in 1999, said a widening partnership with Bayer AG (BAYN) highlights global agrochemical companies’ need to contract out biotechnology research.

Seed and crop-protection suppliers seeking the expertise of biotechnology experts follows trends in pharmaceuticals, though there are far fewer specialists in farming products, Luc Mathis, head of Paris-based Cellectis’s plant-sciences unit, said in a phone interview.

Bayer, the inventor of aspirin that’s valued at about $110 billion, said on Jan. 30 that it’s joining with Cellectis for gene editing in canola as well as assisting with features such as stacking, where multiple traits are inserted into a plant’s genetic makeup to make it sturdier. BASF SE (BAS) and Monsanto Co. (MON), as well as three large seed companies that Mathis declined to identify, also feature on Cellectis’s client list, he said.

“The pipeline of programs makes it difficult for managers to step outside what is planned” at major drug or agricultural-supply companies, Mathis said by phone. “It’s much easier to outsource than divert a team already on something else.”

Bayer and competitors including DuPont Co. (DD), Dow Chemical Co. (DOW) and Syngenta AG (SYNN) bought smaller biotechnology producers over the past two decades to bring in patents. Faced with higher valuations, agrochemical companies have turned to licensing transactions to gain access to intellectual property as developing the technology in-house may take longer and cost more.

Cellectis is eliminating jobs in France to help cut about 10 million euros ($13.5 million) in costs after competition intensified in genome-engineering tools for research. The company’s main focus will remain developing products for therapeutics, supported by the agricultural industry, it said in December.

The agreement with Leverkusen, Germany-based Bayer is a milestone for Cellectis, bringing payments for developing new products and reaching targets as well as royalties on sales, Mathis said, adding that revenue growth in this area is “always too slow.”

The companies aren’t disclosing payment terms, Bayer said.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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